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HomeMy Public PortalAboutA 2017-04-04 LUAThis Agenda contains a brief general description of each item to be considered. Copies of the staff reports or other written documentation relating to each item of business referred to on the Agenda are on file in the Office of the City Clerk and are available for public inspection. Any person who has a question concerning any of the agenda items may call the City Manager at (310) 603 -0220, ext. 200. Procedures for addressing the Members of the Authority IN ORDER TO EXPEDITE LYNWOOD UTILITY AUTHORITY BUSINESS, WE ASK THAT ALL PERSONS WISHING TO ADDRESS THE AUTHORITY FILL OUT A FORM PROVIDED AT THE DOOR, AND TO TURN IT IN TO THE SECRETARY PRIOR TO THE START OF THE MEETING. FAILURE TO FILL OUT SUCH A FORM WILL PROHIBIT YOU FROM ADDRESSING THE MEMBERS OF THE AUTHORITY IN THE ABSENCE OF THE UNANIMOUS CONSENT OF THE AUTHORITY. AGENDA ITEMS ON FILE FOR CONSIDERATION AT THE REGULAR MEETING OF THE LYNWOOD UTILITY AUTHORITY TO BE HELD ON APRIL 4, 2017 6:00 P.M. COUNCIL CHAMBERS 11330 BULLIS ROAD, LYNWOOD, CA 90262 JOSE LUIS SOLACHE VICE PRESIDENT AIDE CASTRO MEMBER EXECUTIVE DIRECTOR ALMA K. MARTINEZ SECRETARY MARIA QUINONEZ MARIA T. SANTILLAN -BEAS PRESIDENT 3V&;(/29*d- RECEIVED LIAR 3 0 2017 CITY OF LYNWOOD CITY CLERKS OFFICE `7th SALVADOR ALATORRE MEMBER EDWIN E. HERNANDEZ MEMBER INTERIM FINANCE DIRECTOR TERRI MARSH DAVID A. GARCIA ' AUTHORITY COUNSEL TREASURER GABRIELA CAMACHO OPENING CEREMONIES I 1. CALL TO ORDER 2. ROLL CALL OF MEMBERS Salvador Alatorre Aide Castro Edwin Hernandez Jose Luis Solache Maria T. Santillan -Beas 3. CERTIFICATION OF AGENDA POSTING BY SECRETARY PUBLIC ORAL COMMUNICATIONS (Regarding Agenda Items Only) NON - AGENDA PUBLIC ORAL COMMUNICATIONS THIS PORTION PROVIDES AN OPPORTUNITY FOR THE PUBLIC TO ADDRESS THE LYNWOOD UTILITY AUTHORITY ON ITEMS WITHIN THE JURISDICTION OF THE LYNWOOD UTILITY AUTHORITY AND NOT LISTED ON THE AGENDA. IF AN ITEM IS NOT ON THE AGENDA, THERE SHOULD BE NO SUBSTANTIAL DISCUSSION OF THE ISSUE BY THE LYNWOOD UTILITY AUTHORITY, BUT LYNWOOD UTILITY AUTHORITY MEMBERS MAY REFER THE MATTER TO THE STAFF OR SCHEDULE SUBSTANTIVE DISCUSSION FOR A FUTURE MEETING. (The Ralph M. Brown Act, Government Code Section 54954.2 (a).) CONSENT CALENDAR All matters listed under the Consent Calendar will be acted upon by one motion affirming the action recommended on the agenda. There will be no separate discussion on these items prior to voting unless members of the Authority or staff request specific items be removed from the Consent Calendar for separate action. 4. MINUTES OF PREVIOUS MEETINGS: Regular Meeting — September 20, 2016 5. REQUEST FOR AUTHORITY TO SOLICIT FUNDING OPTIONS TO IMPROVE THE CONDITION OF CITY STREETS, INCREASE GENERAL FUND REVENUES AND REFINANCING OF OUTSTANDING LYNWOOD UTILITY AUTHORITY REVENUE BONDS Comments: One of the City Council's Strategic Plan goals is to Enhance City Facilities and Infrastructure. A key objective under this goal is to identify and present to the City Council funding options to improve the condition of the City's streets. In November 2016, the voters in Los Angeles County approved Measure M consisting of an additional 0.5 percent sales tax for transportation related projects 2 and the indefinite extension of the existing 0.5 percent sales tax ( "Measure R ") also dedicated to transportation projects that was set to expire in 2039. Recommendation: Staff requests that the City Council authorize and direct the City Manager to solicit funding options for (i) the issuance of the Measures M and R bonds either on a stand -alone basis or through a pool securitization program, (ii) the issuance of lease revenue bonds, and (iii) the issuance of the Lynwood Utility Authority Enterprise Refunding Revenue Bonds, Series 2017A to refinance the 2008 Bonds and 2009 Bonds. Staff will solicit options from qualified firms, including Wolf & Company, as municipal advisor, Stifel, Nicolaus & Company, Incorporated, as underwriter or placement agent, and Nossaman LLP, as bond counsel and disclosure counsel, in connection with proposed financing options. Staff will bring back to council individual agreements with qualified firms for their respective services. Overall, payment of fees and expenses with respect to such agreements shall be contingent upon the closing of each financing. ADJOURNMENT The Lynwood Utility Authority meetings will be posted as needed. The next meeting will be held in the Council Chambers of City Hall, 11330 Bullis Road, City of Lynwood, California. 3 NL AGENDA STAFF REPORT DATE: April 4, 2017 TO: Honorable Mayor and Members of the City Council APPROVED BY: Alma K. Martinez, City Manager PREPARED BY: Maria Quinonez, City Clerk Lourdes Morales, Office Assistant II b ' SUBJECT: Lynwood Utility Authority Minutes Recommendation: Staff recommends the Lynwood City Council approve the following minutes: • Regular Meeting — September 20, 2016 Background: N/A Discussion & Analysis: N/A Fiscal Impact: N/A Coordinated With: N/A AGENDA ITEM IT LYNWOOD UTILITY AUTHORITY REGULAR MEETING September 20, 2016 The Lynwood Utility Authority of the City of Lynwood met in a regular meeting in the Council Chambers, 11330 Bullis Road on the above date at 6:39 p.m. President Hernandez presiding. Members Alatorre, Santillan -Beas, Solache, Vice President Castro and President Hernandez were present. Also present were Executive Director J. Arnoldo Beltran, Authority Counsel Garcia, Secretary Quihonez, Executive Assistant to City Clerk Betancur and City Treasurer Camacho. Secretary Quihonez announced that the Agenda had been duly posted in accordance with the Brown Act. PUBLIC ORAL COMMUNICATIONS (Regarding Agenda Items Only) NONE NONE - AGENDA PUBLIC ORAL COMMUNICATIONS NONE PUBLIC HEARING Item # 4. LYNWOOD UTILITY AUTHORITY ENTERPRISE REFUNDING REVENUE BONDS, SERIES 2016A Item heard in conjunction with item No. 8 on the regular City Council agenda. MOTION: It was moved by Vice President Castro, seconded by Member Santillan -Beas to open the public hearing. Motion carried by unanimous consent. Finance Director Hall presented the staff report. Member Alatorre requested that these resolutions be amended to reflect current staff's titles. MOTION: It was moved by Vice President Castro, seconded by Member Santillan -Beas to close the public hearing. Motion carried by unanimous vote. 1 u,; I MOTION: It was moved by Member Alatorre, seconded by President Hernandez to approve subject to staff making the changes to the resolutions with respect to staff's titles. ROLL CALL: AYES: MEMBERS ALATORRE, SANTILLAN -BEAS, SOLACHE, VICE PRESIDENT CASTRO AND PRESIDENT HERNANDEZ NOES: NONE ABSTAIN: NONE ABSENT: NONE RESOLUTION NO. 2016.202 ENTITLED: A RESOLUTION OF THE CITY COUNCIL OF LYNWOOD APPROVING THE ISSUANCE AND SALE BY THE LYNWOOD UTILITY AUTHORITY OF NOT TO EXCEED $16,000,000 PRINCIPAL AMOUNT OF ITS LYNWOOD UTILITY AUTHORITY ENTERPRISE REVENUE BONDS, 2016 SERIES A, AND AUTHORIZING AND DIRECTING THE EXECUTION THEREOF AND AUTHORIZING ACTIONS RELATED THERETO RESOLUTION NO. 2016.006 ENTITLED: A RESOLUTION OF THE LYNWOOD UTILITY AUTHORITY APPROVING THE ISSUANCE AND SALE BY THE LYNWOOD UTILITY AUTHORITY OF NOT TO EXCEED $16,000,000 PRINCIPAL AMOUNT OF ITS LYNWOOD UTILITY AUTHORITY ENTERPRISE REVENUE BONDS, 2016 SERIES A, APPROVING AN INDENTURE OF TRUST, REFUNDING ESCROW AGREEMENTS, A BOND PURCHASE AGREEMENT, A CONTINUING DISCLOSURE AGREEMENT AND A PRELIMINARY OFFICIAL STATEMENT, AUTHORIZING AND DIRECTING THE EXECUTION THEREOF AND AUTHORIZING ACTIONS RELATED THERETO CONSENT CALENDAR Item # 5. MINUTES OF PREVIOUS MEETINGS: Regular Meeting — July 5, 2016 Regular Meeting — August 2, 2016 Regular Meeting — August 16, 2016 MOTION: It was moved by Vice President Castro, seconded by Member Solache to approve the consent calendar. Motion carried by the following roll call vote: 0J ROLL CALL: AYES: MEMBERS ALATORRE, SANTILLAN -BEAS, SOLACHE, VICE PRESIDENT CASTRO AND PRESIDENT HERNANDEZ NOES: NONE ABSTAIN: NONE ABSENT: NONE Approved by Minute Order No. 2016 -7 ADJOURNMENT Having no further discussion, it was moved by Vice President Castro, seconded by Member Alatorre to adjourn the Lynwood Utility Authority meeting at 6:47 p.m. and reconvene to the regular City Council meeting. Motion carried by unanimous consent. Edwin Hernandez, President Maria Quinonez, Secretary 3 4�4 n AGENDA STAFF REPORT DATE: April 4, 2017 TO: Honorable Mayor and Members of the City Council Honorable President and Members of the Lynwood Utility Authority APPROVED BY: Alma K. Martinez, City Manager PREPARED BY: Terri Marsh, Interim Finance Director SUBJECT: REQUEST FOR AUTHORITY TO SOLICIT FUNDING OPTIONS TO IMPROVE THE CONDITION OF CITY STREETS, INCREASE GENERAL FUND REVENUES AND REFINANCING OF OUTSTANDING LYNWOOD UTILITY AUTHORITY REVENUE BONDS Recommendation: Staff requests that the City Council authorize and direct the City Manager to solicit funding options for (i) the issuance of the Measures M and R bonds either on a stand -alone basis or through a pool securitization program, (ii) the issuance of lease revenue bonds, and (iii) the issuance of the Lynwood Utility Authority Enterprise Refunding Revenue Bonds, Series 2017A to refinance the 2008 Bonds and 2009 Bonds. Staff will solicit options from qualified firms, including Wolf & Company, as municipal advisor, Stifel, Nicolaus & Company, Incorporated, as underwriter or placement agent, and Nossaman LLP, as bond counsel and disclosure counsel, in connection with proposed financing options. Staff will bring back to council individual agreements with qualified firms for their respective services. Overall, payment of fees and expenses with respect to such agreements shall be contingent upon the closing of each financing. Measures M and R Financings One of the City Council's Strategic Plan, goals is to Enhance City Facilities and Infrastructure. A key objective under this goal is to identify and present to the City Council funding options to improve the condition of the City's streets. In November 2016, the voters in Los Angeles County approved Measure M consisting of an additional 0.5 percent sales tax for transportation related projects and the indefinite extension of the existing 0.5 percent sales tax ( "Measure R ") also dedicated to transportation projects that was set to expire in 2039 (Attachment "A "). A percentage of the revenues collected from Measure M would be returned to the 88 cities of Los Angeles County for local transportation projects, including repairs to streets and sidewalks. Lynwood's share of these "local return funds" from Measures M and R is anticipated to be approximately $1.9 million beginning in Fiscal Year 2017 -18. One of the uses of Measures M and R local return funds is to repave and resurface local streets including the repair and replacement of curbs, gutters, sidewalks and ADA ramps. With the new revenue stream of Measure M and R funds, the City has an opportunity to realize substantial savings in street repair costs by funding major street improvements much sooner than anticipated. A means to achieve this is through the issuance of bonds or other obligations secured by the receipt of Measure M and R local return funds. The bonds could be issued by the City on a stand -alone basis or the City could participate in a pool securitization program with other local agencies. Both approaches would not require a pledge of any general fund dollars. If the City elects to issue the bonds on a stand -alone basis, based on the estimated initial annual revenue of $1.9 million with a pledge of 66% of these funds with a debt ratio coverage of 150 %, it is estimated that approximately $15.5 million could be raised to put into needed major street repairs (Attachment "B "). In order for a city to reduce its involvement in issuing bonds, a City may wish to consider utilizing Independent Cities Financing Authority (ICFA) or the California Statewide Communities Development Authority ( "CSCDA "). The City of Lynwood is an ICFA Board member. Both ICFA and CSCDA offer a pool securitization program to assist local agencies like Lynwood to obtain financing for these types of street projects. The pooled program provides cities reduced bond issuance costs and depending upon issuance size could provide more favorable interest rates as compared to stand alone bond issues. The CSCDA program is endorsed by the League of California Cities, while ICFA program is offered to its member cities such as Lynwood. The downside to a pool financing is timing and the issuance of city debt is controlled by others. Measure PS Financing. In November 2016, Measure PS was approved by over 75% of the voters of the City. Measure PS increased the total combined sales tax rate in the City from 9% to 10 %. Collection of this 1 % increase began on or about April 1, 2017 and will automatically expire after 10 years. It is currently expected that the 1% increase will generate an additional $3.5 million in sales tax revenue per year. The tax revenues will be deposited in the City's general fund and may be used for any municipal purpose. In order for the City to take advantage of this additional increase in revenue the City can issue lease revenue bonds that are payable from its general fund to finance certain City projects such as repairing and reconstructing the City's streets and sidewalks. As mentioned above the expected increase in revenue to the general fund, the lease revenue bonds would generate annually approximately $3.5 for City projects. 10% of Measure PS tax collected must be transferred into a Budget Stabilization Fund. The other 90% can be used for public safety, infrastructure and community programs. Lynwood Citizens' Transactions and Use Tax Committee to review the expenditure of the revenues raised by the financing. Lynwood Utility Authority Refinancing The City is required by State law and City policy to collect revenues sufficient to cover the costs of operating the water and sewer systems. These revenues allow the City to protect public health; and safely and reliably treat and convey water and sewer. Costs that must be recovered through rate revenue include purchased water, electricity, equipment, supplies, treatment chemicals, debt service, along with salaries and benefits. Additionally, revenues generated from the water and sewer rate increases would be used to finance the repair and renovation of the City's aging water and sewer infrastructure, and restore depleting reserve funds that have been drawn down to compensate for lower levels of water consumption. Currently, the City water system relies on five water wells to provide water; 4 out of the 5 wells are older than 66 years, with the oldest being in service for 85 years. Water and Sewer pipeline infrastructure is equally aged, resulting in increased water main breaks and sewer backups, and debt service payments, while maintaining adequate reserves. However, water and sewer rates were last increased in 2012, and revenues have dropped due to the State mandated water conservation goals, causing non - payment default of the City's debt covenant. The City's non - compliance with its debt covenants could cause a downgrade of the City's bond rating and may prove to be a significant obstacle to the issuance of additional debt necessary to maintain and rebuild the City's water and sewer systems, or such additional debt would be issued with significant increases in interest costs to the City. The proposed rate increases are essential to restoring compliance with the debt covenants. In order to provide additional information to the City Council and public at the April 18 Utility Water Pubic Hearing, staff will be reviewing the Authority's outstanding water debt financings to see if there are additional savings in refinancing these bonds that can be included with the various rate increases proposed. The Authority currently has outstanding its $8,300,000 Lynwood Utility Authority Enterprise Revenue Bonds, 2008 Series A (the "2008 Bonds ") and its $5,350,000 Lynwood Utility Authority Enterprise Refunding Revenue Bonds, 2009 Series A (the "2009 Bonds "). The 2008 Bonds and the 2009 Bonds are currently eligible for refinancing which would allow the Authority to reduce the annual debt service payments. To carry out the refinancing, the Authority proposes to issue its Lynwood Utility Authority Enterprise Refunding Revenue Bonds, Series 2017A via public sale. At present, considering current market rates and all fees and costs, the Authority and the City can expect to save approximately $73,000 per year from the proposed refinancing. If a surety was secured the saving would increase to $145,000. Fiscal Impact: There is no fiscal impact at this time. Attachments: Attachment "A ": Measure M- Information Guide Attachment "B ": Debt Service Schedule for Measure M and R Bonds 3 The Metro Board of Directors has approved placing a sales tax ballot measure, titled the Los Angeles County Traffic Improvement Plan, on the November 8, 2oi6, ballot. Voters will be asked: "To improve freeway traffic flow /safety; repair potholes) sidewalks; repave local streets; earthquake - retrofit bridges, synchronize signals; keep senior /disabled /student fares affordable; expand rail /subway /bus systems, improve job/ school /airport connections; and create jobs; shall voters authorize a Los Angeles County Traffic Improvement Plan through a %2 d sales tax and continue the existing r/2 s traffic relief tax until voters decide to end it,, with independent audits /oversight and funds controlled locally ?" Why is Metro proposing Measure M? Angelenos spend an average of 8i hours a year stuck in traffic. Currently, there are 10.2 million people living in LA County, and we are projected to grow by 2.3 million people in the next 40 years. Traffic congestion and air pollution are expected to get worse with more growth, and the measure is intended to raise money to meet those needs. ( Accountability Provisions of the Measure Measure M includes provisions establishing an independent oversight process including a Taxpayer Oversight Committee and annual audits. Ease traf c. congestion, im.prove,ieeeway Traffic flow, and reduce bottlenecks: • Expand rail and rapid transit system; accelerate rail construction and build new rail, llnes; enhance.local, regional, and express.bus.service ;.and improve system connectivity . + itepave local streets, repair potholes; and synchronize .signals; improve. neighborhood,streets and iritersections, and enhance bike and pedestrian connections. • Make public transportation more accessible, convenient, and affordable'forseniors, students, and the disabled; and provide better mobility options for our aging population. Earthquake- retrofit bridges; 2nd'keep the transit and highway, system: safe and in good.workin'g.contlition. • Embeace technology and innovations; incorporate modern technology new advancement, and emerging.innovations into,the local transportation system. • Create jobs; reduce pollution; and generate. local economic benefitswl increase personal quality.time, and overall quality of fife. . Provide accountability and .transpare'ncy; protect and monitor the. public's investments through independent audits and oversight.' SOURCES AND USES OF FUNDS City of Lynwood Local Sales Tax Certificates of Participation Scenario: Measure R & Measure M Revenues Dated Date 06/01/2017 Delivery Date 06/01/2017 Sources: Bond Proceeds: Par Amount 14,355,000.00 Premium 1,176,021.30 15,531,021.30 Uses: Project Fund Deposits: Project Fund 13,939,847.97 Other Fund Deposits: Debt Service Reserve Fund 1,225,002.08 Delivery Date Expenses: Cost of Issuance 366,171.25 15,53 1,02 1.30 Notes: The financing was evaluated at interest rate spreads to the generic'AAA' municipal yield index ('MMD') of +60 basis points beginning in 2018, increasing to +125 in 2047, the final maturity of the bonds. The use of the'A' rating is consistent with the S &P rating of similar LA County Measure R sales tax revenue bonds. The interest rate and rating assumptions assumed in this presentation are based on current market conditions and similar credits. The City's actual results may differ, and Stifel makes no commitment to underwrite at these levels. The final maturity of 2047 allowable as Measure M does not have a sunset provision. Measure R & M revenue constraint provided by LACMTA. Prepared by Stifel Page 1 BOND SUMMARY STATISTICS City of Lynwood Price Local Sales Tax Certificates of Participation PV of I by change Scenario: Measure R & Measure M Revenues Dated Date 06/01/2017 Delivery Date 06/01/2017 Last Maturity 06/01/2047 Arbitrage Yield 3.910389 True Interest Cost (TIC) 4.352631% Net Interest Cost (NIC) 4.596351% All -In TIC 4.539769% Average Coupon 4.986097% Average Life (years) 21.020 Weighted Average Maturity (years) 20.947 Duration of Issue (years) 13.104 Par Amount 14,355,000.00 Bond Proceeds 15,531,021.30 Total Interest 15,045,050.00 Net Interest 13,869,028.70 Total Debt Service 29,400,050.00 Maximum Annual Debt Service 1,272,500.00 Average Annual Debt Service 980,001.67 Underwriters Fees (per $1000) Average Takedown Other Fee Total Underwriters Discount Bid Price 108.192416 Bond Component Par Value Price Average Coupon Average Life PV of I by change Serial Bond 3,460,000.00 110.579 4.863% 8.831 2,406.40 Tenn Bond (2037) 1,820,000.00 108.004 5.000% 18.093 1,565.20 Tenn Bond (2042) 3,580,000.00 107.577 5.000% 23.425 3,043.00 Tenn Bond (2047) 5,495,000.00 107.153 5.000% 28.097 4,670.75 - Other Amounts 14,355,000.00 21.020 11,685.35 All -In Arbitrage 15,164,850.05 TIC TIC Yield Par Value 14,355,000.00 14,355,000.00 14,355,000.00 • Accrued Interest 4.352631% 4.539769% • Premium (Discount) 1,176,021.30 1,176,021.30 1,176,021.30 - Underwriters Discount Cost of Issuance Expense - 366,171.25 - Other Amounts Target Value 15,531,021.30 15,164,850.05 15,531,021.30 Target Date 06/01/2017 06/01/2017 06/01/2017 Yield 4.352631% 4.539769% 3.910389% Notes: The financing was evaluated at interest rate spreads to the generic 'AAA' municipal yield index ('MMD') of +60 basis points beginning in 2018, increasing to +125 in 2047, the final maturity of the bonds. The use of the'A' rating is consistent with the S &P rating of similar LA County Measure R sales tax revenue bonds. The interest rate and rating assumptions assumed in this presentation are based on current market conditions and similar credits. The City's actual results may differ, and Stifel makes no commitment to underwrite at these levels. The final maturity of 2047 allowable as Measure M does not have a sunset provision. Measure R & M revenue constraint provided by LACMTA. Prepared by Stifel Page 2 BOND DEBT SERVICE City of Lynwood Local Sales Tax Certificates of Participation Scenario: Measure R & Measure M Revenues Period Ending Principal Coupon Interest Debt Service 06/01/2018 170,000 3.000% 704,900 874,900 06/01/2019 175,000 4.000% 699,800 874,800 06/01/2020 180,000 4.000% 692,800 872,800 06/01/2021 190,000 4.000% 685,600 875,600 06/01/2022 195,000 4.000% 678,000 873,000 06/01/2023 205,000 4.000% 670,200 875,200 06/01/2024 215,000 5.000% 662,000 877,000 06/01/2025 225,000 5.000% 651,250 876,250 06/01/2026 235,000 5.000% 640,000 875,000 06/01/2027 245,000 5.000% 628,250 873,250 06/01/2028 255,000 5.000% 616,000 871,000 06/01/2029 275,000 5.000% 603,250 878,250 06/01/2030 285,000 5.000% 589,500 874,500 06/01/2031 300,000 5.000% 575,250 875,250 06/01/2032 310,000 5.000% 560,250 870,250 06/01/2033 330,000 5.000% 544,750 874,750 06/01/2034 350,000 5.000% 528,250 878,250 06/01/2035 360,000 5.000% 510,750 870,750 06/01/2036 380,000 5.000% 492,750 872,750 06/01/2037 400,000 5.000% 473,750 873,750 06/01/2038 420,000 5.000% 453,750 873,750 06/01/2039 445,000 5.000% 432,750 877,750 06/01/2040 860,000 5.000% 410,500 1,270,500 06/01/2041 905,000 5.000% 367,500 1,272,500 06/01/2042 950,000 5.000% 322,250 1,272,250 06/01/2043 995,000 5.000% 274,750 1,269,750 06/01/2044 1,045,000 5.000% 225,000 1,270,000 06/01/2045 1,095,000 5.000% 172,750 1,267,750 06/01/2046 1,150,000 5.000% 118,000 1,268,000 06/01/2047 1,210,000 5.000% 60,500 1,270,500 14,355,000 15,045,050 29,400,050 Notes: The financing was evaluated at interest rate spreads to the generic 'AAA' municipal yield index ('MMD') of +60 basis points beginning in 2018, increasing to +125 in 2047, the final maturity of the bonds. The use of the'A' rating is consistent with the S &P rating of similar LA County Measure R sales tax revenue bonds. The interest rate and rating assumptions assumed in this presentation are based on current market conditions and similar credits. The City's actual results may differ, and Stifel makes no commitment to underwrite at these levels. The final maturity of 2047 allowable as Measure M does not have a sunset provision. Measure R & M revenue constraint provided by LACMTA. Prepared by Stifel Page 3 BOND PRICING City of Lynwood Local Sales Tax Certificates of Participation Scenario: Measure R & Measure M Revenues Maturity Yield to Call Call Premium Bond Component Date Amount Rate Yield Price Maturity Date Price (- Discount) Serial Bond: 06/01/2018 170,000 3.000% 1.310% 101.673 2,844.10 06/01/2019 175,000 4.000% 1.590% 104.725 8,268.75 06/01/2020 180,000 4.000% 1.870% 106.185 11,133.00 06/01/2021 190,000 4.000% 2.090% 107.292 13,854.80 06/01/2022 195,000 4.000% 2.340% 107.789 15,188.55 06/01/2023 205,000 4.000% 2.510% 108.251 16,914.55 06/01/2024 215,000 5.000% 2.760% 114.169 30,463.35 06/01/2025 225,000 5.000% 2.930% 114.667 33,000.75 06/01/2026 235,000 5.000% 3.120% 114.653 34,434.55 06/01/2027 245,000 5.000% 3.270% 114.655 35,904.75 06/01/2028 255,000 5.000% 3.410% 113.377 C 3.523% 06/01/2027 100.000 34,111.35 06/01/2029 275,000 5.000% 3.540% 112.205 C 3.729% 06/01/2027 100.000 33,563.75 06/01/2030 285,000 5.000% 3.620% 111.492 C 3.867% 06/01/2027 100.000 32,752.20 06/01/2031 300,000 5.000% 3.700% 110.783 C 3.987% 06/01/2027 100.000 32,349.00 06/01/2032 310,000 5.000% 3.780% 110.081 C 4.094% 06/01/2027 100.000 31,251.10 3,460,000 366,034.55 Tenn Bond (2037): 06/01/2033 330,000 5.000% 4.020% 108.004 C 4.394% 06/01/2027 100.000 26,413.20 06/01/2034 350,000 5.000% 4.020% 108.004 C 4.394% 06/01/2027 100.000 28,014.00 06/01/2035 360,000 5.000% 4.020% 108.004 C 4.394% 06/01/2027 100.000 28,814.40 06/01/2036 380,000 5.000% 4.020% 108.004 C 4.394% 06/01/2027 100.000 30,415.20 06/01/2037 400,000 5.000% 4.020% 108.004 C 4.394% 06/01/2027 100.000 32,016.00 1,820,000 145,672.80 Tenn Bond (2042): 06/01/2038 420,000 5.000% 4.070% 107.577 C 4.492% 06/01/2027 100.000 31,823.40 06/01/2039 445,000 5.000% 4.070% 107.577 C 4.492% 06/01/2027 100.000 33,717.65 06/01/2040 860,000 5.000% 4.070% 107.577 C 4.492% 06/01/2027 100.000 65,162.20 06/01/2041 905,000 5.000% 4.070% 107.577 C 4.492% 06/01/2027 100.000 68,571.85 06/01/2042 950,000 5.000% 4.070% 107.577 C 4.492% 06/01/2027 100.000 71,981.50 3,580,000 271,256.60 Tenn Bond (2047): 06/01/2043 995,000 5.000% 4.120% 107.153 C 4.560% 06/01/2027 100.000 71,172.35 06/01/2044 1,045,000 5.000% 4.120% 107.153 C 4.560% 06/01/2027 100.000 74,748.85 06/01/2045 1,095,000 5.000% 4.120% 107.153 C 4.560% 06/01/2027 100.000 78,325.35 06/01/2046 1,150,000 5.000% 4.120% 107.153 C 4.560% 06/01/2027 100.000 82,259.50 06/01/2047 1,210,000 5.000% 4.120% 107.153 C 4.560% 06/01/2027 100.000 86,551.30 5,495,000 393,057.35 14,3 55,000 1,176,021.30 Dated Date Delivery Date First Coupon Par Amount Premium Production Underwriters Discount Purchase Price Accrued Interest 06/01/2017 06/01/2017 12/01/2017 14,355,000.00 1,176,021.30 15,531,021.30 108.192416% 15,531,021.30 108.192416% Net Proceeds 15,53 1,02 1.30 Notes: The financing was evaluated at interest rate spreads to the generic 'AAA' municipal yield index ('MMD') of +60 basis points beginning in 2018, increasing to +125 in 2047, the final maturity of the bonds. The use of the'A' rating is consistent with the S &P rating of similar LA County Measure R sales tax revenue bonds. The interest rate and rating assumptions assumed in this presentation are based on current market conditions and similar credits. The City's actual results may differ, and Stifel makes no commitment to underwrite at these levels. The final maturity of 2047 allowable as Measure M does not have a sunset provision. Measure R & M revenue constraint provided by LACMTA. Prepared by Stifel Page 4 BOND SOLUTION City of Lynwood Local Sales Tax Certificates of Participation Scenario: Measure R & Measure M Revenues Period Ending Proposed Principal Proposed Debt Service 2012 Bonds Debt Service Total Adj Debt Service Revenue Constraints Unused Revenues Debt Sery Coverage 06/01/2018 170,000 874,900 393,427 1,268,327 1,908,872 640,545 150.50320% 06/01/2019 175,000 874,800 395,597 1,270,397 1,908,872 638,475 150.25788% 06/01/2020 180,000 872,800 396,979 1,269,779 1,908,872 639,093 150.33104% 06/01/2021 190,000 875,600 393,548 1,269,148 1,908,872 639,724 150.40584% 06/01/2022 195,000 873,000 394,915 1,267,915 1,908,872 640,957 150.55202% 06/01/2023 205,000 875,200 395,882 1,271,082 1,908,872 637,790 150.17699% 06/01/2024 215,000 877,000 394,971 1,271,971 1,908,872 636,901 150.07194% 06/01/2025 225,000 876,250 393,635 1,269,885 1,908,872 638,987 150.31846% 06/01/2026 235,000 875,000 396,861 1,271,861 1,908,872 637,011 150.08495% 06/01/2027 245,000 873,250 394,810 1,268,060 1,908,872 640,812 150.53480% 06/01/2028 255,000 871,000 396,971 1,267,971 1,908,872 640,901 150.54537% 06/01/2029 275,000 878,250 393,831 1,272,081 1,908,872 636,791 150.05903% 06/01/2030 285,000 874,500 395,540 1,270,040 1,908,872 638,832 150.30020% 06/01/2031 300,000 875,250 396,591 1,271,841 1,908,872 637,032 150.08737% 06/01/2032 310,000 870,250 397,328 1,267,578 1,908,872 641,294 150.59213% 06/01/2033 330,000 874,750 397,751 1,272,501 1,908,872 636,372 150.00953% 06/01/2034 350,000 878,250 392,860 1,271,110 1,908,872 637,762 150.17368% 06/01/2035 360,000 870,750 397,012 1,267,762 1,908,872 641,110 150.57027% 06/01/2036 380,000 872,750 395,655 1,268,405 1,908,872 640,467 150.49389% 06/01/2037 400,000 873,750 393,960 1,267,710 1,908,872 641,162 150.57645% 06/01/2038 420,000 873,750 396,925 1,270,675 1,908,872 638,197 150.22504% 06/01/2039 445,000 877,750 394,382 1,272,132 1,908,872 636,740 150.05298% 06/01/2040 860,000 1,270,500 1,270,500 1,908,872 638,372 150.24573% 06/01/2041 905,000 1,272,500 1,272,500 1,908,872 636,372 150.00959% 06/01/2042 950,000 1,272,250 1,272,250 1,908,872 636,622 150.03906% 06/01/2043 995,000 1,269,750 1,269,750 1,908,872 639,122 150.33448% 06/01/2044 1,045,000 1,270,000 1,270,000 1,908,872 638,872 150.30488% 06/01/2045 1,095,000 1,267,750 1,267,750 1,908,872 641,122 150.57164% 06/01/2046 1,150,000 1,268,000 1,268,000 1,908,872 640,872 150.54196% 06/01/2047 1,210,000 1,270,500 1,270,500 1,908,872 638,372 150.24573% 14,355,000 29,400,050 8,699,428 38,099,478 57,266,160 19,166,682 Notes: The financing was evaluated at interest rate spreads to the generic'AAA' municipal yield index ('MMD') of +60 basis points beginning in 2018, increasing to +125 in 2047, the final maturity of the bonds. The use of the'A' rating is consistent with the S &P rating of similar LA County Measure R sales tax revenue bonds. The interest rate and rating assumptions assumed in this presentation are based on current market conditions and similar credits. The City's actual results may differ, and Stifel makes no commitment to underwrite at these levels. The final maturity of 2047 allowable as Measure M does not have a sunset provision. Measure R & M revenue constraint provided by LACMTA. Prepared by Stifel Page 5 DISCLOSURE City of Lynwood Local Sales Tax Certificates of Participation Scenario: Measure R & Measure M Revenues Stifel, Nicolaus & Company, Incorporated ('Stifel') has prepared the attached materials. Such material consists of factual or general information (as defined in the SEC's Municipal Advisor Rule with current effective date of implementation of July 1, 2014). Stifel is not hereby providing a municipal entity or obligated person with any advice or making any recommendation as to action concerning the structure, timing or terms of any issuance of municipal securities or municipal financial products. To the extent that Stifel provides any alternatives, options, calculations or examples in the attached information, such information is not intended to express any view that the borrower could achieve particular results in any municipal securities transaction, and those alternatives, options, calculations or examples do not constitute a recommendation that any municipal issuer or obligated person should effect any municipal securities transaction. Stifel is not acting as your municipal advisor and does not owe a fiduciary duty pursuant to Section 15B of the Exchange Act to the municipal entity or obligated party with respect to the information and materials contained in this communication. Stifel is providing information and is declaring to the proposed municipal issuer and any obligated person that it has done so within the regulatory framework of MSRB Rule G -23 as an underwriter (by definition also including the role of placement agent) and not as a financial advisor, as defined therein, with respect to the referenced proposed issuance of municipal securities. The primary role of Stifel, as an underwriter, is to purchase securities for resale to investors in an arm's- length commercial transaction. Serving in the role of underwriter, Stifel has financial and other interests that differ from those of the issuer. The issuer should consult with its own financial and /or municipal, legal, accounting, tax and other advisors, as applicable, to the extent it deems appropriate. These materials have been prepared by Stifel for the client or potential client to whom such materials are directly addressed and delivered for discussion purposes only. All terms and conditions are subject to further discussion and negotiation. Stifel does not express any view as to whether financing options presented in these materials are achievable or will be available at the time of any contemplated transaction. These materials do not constitute an offer or solicitation to sell or purchase any securities and are not a commitment by Stifel to provide or arrange any financing for any transaction or to purchase any security in connection therewith and may not relied upon as an indication that such an offer will be provided in the future. Where indicated, this presentation may contain information derived from sources other than Stifel. While we believe such information to be accurate and complete, Stifel does not guarantee the accuracy of this information. This material is based on information currently available to Stifel or its sources and are subject to change without notice. Stifel does not provide accounting, tax or legal advice; however, you should be aware that any proposed indicative transaction could have accounting, tax, legal or other implications that should be discussed with your advisors and /or counsel as you deem appropriate. Notes: The financing was evaluated at interest rate spreads to the generic'AAA' municipal yield index ('MMD') of +60 basis points beginning in 2018, increasing to +125 in 2047, the final maturity of the bonds. The use of the'A' rating is consistent with the S &P rating of similar LA County Measure R sales tax revenue bonds. The interest rate and rating assumptions assumed in this presentation are based on current market conditions and similar credits. The City's actual results may differ, and Stifel makes no commitment to underwrite at these levels. The final maturity of 2047 allowable as Measure M does not have a sunset provision. Measure R & M revenue constraint provided by LACMTA. Prepared by Stifel Page 6