Idaho Public Financeand Market Update

Cameron Arial, Vice PresidentZIONS BANK Public Finance

208.501.7481Cameron.Arial@zionsbank.com

March 2015

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Financial Participants – Role of a Municipal Advisor

Finance Process Idaho and Utah Public Finance Comparative

AnalysisCity of Pocatello – Competitive Sale ProcessMarket Update

Introduction

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Participants in Issuing Municipal Bonds

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Role of a Municipal Advisor – Your Advocate throughout the Financing Process Municipal Consulting* Financial Feasibility* Bond Elections*

Community Involvement* Needs Assessment Advice*

Tax Impact Analysis Official Statements Rating Advice and Presentations Bond Sales Continuing Disclosure* Ongoing Advice and Debt Management

Municipal Advisor Video:https://www.youtube.com/watch?v=exu3quq7cOg

* To our knowledge Zions Bank Public Finance is the only firm in Idaho that provides these services.

Finance Process

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Finance Process

Source: Zions Bank Public Finance

Idaho and Utah Public Finance Comparative Analysis

How Does It Impact Economic Development?

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Financing Tool State Authorization Security/Collateral Repayment Types of Projects

General Obligation Bond

Utah 50% vote Ad valorem property taxes Property tax or other available revenues Many public projectsIdaho 66.67% vote

Revenue Bond Utah Authorization of governing body

Revenues from water, sewer, electric, or other enterprise funds

Revenues from water, sewer, electric, or other enterprise funds

Projects related to the revenue source being pledgedIdaho 50% vote

Tax Increment Bond

Utah Authorization of governing body

Tax increment from increased property value

Tax increment or other revenue

Water, sewer, road, and other infrastructure

IdahoAuthorization of governing body and possibly judicial confirmation

Equipment, fixtures, and real property

Special Assessment/Local Improvement District Bond

Utah Authorization of City Council; <40% protest rate

Property within assessment area

Special assessment levied against property owners

Public projects and infrastructureIdaho

60% vote of property owners or 1/2 plus one vote of City Council

Certificates of Participation****

Utah Authorization of governing body Financed improvements General fund or other

revenuesEquipment, fixtures, and real propertyIdaho Judicial confirmation

Excise Tax/Local Option Tax Revenue Bond

Utah Authorization of City CouncilRevenues - sales tax, class C road tax, franchise, other excise taxes

Excise tax revenues or other available general fund revenues Roads and other public

projectsIdaho

Resort Cities only. 60% vote to levy tax; 50% vote to borrow against tax

Revenues from local option taxes

Revenues from local option taxes

Lease Revenue Bonds/Lease Purchase Agreements****

Utah Authorization of City Council and LBA Board

Financed equipment and improvements

Annually appropriated general fund or other revenues

Equipment, fixtures, and real property

IdahoAuthorization of governing body and possibly judicial confirmation

**** Idaho market is limited due to unresolved legal questions

Utah and Idaho Public Finance Options

Source: Utah and Idaho State Statutes

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Utah and Idaho Credit Ratings

Utah AAA Rated Credits Idaho AAA Rated CreditsState of Utah NoneSalt Lake CountySalt Lake CityWeber CountyDavis CountyJordan School District (South SL)

Source: Utah and Idaho State Statues; Moody's, S&P, and Fitch Rating Agencies

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State Ratings Map

Source: Wells Fargo Securities

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Idaho SD Rating Movements 2010 -2013

Source: Moody’s Investor Services

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Utah SD Rating Movements 2010 -2013

Source: Moody’s Investor Services

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Idaho and Utah Issuance Comparison

Idaho UtahYear Volume # Issues Population /Capita Volume # Issues Population /Capita2004 374,000 51 1,391 269 2,435,600 129 2,469 9862005 918,500 55 1,425 645 2,523,500 121 2,547 9912006 1,031,900 47 1,464 705 2,294,000 97 2,615 8772007 1,268,900 74 1,499 846 2,539,100 114 2,700 9402008 1,099,100 41 1,527 720 3,286,000 96 2,758 1,1912009 724,900 24 1,545 469 4,274,400 116 2,765 1,5462010 764,500 44 1,567 488 3,618,900 126 2,775 1,3042011 517,300 32 1,583 327 2,548,600 73 2,814 9062012 886,700 48 1,595 556 3,118,300 84 2,855 1,0922013 221,800 20 1,612 138 2,147,700 80 2,900 741

TOTAL 7,807,600 436 516 28,786,100 1,036 1,057

Source: Bond Buyer Yearbooks 2003-2013, U.S. Census Bureau

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Total Volume 10 Year Trend

Source: Bond Buyer Yearbooks 2004-2013

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Long-Term Bonds Issued Per CapitaIdaho Utah

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Bond Issuance by Category

Source: Bond Buyer Yearbooks 2004-2013

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Development Education Electrical Environment Health Housing Public Transportation Utilities

Per Capita Average Annual Bond Issuance by CategoryIdaho Utah

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Education 10 Year Trend

Source: Bond Buyer Yearbooks 2004-2013

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2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

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Education Bonds Issued Per CapitaIdaho Utah

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Utilities 10 Year Trend

Source: Bond Buyer Yearbooks 2004-2013

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2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

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Utility Bonds Issued Per CapitaIdaho Utah

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Transportation 10 Year Trend

Source: Bond Buyer Yearbooks 2004-2013

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Transportation Bonds Issued Per CapitaIdaho Utah

City of PocatelloCompetitive Sale

Joyce Stroschein

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Competitive Sale Results – Pocatello

Source: Ipreo, Bid Results, 2/17/2015

$22,315,000 Pocatello / IBBA Series 2015A Revenue BondsCompetitive Bid Comparison

Bidder Bid TIC Final TIC Total P&I vs. Winning Bid1 Robert W. Baird & Co., Inc. 2.939% 2.935% 31,705,793.42 - 2 Janney Montgomery Scott LLC 3.049% 3.092% 32,236,511.49 530,718.07 3 JP Morgan Securities LLC 3.073% 3.349% 33,106,867.36 1,401,073.94 4 Hutchinson, Schockey, Erley & Co. 3.100% 3.106% 32,281,662.50 575,869.08 5 Citigroup Global Markets, Inc. 3.179% 3.222% 32,658,347.22 952,553.80 6 UBS Financial Services, Inc. 3.200% 3.213% 32,638,050.35 932,256.93

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The Idaho Bond Bank Authority (IBBA) is a pooled borrowing program managed through the Idaho State Treasurer’s Office.

Video: http://www.youtube.com/watch?v=5z2PaDSOkp0 Lower up-front issuance costs – Pooled issue Lower interest rates – Backed by the State’s sales tax

rated “Aa1” Streamlined process - Reduce staff time Increased Marketability - Size, Competitive sale

The IBBA is currently on hiatus and will be available again for an August issuance (May 31 Application Deadline).

Idaho Bond Bank Overview

Market Update

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Market Update – 20 Year Bond Buyer Index

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Market OutlookMunicipal Market Outlook

March 19, 2015RATE DATA

Today Week Prior Month Prior Year Prior

MMD AAA GO

3 Year 0.79 0.91 0.74 0.52

5 Year 1.21 1.38 1.16 1.13

10 Year 1.97 2.14 2.08 2.49

15 Year 2.43 2.58 2.52 3.08

20 Year 2.64 2.78 2.73 3.46

30 Year 2.77 2.94 2.88 3.74

US Treasury

2 Year 0.63 0.67 0.62 0.47

5 Year 1.48 1.59 1.52 1.75

10 Year 1.98 2.10 2.07 2.78

30 Year 2.54 2.69 2.7 3.66

Federal Funds 0.12 0.11 0.12 0.08

Prime Rate 3.25 3.25 3.25 3.25

SIFMA 7 Day 0.02 0.02 0.02 0.06

BOND BUYER AND SHORT TERM INDEXES20 Bond GO1 3.52 3.62 3.60 4.51

25 Bond REV2 4.19 4.31 4.23 5.30

Jefferies ST 0.02 0.02 0.03 0.09

1GO bonds maturing in 20 years, avg. rating equivalent to Moody's Aa2 & S&P's AA

2Revenue bonds maturing in 30 years, avg. rating equivalent to Moody's A1 & S&P A+

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Idaho Bond Bank Auth $51,600,000 Revenue Bonds, Series 2014A

Bid Award* Bidder Name TIC

Hutchinson, Shockey, Erley & Co. 3.471549

BMO Capital Markets 3.520818

KeyBanc Capital Markets 3.534725

Morgan Stanley & Co, LLC 3.559976

Robert W. Baird & Co., Inc. 3.564142

Citigroup Global Markets Inc. 3.612645

Piper Jaffray 3.626343

Jefferies LLC 3.669214

J.P. Morgan Securities LLC 3.690038

Bank of America Merrill Lynch 3.696130

Guggenheim Securities, LLC 3.710156

Wells Fargo Bank, National Association 3.734445

Competitive Sale Results –Cities of Twin Falls and Jerome

Source: Ipreo, Bid Results, 2/12/2014

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Idaho Bond Bank Authority $13,660,000 Revenue Bonds, Series 2014C

Bid Award* Bidder Name TIC

BMO Capital Markets 2.792250

Hutchinson, Shockey, Erley & Co. 2.800024

J.P. Morgan Securities LLC 2.806799

Raymond James & Associates, Inc. 2.824912

Robert W. Baird & Co., Inc. 2.869188

Competitive Sale Results –Cities of Ketchum, Hailey and Jerome

Source: Ipreo, Bid Results, 11/6/2014

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Municipal Videos – www.zionspf.com/clients

ZB Public Finance’s Commitment to Idaho:http://www.youtube.com/watch?v=WllC-t9Z-5M

Role of a Municipal Advisor:https://www.youtube.com/watch?v=exu3quq7cOg

Chobani and Twin Falls Economic Development:http://www.youtube.com/watch?v=fSUH9BDdRtw

Minidoka School District GO Bond: https://www.youtube.com/watch?v=f-LqtxJxhMg

Pocatello Animal Shelter Bond:http://www.youtube.com/watch?v=J4UYprVRJ7w

City of Kuna and Financial Feasibility:https://www.youtube.com/watch?v=5HnwlWp3QtA

The Making of a Bond Election:https://www.youtube.com/watch?v=5WGD0eIf3lM

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Thank You

Christian AndersonFinancial Analyst

(208) 501-7533christian.anderson@zionsbank.com

Cameron ArialVice President(208) 501-7481

Cameron.arial@zionsbank.com