Finance Chapter 9 Homework See Note Derivatives Interest Rate Swap County Sacramento 1997 Refunding Certificates

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COUNTY OF SACRAMENTO

NOTES TO BASIC FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009

(amounts expressed in thousands)

A portion of OPEB liabilities and compensated absences is accounted for in accrued liabilities in the Government-wide Statement of Net Assets for governmental

2015, escalating from $4,055 to $5,315, with interest ranging from 2.0 percent to 5.0 percent. $ 27,870

County of Sacramento 2003 Certificates of Participation (2003 Public Facilities Projects – ADA Improvements to the Boys Ranch, Mather

Golf Course and Thornton Youth Center) issued April 24, 2003. Principal payments are due June 1, 2010 through the year 2034, escalating

from $315 to $4,145, with interest rates ranging from 2.0 percent to 5.0 percent. 13,765

County of Sacramento 2003 Certificates of Participation (Juvenile Courthouse Project) issued June 19, 2003. Principal payments are due

COUNTY OF SACRAMENTO

NOTES TO BASIC FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009

(amounts expressed in thousands)

County of Sacramento Certificates of Participation (Administration Center and Courthouse Project) issued October 4, 1990, for the

implementation of the County’s fixed asset financing program. This program provides long-term financing to County departments for the

acquisition and construction of capital assets. Principal payments are due June 1, 2010, through the year 2020, escalating from $4,250 to

$8,355. The certificates are collateralized by the Main Jail Detention Facility, and secured by a letter of credit in the original amount of

May 11, 2006 a partial advance refunding was done from the 2006 Certificates of Participation, in the amount of $14,550, to release the Bank

of America building from this lease. Principal payments are due February 1, 2010, through the year 2019, escalating from $2,235 to $2,870

with interest ranging from 4.875 percent to 5.375 percent. A lump-sum payment of $13,420 is due February 1, 2019. 15,250

County of Sacramento Certificates of Participation (2006 Public Facilities Project) issued on May 11, 2006, $40,860 of refunding bonds for

the cost of acquisition, construction of a new fleet maintenance facility, acquiring and improving the county’s voter registration and elections /

from 4.0 percent to 5.0 percent. 46,260

Total certificates of participation 325,175

Add: deferred amount for issuance premium 4,167

Less: deferred amount on refunding (59)

$ 329,283

COUNTY OF SACRAMENTO

NOTES TO BASIC FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009

(amounts expressed in thousands)

Teeter notes:

County of Sacramento, 2004 Teeter Loan Agreement Note, dated September 14, 2004, to purchase the delinquent property taxes receivable as

of June 30, 2004. Annual payments of principal and interest are due August 1 of each year and ending in 2009. The amount of principal each

year shall be the full amount of the County’s share of the principal of delinquent tax collections received in the prior year. The unpaid

principal shall be due and payable on August 1, 2009. Interest payments will be at a variable rate that averaged 1.575 percent in fiscal year

2008-09 and was .830 percent at June 30, 2009. $ 32

County of Sacramento, 2005 Teeter Loan Agreement Note, dated October 4, 2005, to purchase the delinquent property taxes receivable as of

June 30, 2005. Annual payments of principal and interest are due August 1 of each year and ending in 2010. The amount of principal each

year shall be the full amount of the County’s share of the principal of delinquent tax collections received in the prior year. The unpaid

principal shall be due and payable on August 1, 2010. Interest payments will be at a variable rate that averaged 1.828 percent in fiscal year

year 2008-09 and was 2.155 percent at June 30, 2009. 10,984

County of Sacramento, 2008 Teeter Loan Agreement Note, dated December 9, 2008, to purchase the delinquent secured property taxes

receivable as of June 30, 2008. Annual payments of principal and interest are due August 1 of each year and ending in 2013. The amount of

principal each year shall be the full amount of the County’s share of the principal of delinquent tax collections received in the prior year. The

unpaid principal shall be due and payable on August 1, 2013. Interest payments will be at a variable rate that averaged 2.846 percent in fiscal

COUNTY OF SACRAMENTO

NOTES TO BASIC FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009

(amounts expressed in thousands)

Pension obligation bonds:

County of Sacramento Pension Obligation Bonds issued July 5, 1995, $538,060 of Series 1995 Taxable Pension Funding Bonds to fund the

accrued actuarial liability of the County to the Retirement System. The issue is composed of $404,060 of Series 1995A Fixed Rate Bonds,

$67,000 of Series 1995B Variable Rate Bonds, and $67,000 of Series 1995C Variable Rate Bonds. Principal payments on the fixed rate

bonds are due commencing August 15, 1998, through August 15, 2021, escalating from $13,060 to $78,879. Principal payments on the

variable rate bonds are due commencing July 1, 2019, through July 1, 2022, with equal payments of $33,500. Rates on the fixed rate bonds

range from 6.625 percent to 7.68 percent. The variable rate bonds had an initial rate of 6.1 percent through July 1, 1998. Thereafter, the

variable rate will be determined by the Remarketing Agent as explained below. The variable rate bonds (Series 1995B and Series 1995C) are

Bonds, from August 15, 2003 through August 15, 2008. The issue is composed of $54,879 of Series 2003A, Capital Appreciation Bonds,

$97,441 of Series 2003B Convertible Capital Appreciation Bonds to provide budgetary relief (over three to seven years at the time of bonds

were issued) due to pension benefit enhancements and losses incurred by the pension system. Final principal payment on the Series 2003A

bonds was made on August 15, 2008, in the amount of $26,500. Principal payments on the Series 2003B bonds are due commencing August

15, 2022, for $69,014, and August 15, 2023, for $28,426. The rate on Series 2003B bonds is 5.73 percent. 97,441

COUNTY OF SACRAMENTO

NOTES TO BASIC FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009

(amounts expressed in thousands)

County of Sacramento Pension Obligation Bonds issued March 28, 2008, $359,165 of Series 2008 Taxable Pension Refunding Bonds. The

refunded debt and the new debt) of $3,496. Principal payments on the Series 2009 bonds are due commencing June 30, 2011 through June

30, 2015, escalating from $1,000 to $45,760. The advance refunding resulted in a difference between the reacquisition price and the net

carrying amount of the old debt of approximately $ 10,613. This difference will be amortized over the life of the refunded debt. The refunded

bonds are considered to be defeased and the liability has been removed from the statement of net assets. The county entered into a swap

agreement effective July 10, 2006, on the 2004 refunded series C-2 fixing the interest rate to 5.901%, which remains in effect for the 2009

COUNTY OF SACRAMENTO

NOTES TO BASIC FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009

(amounts expressed in thousands)

Revenue bonds:

Tobacco Securitization Authority issued on December 1, 2005, $255,486 of refunding bonds to provide resources to purchase U.S.

Government State and Local Government Series securities that were placed in an irrevocable trust for the purpose of generating resources for

all future debt service payments for the 2001 Refunded Tobacco Bonds of $176,080 of bonds and to provide additional funds to be used by

the County on selected projects. As a result, the refunded bonds are considered to be defeased and the liability has been removed from the

The Sacramento County Financing Authority issued three series of Revenue Bonds issued December 23, 2003 for the purpose of allowing the

Authority to finance four redevelopment projects in designated redevelopment project areas in the City and County of Sacramento. The net

proceeds were then in turn loaned to the County and City. The sources of repayment of the bonds are tax increment and/or housing set-aside

tax increment revenues, depending upon the project. Incremental sales taxes were projected to produce 128 percent of the debt service

requirements over the life of the bonds. Total principal and interest remaining on the bonds is $90,369, payable through June 2033. For the

2020-2030. Series B – $8,345 Mather/McClellan Housing Project. The issue consists of four term bonds ranging in value from $670 to

$4,450. The bonds mature from 2008 through 2033. Stated interest rates range from 3.82%-6.26%. Series C – $12,880 North Sacramento

Project, North Sacramento Housing Project, Alkali Flat Project and Alkali Flat Housing Project. This issue contains 18 serial bonds, totaling

$8,665 maturing from December 2004 to 2021. Interest rates range from 2.5% to 5.3%. It also has two term bonds ($1,635 and 2,580)

maturing in December 2028 and 2033, respectively. Both term bonds have a stated interest rate of 5.0%. 49,706

COUNTY OF SACRAMENTO

NOTES TO BASIC FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009

(amounts expressed in thousands)

The Sacramento Financing Authority issued two series of Tax Allocation Revenue bonds on March 5, 2008 for the purpose of loaning the

proceeds to the Agency. The loan proceeds will finance redevelopment activities, including low and moderate income housing in the

designated redevelopment project area in the County of Sacramento. The source of repayment of the bonds is tax increment and/or housing

set-aside tax increment revenues, depending upon the project. The 2008 loans are issued on parity to the outstanding 2003A and 2003B loans.

The loans are sized to satisfy the coverage and cash flow requirements of the project area wrapping around parity debt. Payment of debt

service on the Bonds is insured by Assured Guaranty. Incremental sales taxes were projected to produce 128 percent of the debt service

requirements over the life of the bonds. Total principal and interest remaining on the bonds is $100,312, payable through December 2038.

For the current year, principal and interest paid and total incremental tax revenues were $1,140 and $2,514, respectively. Series A – $24,765

Mather/McClellan (Tax Exempt) Redevelopment Area improvements. The bonds were structured with one serial maturity in 2028 and three

term bonds. The $950 2028 serial was priced with a 4.50% coupon to yield 4.66%. The $4,930 2032 term bond was priced with a 4.625%

Total revenue bonds 344,462

Less: deferred amount for issuance discount (4,944)

Less: deferred amount for refunding (13,673)

$ 325,845

Other long-term debt:

COUNTY OF SACRAMENTO

NOTES TO BASIC FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009

(amounts expressed in thousands)

Long-term debt obligation maturities of governmental activities are summarized below. The amounts representing interest for variable rate obligations have been based

on the debt’s interest rate at June 30, 2009.

Certificates of Participation Teeter Plan Pension Obligation

Year ending June 30 Principal Interest Principal Interest Principal Interest

2010 16,885 $ 12,791 11,635 328 13,185 66,450

2011 17,775 12,213 11,603 1,014 15,285 69,013

2012 18,725 11,587 10,948 717 14,649 71,689

2010 1,620 $ 16,788 5,090

2011 1,675 16,662

2012 1,730 16,537

2013 3,580 16,365

2014 4,175 16,174

(857)

$ 344,462

COUNTY OF SACRAMENTO

NOTES TO BASIC FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009

(amounts expressed in thousands)

Swap Payments and Associated Debt: Using the rates as of June 30, 2009, debt service requirements of the variable rate debt and the net swap payments, assuming

current interest rates remain the same for their term, were as follows. As rates vary, variable-rate bond interest payments and net swap payments will vary.

Interest Rate Total

2,307 7,832

2,082 7,941

6,445 41,605

361 8,766

19,322 89,060

1990 COP

Variable -Rate Bonds

2013 5,205 320

2014 5,570 289

2015 – 2019 34,265 895

2020 – 2024 8,355 50

67,055 $ 2,683

2025 – 2029 67,000 1,005

134,000 $ 20,770

2008 Pension Refunding Bonds

Series C-1 Variable-Rate

Year ending June 30 Principal Interest

2010 750 $ 5,823

10,482

78,487

134,174 288,945

Interest Rate

Swaps, Net T otal

26,585

COUNTY OF SACRAMENTO

NOTES TO BASIC FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009

(amounts expressed in thousands)

Business-type Activities:

and 5.0 percent. The maturity dates on the serial bonds range from June 1, 2005 to June 1, 2023; the maturity on the term bonds range from

June 1, 2028 and June 1, 2034. $ 4,320

4.138% – 4.158% at June 30, 200/8 and 2007, respectively. Net proceeds of $44,285 (after payment of $368 for underwriting fees,

insurance, and issuance costs, plus $478 in premium and an additional $970 from restricted accounts related to the 2003 and 2007 Revenue

Bonds) were used to purchase securities and were deposited in an irrevocable trust with an escrow agent to provide for a portion of future

debt service payments on $41,740 of the 2003 Revenue Bonds. As a result, these bonds are considered to be defeased and the liability for

the bonds has been removed from the long-term debt. The defeased 2003 Revenue Bonds outstanding at June 30, 2009, was $41,740. The

1998B Bonds. Interest rate is 5.0% and due in fiscal year 2026. Series 2008E fully refunded 54.6% of the Series 2006A Bonds. Interest

rates ranging from 4.25% to 5.75%, due in fiscal years 2013-2024. The Series A, B and C Bonds are payable, and secured by, future Net

Revenues of the Airport. The Series D and E Bonds are payable and secured by a pledge of the net proceeds of the PFC imposed by the

Airport System. The bonds are additionally payable from, and secured by, the net revenues of the Airport System subordinate and junior

to the lien of the Series 2008 A, B and C Bonds, and any additional parity revenue bonds that may be issued in the future. The bonds are

COUNTY OF SACRAMENTO

NOTES TO BASIC FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009

(amounts expressed in thousands)

System prior to their respective maturity dates. The bonds are redeemable based on the following terms and the redemption may occur

from any source other than the Bonds Sinking Fund Account. Series 2008 A,B,D,E maturing after June 30, 2019, Prices decreasing from

100% in FY 20 at 100% and thereafter. Series 2008 C, maturing after June 30, 2012, are not subject to optional redemption.

Revenue bonds $ 492,715

PFC & Subordinated revenue bonds 87,940

Total Revenue, PFC & Subordinated Bonds 998,395

Add: deferred amount for issuance premiums 15,951

Less: deferred amount for issuance discounts (2,789)

Less: deferred amount on refunding (23,495)

Participation 1998 Public Facilities Project and the County of Sacramento Certificates of Participation 2002 Public Facilities Project are

considered to be defeased and the liability for those Certificates of Participation have been removed from the Fund’s financial statements.

At June 30, 2009, $3,955 of bonds were legally defeased and remain outstanding. $ 22,405

County of Sacramento, 1999 Refunding Certificate of Participation (1991 Refunding Certificates of Participation, Series A for Parking

Enterprise) issued December 14, 1999, to advance refund and defease $7,545 of outstanding debt for County of Sacramento 1991 Refunding

COUNTY OF SACRAMENTO

NOTES TO BASIC FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009

(amounts expressed in thousands)

Reimbursement agreements:

The Sacramento County Water Agency enters into various reimbursement agreements with developers for construction of water supply

facilities within the Agency’s jurisdiction. Impact fees are established within the zone to pay for the construction of new water supply

payment occurring during the 2018 fiscal year. $ 8,750

Water rights – SMUD assignment:

The Water Agency has entered into an agreement with Sacramento Municipal Utilities District (SMUD) which provides for the assignment of

thirty thousand acre feet of SMUD’s CVP water supply to the Water Agency. Under this contract the Water Agency has agreed to pay the

United States certain costs that are allocated to the assigned contract amount. At June 30, 2009 the principal balance remaining of the

COUNTY OF SACRAMENTO

NOTES TO BASIC FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009

(amounts expressed in thousands)

Long-term debt obligation maturities of business-type activities are summarized below. The amounts representing interest for variable rate obligations have been based

on the debt’s interest rate at June 30, 2009.

Revenue Bonds and PFC

Revenue Bonds COP Usage Fee – City

Year ending June 30 Principal Interest Principal Interest Principal Interest

2010 17,685 $ 47,576 1,960 997 847 298

2011 19,325 46,777 2,040 917 876 269

Swap Payments and Associated Debt: Using the rates as of June 30, 2009 debt service requirements of the variable rate debt and the net swap payments, assuming

current interest rates remain the same for their term, were as follows. As rates vary, variable-rate bond interest payments and net swap payments will vary.

Water Enterprise

Series 2007B Revenue Bonds

Interest Rate

Year ending June 30 Principal Interest Swaps, Net Total

$ 228,920 56,715 180,242 465,877

COUNTY OF SACRAMENTO

NOTES TO BASIC FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009

(amounts expressed in thousands)

NOTE 11 – DERIVATIVES – INTEREST RATE SWAP

1990 Certificates of Participation (COP)

Objective of the interest rate swap: As a means to stabilize its variable-rate borrowing costs during a historically low fixed-rate interest environment, the County

entered into an interest rate swap in connection with its $105,750 1990 Certificates of Participation with Bank of America. The intention of the swap was to

effectively change the County’s variable interest rate on the certificates to a synthetic fixed rate of 4.534%.

Terms: The certificates and the related swap agreement mature on June 1, 2020, and the swap’s original notional amount of $89,950 matched the $89,950 variable-

rate certificates. The swap’s current notional amount is $ 67,055. During January 1, 2007 through January 1, 2020, the counterparty has the option of ending the

swap arrangement and no payments will be made to either party on the fixed and variable-rate payment dates, nor is there a termination payment. If the counterparty

should interest rates change and the fair value of the swap become positive, the County would be exposed to the credit risk of the counterparty in the amount of the

derivative’s fair value. The swap counterparty was rated A2 by Moody’s Investors Services, A by Standard & Poor’s and A+ by Fitch Ratings.

Basis risk: The swap exposes the County to basis risk. The basis risk is the difference between the Weekly Rate paid on the variable-rate bonds and the floating

amount received from the interest rate swap of 67% of 1-Month LIBOR. The Weekly Rate was 0.60%, whereas 67% of the 1-Month LIBOR was 0.214%, a

difference of 0.386%. The effect of this difference increases the intended synthetic fixed rate of 4.534% to a rate of 4.92%.

COUNTY OF SACRAMENTO

NOTES TO BASIC FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009

(amounts expressed in thousands)

Termination risk: The County or the counterparty may terminate the swap if the other party fails to perform under the terms of the contract. If the swap is

terminated, the variable-rate certificates would no longer carry a synthetic interest rate. If the swap is terminated, other than by the counterparty exercising its option

under the agreement, and at the time of termination, the swap has a negative fair value, the County would be liable to the counterparty for a payment equal to the

swap’s fair value.

1995 B&C Pension Obligation Bonds

Objective of the interest rate swap: As a means to stabilize its variable-rate borrowing costs, the County entered into an interest rate swap in connection with its

$134,000 County of Sacramento Taxable Pension Funding Bonds, Series 1995 Series B and C Variable-rate Bonds with Lehman Bros. The intention of the swap

one-time premium of $8,100 for the option. If the counterparty exercises this option, it will not constitute an early termination.

On October 22, 2008, for effective October 24, 2008, Deutsche Bank replaced Lehman as counterparty and the terms were changed. The County pays the

counterparty a fixed rate of 5.935% through June 30, 2009, and receives a variable-rate payment based upon the 1-Month LIBOR. For the swap option, the rate

changed to 6.04% from 5.935% when it was exercised on June 30, 2009, and is effective starting July 1, 2009. The bonds’ variable-rate payments are based on the

Weekly Rate provided by Barclay’s Capital, the remarketing agent. Starting in fiscal year 2019-20, the notional value of the swap and the principal amount of the

COUNTY OF SACRAMENTO

NOTES TO BASIC FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009

(amounts expressed in thousands)

Credit risk: The County was not exposed to credit risk resulting from a failure of the counterparty to perform because the swap had a negative fair value.

However, should interest rates change and the fair value of the swap become positive, the County would be exposed to the credit risk of the counterparty in the

amount of the derivative’s fair value. In that event, because of the counterparty’s current credit ratings, the counterparty is required to deliver collateral to the

County. The swap counterparty was rated Aa1 by Moody’s Investors Services, A+ by Standard & Poor’s and AA- by Fitch Ratings.

0.677%. As of June 30, 2009, the effect of this difference increases the intended synthetic fixed rate of 5.935% to a rate of 6.612%. Beginning July 1, 2009, the

intended synthetic fixed rate will be 6.04% plus the difference between the Weekly Rate and the reset of the 1-Month LIBOR.

Termination risk: The County or the counterparty may terminate the swap if the other party fails to perform under the terms of the contract. If the swap is

terminated, the variable-rate bonds would no longer carry a synthetic interest rate. If the swap is terminated, other than by the counterparty exercising its option

under the agreement, and at the time of termination, the swap has a negative fair value, the County would be liable to the counterparty for a payment equal to the

was 1.623% and for the 2030 Term bonds the rate was 1.773%.

COUNTY OF SACRAMENTO

NOTES TO BASIC FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009

(amounts expressed in thousands)

Basis risk: The basis risk is the difference between the rate paid on the variable-rate bonds and the floating amount received from the interest rate swap of the 1-

Month LIBOR. Since the refunded bonds variable-rate payments were fixed to the 1-Month LIBOR as well, the basis risk became fixed. The basis risk for the

2026 Term bonds is 1.30% and for the 2030 Term bonds is 1.45%.

Termination risk: The County or the counterparty may terminate the swap if the other party fails to perform under the terms of the contract. If the swap is

terminated, the variable-rate bonds would no longer carry a synthetic interest rate. If the swap is terminated, other than by the counterparty exercising its option

under the agreement, and at the time of termination, the swap has a negative fair value, the County would be liable to the counterparty for a payment equal to the

SCWA pays a fixed rate of 4.193% to JPMorgan Chase Bank, N.A. and JPMorgan Chase Bank, N.A. pays a variable rate of the lesser of 67% of USD-LIBOR-BBA

plus .55 bps or 12% to the SCWA. For the 2039 term swap, the SCWA pays a fixed rate of 4.221% to JPMorgan Chase Bank, N.A. and JPMorgan Chase Bank,

N.A. pays a variable rate of the lesser of 67% of USD-LIBOR-BBA plus .57 bps or 12% to the SCWA.

Fair Value: The 2034 term swap has a negative fair value of $17,760 and the 2039 term swap has a negative fair value of $15,803 at June 30, 2009. The fair value

was estimated using the zero-coupon method. This method calculates the future net settlement payments required by the swap, assuming that the current forward

COUNTY OF SACRAMENTO

NOTES TO BASIC FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009

(amounts expressed in thousands)

Credit Risk: The SCWA is not exposed to credit risk resulting from a failure of the counterparty to perform because of the swaps’ negative fair value. If the swap

had positive fair value greater than $10 million, the Water Agency would be exposed to credit risk from the counterparty. The swap counterparty was rated AA- by

Standard & Poor’s and Aa1 by Moody’s Investors Services.

Basis risk: The swaps are not exposed to basis risk since there is no difference between the rate paid on the variable rate bonds and the floating amount received

from the interest rate swaps.

Termination Risk: The SCWA or the counterparty may terminate the swaps if the other party fails to perform under the terms of the contract. If the swaps are

terminated, the variable-rate bonds would no longer carry a synthetic interest rate. If the swaps are terminated, other than by the counterparty exercising its option under

indebtedness of the District. The defeased 1999 bonds in original aggregate principal amount of $13,025 are the only bonds that have been issued under such

authorization. Thus, at June 30, 2009, $6,975 of authorized bonds remains un-issued. At June 30, 2009, the outstanding balance was $10,220.

The McClellan Park Community Facilities District No. 2004-1 (District) has been authorized to issue $90,000 of Special Tax Bonds. On September 28, 2004 the

District issued $10,250 of Special Tax Bonds with interest rates ranging from 3.00% to 6.00%. These bonds constitute the entire bonded indebtedness. Thus, at

June 30, 2009, $79,750 of authorized bonds remains un-issued. At June 30, 2009, the outstanding balance was $10,145.

COUNTY OF SACRAMENTO

NOTES TO BASIC FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009

(amounts expressed in thousands)

The Metro Air Park Community Facilities District No. 1998-1 (District) has been authorized to issue $7,250 of Special Tax Bonds. On December 30, 1998 the District

The Park Meadows Community Facilities District No. 1 (District) has been authorized to issue $1,200 of Special Tax Bonds. On June 28, 2000 the District issued

Current Interest Bonds in the amount of $230 at the interest rate of 7.75%, and Convertible Capital Appreciation Bonds in the original principal amount of $892 at the

interest rate of 8.25%. These bonds constitute the entire bonded indebtedness as of June 30, 2009. At June 30, 2009, the outstanding balance was $847.

Sunrise Recreation and Park District (District) issued $7,435 of Certificates of Participation bonds on July 12, 2007 for a portion of the District’s cost of recreation and

park construction at or near the Antelope Community Park. Interest rates for this range from 3.95% to 4.50%. At June 30, 2009, the outstanding balance was $7,305.

was $2.

1915 Act Bonds for Hampton Village A.D. issued April 11, 1995 for $2,283, with an interest rate ranging from 5.00 % to 6.90%. At June 30, 2009, the outstanding

2008. The notes are due and payable to the County of Sacramento-Pooled Investment Fund and are payable solely from the collection of delinquent property taxes.

Total principal of $49,800 and interest of $2,673 remain on the notes and are payable through August 1, 2013. For the current year, total principal and interest paid

was $81,542 and $1,631 respectively.

COUNTY OF SACRAMENTO

NOTES TO BASIC FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2009

(amounts expressed in thousands)

The Airport System has pledged Passenger Facility Charges to repay $89,430 in Airport System Subordinate and PFC Revenue Refunding Bonds issued in May

2008. Proceeds from the bonds refunded Series 1996C, Series 1998B and 54.6% of Series 2006A. The bonds are payable through 2026. The pledged revenues

below are estimated to require an average 27% of PFC Revenues over the next four years. Total principal and interest remaining to be paid on the bonds is

$127,943. Principal and interest paid for the current year was $4,220 and PFC revenue was $21,490. The table below identifies the available PFC revenue pledged

for the payment of debt service on the Series 2008D and 2008E bonds:

Fiscal Year Ending June 30 Passenger Facility Charges