Mt. Diablo Unified School DistrictMt. Diablo Unified School District

General Obligation Bond Program General Obligation Bond Program and 2010 Series A & B Summaryand 2010 Series A & B Summary

October 12, 2010

2

Bond Program and Financing Objectives

3

Ultimate Goals of the Bond Program

Renovate and Upgrade existing classrooms and school facilities of the Mt. Diablo USD

“Go Green”, Install Energy Efficient Utility/Solar Systems

Pay off outstanding debt to provide General Fund relief

4

Specific Financing Objectives

Maintain and /or upgrade existing credit ratings and secure insurance at cost effective rates

Utilize the District’s entire Clean Renewable Energy Bond (“CREB”) allocation

Maximize construction fund proceeds and minimize interest rate expense

Pay off outstanding leases to provide general fund relief

Maintain the tax rate as estimated to voters

5

Ratings and Insurance

District staff and finance team met with rating agencies Moody’s and Standard and Poor’s in San Francisco in August

Moody’s Investor Services assigned the District an “Aa3” rating. Moody’s cited “the District’s large-sized tax base, above average income levels of district residents…and modest debt burdens” as part of the strong ratings rationale.

The District received an affirmed “A+” rating from S&P. In the opinion of S&P the ratings reflect “Large and diverse property tax base; High wealth and income indicators, evidenced by extremely strong per capita market values; and History of good financial performance, although management expects reserves to decline in the near term.”

District secured an insurance bid from Assured Guaranty, which allowed the bonds to be sold as “AAA”

6

Selling the CREBs

The CREB program is a federal subsidy for which the District qualified that provides for low interest loans to participating agencies for the implementation of “clean renewable energy” projects

Negotiating with the IRS - Allocation by specific school site or in the aggregate

approximately $5 million for the first five years followed by $3 million annually thereafter

47 school district sites to benefit by the CREB program

17 year borrowing to fund solar installation

$59,540,000 in CREBs were sold with a true interest cost of 1.689%, representing $11,107,099.54 in total interest costs

Benefit to the District are annual utility savings of

7

Maximizing Proceeds, Minimizing Interest

Favorable market conditions at the time of the September 22 pricing with interest rates near 30-year lows

Underwriting team of Stone and Youngberg, George K. Baum, and Brandis Tallman began to premarket the bonds to their pool of investors

Due to the strong underlying credit scores, the “AAA” rating, and competitive structure among underwriters, the District was able to sell $109,996,475 of bonds for projects at a TIC of 4.392%

The ratio of debt service to principal is 1.94, which means that for every dollar of principal there is .94 cents of interest

District has approximately $238 million in remaining authorization

8

Logistics of Negotiated Bond Sales

Bonds are pre-marketed to investors prior to the sale Retail order period held Underwriter conducts auction among investors for each maturity of

the bond issue Final purchase price is awarded based on lowest interest rate orders

submitted by investors

IssuerIssuer

UnderwriterUnderwriter

Term Bond 2Term Bond 2Term Bond 1Term Bond 1Serial BondsSerial Bonds

US TrustUS TrustCitibank

Trust

Citibank

Trust

Eaton

Vance

Eaton

VancePutnamPutnamNuveenNuveen FidelityFidelity

IssuerDistrict

UnderwriterStone & Youngberg

Term Bond 2Taxable SerialsTerm Bond 1Convert. CABSSerial BondsCABS

US TrustInvestors Citibank

TrustInvestorsEaton

VanceInvestors PutnamInvestorsNuveenInvestors FidelityInvestors

Brandis Tallman George K. Baum

Taxable Term

9

Relief to the General Fund

• Paying off Existing General Fund Obligations will free up much needed Operating Capital

• Pre-paying the outstanding obligations will save the General Fund over $1.4 million annually with over $19.4 million through 2025.

Total Annual Payments

Principal Interest Principal Interest Principal Interest2010 $240,000 $268,478 $329,065 $234,072 $204,684 $158,960 $1,435,2572011 255,000 257,438 344,133 219,004 213,935 149,708 1,439,2172012 265,000 245,453 359,890 203,246 223,605 140,038 1,437,2322013 275,000 232,865 376,370 186,767 233,712 129,931 1,434,6452014 285,000 219,665 393,604 169,533 244,276 119,367 1,431,4452015 300,000 205,700 411,627 151,510 255,317 108,326 1,432,4802016 310,000 191,000 430,475 132,662 266,858 96,786 1,427,7802017 330,000 175,500 450,186 112,951 278,920 84,724 1,432,2802018 340,000 159,000 470,800 92,337 291,527 72,116 1,425,7802019 355,000 142,000 492,358 70,779 304,704 58,939 1,423,7802020 370,000 124,250 514,903 48,234 318,477 45,167 1,421,0302021 385,000 105,750 538,480 24,657 332,872 30,772 1,417,5302022 405,000 86,500 347,917 15,726 855,1432023 420,000 66,250 486,2502024 445,000 45,250 490,2502025 460,000 23,000 483,000

TOTAL Annual Payments $19,473,100

1998 Certificates of Participation 2006 Lease (Capital One) 2007 Lease (Bank of America)

10

Keeping the District Tax Rates

11

Program Summary

12

Specific Financing Objectives

Maintain and /or upgrade existing credit ratings and secure insurance at cost effective rates

Utilize the District’s entire Clean Renewable Energy Bond (“CREB”) allocation

Maximize Construction Fund Proceeds and minimize interest rate expense

Pay off leases to provide general fund relief

Maintain the tax rate as estimated to voters

13

Appendix A

Municipal Market Conditions and Pricing Comparables

Market StatisticsMarket Indicators & Forecasts

10/7/2010 Q4 '10 Q1 '11 Q2 '11Current Forecast Forecast Forecast

Fed Funds Target 0.25 0.25 0.25 0.252-Year T-note 0.38 0.60 0.75 0.9210 Year T-note 2.63 2.72 2.85 3.0830 Year Bond 3.88 3.80 3.95 4.16Source: Bloomberg

Current Rates1-Month LIBOR 0.26Bond Buyer 20- Bond Index GO 3.84Bond Buyer Revenue Bond Index 4.59Bond Buyer One-Year Note 0.44Source: The Bond Buy er

Economic DataQ2 '10 Q4 '10 Q1 '11 Q2 '11Actual Forecast Forecast Forecast

Real GDP 1.70 2.30 2.30 2.70Consumer Prices 1.77 1.10 1.15 1.60Unemployment 9.70 9.60 9.50 9.30Source: Bloomberg

Crude Oil continues to trade around $81/barrel

Gold currently trading around $1,335/oz

Deflation is a going concern

Bond Insurance still provides significant interest rate savings to issuers with credit ratings lower than AA

The District Can Expect Average Annual Savings from Insurance of approximately 10 basis points

AAA (Pure) AAA Insured AA A Baa2011 0.3 0.58 0.35 0.74 1.972015 1.25 1.84 1.41 1.94 3.002020 2.49 3.16 2.71 3.26 4.262025 2.97 3.67 3.21 3.77 4.682030 3.36 4.04 3.57 4.14 4.872035 3.66 4.24 3.87 4.34 5.052040 3.74 4.32 3.94 4.41 5.12

As of 10/6/2010

Municipal Market Data General Obligation Yields

30-Day Visible Supply is expected to increase through the rest of year.

The District timed the issuance of its debt before supply continued to increase

Historical Tax-Exempt Interest Rates

30-Year “AAA” MMD (1981 - Present)

The 29-Year average “AAA” MMD is 6.27%

Interest Rates are very close to 30 Year Lows

9/30/2010: 3.7%High: 12.70%Low: 3.67%

Municipal Credit Spreads

Impact of the Credit Crunch is visible in credit spreads during 2009, but 2010 has seen increased liquidity in the market, causing spreads to decline.

10 Year Maturities: Credit Spreads to AAA MMD

Tax-Exempt Bond Market Highlights

Reduced Spreads on A and BBB rated debt allow for improved access to the tax exempt bond market for lower rated issuers.

Interest Rates remain very Attractive for issuers with A rated debt and above

Mt. Diablo Unified School District 2010 General Obligation Bonds were priced within a month of the 30-Year Record Low Rate of 3.67%

The flight of Capital to the safety of the US Treasury Market has caused rates to fall in the Taxable Market

The popularity of the Build America Bond Program continues, with the market remaining strong for these types of federally subsidized financing structures, including Qualified School Construction Bonds and Clean Renewable Energy Bonds.

Anticipated heavy BAB issuance toward the end of the 2010 Calendar year due to the pending expiration of the program.

Pricing Comparables

Size

Issue

Type

Bond Insurance

Underlying Rating

Call Features

Senior Manager

Sale Date

Maturity Coupon

Yield to Maturity

Spread to MMD Coupon

Yield to Maturity

Spread to MMD Coupon

Yield to Maturity

Spread to MMD

2011 3.000% 0.700% 33.000 2.000% 0.400% 3.000 2.000% 0.750% 3.0002012 2.000% 0.900% 45.000 3.000% 0.550% 10.000 2.000% 1.000% 10.0002013 2.000% 1.250% 64.000 2.000% 0.720% 11.000 3.000% 1.160% 11.0002014 2.000% 1.400% 55.000 3.000% 0.960% 11.000 3.000% 1.450% 11.0002015 3.000% 1.800% 63.000 3.000% 1.300% 12.000 3.000% 1.780% 12.0002016 3.000% 2.150% 68.000 4.000% 1.650% 17.0002017 3.000% 2.400% 64.000 4.000% 1.950% 18.0002018 3.000% 2.650% 65.000 4.000% 2.240% 23.0002019 4.000% 2.950% 74.000 4.000% 2.500% 28.0002020 3.000% 3.250% 86.000 4.500% 2.690% 30.0002021 4.000% 3.500% 98.000 4.000% 3.000% 48.0002022 3.500% 3.750% 111.000 5.000% 3.110% 47.0002023 3.750% 3.900% 118.000 5.000% 3.190% 47.0002024 3.875% 4.050% 126.000 5.000% 3.300% 51.0002025 4.000% 3.650% 79.0002026 4.000% 4.180% 123.000 5.000% 3.450% 50.0002027 5.000% 3.540% 50.0002028202920302031203220332034203520362037203820392040

EJ De La Rosa/Stone & Youngberg

9/14/2010

$1,615,000

Greenfield Union School Dist

G.O. Refunding Bonds

Assured Guaranty

A (S&P), A2 (Moody's)

Not Callable

Piper JaffrayO'Conner & Co Securities

9/15/2010

G.O. Refunding Bonds

$21,025,000

Los Rios Community College Dist

G.O. Refunding Bonds

None

AA- (S&P)

8/1/2020 @ 1008/1/2020 @ 100

Los Banos Unified School District

$12,840,000

Assured Guaranty

A+ (S&P)

9/17/2010

Pricing Comparables

Size

Issue

Type

Bond Insurance

Underlying Rating

Call Features

Senior Manager

Sale Date

Maturity Coupon

Yield to Maturity

Spread to MMD Coupon

Yield to Maturity

Spread to MMD Coupon

Yield to Maturity

Spread to MMD Coupon

Yield to Maturity

Spread to MMD Coupon

Yield to Maturity

Spread to MMD

2011 4.000% 0.800% n/a 5.750% 0.500% n/a 2.000% 0.650% 28.0002012 3.000% 0.900% n/a 5.750% 0.800% n/a 3.000% 0.900% 43.000 2.000% 0.950% 50.0002013 3.000% 1.100% n/a 5.750% 1.050% n/a 3.000% 1.170% 52.000 3.000% 1.170% 54.0002014 3.000% 1.300% n/a 5.750% 1.300% n/a 4.000% 1.440% 55.000 3.000% 1.440% 58.0002015 3.000% 1.700% n/a 5.750% 1.650% n/a 4.000% 1.750% 58.000 3.000% 1.750% 61.0002016 3.000% 2.000% n/a 5.000% 2.000% 52.000 4.000% 2.100% 64.000 3.000% 2.060% 64.0002017 3.000% 2.300% n/a 5.000% 2.300% 53.000 4.000% 2.400% 66.000 3.000% 2.360% 66.0002018 3.000% 2.500% n/a 5.000% 2.550% 54.000 4.000% 2.650% 66.000 3.000% 2.620% 67.0002019 4.000% 2.750% n/a 5.000% 2.750% 53.000 0.000% 3.590% 139.000 4.000% 2.920% 72.000 4.000% 2.840% 68.0002020 4.000% 3.000% n/a 5.000% 2.950% 56.000 0.000% 4.040% 164.000 4.000% 3.120% 74.000 5.000% 3.070% 73.0002021 4.000% 3.150% n/a 0.000% 4.420% 189.000 5.000% 3.370% 84.000 5.000% 3.220% 73.0002022 4.000% 3.250% n/a 5.000% 3.350% 71.000 0.000% 4.690% 204.000 5.000% 3.560% 92.000 5.000% 3.340% 73.0002023 4.250% 3.350% n/a 0.000% 4.950% 222.000 5.000% 3.640% 93.000 3.500% 3.770% 108.0002024 5.000% 3.430% n/a 5.000% 3.550% 76.000 0.000% 5.120% 233.000 5.000% 3.720% 93.000 3.625% 3.850% 108.0002025 5.000% 3.520% n/a 0.000% 5.300% 243.000 5.000% 3.800% 93.000 3.750% 3.930% 108.0002026 5.000% 3.620% n/a 5.125% 3.700% 75.000 0.000% 5.540% 259.000 5.000% 3.880% 93.000 4.000% 4.060% 113.0002027 5.000% 3.720% n/a 0.000% 5.630% 259.000 4.000% 4.150% 114.0002028 5.000% 3.810% n/a 5.125% 3.880% 75.000 0.000% 5.730% 260.0002029 4.000% 4.000% n/a 0.000% 5.830% 260.0002030 4.000% 4.070% n/a 5.250% 4.080% 75.000 0.000% 5.930% 260.0002031 4.125% 4.150% n/a 0.000% 6.020% 260.0002032 4.125% 4.220% n/a 5.250% 4.250% 75.000 0.000% 6.100% 260.0002033 4.250% 4.300% n/a 0.000% 6.180% 260.0002034 4.300% 4.350% n/a 0.000% 6.230% 260.0002035 4.375% 4.380% n/a 5.250% 4.400% 74.000 0.000% 6.260% 260.0002036 0.000% 6.280% 260.0002037 0.000% 6.290% 260.0002038 0.000% 6.300% 260.0002039 0.000% 6.310% 260.0002040 0.000% 6.320% 260.000

9/14/2010

$12,415,000

Hope Elementary School District

G.O. Bonds (Capital Apprec. Bonds)

None

AA- (S&P)

Not Callable

Stone & Youngberg

9/9/2010

Assured Guaranty

A+ (S&P)

8/1/2020 @ 101

Stone & Youngberg

$2,000,000

Rohnerville School District

G.O. Bonds

$8,000,000

Souther Humboldt Joint USD

G.O. Bonds

Assured Guaranty

A+ (S&P)

8/1/2020 @ 100

UBS Financial Services

9/9/2010

$8,990,000

John Swett USD

G.O. Refunding Bonds

Assured Guaranty

A+ (S&P)

8/1/2020 @ 100

Stone & Youngberg

9/30/2010

$46,160,000

East Side UHSD

G.O. Refunding Bonds

Assured Guaranty

A (S&P)

8/1/2020 @ 100

Piper Jaffray

9/29/2010

Pricing ComparablesSize

Issue

Type

Bond Insurance

Underlying Rating

Call Features

Senior Manager

Sale Date

Maturity Coupon

Yield to Maturity

Spread to MMD Coupon

Yield to Maturity

Spread to MMD Coupon

Yield to Maturity

Spread to MMD Coupon

Yield to Maturity

Spread to MMD Coupon

Yield to Maturity

Spread to MMD

2011 2.000% 0.500% 13.000 1.299% 1.299% 92.900 1.244% 1.244% 87.4002012 1.726% 1.726% 127.6002013 2.177% 2.177% 155.700 0.000% 1.500% 88.0002014 2.624% 2.624% 178.400 0.000% 1.850% 101.0002015 3.024% 3.024% 188.400 0.000% 2.400% 126.000 3.009% 3.009% 186.9002016 3.479% 3.479% 205.900 0.000% 2.600% 118.000 0.000% 2.460% 104.000 3.487% 3.487% 206.7002017 3.879% 3.879% 217.900 0.000% 3.000% 130.000 0.000% 2.900% 120.000 3.887% 3.887% 218.7002018 4.305% 4.305% 236.500 0.000% 3.350% 141.000 0.000% 3.300% 137.000 4.348% 4.348% 241.8002019 4.505% 4.505% 236.500 0.000% 3.700% 156.000 0.000% 3.650% 152.000 4.548% 4.548% 241.8002020 3.000% 3.000% 68.000 4.705% 4.705% 238.500 0.000% 4.000% 169.000 4.748% 4.748% 243.8002021 4.905% 4.905% 243.500 0.000% 4.350% 188.000 0.000% 4.400% 195.000 4.948% 4.948% 249.8002022 5.055% 5.055% 246.500 0.000% 4.600% 201.000 0.000% 4.700% 213.000 5.048% 5.048% 247.8002023 5.205% 5.205% 253.500 0.000% 4.850% 218.0002024 4.000% 3.800% 105.000 5.305% 5.305% 255.5002025 4.250% 3.880% 105.000 5.405% 5.405% 257.500 0.000% 5.100% 229.0002026 4.250% 3.960% 105.000 5.505% 5.505% 259.5002027 4.000% 4.050% 105.000 5.605% 5.605% 260.500 5.548% 5.548% 255.8002028 4.000% 4.140% 105.0002029 4.000% 4.230% 105.0002030 4.250% 4.330% 106.000 0.000% 5.560% 228.0002031 0.000% 5.980% 262.0002032 0.000% 6.060% 262.000203320342035 4.500% 4.600% 100.000 0.000% 5.770% 215.00020362037203820392040

Not Callable

S&Y, George K Baum, B. Tallman

9/23/2010

$59,540,000

Mt Diablo USD

G.O. Bonds (TAXABLE ) Series B

Assured Guaranty

A+ (S&P)

$3,985,000

Anderson Valley USD

G.O. Bonds (Bank Qualified)

Assured Guaranty

unknown

8/1/2020 @ 100

Stone & Youngberg

9/28/2010

$2,200,000

Anderson Valley USD

G.O. Bonds (Bank Qualified) (TAXABLE)

Assured Guaranty

unknown

Not Callable

Stone & Youngberg

9/28/2010

A+ (S&P)

8/1/2025 @ 100

$238,485

Anderson Valley USD

G.O. Bonds (CABs)

Assured Guaranty

unknown

S&Y, George K Baum, B. Tallman

9/23/2010

Not Callable

Stone & Youngberg

9/28/2010

$50,456,475

Mt Diablo USD

G.O. Bonds (Convertible CABs) Series A

Assured Guaranty