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HomeMy WebLinkAboutRESPONSE - RFP - P936 FINANCIAL ADVISORY INVESTMENT BANKINGPresentation to City of Fort Collins Presented by Georgea!!a=&. Company IntmSince 1928 May 27, 2004 Commitment to the State of Colorado George K. Baum & Company has 84 Colorado -based employees. The firm and its employees are active and committed members of the Colorado business and civic community. The firm and its employees continue to support the arts, charitable and business organizations, and civic and social causes via financial and personal contributions (money and time). A partial list of the groups we have supported in recent years include: Denver Metro Chamber of Commerce Colorado Association of School Boards Colorado Education Network Downtown Denver Partnership Leadership Denver Denver Regional Council of Governments Colorado Counties Inc. Colorado Municipal League Colorado Government Finance Officers Association Leadership Denver Urban Peak Denver Community Leadership Forum Colorado Symphony Colorado Community Revitalization Association Colorado Association of School Executives Season for Non -Violence Kids Voting Denver Habitat for Humanity American Cancer Society United Way Smart Government, Inc. Theodora House Samaritan House MLK Business Social Responsibility Luncheon Anti -Defamation League Presentation to City of Fort Collins George K. Baum & Company lcnesanenc Bankers Since 1928 Proposal to City of Fort Collins Proposal No. P-936 Financial Advisory, Investment Banking & Consulting Services April 28, 2004 George K. Baum & Company Specialists in Colorado Public Finance Douglas Houston + I Senior Vice President Public Finance 717 17th Street, Suite 2500 Denver, CO 80202-3354 Tel 303.292.1600 �l�gs 3 3-D3-2� ce City of Fort Collins Larimer County, Colorado Certificates of Participation (Police Building & Open Space Acquisition) Series 2004 Tentative Financing Schedule As of May 27, 2004 Target Date Week of May 31 Action Designate Finance Team. Lead Week of May 31 Hold organizational meeting of Finance Team Week of June 14 Bond Counsel distributes first draft of documents: lease, mortgage, Indenture, and Preliminary Official Statement. Week of June 14 Document review meeting — all members of Finance Team. Week of June 14 Distribute draft credit presentation materials. SellsBemberg Week of June 14 Title insurance request. Week of June 21 Distribute Second Draft of all Documents to working group. Week of June 21 Distribute Second Draft of Credit Presentation to working group. Sells/Bemberg Week of June 21 Final comments and changes on all Documents to Bond Counsel ALL Week of June 21 Final comments and changes for Credit Presentation to GYB. ALL Week of June 28 Distribute Third Draft of all documents to working group, rating agencies an insurers. Distribute documents to City Council and place on July 20 Council Agenda Week of July 5 Presentation to rating agencies and insurers in New York. Week of July 12 Receive insurance commitment and/or ratings. Houston Week of July 12 Final Project cost revisions; Finance Plan Revisions. Week of July 12 Distribute third and final draft of all documents and finance plan. July 20, 2004 (Tuesday) City Council approves all documents and sale of Certificates of Participation. Authorizes execution of Certificate Purchase Agreement upon sale of COP's. July 22, 2004 (Thursday) July 22, 2004 (Thursday) Order CUSIPS. Preliminary Official Statement delivered to printer and posted on website. Bernberg July 23-27 Pre -marketing with potential investors. Houston Week of July 26 Price and market COPS. Houston Week of July 26 Execute Certificate Purchase Agreement August 2, 2004 (Monday) Distribute final draft of Official Statement and first draft of closing documents. August 6, 2004 (Friday) Print and mail Final Official Statement August 6, 2004 (Friday) Comments due on closing documents. August 11, 2004 (Wednesday) Pre -closing on Certificates of Participation. August 12, 2004 (Thursday) Closing on Certificates of Participation. [Meetings shaded in yellow. Table of Contents Section Page Overview............................................................................................................................1 Ability& Experience.........................................................................................................2 Approach............................................................................................................................5 Staffing..............................................................................................................................11 OfficeLocation.................................................................................................................11 Disclosure.........................................................................................................................11 Appendices Appendix 1: Issuers Served as Financial Advisor, 2000-present .............................12 Appendix 2: Services to be Performed........................................................................13 Appendix 3: About George K. Baum & Company.....................................................14 Appendix 4: Conflict of Interest....................................................................................15 Appendix 5: Underwriting Statistics............................................................................16 Appendix 6: Financing Team........................................................................................17 Appendix 7: Proposed Fees & Expenses......................................................................19 Appendix 8: Unique Qualifications..............................................................................20 Appendix 9: Financial Advisory & Underwriting Clients........................................21 Appendix 10: Required Statement and Form.............................................................22 0 GEORGE K. BAUM & COMPANY I Investment Bankers Since 1928 gkb April 28, 2004 Mr. Alan Krcmarik Executive Officer of Finance City of Fort Collins 215 North Mason Street, 2nd Floor Fort Collins, CO 80524 Re: Proposal Number P-936, RFP for Financial Advisory, Investment Banking & Consulting Services Dear Mr. Krcmarik: George K. Baum & Company is pleased to present our qualifications to serve as financial advisor and/or investment banker to the City of Fort Collins for its financial programs. If selected for this engagement, we will provide the City a level of expertise and personal service unmatched by our competitors. We offer a unique package of local commitment and national resources that ensures the City convenient accessibility to our banking professionals and the expertise they bring to this engagement. Following is a summary of our key qualifications. Largest underwriter of tax-exempt securities in Colorado. During the past decade, no firm managed more Colorado bond issues than George K. Baum & Company. With a staff of nearly 90 professionals, we maintain the largest public finance office in the state and have more resources to ensure the best possible transaction. Colorado's financial advisory specialist. Douglas Houston is one of Colorado's most active financial advisors. He has served several Colorado issuers, including the City of Colorado Springs and the Denver Water Board. Last year, George K. Baum & Company ranked as the third most active financial advisor to Colorado issuers. Long-term commitment to municipal finance. Unlike other firms that are scaling back or completely eliminating their public finance operations, George K. Baum & Company continues to aggressively recruit seasoned public finance professionals, including bankers, quantitative analysts, credit rating specialists and municipal research professionals. Municipal finance remains the primary focus of George K. Baum & Company's operation. National Presence. George K. Baum & Company consistently ranks among the top underwriting firms in the nation. Since 1990, our firm has served as senior, co -manager or financial advisor for more than 4,600 municipal bond issues totaling approximately $154 billion. We understand that sustaining customer loyalty requires hard work. It requires being reliable and responsive, maintaining an unwavering commitment to our clients' long-term success, doing the right thing —every time — and sustaining a passion for delivering the highest level of service each and every day. George K. Baum & Company's team is truly excited about the opportunity to continue our work with the City of Fort Collins. We look forward to your decision and welcome the opportunity to further discuss the financing options we have presented in our proposal. Sincerely, GEORGE K. BAUM & COMPANY Dou las Houston Senior Vice President Note: George K. Baum & Company acknowledges receipt of Addendum No. 1 to the City's RFP George K. Baum & Company 717 Seventeenth Street, Suite 2500 Denver, Colorado 80202 800.722.1670 C PROPOSAL TO City of Fort Collins Overview 1. Briefly describe, in two (2) pages or less, the nature of the firm's business as it relates to providing financial advisory services to municipalities, particularly for tax-exempt revenue bonds and lease -purchase transactions financed through COPS. Colorado Presence George K. Baum & Company has maintained its municipal finance headquarters in Denver since 1990. The firm has the largest and most active public finance, municipal bond sales and trading, and municipal research operations in Colorado, with more than 80 employees located in Denver. Approximately one-half of our sales and trading professionals are based in Denver. Our Colorado clients have tremendous access to the professionals assigned to their engagement(s), in addition to our large support staff. Our firm has traded more than $57 billion of municipal securities in the secondary market since 1994, including more than $7 billion of Colorado municipal securities. We are a major market maker in Colorado municipal bonds in the secondary market. Investors' knowledge of our willingness to provide secondary market liquidity significantly enhances our ability to generate demand for the new Colorado issues we underwrite, which ultimately results in stronger pricing. Financial Advisory & Underwriting Experience Since 1995, George K. Baum & Company has served as financial advisor on 476 issues with a total par value of approximately $6.7 billion. We have also provided many of the same services that a financial advisor provides in connection with the more than 1,800 negotiated issues we have senior managed during this same time period. Additionally, Baum has served as underwriter on more than 1,340 tax-exempt revenue bond issues, and 130 certificate of participation (COP) issues since 1995, together totaling more than $51.8 billion. Our hands- on experience with the structuring, underwriting and marketing of municipal bond issues —coupled with our extensive advisory experience —has proven extremely valuable to our financial advisory clients. Approach to Services George K. Baum & Company will rely upon an interactive process involving the City's staff and our team members to successfully complete those projects to which we are assigned. In serving as financial advisor or investment banker, George K. Baum & Company will be involved in the following services. Accessibility. George K. Baum & Company offers a high degree of accessibility. Personnel representing the City can be assured that their needs for data analysis and information will be met quickly and efficiently. Identification of a primary contact. . Identification of primary contacts establishes clear channels of communication, avoids confusion and eliminates the need for duplication of effort in notifying the client or the advisor on various matters. All work provided by George K. Baum & Company will be coordinated through Doug Houston, who will be acting as our team leader. Clearly articulated responsibilities. While all financings are unique, most involve performance of standard and readily identifiable tasks. Preparation of debt schedules, assembly of rating information, review of Official Statements, publication of sale notices, bid calculations and oversight of the closing are among the key activities associated with a financing. At the outset, George K. Baum & Company will review all primary steps associated with the financing to establish a clear understanding of primary responsibility for completion of tasks. Establishment of a timetable. In conjunction with the above, a timetable for the financing, highlighted by major steps or events, should be developed at the very beginning and shared with all persons involved in the financing. Establishment of a timetable imposes discipline on both the provision of services and the development of a financing plan. 0 GEORGE K. BAUM & COMPANY I Investment Bankers Since 1928 Page I Efficiently organized and coordinated meetings. Meetings organized for the development of a finance plan and delivery of services should be well coordinated and kept to a minimum. Meetings should be attended by all parties of the transaction with each session's purpose clearly defined and understood in advance of the meeting. This approach will avoid delays in developing the analysis needed to effectively plan for the sale of bonds, and will avoid duplication of efforts. Ability and Experience 2. State in two (2) pages or less, why your firm is well qualified to provide the services outlined in the Scope of Services section above, and your firm's experience in providing such services. In citing prior engagements, indicate the role and responsibilities your firm undertook (financial advisor, senior managing underwriter, etc.). Identify the individual from the firm who had principal responsibility for the financing. Identify at least three individuals from different entities with phone numbers who can be contacted to serve as references. George K. Baum & Company has extensive experience in the financing of all types of public projects in Colorado, both as an investment banker and as financial advisor. In particular, Doug Houston, our team leader for the City of Fort Collins, has significant experience in the use of COPs and has underwritten or served as FA on some of the most prominent recent COP projects in Colorado. Following is a sampling of recent case studies for which George K. Baum & Company served as either investment banker or financial advisor; Doug Houston has served as primary contact on the following financings. City of Colorado Springs Client Contacts: Mr. Steve Hilfers, City Finance Director; Mr. Richard Comerford, Utilities Chief Financial & Planning Officer Telephone: Mr. Hilfers: (719) 385-5203; Mr. Comerford: (719)668-3808 Role of GKB: Financial Advisor George K. Baum & Company has served as financial advisor to the City of Colorado Springs and its Utilities on numerous transactions involving both utilities, open space acquisition, public building construction and renovation projects, airport, parking PROPOSAL TO City of Fort Collins and other transportation projects. Since 1991, we have served as financial advisor for all of the City's numerous financings totaling nearly $2 billion. Our involvement with these financings included the provision of a full range of financial advisory services including structuring, assisting with the Preliminary Official Statements, presentations to advisory boards and city council, preparing and coordinating rating agency presentations, promoting the issues to bidders, assisting with all bond documents including Notice of Sale, coordinating bid openings, analyzing bids received and coordinating closings. The specific types of financings with which we have been involved include utility revenue bonds, COPs, sales tax, airport and parking revenue bonds. Of particular note and detailed later in this proposal was our leadership on the issuance of $15,090,000 of open space acquisition COPS in 2003 for the City. George K. Baum & Company has also just competed directing the first negotiation in Colorado of common ISDA agreements with seven "AA" -rated counterparties for financial and commodity (gas) trades for the City's Utilities. This will enable the Utilities to competitively bid financial products such as swaps based on underlying documents that represent the Utilities' best interests, and to act rapidly to take advantage of market opportunities. City and County of Denver, Colorado (Denver Water Board) Client Contact: Ms. Kathryn M. Kempke, CIA, Manager of Treasury Operations Telephone: (303) 628-6410 Role of GKB: Financial Advisor George K. Baum & Company has served the Denver Water Board as financial advisor for most of its financings dating back to the 1970s. Many of its issues have been secured by the general obligation credit of the City, but post -TABOR, its issues have been revenue supported or certificates of participation. All manner of water facilities have been financed. We have also assisted the Water Board with rating and insurance presentations. In 2003, George K. Baum & Company completed the structuring, rating and public sale of Denver Waters first revenue bond issue. 0 GEORGE K. BAUM & COMPANY I Investment Bankers Since 1928 Page 2 Boulder, Colorado, Urban Renewal Authority Client Contact: Paul C. Benedetti, Esq., Authority's former legal counsel Telephone: (303) 499-6340 Role of GKB: Investment Banker Our work with this authority during the past 15 years has led to a number of breakthroughs, including: • the first tax -increment bonds issued in Colorado • the first tax -increment bonds to receive a rating • the first bonds of this type to be secured by a letter of credit and insured by a bond insurance company We issued two series of initial financing for the Authority followed by several refundings. Project costs were $20 million. In 1980, our personnel took over project financing from another underwriting firm which had failed in their efforts to sell the Authority's bonds. In the face of multiple lawsuits, a petition drive calling for a second vote on the project and investors unfamiliar with TIF financing, we immediately restructured the financing to meet Colorado investor needs and closed a $10 million start-up issue into escrow. Within months of the start-up bond issue, we structured a long-term bond issue for the Authority and successfully marketed it to Colorado banks and institutions. Estes Park, Colorado, Urban Renewal Authority Client Contact: Mr. Will Smith Telephone: (970) 577- 3704 Role of GKB: Investment Banker We began assisting the Town of Estes Park shortly after a flood caused by the failure of an upstream dam, an event causing significant damage to the downtown area. We participated on planning teams that prepared an action plan for the redevelopment of Estes Park and have subsequently served as financial advisor and underwriter for four related TIF bond issues totaling more than $25 million. Bond proceeds were used to finance extensive streetscape improvement projects, fund land acquisition for public facilities and private redevelopment, and refund J 7 PROPOSAL TO City of Fort Collins outstanding bonds to reduce debt service costs. Our most recent issue for Estes Park was to underwrite a combination new money and refunding issue in 2003 to extend the riverwalk project and construct a kayak course through downtown. A full rating presentation was developed and a visit to the town by Moody's was arranged. Despite the small size of the project area, the TIFs'Baal" rating was retained. Las Vegas, NV, Downtown Redevelopment Agency Client Contact: Mr. David Oka, Dev. of Economic Development Telephone: (702) 229-6551 Role of GKB: Investment Banker Our firm was selected by the City of Las Vegas through a nationwide competition and served as investment banker on a 2,400-acre redevelopment project from 1986 to 1994, and again in 2001. Among the services we provided the Agency were:1) structuring and underwriting a $50 million tax - increment financing, 2) remarketing two issues ($15 million and $35 million), 3) structuring and underwriting two subordinate lien tax -increment issues ($18.8 million and $3.3 million) for parking and housing projects, and 4) helping the Agency maintain its "BBB+" rating on its subordinate lien bonds and an "A-" rating on its senior bonds. City of Bakersfield, California Downtown Redevelopment Program Client Contact: Mr. Alan Tandy, City Manager Telephone: (661) 326-3751 Role of GKB: Investment Banker Our firm underwrote a $40.650 million Convention Center Arena Project, Series 1997 COP issue which involved numerous complex elements: a design -build process which developed major contract pricing difficulties; litigation from one of the design -build parties; City assumption of Downtown Redevelopment debt in order to capture all tax -increment revenues for COP repayment and the refinancing of earlier COP debt to eliminate overlapping asset title problems. Key to obtaining 0 GEORGE K. BAUM & COMPANY I Investment Bankers Since 1928 Page 3 both an MBIA insurance policy and Debt Service Reserve Fund Surety, was our firm's successful strategy of first obtaining an "Aa3" general obligation rating for the City in the face of strong downgrade pressure. This provided the assurances needed by MBIA to not only commit to insuring the transaction, but also to provide a surety and very aggressive premium bonds. Baum has also assisted the City in the development of a finance plan for a newly - created City Center Redevelopment Area. Projects include parking, a minor league baseball stadium, theaters, retail, housing and an ice rink/recreation facility, issuance of wastewater revenue bonds and a GO refunding. We are currently assisting the City in the development and execution of a $55 million wastewater treatment plant expansion financing. City of Fort Collins, Colorado City Contacts: Alan Krcmarik, Financial Officer Telephone: (970) 221-6788 Role of GKB: Underwriter George K. Baum & Company has served as senior managing underwriter on numerous City of Fort Collins issues since 1988. Our firm has had the privilege of serving the Storm Drainage Utility since its first bond issue in 1988. In 1997 and 1998, we assisted the City in the execution of a COP financing for a new parking garage and city office building. Of significant note is that GKB assisted the City in developing a rating strategy that not only led to a high underlying rating for the COPS, but also achieved a long awaited upgrade in the City's GO rating to "Aal". Baum has assisted the City on several other financings including general obligation, sales tax and utility revenue bonds. PROPOSAL TO City of Fort Collins El Paso County, Colorado Client Contact: Mr. Terry Harris, County Administrator; Mr. Frank Barber, Director of Economic Development & Public Finance Telephone: Mr. Harris (719) 520-6426; Mr. Barber (719) 520-6480 Role of GKB: Underwriter George K. Baum & Company has served as the County's investment banker since 1995, underwriting five COP issues used to finance the purchase or construction of facilities totaling nearly $110 million including an office building, jail facility, courthouse expansion, regional building department offices, computer services building and a county -wide emergency services radio system. Projects financed were almost always controversial with Douglas Bruce often contesting the County's ability to utilize COPS. Services to the County included the full range of investment banking services including structuring, rating and insurance presentations and transaction processing. 0 GEORGE K. BAUM & COMPANY I Investment Bankers Since 1928 Page 4 M PROPoSALTo City/ of Fort Collins Approach 3. Based on your understanding of the Scope of Services, describe the general framework the firm would use to analyze the financing options available to the City and discuss the key factors to be evaluated. In addition: A) Identify and discuss any services or methods of approach which the firm believes to be either unique or outstanding or is recognized as giving your firm a superior competitive advantage; B) Identify the firm's position as to (a) requesting a rating for the bonds or certificates, and (b) seeking insurance. Describe the key topics and strategies upon which you would focus in conducting a rating agency or insurance company presentation. C) Identify the municipal bond interest rate scales that would be used as benchmarks for pricing the transactions specifically listed in this proposal. Using the scales as of April 15, 2004, estimate the interest rates that the City would have attained, had the transaction been completed on that day. Provide the basis for your estimates. George K. Baum & Company has extensive experience in developing finance programs utilizing enterprise revenue bonds, redevelopment TIFs and COPS in Colorado and in other states. We have been fortunate to work with the City of Fort Collins on numerous financings where an extensive amount of planning has gone into developing finance plans both workable for the City and attractive to the marketplace. In this section, we set forth our ideas on how the financing process for both types of the City's bond issues might best be approached, as well as specific rating and insurance considerations and special concerns for each type of bond. General Framework for Analysis A team approach. The complexity of the City's projects, combined with the elaborate legal and financial structures involved, clearly suggests the need for "project teams" These teams should be led by the Financial Officer and should include, at a minimum: • Key Finance Department staff • Key Utility Enterprise personnel • City Attorney • Bond and Disclosure Counsel • Financial Advisor (if not investment banker) Others who may likely need to be involved as appropriate for individual financings include: • City Manager's office • City Council committees • Project Planners/ Architect • Building (or Finance) Authority members • Title Company • Representatives of the DDA and any other redevelopment entities which may be formed • Representatives of involved City departments such as open space Establish City's goals and objectives. The first task of the assembled teams would be to clearly identify the City's goals and objectives for the projects and financings. Goals of other parties should also be clearly set forth, especially those of outside parties, if any. Develop an acquisition, construction and cash flow schedule for each project. It is important to have a construction and cash flow available as a framework for evaluating the impact of all decisions. Key project factors to be evaluated. Once goals and objectives are defined, the complex task of identifying and evaluating those key factors which will ultimately determine the structure of the project and the financing(s) must occur. Key factors will include many of the following: • Project grouping and timing • How can projects be sequenced to maximize efficient borrowing and to maximize credit quality • How best to develop public support for the projects and financing methods, or, at a minimum, how to keep the public informed so as to avoid contention and controversy which may negatively impact the rating process (especially with regard to COPS) • Sources of revenue for lease payments on COPS, (e.g. dedicated sales taxes, payments from other entities such as Larimer County, earmarked funds, etc.) • The incorporation of private users or management contracts into any of the facilities may require careful structuring to avoid losing tax exemption for the financing Derivative Financial Products and Variable Rate Securities George K. Baum & Company provides significant resources pertaining to the provision of derivative 0 GEORGE K. BAUM & COMPANY I Investment Bankers Since 1928 Page 5 Recognized Leader in Serving Colorado Issuers George K. Baum & Company is a recognized leader in Colorado among underwriters and financial advisors to municipalities. Our experience is unmatched by the other proposing firms. Colorado Underwriter Ranking By Number of Issues, 1998 to Present George IL Baum & Company Newman & Associates rAG Edwards & Sons Inc. Lehman Brothers welis Fargo Bank Financial Services Inc. 0 50 100 150 Number of Issues Underwritten I 200 250 300 Colorado Financial Advisor Rankings By Par Amount, 1998 to Present $0 $.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 Total Amount in Billions Presentation to City of Fort Collins George K Baum & Company Investment Bankers Since 1928 and variable rate financial products. We have a fully staffed and dedicated derivatives and variable rate trading desk in our Denver headquarters. GKB is the only regional investment banking firm in the nation to have the ability to act as principal on derivative transactions through its Financial Services Corporation, a wholly owned, "AA" -rated counterparty. Revenue Bonds No specific projects are specified, but the City has a well established procedure for bringing such issues as utility enterprise bonds to market. These are generally straightforward and supported by investor and rating agency confidence. Downtown Development Authority TIF Bonds George K. Baum & Company has provided extensive underwriting services on tax -increment bonds in Colorado and throughout the nation. Our firm has successfully obtained ratings, letters of credit and bond insurance for redevelopment financings. Our trading desks and sales department are familiar with tax -increment financing and the unique concerns encountered in marketing such bonds. This expertise is a critical asset when evaluating market reception to determine the optimum financing structure. We have assisted many clients in the negotiation of development agreements with both public and private developers. Our expertise in this important area of economic development makes our investment banking and financial advisory services especially useful and relevant. Few Colorado TITS have been issued in the 1990s due to the passage of TABOR and litigation challenging this method of financing. An additional challenge has arisen to the use of TIF and redevelopment powers in Colorado in the currently ongoing session of the State Legislature. At the writing of this proposal it appears likely that a bill containing such restrictions will be adopted although the final outcome is not clear. Certificates of Participation Certificates of Participation (COPS) remain one of the most complex and controversial methods of financing projects in Colorado. High "essentiality" projects such as the City's police services building PROPOSAL TO City of Fort Collins will be well received by rating agencies, insurers and investors. Other projects may be perceived by outsiders as somewhat less essential and may encounter rating and insurance difficulties and meet investor resistance. The City's transportation de-icing facility and SE branch library —if financed by COPs on a stand alone basis —will require some effort to be satisfactorily defended as essential, but we would not anticipate any major difficulties if properly presented and structured. The City's proposed open space COPS are another matter entirely if they must be done on a stand alone basis and are addressed below. Key Factors for a COP Financing Assuming that COPS are confirmed as the best method for financing for certain projects, the following additional key factors must be evaluated: • Should a "Master Lease' structure be used that incorporates all facilities financed under the same lease as the parking garage and city Office building were? This is almost always viewed as a major credit strength for a COP issue since failure to appropriate lease payments for one project means that the trustee can repossess all facilities included under the lease. If the projects with weaker "essentiality" are financed under the same lease projects of high essentiality, the rating agencies and insurers will often commit to the package of projects even though they would not insure some of the projects on a stand alone basis. • Does the City have clear title to the improvements to be financed? Do some of the sites need to be purchased with COP funds? • Are there any title complications which may create difficulties in establishing collateral for the COPS? • For those sites already owned by the City, what is the best mechanism for incorporating the land into the project lease, e.g., sale to the leasing entity, ground lease tied to the length of the financing? • If serious impediments arise to the use of COPS for the intended improvements, one or more existing City facilities could be sold to the leasing entity and leased back to the City. The City would utilize the proceeds from the sale of the existing facilities to build the new improvements. The leasing entity would issues COPs to pay for the purchase of the City's existing facilities. This process is called 0 GEORGE K. BAUM & COMPANY I Investment Bankers Since 1928 Page 6 "Asset Transfer", and while not often utilized in Colorado, it is a technique frequently use in other states, especially California. Special Considerations for Open Space COPs As the City's RFP acknowledges, open space financings utilizing COPS represent a very specialized type of financing. Like Fort Collins' efforts, many open space programs have a dedicated tax to support them but do not have authority to enter in to multi- year debt and therefore must increasingly rely on COPS as a financing mechanism. George K. Baum & Company has had significant recent experience with open space COPS that is directly related and on point with the Fort Collins finance plan for open space. In 2003, George K. Baum & Company successfully orchestrated the public sale of a $15,070,000 Open Space Acquisition COP for the City of Colorado Springs. A number of difficulties typical to open space financing were encountered and overcome: • An extremely short time frame was involved as a complex acquisition plan for the open space parcel required the COP financing to take out temporary financing put in place by the City of Colorado Springs and the national Trust for Public Lands. • A 50-acre portion of the 732-acre project had been used as landfill. While no longer environmentally a hazard, a plan was developed to exclude the 50-acre site from the larger site and to have it purchased separately by City open space cash. This eliminated environmental risk from the project —a very important concern for the rating agencies and investors. • A city council composed of a majority of new members had never been through the COP process and were receiving negative input from Douglas Bruce and others in the anti -tax community. A thorough set of financing options had to be assembled for the council to review and several meetings were held to inform the council, some of whom did not want to use lease financing for open space. In the end, a strong majority of council members voted to support the financing. • COPS, after extensive outside credit analysis, typically are rated one notch below an issuer's general obligation rating and insurance is occasionally unavailable. Accordingly an PROPOSAL TO City of Fort Collins extensive and elaborate credit presentation was created by George K. Baum & Company and in person presentations and conference calls were held with Moody's and several bond insurers. Despite strong support from analysts, rating and insurance commitment committees simply discounted the essentiality of the City's open space program based on their own short sighted "policies regarding open space" and rated the COPS two notches below the GOs. Insurers declined coverage. The investor market for Colorado COPs had lost some of it's confidence as a result of continued political noise from anti -tax activists and law suits, the most current of which was still pending involving a group of anti prison activists suing to stop the State of Colorado from issuing COPs to build a prison and facilities for the CU Medical Center. This situation, which didn t directly apply to local government COPS, was potentially exacerbated by the placement of disclosure of this matter in the POS for the City's COPS. George K. Baum & Company worked with bond counsel to make sure the disclosure was made as "litigation" and not as a "risk factor" as had recently been done for other COP issues. • Another factor impacting investor confidence in Colorado COPS involved a controversy among bond trading desks over the description of a "redeem from other funds" call feature which had historically been used in Colorado COPS. This matter arose in a COP involving another issuer in the market just prior to Colorado Springs. George K. Baum & Company resolved this issue by reluctantly deleting the controversial language. This issue must now be dealt with as part of every Colorado COP. Our analysis of the current situation as well as Fort Collins' 1998 COPS is that this matter should be able to be handled through proper discussion of "extraordinary redemption' features. • The Colorado Springs COPS were offered at public sale with the expectation that 4 or more bids would be received. The above controversies, all beyond the control of the City, resulted on only two narrowly separated bids received, one of which was from George K. Baum & Company acting by itself; the winning bid was submitted by GEORGE K. BAUM & COMPANY I Investment Bankers Since 1928 Page 7 a syndicate of over ten firms. Nonetheless, good interest rates were received due to the strength of the overall bond market in 2003 and the issue closed in a timely manner, meeting the needs of the City and the Trust for Public Lands. Based on this direct and recent experience with open space COPS in Colorado, we suggest the following strategy for utilizing COPs to acquire open space for the City of Fort Collins: Fort Collins should retain George K. Baum & Company as investment banker to oversee the negotiated sale of its open space COPs. Despite extraordinary efforts to effect public sales, open space COPs have become a uniquely Colorado product and as such they require a concentrated effort by a Colorado underwriter to tell the "story" to investors through an extensive pre -sale marketing campaign. While a single investment bank should take charge, a selling group should be formed and a briefing meeting for their sales force should be conducted. An extensive credit presentation should be assembled and presented in person to all of the insurers and both Moody's and S&P. In addition, consideration should be given to meeting with Fitch Ratings. The credit presentation should include a description of all open space programs in Colorado. The purpose of this is to demonstrate the success, importance and support for open space programs throughout the State—i.e., this is a matter of statewide concern. We believe it's possible to demonstrate that no Colorado open space purchases by municipalities or counties have been forfeited or given over to any other use. George K. Baum & Company is prepared to devote its extensive research capacity to this purpose. No other firm in Colorado has more than a fraction of the staff resources that George K. Baum & Company can devote to assisting the Fort Collins. Credit presentations must involve multiple members of each entity's credit committee and will of necessity have to be held in the offices of each firm. It's not enough to convince individual analysts of the viability of Colorado's open space programs —rating agencies and insurance PROPOSAL TO City of Fort Collins companies must be convinced to change firm - wide policies (e.g. Moody's rates open space COPS two rather than one notch below other COPS and insurers have heretofore refused to insure open space COPs). Rating agencies and insurers need to be convinced that open space, unlike buildings, only grows in value with usage and does not depreciate. Again, statewide information must be gathered to make this point. Most open space programs, like Fort Collins', have a voter approved tax dedicated solely to the acquisition and management of open space. Most such programs have been overwhelmingly reauthorized by voters as robust, multi year programs. Credit entities must be made to appreciate the significance of this in a tax resistant state like Colorado. Rating and Insurance Recommendations We recommend that the City credit enhance its proposed COPS and potential redevelopment financings by aggressively seeking bond insurance. To support that effort and to minimize the insurance premium and aid in marketing, we also recommend that the City seek an underlying rating from Moody's Investors Services and/or Standard & Poor's. If the financings are insured and marketed in the issues of $15 million or less, we would also suggest, to save the cost of issuance, using only one of the insurance ratings, most likely Moody's "Aaa". Alternatively, if the COP issues are issued in close proximity, we would recommend going to both rating agencies with all issues and negotiating a single fee covering all the COPS. Rational for obtaining an underlying rating. While an insured bond issue will carry one or more "AAA" ratings, investors typically want to be informed of the issues unenhanced "underlying" rating. A high underlying rating clearly assures the investor of the underlying credit quality and allows for more aggressive pricing and marketing of an issue. Additionally, a high underlying rating will create more aggressive pricing of insurance premiums and often will sway an indecisive insurer to commit. For 0 GEORGE K. BAUM & COMPANY I Investment Bankers Since 1928 Page 8 example, a COP credit with an underlying rating in the "Aa " category could be charged an insurance premium of up to 10 to 15 basis points lower than the same COP with a single "A" level rating. Rating Strategies George K. Baum & Company believes in a proactive approach to the rating process, including detailed organization of necessary documents and facts and the development of a specific agenda for discussion. A strategy of this nature is particularly important when meeting directly with rating agency analysts. Entering a rating presentation with an organized and thorough plan of discussion provides an issuer opportunity to stress its strong points while controlling discussion of potential problem areas. Without a formalized agenda, the issuer may be forced to spend an inordinate amount of time defending its perceived weaknesses while struggling to point out strengths. For reliable decision making, it is essential that your financial advisor have a great deal of experience evaluating credit quality and rating agency/bond insurance processes. It is also important for the financial advisor to have access to the trading and syndication information that is so critical to making appropriate credit decisions. George K. Baum & Company personnel have extensive experience working with all relevant rating agencies and insurance providers, including Moody's, Standard & Poor's, Fitch Ratings, MBIA, AMBAC, FGIC, ,and FSA Insurance Experience George K. Baum & Company has negotiated numerous insurance commitments that have created valuable savings for our clients. In some instances, we have managed to gain a commitment for issues previously rejected by the insurance providers such as Colorado Springs Airport. Municipal bond insurance can prove a valuable tool even to issuers that already possess high credit ratings on their bonds. Pricing Benchmarks and Considerations The following table represents our best estimates as to how the City's COPS might have been priced on April 15, 2004: PROPOSAL TO City Of Fort Collins Municipal Bond Inter- est Rate scales April 15, 2004 A2a/Aa2 COP Uninsured/ Aa3 Plus Plus 1.18 .07 .22 1.71 .09 .24 2.01 .10 .25 2.42 .10 .25 2.73 .12 .27 3.01 .12 .27 3.26 .14 .29 3.47 .16 .31 3.63 .18 .33 3.79 .20 .35 3.91 .20 .35 4.00 .20 .35 4.09 .20 .35 4.18 .20 .35 4.27 .20 .35 4.37 .20 .35 4.47 .20 .35 4.57 .20 .35 4.65 .20 .35 4.73 .20 .35 We must emphasize the significant uncertainty in projecting interest rates for COPS to be issued at a point in the future. In recent months improved economic indicators have put upward pressure on interest rates. The economy added 308,000 jobs in March, the biggest gain since April 2000; this caused almost a 0.20% increase in MME1. In his remarks 0 GEORGE K. BAUM & COMPANY I Investment Bankers Since 1928 Page 9 to Congress on April 21s°, Alan Greenspan noted deflation is no longer an issue and that interest rates will eventually need to rise to curb inflation pressures. The uncertainty as to when interest rates will be raised has contributed to significant volatility in the bond market. In the four days ending April 23rd, the MMD scale moved 0.05% in both directions each day. This volatility also impacts the yield curve and the relationship of the spread between tax exempt bonds and U.S. Treasuries and can have a dramatic effect on the spread with which any given municipal security may trade to MMD. In estimating interest rate scales for the Certificate of Participation (COP) transactions (Police Services Building, Open Space Acquisition, Transportation De- icing facility, Southeast Fort Collins Branch Library), we have provided the above table showing the Municipal Market Data (MMD) scale as a benchmark for the municipal bond market as well as the spreads to MMD for the different COP transactions the City is considering. The Police Services Building, Transportation De-icing facility and Southeast Fort Collins Branch Library are types of projects often financed in Colorado. Rating agencies and bond issuers are familiar with these types of projects and generally regard them as having superior "essentiality"; therefore, we assume the underlying rating for these COPS will be at Aa2/AA , one notch below the City's Aa1 GO rating and that they will qualify for Aaa/AAA bond insurance. The spread begins at plus 0.07% to MMD in 2005 and continues to plus 0.20% in 2024. Given the volatility in the current bond market, bond insurance is very important for the marketing of the City's COPS. Investors also regard Colorado COPS with less confidence than they do many other types of securities (as discussed elsewhere) and this can affect the both the pricing and market acceptance. Firms underwriting COPS often must inventory large unsold balances for several days. PROPOSALTO City Of Fort Collins Open space projects/acquisitions are not as common as the City's other planned projects. Rating agencies, bond insurers and investors are not as comfortable with these financings. Fortunately, we worked closely with rating agencies in attaining a Moody's A2 rating for a recent Colorado Springs open space financing. With bond insurance, we have assumed the same ratings and spread to MMD as the other COP financings. However qualifying for insurance proved difficult for the Colorado Springs open space financing. Therefore, we have also provided a scale with no bond insurance, an underlying rating of Aa3/ AA-, and a spread to MMD 0.15% more than the first COP scale. Given our experience of Downtown Development Authority financings we would like to learn more about the project before determining an accurate scale. Often such bonds are sold prior to project construction on a non -rated basis or with a private placement. Occasionally TIF bonds may be backed by other City monies such as in Fort Collins' current DDA and in some of Denver s TIF projects. Structure has a dramatic impact on rates and marketability of TIF bonds and we simply do not have enough information on which to base a scale. 0 GEORGE K. BAUM & COMPANY I Investment Bankers Since 1928 Page 10 PROPOSAL TO City of Fort Collins Staffing 4. Identify the specific individuals who would be assigned to work with the City and specify which individual would be the principal contact. Identify the nature of the work each individual would perform, together with proposed time commitments and their related professional knowledge and experience. George K. Baum & Company has assembled a team of professionals with extensive experience within the municipal bond industry, particularly in the field of tax- exempt revenue bond and lease -purchase financings. Douglas Houston, senior vice president, will serve as financial advisor and the City's primary contact. Troy Bernberg, assistant vice president, will provide transaction management assistance. James Cleveland, senior vice president, will manage all quantitative analysis including the preparation of all necessary spreadsheets. Mary Katherine Sells, vice president and credit ratings specialist, will oversee all credit ratings presentations. Ho uston ouston Robert Lombardi, executive vice president, will oversee pricing of the City's bond Seniors President issues. For complete information about our financing team professionals, please refer to Appendix 6. Office Location 5. Identify the location of the office from which the individuals identified in the staff item above will be operating. George K. Baum & Company's financing team will work from our Public Finance Headquarters in Denver, Colorado. Disclosure 6. Disclose any relationship which could create or appear to create a potential conflict of interest if your firm is selected. To the best of our knowledge, no employment engagement or relationship exists or has existed that would create a conflict of interest if the City enters into an agreement with George K. Baum & Company. 0 GEORGE K. BAUM & COMPANY I Investment Bankers Since 1928 Page I I APPENDIX 1 2000to Present George K. Baum & Company - FIA Issues 4/20/2004 C 1.050 Granls/Cibola Co SO #1 NM GO School Building Bonds FA Aa2 NR NR 3/30/2004 C 36.340 Alabama Water Poll Control Auth AL Revolving Fund Loan Ref Bonds FA Aaa AAA AAA INS 3/23/2004 C 4.705 Little Thompson Water Dt CO Water Revenue Ref Bonds FA Aaa AAA AAA INS 3116/2004 C 10.000 Summit Cc (Park City) SO BOE UT GO School Building Bonds FA Aaa NR AAA 3/4/2004 N 15.210 Washington Co SO BOE UT GO Refunding Bonds PYGAGENT Aaa NR AAA 2126/2004 N 62.800 Intermountain Power Agency UT Revenue Refunding Bonds FA Aaa AAA AAA INS 2125/2004 C 2.500 Chama Valley ISO #19 NM GO School Building Bonds FA Aa2 NR NR 2/24/2004 C 30.585 Salt Lake Cc (Jordan) SO BOE UT GO Refunding Bonds CO-MGR Aaa AAA AAA 2/10/2004 C 22.000 Washington Co SO BOE UT GO School Building Bonds FA Aaa NR AAA 2/9/2004 C 0.600 Bonner Springs -Kansas KS GO Temporary Notes FA NR NR NR 219/2004 C 1.400 Bonner Springs -Kansas KS General Obligation Bonds FA NR NR NR 21212004 C 1.445 Rose Hill -Kansas KS General Obligation Bonds FA NR NR NR 1/26/2004 C 16.425 Johnson Co(Gardner-Antioch)SD#231 KS GO School Bonds LEAD Aaa AAA AAA INS 1/14/2004 C 17.115 Colorado Springs City -Colorado CO GO Refunding Bonds FA Aa3 AA NR 1/1212004 C 1.330 Sedgwick Co (Goddard) USD #265 KS GO School Improvement Bonds FA 11612004 C 0.475 Butter Co -Kansas KS GO Temporary Notes FA NR NR NR 121912003 C 0.400 Jewel Co (Mankato) USD #278 KS GO School Building Bonds FA 12/1/2003 C 1.750 Salina -Kansas KS GO Temporary Notes FA NR NR NR 11/25/2003 C 0.350 Garden City -Kansas KS General Obligation Bonds FA 11120/2003 C 38.915 Alabama Drinking Water Fin Auth AL Revolving Fund Loan Bonds FA Aaa AAA AAA INS 11/18/2003 C 15.070 Colorado Springs Pub Facs Auth CO Certificates of Participation FA A2 11/18/2003 C 1.500 Moriarty Municipal SD #8 NM GO School Building Bonds FA Aa2 NR NR 11114/2003 N 158.310 Colorado Springs City -Colorado CO Utilities Improvement Rev Bonds FA Aa2 AA NR 11/13/2003 N 77.000 Murray City -Utah UT Hospital Revenue Bonds RA 11/13/2003 N 231.000 Murray City -Utah UT Hospital Revenue Bonds RA AA+ 11/5/2003 C 3.175 West Harris Co MUD #9 TX Unlimited Tax Bonds FA Aaa AAA AAA INS 11/4/2003 C 7.465 Olathe -Kansas KS GO Temporary Notes FA NR NR NR 10/24/2003 N 9.860 Wasatch Cc SD Board of Educ UT GO Refunding Bonds PYGAGENT A2 10124/2003 C 0.860 West Las Vegas Municipal SO #1 NM GO School Building Bonds FA Aa2 NR NR 10/21/2003 N 8.500 Murray City -Utah UT Water & Sewer Revenue Bonds PYGAGENT Aaa AAA AAA INS 10/14/2003 N 128.230 Valdez City -Alaska AK Marine Terminal Rev Ref Bonds RA NR NR NR GTD 10/9/2003 C 1.815 Hays City -Kansas KS General Improvement Bonds FA NR NR NR 9/25/2003 C 0.200 Magdalena Muni SO #12 NM GO School Building Bonds FA NR NR NR 9/23/2003 C 20.000 Salt Lake Cc (Jordan) SO BOE UT GO School Building Bonds LEAD Aaa AAA 911512003 C 5.060 Leawood -Kansas KS GO Improvement Bonds FA Aal 911512003 C 12.600 Leawood -Kansas KS GO Temporary Notes FA Aaa NR NR 9115/2003 N 0.090 Magdalena Muni SO #12 NM Teaching Housing Revenue Bonds FA NR NR NR 9/10/2003 C 77.155 Denver City Cc Board of Water Comm CO Wtr Rev Ref & Imp Bond FA Aaa AAA AAA INS 919/2003 N 3.000 Murray City -Utah UT Excise Tax Road Bonds FA Aaa NR AAA INS 9/4/2003 C 0.900 Cimarron Municipal SO #3 NM Certificates of Participation FA NR NR NR 8/28/2003 C 0.440 Santa Rosa Consol SO #8 NM GO School Building Bonds FA NR NR NR 8/19/2003 N 375.000 Valdez City -Alaska AK Marine Terminal Rev Ref Bonds RA NR AA+ NR GTD 8/14/2003 C 0.475 Osawatomie-Kansas KS General Obligation Bonds FA 8/12/2003 C 0.400 Tularosa Municipal SO #4 NM GO School Building Bonds FA NR NR NR 8/5/2003 C 11.370 Alabama Water Poll Control Auth AL Revolving Fund Loan Ref Bonds FA Aaa AAA AAA INS 7/1612003 N 3.000 Grants/Cibola Co SO #1 NM GO School Building Ref Bonds FA Aaa NR AAA INS 7/15/2003 C 0.080 Zuni Public SO NM GO School Building Bonds FA 7/14/2003 C 4.952 Dickinson (Abilene) USD #435 KS GO School Building Bonds FA 71712003 C 1.200 Salina -Kansas KS GO Temporary Notes FA 7f7/2003 C 3.800 Salina -Kansas KS GO Temporary Notes FA 717/2003 C 4.350 Salina -Kansas KS GO General Improvement Bonds FA 6/18/2003 C 2.000 Moriarty Municipal SD #8 NM GO School Building Bonds FA 6/17/2003 C 6.000 Duloe ISD #21 NM GO School Building Bonds FA 6/12/2003 N 1.930 Hays City -Kansas KS Wtr & Swr Sys Rev Ref Bonds SOLE 6112/2003 C 1.500 Las Vegas City SD #2 NM GO Educ Tech Lease COPS FA 6/10/2003 C 0.850 Dora Cons SO #39 NM GO School Building Bonds FA 6/10/2003 C 0.685 Portales Municipal SO #1 NM Ed Technology GO Lease Purchase FA 6/9/2003 C 40.925 Riley Co (Blue Valley) USD #229 KS GO Refunding & Imp Bonds FA 6/9/2003 C 0.850 Roosevelt Cc (Dora) Consol SD # 39 NM GO School Building Bonds FA 6/3/2003 C 9.850 Atchison Unified SO #409 KS GO School Building Bonds FA 6/2/2003 C 0.900 Stanton Co -Kansas KS General Obligation Bonds FA 5/21/2003 C 0.300 Mosquero Municipal SD #5 NM GO School Building Bonds FA 5/20/2003 C 1.500 Butler Co Fire District #3 KS General Obligation Bonds FA 5/1312003 C 0.535 Buhler-Kansas KS General Obligation Bonds FA 511312003 C 50.000 Denver City Co Board of Water Comm CO Water Revenue Bonds FA 5113/2003 C 20.200 Salt Lake Co (Jordan) SD BOE UT GO School Building & Ref Bonds FA 5/1212003 C 4.942 Barton Co -Kansas KS GO Sales Tax Bonds FA 5/6/2003 C 1.475 Olathe -Kansas KS Taxable General Obligation Bonds FA 5/6/2003 C 19.675 Olathe -Kansas KS General Obligation Bonds FA 5/6/2003 C 39.540 Olathe -Kansas KS Temporary Notes FA 5/5/2003 N 93.500 Valdez City -Alaska AK Marine Terminal Rev Ref Bonds RA 4/23/2003 N 25.000 Garfield Co -Colorado CO Hospital Revenue Bonds FA 4/15/2003 C 1.285 Grants/Cibola Cc SO #1 NM GO School Building Bonds FA 4/1/2003 C 1.500 Mosquero Municipal SD #5 NM GO School Building Bonds FA 3125/2003 N 0.460 Magdalena Muni SD #12 NM GO School Building Bonds FA 3/24/2003 C 0.140 Grady Muni SD #61 NM GO School Building Bonds FA 3/20/2003 C 2.710 Winfield -Kansas KS General Obligation Bonds FA 3114/2003 N 15.495 Intermountain Power Agency UT Power Supply Revenue Bonds FA 3/1412003 N 287.225 Intermountain Power Agency UT Power Supply Rev Ref Bonds FA 3/12/2003 C 0.209 Wellsville City -Kansas KS General Obligation Bonds FA 3/11/2003 C 5.995 Albany Cc SO #1 WY GO Refunding Bonds FA 3111/2003 C 0.200 Des Moines Muni SD #22 NM GO School Building Bonds FA 3/11/2003 C 21.000 Washington Co SO UT GO School Building Bonds FA 3/4/2003 C 16.095 Sedgwick Co (Clearwater) USD #264 KS GO School Building Bonds FA 2110/2003 C 0.320 North Newton -Kansas KS General Obligation Bonds FA 21412003 C 5.700 Jefferson Co Consol SD #6 MO GO School Bldg & Refunding Bonds FA 1129/2003 C 2.945 West Harris Co MUD #9 TX Unlimited Tax Bonds SOLE 1/27/2003 C 6.000 Johnson Co(Gardner-Antioch)SD#231 KS GO School Bonds FA 1/9/2003 C 8.000 Douglas Co (Eudora) USD #491 KS General Obligation Bonds FA 1/7/2003 C 0.138 St John City -Kansas KS General Obligation Bonds FA 12117/2002 C 4.000 Duloe ISD #21 NM GO School Bldg Bonds FA 12/17/2002 C 0.205 Jemez Valley Public SO #31 NM GO School Bldg Bonds FA 12/12/2002 C 0.600 West Las Vegas Municipal SD #1 NM GO School Building Bonds SOLE 12/10/2002 N 27.055 Colorado Springs City -Colorado CO Taxable Var Rte Dem Utils Bonds RA 12/5/2002 N 43.005 Colorado Springs City -Colorado CO Airport System Rev Ref Bonds FA 11/20/2002 C 110.000 Colorado Springs City -Colorado CO Util Sys Sub Lien Imp Rev Bonds FA NR Aaa Al NR Aaa A3 Baal NR Baal NR Baal Aal Aaa NR Aaa Aaa Aaa Aa3 Aaa NR NR NR Baa2 NR NR NR Aaa Aaa Aaa NR NR Aaa Aaa NR NR Aaa Aaa Aaa NR Baa2 NR Baa2 Aa2 Aaa Aa2 NR AAA NR NR NR NR NR NR NR NR AA NR AAA INS NR NR AAA INS NR NR NR NR NR NR AAA INS NR NR AAA AA AAA NR AA+ AA NR NR NR NR AAA AAA AAA AAA NR AAA NR AA+ AAA AAA NR NR NR NR NR AA AAA AA AAA AAA AAA NR AAA NR NR NR NR NR NR NR AAA AAA AAA INS INS INS INS INS INS INS NR NR AAA AAA INS NR AAA AAA INS AAA INS AAA INS NR NR NR NR NR AAA INS 11/4/2002 C 5.050 Leawood -Kansas KS General Obligation Imp Bonds FA Aaa AAA INS 1012112002 C 1.940 El Dorado -Kansas KS General Obligation Bonds FA 10/18/2002 N 3.420 Haysville-Kansas KS Temporary Notes FA 10/15/2002 C 3.640 Olathe -Kansas KS Temporary Notes FA NR NR NR 10/10/2002 C 3.305 Little Thompson Water Dt CO Water Revenue Bonds FA Aaa NR AAA INS 10/1/2002 C 19.605 Summit Cc (Park City) SD BOE UT GO Refunding Bonds FA Aaa NR AAA 9/24/2002 C 39.540 Salt Lake Cc (Jordan) SD BOE UT GO Refunding Bonds FA Aaa AA+ 9/23/2002 C 3.875 Haysville-Kansas KS General Obligation Bonds FA AAA 912312002 C 94.830 Sedgwick Cc (Wichita) USD #259 KS General Obligation Bonds FA Aaa AAA AAA INS 9/17/2002 C 11.610 Denver City Cc Board of Water Comm CO GO Water Refunding Bonds FA Aat AA+ AA+ 9/17/2002 C 0.600 Portales Municipal SD #1 NM GO School Building Bonds FA Baal NR NR 9116/2002 N 18.765 Delta Cc Mem Hosp Dt CO Enterprise Revenue Bonds FA NR BBB NR 9/12/2002 C 0.185 Springer Municipal SO #24 NM GO School Building Bonds FA NR NR NR 9/11/2002 C 0.075 Mountainair SD # 13 NM GO School Building Bonds FA NR NR NR 9/10/2002 C 0.345 Tularosa Municipal SD #4 NM GO School Building Bonds SOLE NR NR NR 9/5/2002 C 0.460 Santa Rosa Consol SD #8 NM GO School Building Bonds FA NR NR NR 8121/2002 C 2.365 Salina Airport Authority KS GO Improvement Bonds FA Al 8/19/2002 C 2.080 Bonner Springs -Kansas KS Temporary Notes FA NR NR NR 8/19/2002 C 5.235 Bonner Springs -Kansas KS General Obligation Bonds FA Aaa AAA AAA INS 8115/2002 N 74.695 Colorado Springs City -Colorado CO Subordinate Lien Ref Rev Bonds FA Aaa AAA AAA INS 7/22/2002 C 0.225 Chase Cc Unified SD#284 KS School Bonds FA NR NR NR 7/1012002 C 0.144 Sierra Kings Health Dt CA General Obligation Bonds FA Aaa AAA AAA INS 7/10/2002 C 5.855 Sierra Kings Health Dt CA General Obligation Bonds FA Aaa AAA AAA INS 718/2002 C 1.980 Salina -Kansas KS GO Internal Improvement Bonds FA Al 71212002 C 0.800 Olathe -Kansas KS General Obligation Bonds FA Aa3 AA NR 7/2/2002 C 13.650 Olathe -Kansas KS GO Refunding Bonds FA Aa3 AA NR 6/28/2002 N 1.910 Lubbock Housing Finance Corp TX Multi -Family Housing Rev Bonds FA A3 6/28/2002 N 11.090 Lubbock Housing Finance Corp TX Multi -Family Housing Rev Bonds FA A3# 6/27/2002 C 36.800 Johnson Cc (Blue Valley) USD #229 KS GO School Bonds FA Aaa AA AAA INS 6/18/2002 C 0.335 Jemez Valley Public SD #31 NM GO School Building Bonds FA 6/17/2002 C 0.685 Winfield -Kansas KS General Obligation Bonds FA NR NR NR 6/13/2002 C 1.000 Moriarty Municipal SD #8 NM GO School Building Bonds FA Aaa NR AAA INS 6/1212002 N 1.955 Mission City -Kansas KS GO Refunding Bonds SOLE Aaa NR AAA INS 6/12/2002 N 3.800 Mission City -Kansas KS GO Sales Tax Bands SOLE Aaa NR AAA INS 6/11/2002 C 10.000 Washington Cc SD UT GO School Building Bonds FA Aaa AAA 611112002 C 0.360 West Las Vegas Municipal SO #1 NM GO School Building Bonds FA Baal NR NR 6110/2002 C 0.200 Dickinson Cc (Herington) SO #487 KS GO School Bonds FA 5/22/2002 N 151.000 Utah Co -Utah UT Hospital Revenue Bonds CO-MGR Aa2 AA+ NR 5/2112002 C 95.835 Intermountain Power Agency UT Power Supply Rev Ref Bonds FA Aaa AAA AAA INS 5/16/2002 C 5.000 Dulce ISD #21 NM GO School Building Bonds FA Aaa NR AAA INS 5/14/2002 C 7.000 Hobbs Municipal SD #16 NM GO School Building Bonds FA Aaa NR AAA INS 5/912002 C 0.428 Conway Springs -Kansas KS General Obligation Bonds FA 5/8/2002 C 9.210 Olathe -Kansas KS General Obligation Bonds FA Aa3 AA NR 5/8/2002 C 41.785 Olathe -Kansas KS GO Temporary Notes FA NR NR NR 51712002 C 5.300 Espanola Public SO #45 NM General Obligation Bonds FA Aaa NR AAA INS 516/2002 C 1.748 Atchison -Kansas KS General Obligation Bonds FA A3 5/6/2002 C 0.800 Rose Hill -Kansas KS General Obligation Bonds FA 5/l/2002 C 0.900 Questa ISD #9 NM GO Lease Pumh Carts of Partic FA NR NR NR 5/l/2002 N 17.500 Valdez City -Alaska AK Marine Terminal Rev Ref Bonds RA NR BBB+ NR 4/23/2002 N 3.650 Denver City and Co -Colorado CO Certificates of Participation RA Aaa AAA AAA INS 4123/2002 C 13.480 Denver City and Co -Colorado CO Certificates of Participation FA Aaa AAA AAA INS 4/15/2002 C 4.299 Crawford Co (Northeast) USD#246 KS GO School Bonds LEAD Aaa AAA AAA INS 411512002 C 2.850 Louisburg -Kansas KS Temporary Notes FA NR NR NR 4/11/2002 C 2.940 Hays City -Kansas KS GO Internal Improvement Bonds LEAD Aaa AAA AAA INS 4/412002 C 0.850 West Las Vegas Municipal SO #1 NM GO School Building Bonds FA Baa2 NR NR 3/19/2002 C 2.200 Arkansas City -Kansas KS General Obligation Bonds FA NR NR NR 314/2002 C 4.865 Salina -Kansas KS Temporary Notes FA NR NR NR 2/1412002 C 1.000 Neodesha -Kansas KS Improvement Bonds FA 111512002 C 15.000 Jefferson Co Conscl SD #6 MO GO School Building Bonds FA Aaa AAA AAA INS 12/18/2001 C 1.350 Johnson Co Fire Dt #2 KS GO Improvement Bonds FA 12118/2001 C 3.000 Moriarty Municipal SO #8 NM GO School Building Bonds FA Aaa NR AAA INS 12/10/2001 C 0.165 Hondo Valley Public SD #20 NM GO School Building Bonds FA NR NR NR 121412001 C 0.725 Olathe -Kansas KS Temporary Notes FA NR NR NR 12/4/2001 C 4.575 Olathe -Kansas KS General Obligation Bonds FA Aa3 AA 11/21/2001 C 1.400 Portales Municipal SO #1 NM GO School Building Bonds FA Aaa NR AAA INS 11120/2001 C 0.340 Jemez Valley Public SO #31 NM GO School Building Bonds FA 11/13/2001 C 16.070 Denver City and Co -Colorado CO Certificates of Participation FA Aaa AAA AAA INS 11113/2001 C 1.292 Garden City -Kansas KS General Obligation Bonds FA A2 11/7/2001 C 33.910 Denver City and Co -Colorado CO Certificates of Participation FA Aa2 AA AA- 111612001 C 2.260 Junction City -Kansas KS GO Improvement Bonds FA Aaa AAA AAA INS 11/5/2001 C 0.130 Lindsborg City -Kansas KS General Obligation Bonds FA 10/2512001 N 0.775 Cimarron Municipal SD #3 NM GO Certificates of Participation FA NR NR NR 10/2312001 C 0.340 Fort Scott City -Kansas KS General Obligation Bonds FA 10/17/2001 C 1.385 Salina Airport Authority KS GO Improvement Bonds FA Al 10/10/2001 C 0.150 Mosquero Municipal SO #5 NM Ed Tech GO Lease Purchase COP FA NR NR NR 10/9/2001 C 13.575 Washington Co Board of Education AL General Obligation Bonds FA Aaa AAA 101912001 C 13.575 Washington Co SD UT School Building Bonds FA Aaa A+ 10/1/2001 C 4.040 El Dorado -Kansas KS General Obligation Bonds CO-MGR Aaa AAA AAA INS 9/2612001 C 1.250 Haysville-Kansas KS Temporary Notes FA NR NR NR 9/25/2001 C 10.000 Salt Lake Co (Jordan) SO BOE UT GO School Building Bonds FA Aaa AAA AAA 9/18/2001 C 1.175 Arkansas City -Kansas KS General Obligation Bands FA 9/18/2001 C 2.000 Dulce ISO #21 NM GO School Building Bonds FA Aaa NR AAA INS 9/1112001 C 1.330 Garden City -Kansas KS General Obligation Bonds FA A2 NR NR 9111/2001 C 0.435 Tularosa Municipal SO #4 NM GO School Building Bonds FA NR NR NR 9/10/2001 C 4.845 Wilson Co -Kansas KS Unitd Tau GO Sales Tax Bonds FA Aaa AAA AAA INS 8/9/2001 C 0.215 Springer Municipal SO #24 NM GO School Building Bonds FA NR NR NR 816/2001 C 9.300 Leawood -Kansas KS GO Improvement Bands FA Aal NR NR 8/2/2001 C 42.800 Denver City Co Board of Water Comm CO Certificates of Participation FA Aa2 AA- 81112001 C 74.500 Johnson Co (Blue Valley) USD #229 KS GO Refunding Bonds FA Aal AA+ 7/27/2001 N 300.790 Colorado Springs City -Colorado CO Subor Lien Improv & Ref Rev Bonds FA Aa2 AA NR 712512001 C 11215 Denver City Co Board of Water Comm CO GO Water Refunding Bonds FA Aal AA+ AA+ 7/25/2001 C 77.990 Denver City Co Board of Water Comm CO GO Water Refunding Bonds FA Aal AA+ AA+ 7125/2001 N 9.790 Murray City Municipal Bldg Auth UT Lease Revenue Bonds PYGAGENT Aaa NR AAA INS 7/1812001 C 0.711 Fort Scott City -Kansas KS General Obligation Bonds FA 7/16/2001 C 3.507 Goddard -Kansas KS General Obligation Bonds FA 7/9/2001 C 0.935 Salina -Kansas KS General Obligation Temp Notes FA NR NR NR 71912001 C 5.350 Salina -Kansas KS General Obligation Bonds LEAD At 7/212001 C 0.460 Winfield -Kansas KS General Obligation Bonds FA 6125/2001 C 1.274 Marion -Kansas KS GO Sales Tax Bonds FA 6/22/2001 C 2.700 Pecos ISO #21 NM GO School Building Bonds FA Aaa NR AAA INS Commitment to Colorado Issuers Colorado Presence • George K. Baum & Company has maintained its municipal finance headquarters in Denver since 1990. • The firm has the largest and most active public finance, municipal bond sales and trading, and municipal research operations in Colorado, with more than 80 employees located in Denver. • Our Colorado clients have tremendous access to the professionals assigned to their engagement(s), in addition to our large support staff. • Our firm has traded more than $57 billion of municipal securities in the secondary market since 1994, including more than $7 billion of Colorado municipal securities. We are a major market maker in Colorado municipal bonds in the secondary market. Investors' knowledge of our willingness to provide secondary market liquidity significantly enhances our ability to generate demand for the new Colorado issues we underwrite, which ultimately results in stronger pricing. Presentation to City of Fort Collins George K Baum & Company Investment Bankcm Since 1928 6/1912001 C 2.600 Loving Municipal SO #10 NM GO School Building Bonds FA Baa2 NR NR 6118/2001 C 0.995 Louisburg -Kansas KS General Obligation Bonds FA 6114/2001 C 0.900 West Las Vegas Municipal SO #1 NM GO School Building Bonds FA Baa2 NR NR 6111/2001 C 0.990 Logan Muni SO #32 NM GO School Building Bonds FA NR NR NR 6/11/2001 C 94.835 Sedgwick Co (Wichita) USD #259 KS General Obligation Bonds FA Aa3# AA# AAA 5/21/2001 C 9.965 Atchison -Kansas KS GO Water & Sewer Sys Bonds CO-MGR Aaa NR AAA 5/1512001 C 9.460 Park City SO UT GO Sch Bldg and Ref Bonds FA Aaa NR AAA 5/1412001 N 20.000 Murray City -Utah UT Electric Revenue Bonds FA Aaa AAA 51712001 C 6.230 Clay Cc Unified SO #379 KS GO School Bonds FA Aaa AAA AAA 5/312001 C 2.500 Las Vegas City SO #2 NM GO Education Technology Notes FA Aaa NR AAA 5/2/2001 C 0.150 Wagon Mound Public SO #45 NM Certificates of Participation FA NR NR NR 5/112001 C 6.825 Olathe -Kansas KS General Obligation Bonds FA Aa3 AA 5/1/2001 C 37.700 Olathe -Kansas KS General Obligation Temp Notes FA NR NR NR 413012001 C 2.720 Barton Co -Kansas KS General Obligation Bonds FA 4/25/2001 C 19.500 Murray City SO UT GO School Building Bonds FA Aaa AAA AAA 4/18/2001 C 0.885 Mendocino Coastal Health Care Dt CA General Obligation Bonds FA Aaa AAA AAA 4/1812001 C 4.615 Mendocino Coastal Health Care Dt CA General Obligation Bonds FA Aaa AAA AAA 4/17/2001 C 1.800 Grant Co -Kansas KS GO Library Bonds FA NR NR NR 4/12/2001 C 1.965 Hays City -Kansas KS GO Temporary Notes FA NR NR NR 4/1212001 N 100.000 Salt Lake Co -Utah UT Hospital Revenue Bonds FA Aaa AAA AAA 41312001 C 8.270 Olathe -Kansas KS Water and Sewer Sys Revenue Bonds FA Aaa AAA AAA 4/2/2001 C 12.058 Barton Co (Hoisington) USD #431 KS GO School Bonds LEAD Aaa AAA AAA 3/2012001 N 0.500 University of New Mexico Regents NM General Obligation Bonds FA Al NR NR 3113/2001 C 0.770 Elide Muni SO # 2 NM GO School Building Bonds FA NR NR NR 3/12/2001 C 6.500 Portales Municipal SO #1 NM GO School Building Bonds FA Aaa NR AAA 3/8/2001 C 0.742 Vaughn Municipal SO #33 NM GO School Building Bonds FA NR NR NR 3/5/2001 C 0.250 Barton Co USD #354 KS GO School Improvement Bonds FA NR NR NR 2128/2001 C 14.850 Denver City and Co -Colorado CO Certificates of Participation FA Aaa AAA AAA 2/1212001 C 1.763 Haysville-Kansas KS General Obligation Bonds FA Aaa AAA AAA 217/2001 N 125.000 Salt Lake Co -Utah UT Hospital Revenue Bonds FA Aaa AAA AAA 21712001 C 9.800 Ulysses Unified SO #214 KS GO School Improv Bonds FA Aaa AAA AAA 2/6/2001 C 6.000 Grants/Cibola Co SO #1 NM GO School Building Bonds FA Aaa NR AAA 12/21/2000 C 0.150 Mora ISO #1 NM GO School Building Bonds FA NR NR NR 12/20/2000 C 0.400 Cuba ISO #20 NM GO Education Technology Notes FA NR NR NR 12/1412000 N 14.000 ABC Unified SO CA General Obligation Bonds FA Aaa AAA AAA 12/14/2000 C 2.000 Santa Rosa Consol SO #8 NM GO School Building Bonds FA NR NR NR 12113/2000 C 3.000 Moriarty Municipal SO #8 NM GO School Building Bonds FA Aaa NR AAA 12/12/2000 C 0.310 Tularosa Municipal SO #4 NM GO School Building Bonds FA NR NR NR 12112/2000 C 10.000 Washington Co SO BOE UT GO School Building Bonds FA Aaa AAA AAA 12/11/2000 C 60.000 Johnson Cc (Blue Valley) USD #229 KS GO School Bonds FA Aal AA NR 12/4/2000 C 7.500 Olathe -Kansas KS Temporary Notes FA NR NR NR 11/2112000 C 8.000 Dulce ISO #21 NM GO School Building Bonds FA Aaa NR AAA 1111512000 C 0.350 Garden City -Kansas KS General Obligation Bonds FA 11/14/2000 N 110.000 Colorado Springs City -Colorado CO Var Rte Util Sys Sub Rev Bonds RA Aa2 AA NR 11/612000 C 8.310 Leawood -Kansas KS GO Improvement Bonds LEAD Aal NR NR 11/1/2000 C 15.000 Colorado Springs City -Colorado CO Utilities System Subordinate Lien FA Aaa AAA AAA 10/18/2000 C 1.170 Concordia -Kansas KS General Obligation Bonds FA NR NR NR 10/1712000 C 14.500 Salt Lake Co (Jordan) SD BOE UT GO School Building Bonds FA Aaa AAA NR 9/14/2000 C 12.700 Denver City Co Board of Water Comm CO GO Water Refunding Bonds FA Aa2 AA+ NR 911412000 C 2.450 Hays City -Kansas KS GO Internal Improvement Bonds FA Aaa AAA AAA INS# INS INS INS INS INS INS INS INS INS INS INS INS INS INS INS INS INS INS STBY INS MTG INS 911212000 C 0.425 MountainairSO # 13 NM GO School Building Bonds FA NR NR NR 9/11/2000 C 0.060 San Jon Municipal SO #34 NM GO School Building Bonds FA NR NR NR 9/7/2000 C 0.508 Conway Springs -Kansas KS GO Internal Improvement Bonds FA 916/2000 C 0.500 Lordsburg Muni SO #1 NM GO School Building Bonds FA NR NR NR 915/2000 C 1.278 Goddard -Kansas KS General Obligation Bonds FA 8/1512000 C 5.705 Olathe -Kansas KS General Obligation Bonds FA Aa3 AA- NR 8/1412000 C 94.833 Sedgwick Co (Wichita) USD #259 KS General Obligation Bonds FA Aa3# AA# NR# 8/9/2000 C 10.000 Murray City SO UT GO School Building Bonds FA Aaa NR AAA 7/31/2000 C 3.000 Fort Scott City -Kansas KS Temporary Notes FA NR NR NR 7/19/2000 C 7.265 Colorado Springs Pub Facs Auth CO Certificates of Participation FA Aaa AAA AAA 711812000 C 0.800 Jemez Valley Public SO #31 NM GO School Building Bands FA NR NR NR 7/17/2000 C 2.500 Great Bend -Kansas KS General Obligation Bonds FA A2 NR NR 7/13/2000 C 0.175 Osawatomie-Kansas KS General Obligation Bonds FA NR NR NR 7/12/2000 N 200.845 Denver City and Co -Colorado CO Certificates of Participation FA Aaa AAA AAA 7/10/2000 C 0.800 Salina -Kansas KS GO Temporary Notes FA NR NR NR 7/10/2000 C 3.885 Salina -Kansas KS GO Internal Improvement Bonds FA Al NR NR 6/2112000 C 23.690 Denver City and Co -Colorado CO Certificates of Participation FA Aaa AAA AAA 6119/2000 C 0.393 Rose Hill -Kansas KS General Obligation Bonds FA 6/15/2000 C 0.600 Vaughn Municipal SO #33 NM GO School Building Bonds FA NR NR NR 61712000 C 6.188 Barton Co USD #355 KS GO School Improvement Bonds FA Aaa AAA 616/2000 C 7.000 Olathe -Kansas KS Certificates of Participation FA Aaa AAA AAA 6/l/2000 C 5.000 Little Thompson Water Dt CO Water Revenue Bonds FA Aaa NR# AAA 5/23/2000 C 0.595 Cherry Hills Village -Colorado CO Special Assessment Bonds FA NR NR NR 5/2312000 C 0.930 Cherry Hills Village -Colorado CO Special Assessment Bonds FA NR NR NR 5115/2000 C 7.860 Johnson Co(Gardner-Antioch)SD#231 KS GO School Bonds FA Aaa AAA AAA 5/11/2000 C 1.100 West Las Vegas Municipal SO #1 NM GO School Building Bonds FA Baal NR NR 519/2000 C 0.500 Estancia Municipal SO #7 NM GO School Building Bonds LEAD NR NR NR 512/2000 C 0.395 Arkansas City -Kansas KS Temporary Notes FA NR NR NR 5/212000 C 1.790 Arkansas City -Kansas KS General Obligation Bonds FA NR NR NR 51212000 C 0.814 Leavenworth City -Kansas KS General Obligation Bonds FA Aa NR NR 5/212000 C 3.470 Olathe -Kansas KS General Obligation Bonds FA Aa3 AA- NR 512/2000 C 5.800 Olathe -Kansas KS Temporary Notes FA NR NR NR 5/2/2000 C 22.250 Olathe -Kansas KS Temporary Notes FA NR NR NR 4125/2000 C 0.280 Des Moines Muni SO #22 NM GO Educ Technology Notes FA NR NR NR 4/20/2000 C 2.500 Pecos ISO #21 NM Education Technology Notes FA NR NR NR 4/19/2000 C 0.135 Hondo Valley Public SO #20 NM GO School Building Bonds FA NR NR NR 4/6/2000 C 1.500 Espanola Public SO #45 NM General Obligation Bonds FA Baal NR NR 4/312000 C 3.900 Salina -Kansas KS GO Temporary Notes FA NR NR NR 3/20/2000 C 0.925 Holton -Kansas KS General Obligation Bonds FA NR NR NR 3/14/2000 C 0.375 Tularosa Municipal SO #4 NM GO School Building Bonds FA NR NR NR 31912000 N 24.999 ABC Unified SO CA General Obligation Bonds FA Aaa AAA AAA 3/9/2000 C 0.225 Springer Municipal SO #24 NM GO School Building Bonds FA NR NR NR 3/6/2000 C 1.171 Lindsborg City -Kansas KS GO Public Building Bonds FA NR NR NR 2/28/2000 P 17.400 Southeast Texas Housing Fin Corp TX Txble Single Family Mtg Rev Bonds CO-MGR NR AAA NR 212212000 C 0.300 Mesa Vista Consol SO #6 NM School Building Bonds FA NR NR NR 211812000 N 37.500 Weber Co -Utah UT Var Rle Dem Hospital Rev Bonds RA NR AA+ NR 2/18/2000 N 87.500 Weber Co -Utah UT Var Rte Dem Hospital Rev Bonds CO-MGR NR AA+ NR 2115/2000 C 1.000 Las Vegas City SO #2 NM Education Technology Notes FA Baal NR NR 217/2000 C 9.750 Eureka Unified SD #389 KS GO School Improvement Bonds FA Aaa NR AAA 217/2000 C 1.600 Prairie Village -Kansas KS GO Park Improvement Bonds FA NR NR NR INS# INS INS INS INS INS INS INS INS INS MTG INV INV INS 112412000 C 11.050 Kingman Unified SD #331 1118/2000 C 1.345 Atchison Co -Kansas 1/11/2000 C 0.165 Grady Muni SD #61 1/1112000 C 10.000 Park City SO 1/1012000 C 17.000 Johnson Co(Gardner-Antloch)SD#231 1110/2000 C 16.193 Sedgwick Co (Derby) USD #260 $ 5,195.11 Total Issues: 302 KS GO School Improvement Bonds LEAD Aaa AAA AAA KS General Obligation Bonds FA NR NR NR NM GO Education Technology Notes FA NR NR NR UT GO School Building Bonds FA Aaa NR AAA KS GO School Bonds FA Aaa AAA AAA KS GO School Improvement Bonds LEAD Aaa AAA AAA INS INS INS 1 Services to be Performed Appendix 2: Outline the procedures your firm would use to provide the services as listed above. The City is interested in many types of innovative financings which should be established to achieve the highest possible quality ratings from Fitch, Moodys and Standard & Pooes and the most favorable insurance quotes on each transaction. The tasks that will be performed by George K. Baum & Company in connection with the City's financing include: • Assist in the development of a written chronolog- ical timetable of all steps necessary to complete the transaction. • Structure the financing package, including matu- rity schedules, call features, covenants, etc. • Design and distribute a Preliminary Official State- ment to attract broad -based interest in the securi- ties. • Develop with Bond Counsel and Disclosure Counsel all necessary documents incidental to the issuance of the bonds. • Advise the City of the optimum timing of the bond sale to minimize conflicts with other issues and obtain the best available borrowing rates. PROPOSAL TO City of Fort Collins • Present the financial plan and the issue to be sold to the rating agencies for their review and rating and, in the process, coordinate the development of all background information relevant to the rat- ing process. • Evaluate the cost and benefits of obtaining bond insurance. Should insurance appear to be advan- tageous, coordinate and develop all necessary information and applications for bond insurance. • Develop a marketing plan for the issue which would consist of the appropriate notices of sale being circulated to the prospective bidders and further contacts to stimulate interest in bidding on the issue. • Help arrange for the printing, signing, and delivery of the bonds, and assist with the steps involved in arranging for book -entry securities. • Close the transaction and assure the City of the prompt receipt of bond proceeds. George K. Baum & Company provides its clients many services and resources that extend well beyond the traditional investment banking scope of services. Many are unique to the industry; all are valuable sources of information for our clients. 0 GEORGE K. BAUM & COMPANY I Investment Bankers Since 192E Page 12 PROPOSAL TO City of Fort Collins About George K. Baum & Company Appendix 3: Provide a concise history of the firm. George K. Baum & Company was founded in 1928 to provide a full range of investment banking services and products to investors, corporations and municipalities. Over our 76-year history, the firm has developed into one of the nations leading underwriters of municipal securities. Our public finance professionals provide: • Negotiated underwritings (taxable and tax-exempt) • Competitive underwritings (taxable and tax-exempt) • Credit enhancement • Financial advisory services • Refundings • Rating agency presentations • Service plan development • Tailored quantitative analysis • Contract negotiations • Remarketings • Investment of bond proceeds • Derivative products George K. Baum & Company maintains municipal division offices in 18 U.S. cities including institutional sales operations in four major U.S. cities. city `a> p- An_chorSge Offices Nationwide PUBLIC FINANCE Albuquerque, NM Anchorage, AK Atlanta, GA Bellevue, WA Cheyenne, WY Chicago, IL Dallas, TX Denver, CO Houston, TX Kansas City, MO New York, NY Sacramento, CA Salt Lake City, UT Seattle, WA Springfield, MO Wichita, KS INSTITUTIONAL SALES Boston, MA Denver, CO Kansas City, MO Philadelphia, PA TRADING DESKS Denver, CO Kansas City, MO 0 GEORGE K. BAUM & COMPANY I Investment Bankers Since 1928 Pdge 13 71 r PROPOSAL TO City of Fort Collins Conflicts of Interest Appendix 4: The City requires that the selected firm(s) would be completely independent and work in an unbiased manner. Please explain any agreements that your firm would have that may conflict with the needs of the City or prevent full disclosure. As stated in our answer to Question #11 Disclosure, to the best of our knowledge, no employment engagement, agreement or relationship exists or has existed that would create a conflict of interest if the City enters into an agreement with George K. Baum & Company. 0 GEORGE K. BAUM & COMPANY I Investment Bankers Since 1928 Page 14 J PROPOSAL TO City of Fort Collins Underwriting Statistics Appendix S: List the dollar volume of your underwritings in the tax. exempt market for the years 2001, 2002, 2003 and 2004 to date. George K. Baum & Company Underwriting Statistics 2001- $7.24 billion (274 issues) 2002 - $9.91 billion (316 issues) 2003 - $6,84 billion (277 issues) 2004 YTD - $3.04 billion (101 issues) 0 GEORGE K. BAUM & COMPANY I Investment Bankers Since 1928 Page is Financing Team Appendix 6: Provide complete information including background, overall abilities and experience for the person(s) who would serve in the role as described above. The City needs this information to include consulting on tax-exempt debt issues with special emphasis on the various types of instruments listed above. Douglas Houston is a senior vice president with George K. Baum & Company with more than 30 years of municipal and governmental finance experience gained both as an investment banker and municipal official. Mr. Houston will serve as lead banker and primary contact for the City of Fort Collins. His specific areas of expertise include financial advisory services, certificates of participation/lease revenue financings, municipal utilities, airports, redevelopment, mass transit projects, credit evaluations, refundings and derivative and swap advisory services. His clients have included the cities of Fort Collins and Colorado Springs; the Colorado Springs Utilities; El Paso County,; the town of Estes Park and its Urban Renewal Authority, Thompson and Estes Park school districts; the cities of Billings and Great Falls, Montana; the City of Bakersfield, California; the City of Las Vegas, Nevada; and the Regional Transportation District (Denver). Mr. Houston previously held a variety of positions in local government, including serving on the Regional Planning Commission of Champaign County, Illinois; director of community development for the City of Rock Island, Illinois, and executive director of the City of Boulder's Urban Renewal Authority. When he was with the Boulder Urban Renewal Authority, Mr. Houston directed the first use of a tax -increment financing in Colorado. Mr. Houston is a graduate of the University of Illinois (Department of Urban and Regional Planning). PROPOSAL TO City of Fort Collins Troy Bernberg is an assistant vice president with George K. Baum & Company. Mr. Bernberg joined the firms Denver office in July 2002 and is responsible for performing quantitative analysis including structuring of amortization schedules, cash flow analyses, financial assessments, and other transaction functions for his Colorado clients. Since joining the firm, he has worked on a variety of new issue and refunding transactions encompassing many types of taxable and tax-exempt municipal securities. Mr. Bernberg holds a B.S. in business administration from Leeds School of Business at the University of Colorado at Boulder. James Cleveland is a senior vice president and manager of the firms Quantitative Finance Group. He has more than 28 years of quantitative finance experience and has been with George K. Baum & Company since 1970. Mr. Cleveland specializes in refunding bond issues, structured financings, and other technically -driven bond issues. He has performed quantitative analysis for more than $12 billion of tax-exempt and taxable financings involving more than 400 issuers during his career,.. Mr. Cleveland holds an M.B.A. and B.A. from the University of Colorado. He is a member of the National Association of Securities Dealers, Society of Security Analysts, Association for Investment Management and Research and the Municipal Bond Dealers Association. 0 GEORGE K BAUM & COMPANY I Investment Bankers Since 1928 Page 16 Mary -Katherine Sells is a first vice president and senior research analyst with George K. Baum and Company. Ms. Sells researches and develops credit analyses for general governmental, health care and higher education issuers, with final products successfully used in credit rating and enhancement presentation meetings. She is considered an expert in evaluating COP credits. Ms. Sells also compiles and prepares Financial Profile, Credit and Debt Capacity Analysis reports, which are used extensively by a variety of issuers in the course of their strategic planning. Ms. Sells joined the firm in 1990, and holds an M.B.A. from the University of Denver and B.S. from Boston College. She is a member of the National Federation of Municipal Analysts (NFMA) and the Health care Financial Management Association (HFMA). PROPOSAL TO City Of Fort Collins Robert Lombardi is an executive vice president and George K. Baum & Company's most senior underwriting/syndicate specialist. Mr. Lombardi has more than 30 years of underwriting and trading experience. His primary responsibility includes managing the syndication and underwriting of negotiated bond issues sold by the firm. Mr. Lombardi has personally supervised the firm's underwriting/ syndication efforts on transactions totaling in excess of $15 billion. He has priced almost all the Colorado financings underwritten by our firm over the past 20 years, including all of the COP financings underwritten by Baum in recent years. Prior to joining George K. Baum & Company in 1974, Mr. Lombardi was employed with Merrill Lynch. He is a graduate of the University of Colorado. 0 GEORGE K. BAUM & COMPANY I Investment Bankers Since 1928 Page 17 Proposed Fees & Expenses Appendix 7- A) For advisory services, propose a flat dollar amount fee respective to each financing. Indicate whether any economies of scale will be obtained if more than one of the transactions is completed by your firm. Estimate and commit to a not -to -exceed dollar amount of each respective transaction not included in the flat fee quoted. B) For negotiated sales, indicate how your firm will manage transactions to minimize costs to the City. Provide specific examples of the fee levels and arrangements obtained for other clients. C) Fees will be billed after closing of any transaction(s). If a transaction is not consummated, the City will not be responsible to pay any fees or expense related to that transaction. Identify all fees for other services that may be required to complete the transaction. George K. Baum & Company is a full service investment banking firm which utilizes the talent and expertise of its many experienced team members on any assignment, financial advisory or underwriting, that it undertakes for a client. In our opinion, all of the fees proposed below are reasonable and competitive except where competing firms are unable to provide the same level of resources and expertise as George K. Baum & Company. We are however open to negotiation with the City on any aspect of the fees proposed based on the City's final requirements. Financial Advisory Services Fee If our firm is selected to serve as financial advisor we recommend that the fees for the COPS be divided into two tranches: for the general City supported COP's for the police services building, transportation de-icing facility and the Southeast branch library we propose a flat fee of $25,000 if all are done as a single issue. If done separately (but services provided by George K. Baum & Company for all three projects) we propose a fee of $18,000 for the police facility and $6,000 each for the transportation and library facilities. Because of the very different nature and difficulty of the open space COP's we have suggested that George K. Baum & Company act as investment banker for a negotiated sale; however were the City to choose that we serve as financial advisor we would do so at a fee of $25,000 which would include the extensive and elaborate program described in "Approach". With regard to redevelopment financings we propose an advisory fee of $15,000 for each insured issue up to $10.0 million in par amount. If redevelopment financings are to be done on a non -rated basis our PROPOSAL TO City of Fort Collins base fee would be $20,000. Because of the extensive time involved from conception of a redevelopment project to the actual issuance of a financing, we propose an additional $5,000 be added to our compensation for each additional year it takes to bring a financing to market. These fees would prevail whether we served as advisor for public or negotiated sales. As financial advisor for negotiated sales, George K. Baum & Company have prepared RFPs for underwriters and has been successful at obtaining competitive fee structures for bankers. Our emphasis however has always been at selecting the best proposals which may or may not be the lowest prices. Our experience is that it is important to assure that bankers are appropriately compensated to provide an incentive for aggressive interest rate pricing which is much more important to interest cost reductions and to the best marketing of difficult financings such as TIFs and COP s. Negotiated Sales George K. Baum & Company proposes that the City retain its services as an investment banker to underwrite the City's proposed COPS, which are resistant to effective public sale especially its open space COP's. For the difficult task of structuring, obtaining ratings and credit enhancement and underwriting the open space COP's we would seek compensation of $7.00/$1000 of par amount. For underwriting the police services building COP s a fee of $5.00/$1000 is proposed as it is for the transportation and library COPS. For redevelopment TIF bonds, we would underwrite at a fee of $9.00/$1000 for insured bonds and $12.50 for non-insured and or non -rated bonds. Additional Fees for Other Services George K. Baum & Company will pay all its normal and customary out -of -pocket expenses from the above fees. Out-of-pocket expenses for out of state travel for rating and insurance presentations would be charged at our cost and only with the prior approval of the City. On any issue we will commit that such direct expenses would not exceed $1,500 without the City's consent. We do not anticipate that George K. Baum & Company 0 GEORGE K. BAUM & COMPANY I Investment Bankers Since 1928 Pdge 18 Experience Financial Advisory & Underwriting Experience • Since 1995, George K. Baum & Company has served as financial advisor on 476 issues with a total par value of approximately $6.7 billion. • We have also provided many of the same services that a financial advisor provides in connection with the more than 1,800 negotiated issues we have senior managed during this same time period. • Additionally, Baum has served as underwriter on more than 1,340 tax- exempt revenue bond issues, and 130 certificate of participation (COP) issues since 1995, together totaling more than $51.8 billion. • Our hands-on experience in structuring, underwriting and marketing municipal bond issues —coupled with our extensive advisory experience — has proven extremely valuable to our financial advisory clients. Presentation to City of Fort Collins George K Baum & Company In%esmx-nr Bankers Since 1928 PROPOSALTO City/ of Fort Collins will incur reimbursable expenses for other of our services that will occur in the course of completing individual issues for the City. Normal cost of issuance such as bond and disclosure counsel, insurance, rating fees, title insurance, POS/OS printing and distribution, including electronic posting, paying agent, fees of the City's auditor, CUSIP, DTC, etc., will vary with each issue's size and complexity and are considered the Cit),Is normal expenses to be paid from issue proceeds. Fees for such services as opinion surveys and special studies and research provided by George K. Baum & Company would be determined at the time such services were requested and at a level mutually agreed. 0 GEORGE K. BAUM & COMPANY I Investment Bankers Since 1928 Page 19 Unique Qualifications Appends & Include all other information or data which may uniquely qualify your firm in serving the City in the role outlined in this document. George K. Baum & Company offers the best staffed, most fundamentally experienced investment bank- ing and financial advisory services in Colorado. We are clearly unique in the aggressive investments we have made in recent years in both our personnel and our resources to better serve our clients. Certain of our services, methods of approach, and ex- perience, our firm is uniquely well -suited to meeting the City's needs on the proposed projects. Knowledge of Fort Collins. The professionals assigned to this project have extensive experience working with the City of Fort Collins on many types of financings. Baum has completed many of the City's Storm Drainage bonds; worked on utility, general obligation, and sales tax bonds and the City's prior issue of COPs for the mason Street parking garage and City office building Rating Presentations. We believe the rating presenta- tions we prepare for our clients are unique in their comprehensiveness and professional appearance. In fact, our credit rating presentation packages have been described as "industry leading' by major rating agencies. Our firm has prepared such presentations for the City in the past, and in 1998 assisted the City in a rating strategy which resulted in an upgrade of the City's general obligation rating to Aal. PROPOSAL TO City of Fort Collins Strategies for Ratings and Insurance. We feel that our recent and directly -on -point experience in gain- ing favorable ratings and insurance terms for our revenue bond and COP clients is due in large part to the unique extra effort we place on developing careful strategies for the timing and sequencing of personal contacts and organization of information. Mary Kay Sells of George K. Baum & Company's research staff has worked on many of Fort Collins rating presenta- tions and will continue to serve the City as one of our team members on this assignment. Competitive and Negotiated Sale of Issues. George K. Baum & Company, and specifically the profession- als assigned to the City, have extensive experience acting as financial advisor for the competitive sale of bond issues and COPS. Unique among investment banking firms in Colorado is the significant advisory services we provide to a wide variety of clients, in- cluding the City of Colorado Springs and the Denver Water Board. Our's is one of only two fully Denver based trading desks and as such continues to have a vastly superior grasp on the intricacies of Colorado municipal bonds, especially COP's. Public Opinion Surveys. George K. Baum & Compa- ny has completed numerous public opinion surveys for the City of Fort Collins, some very applicable to the projects and methods of the proposed financings. This knowledge is unique and will be helpful in ad- vising the City and others, such as rating analysts and insurers, about public perceptions. 0 GEORGE K. BAUM & COMPANY I Investment Bankers Since 1928 Page 20 PROPOSAL TO City of Fort Collins Financial Advisory & Underwriting Clients Appendix 9: List all Colorado clients and those clients for similar transactions for which your firm has provided financial advisory or underwriting services over the past three years and those which will provide a reference. George K. Baum & Company Colorado Clients Served April 2001- April 2004 Following is a list of our Colorado COP issues followed by a list of all underwriting and financial advisory issues during the past three years. 0 GEORGE K. BAUM & COMPANY I Investment Bankers Since 1928 Page 21 APPENDIX 9 George K. Baum & Company Colorado Issues Served as Underwriter or Financial Advisor April 2001- April 2004 Certificates of Participation Issues 4/712004 N 4.485 Thompson SD #R2J Certificates of Participation SOLE Aaa AAA INS 11/1812003 C 15.07 Colorado Springs Pub Facs Auth Certificates of Participation FA A2 11/6/2003 C 7.275 Boulder Valley SO #RE-2 Certificates of Participation CO-MGR AA- 5115/2003 C 60.78 Denver City and Co -Colorado Certificates of Participation CO-MGR Aaa AAA AAA INS 4/16/2003 N 17.245 El Paso Co -Colorado Certificates of Participation SOLE Aaa AAA AAA INS 12/6I2002 N 44.865 El Paso Co -Colorado Certificates of Participation SOLE Aaa AAA AAA INS 12/5/2002 N 40.11 El Paso Co -Colorado Certificates of Participation SOLE Aaa AAA AAA INS 5/2812002 N 15.76 Arapahoe Co -Colorado Certificates of Participation SOLE Aaa AAA INS 5/2112002 N 2.5 Frisco Finance Authority Certificates of Participation SOLE Aaa NR AAA INS 4/24/2002 N 4.075 Mesa Co (Valley) SO #51 Certificates of Participation SOLE Baal NR NR 4123/2002 N 3.65 Denver City and Co -Colorado Certificates of Participation RA Aaa AAA AAA INS 4/23/2002 C 13.48 Denver City and Co -Colorado Certificates of Participation FA Aaa AAA AAA INS 3/21/2002 N 4.92 Adams Co Communication Ctr Inc Certificates of Participation SOLE Baal NR NR 3114/2002 N 5.26 Chaffee Co -Colorado Certificates of Participation SOLE Aaa AAA AAA INS 11/13/2001 C 16.07 Denver City and Co -Colorado Certificates of Participation FA Aaa AAA AAA INS 11f712001 C 33.91 Denver City and Co -Colorado Certificates of Participation FA Aa2 AA AA- 10/1912001 N 9.46 Garfield Co Finance Auth Certificates of Participation SOLE Aaa AAA AAA INS 10/5/2001 N 20.195 Logan Co Justice Ctr Fin Corp Certificates of Participation LEAD Aaa AAA AAA INS 8/6/2001 N 6.75 Steamboat Springs -Colorado Certificates of Participation LEAD Aaa AAA AAA INS 81212001 C 42.8 Denver City Co Board of Water Comm Certificates of Participation FA Aa2 AA- 6128/2001 N 6.75 Steamboat Springs -Colorado Certificates of Participation LEAD Aaa AAA AAA INS 5/24/2001 N 7.715 Packer -Colorado Certificates of Participation SOLE A3 NR NR All Other Colorado Issues 4/15/2004 N 2.24 Brush Creek Metropolitan Dt GO Refunding Bonds SOLE 4/l/2004 N 414,86 Colorado Dept of Transportation Transportation Revenue Notes LEAD Aaa AAA AAA INS 411/2004 N 9.885 Left Hand Canyon -Colorado Water Revenue Bonds SOLE Aaa AAA INS 3/2312004 C 4,705 Little Thompson Water Dt Water Revenue Ref Bonds FA Aaa AAA AAA INS 3/15/2004 N 1.35 Milliken -Colorado Sales & Use Tax Revenue Bonds SOLE 3/11/2004 N 1.375 Black Hawk -Colorado Device Tax Revenue Ref Bonds SOLE NR NR NR 3/11/2004 N 8.43 Adams Co (Westminister) SO #50 GO Refunding Bonds SOLE Aaa AAA AAA INS 3/11/2004 N 34.5 Colorado Ed and Culture Auth Student Housing Rev Bonds SOLE Al NR NR 3/9/2004 C 4.215 Boulder Co -Colorado Offender Mgmt Cap Imp Trust Bonds LEAD Aaa AAA AAA INS 315/2004 N 2.74 El Paso Co SO #22 GO Refunding Bonds SOLE Aaa AAA AAA INS 2/26/2004 N 5.68 Montezuma Co -Colorado Sales & Use Tax Rev Ref Bonds SOLE Aaa AAA AAA INS 2/24/2004 N 57.075 Grand Junction City -Colorado General Fund Rev Bonds CO-MGR Aaa AAA AAA INS 2/24/2004 N 30.92 Arapahoe Co (Littleton) SD #6 GO Refunding Bonds LEAD Aaa AAA AAA INS 2/11/2004 N 15.48 Adams Co (Commerce City) SO #14 GO Refunding Bonds SOLE Aaa NR AAA INS 2/11120D4 N 13.38 Summit Co (Summit) SD #RE-1 GO Refunding Bonds SOLE Aaa AAA INS 2/612004 N 11.575 Adams St College Board of Trustees Refunding and Improvement Bonds SOLE Aaa AAA AAA INS 215/2004 N 28,76 Mesa Co (Valley) SD #51 GO Refunding Bonds SOLE Aaa AAA INS 1/29/2004 N 9.785 Weld Co (Weld) SO #RE-4 GO Refunding Bonds SOLE Aaa AAA INS 1/14/2004 C 17.115 Colorado Springs City -Colorado GO Refunding Bonds FA Aaa AA NR 1/912004 N 9.5 Fremont SD #RE-1 General Obligation Bonds SOLE Aaa AAA AAA INS 1/8/2004 N 310.8 Denver City and Co SO #1 General Obligation Bonds CO-MGR Aaa AAA 1/8/2004 N 9.5 Weld Co SO # RE5J General Obligation Bonds SOLE Aaa AAA INS 12/18/2003 N 2.935 Englewood -Colorado Golf Course Rev Ref Bonds SOLE NR NR NR 12117/2003 N 1.5 Milliken Fire Protection Dt General Obligation Bonds SOLE 1215/2003 N 6.4 Weld Co SD # RE5J General Obligation Bonds SOLE Aaa AAA AAA INS 1215/2003 N 8.255 Weld Co SO # RE5J GO Refunding Bonds SOLE Aaa AAA AAA INS 1214/2003 N 16.5 Fremont SO #RE-1 General Obligation Bonds SOLE Aaa AAA INS# 12/3/2003 N 9.995 Castle Rock -Colorado Water and Sewer Revenue Bonds SOLE Aaa AAA INS 11/25/2003 N 9.615 Castle Pines North Metro Dt General Obligation Bonds SOLE Aaa AAA AAA INS 11/25/2003 N 1.48 Las Animas Cc (Hoehne) Reorg SD #3 GO Refunding Bonds SOLE NR AA- NR 11/24/2003 N 9.565 Castle Pines North Metro Dt GO Refunding Bonds SOLE Aaa AAA INS 11/14/2003 N 158.31 Colorado Springs City -Colorado Utilities Improvement Rev Bonds FA Aa2 AA NR 11/14/2003 N 9.955 Castle Rock -Colorado Water and Sewer Revenue Bonds SOLE Aaa AAA INS 11/6/2003 N 53 Colorado Housing and Finance Auth Single Family Mortgage Bonds RA Al A+ 11/6/2003 N 70 Colorado Housing and Finance Auth Single Family Mortgage Bonds RA Al A+ 10/30/2003 N 1.8 Bennett Park & Recreation Dt General Obligation Bonds SOLE AA INS 10/17/2003 N 4.165 Estes Park Urban Renewal Auth Urban Renewal Tax Increment Bonds SOLE Baal 101212003 N 7.93 Aspen -Colorado GO Refunding Bonds SOLE Aa3 9/2412003 N 48.78 Colorado Housing and Finance Auth Multi -Family Housing Rev Bonds CO-MGR AAA 9/10/2003 C 77.155 Denver City Co Board of Water Comm WV Rev Ref & Imp Bond FA Aaa AAA AAA INS 8/21/2003 N 12.645 Delta Cc Joint SD #50 General Obligation Bonds SOLE Aaa AAA INS 8/1212003 N 60 La Plata Co (Durango) SD #9-R General Obligation Bonds SOLE Aaa AAA INS 817/2003 N 100 Colorado Dept of Transportation Revenue Anticipation Notes LEAD Aaa AAA AAA INS 7/18/2003 N 2.805 Fremont Cc Finance Corp Refunding & Imp Certs of Partic SOLE Aaa AAA AAA INS 7/18/2003 N 19.22 Fremont Cc Finance Corp Refunding & Imp Carts of Partic SOLE Aaa AAA AAA INS 7/16/2003 N 19.025 Timber Ridge Affordable Hsg Corp Adj Rte Housing Fac Rev Bonds SOLE Aa2 NR NR LC:D 7/11/2003 N 22.215 Thompson SD #R2J GO Refunding Bonds SOLE Aaa AAA INS 7/11/2003 N 3.57 Woodmoor Wtr & Sanitation Dt #1 GO Refunding Bonds SOLE Aaa AAA INS 7/10/2003 N 25.66 Thompson SD #R2J GO Refunding Bonds SOLE Aaa AAA INS 6/27/2003 N 0.57 Grand Lake Metro Recreation Dt Revenue Refunding & Imp Bonds SOLE NR NR NR 6/20/2003 N 354.825 Denver Convention Ctr Hotel Auth Senior Revenue Bonds CO-MGR Aaa AAA AAA INS 6/1812003 N 1.42 Steamboat Springs -Colorado GO Various Purpose Ref Bonds SOLE A2 6116/2003 P 2.505 Stetson Ridge Metro Dt #2 GO Ltd Tax Bonds SOLE NR NR NR 6/11/2003 N 80 Colorado Housing and Finance Auth Single Family Mortgage Rev Bonds CO-MGR Aaa AAA AAA INS 6/11/2003 N 120 Colorado Housing and Finance Auth Single Family Mortgage Rev Bonds CO-MGR Aaa AAA AAA INS 6/10/2003 C 3.92 Colorado Wtr Res and Pwr Dev Auth Water Resources Rev Bonds CO-MGR Aaa AAA AAA INS 6/5/2003 N 1.5 Heritage Greens Metro Dt General Obligation Bonds SOLE 5/29/2003 N 50.546 Jefferson Co SD #R-1 GO Refunding Bonds CO-MGR Aaa AAA AAA INS 5/13/2003 C 50 Denver City Co Board of Water Comm Water Revenue Bonds FA Aaa AAA AAA INS 5/6/2003 N 20 Colorado Ed and Culture Auth Education Rev Bonds SOLE Al LC:D 4/24/2003 N 125 Denver City and Co -Colorado Airport System Revenue Bonds CO-MGR Aaa# AAA# AAA# INS# 4/24/2003 N 161.965 Denver City and Co -Colorado Airport System Revenue Bonds CO-MGR Aaa AAA AAA INS 4/23/2003 N 25 Garfield Co -Colorado Hospital Revenue Bands FA NR AA NR INS 4/16/2003 C 20.535 Colorado St University Enterprise System Revenue Bonds CO-MGR Aaa AAA AAA INS 4/11/2003 N 5.13 Crown Mountain Park & Recr Dt General Obligation Bonds SOLE Aaa AAA AAA INS 4/9/2003 N 92 St Vrain Valley SD #RE-lJ General Obligation Bonds CO-MGR Aaa AAA AAA INS 4/8/2003 N 10 Central Colorado Wtr Consent Dt Ltd Tax GO Water Consery Bonds SOLE Aaa AAA AAA INS 4/4/2003 N 1.425 Arabian Acres Metro Dt Ltd Tax GO Bonds SOLE 4/3/2003 N 15.645 Lafayette -Colorado Water Revenue Bonds CO-MGR Aaa AAA AAA INS 4/1/2003 C 5.73 Fort Collins -Colorado Sales and Use Tax Rev Ref Bonds CO-MGR Aa2 NR AA 3/18/2003 N 3.605 Aurora City -Colorado Ltd Tax GO Bonds SOLE 3/4/2003 N 0.895 Mount Crested Butte -Colorado GO Refunding Bonds SOLE NR NR NR 2/25/2003 N 20 Colorado Housing and Finance Auth Single Family Mortgage Rev Bonds RA Aaa AAA NR STBY 2/25/2003 N 42 Colorado Housing and Finance Auth Single Family Mortgage Rev Bonds RA Aaa AAA NR STBY 2/20/2003 N 0.48 Ridgway Public Library Dt GO Library Bonds SOLE 216/2003 N 16 Colorado Housing and Finance Auth Single Family Mortgage Bonds CO-MGR Al# A+# NR 1/31/2003 N 0.38 Swink SO #33 GO Refunding Bonds SOLE NR NR NR 112012003 N 3.2 Delta Cc Joint SO #50 General Obligation Bonds SOLE Aaa AAA AAA INS 1/1512003 N 5.68 Pagosa Area Water and Sanit Dt General Obligation Bonds SOLE Aaa AAA AAA INS 1/15/2003 N 3 Foxfield-Colorado General Obligation Bonds SOLE NR BBB+ NR 1/13/2003 N 1.5 Montrose Co SD #RE-lJ General Obligation Bonds SOLE Aaa NR AAA INS 1/10/2003 N 0.35 Elbert Co Local Improvement Dt Special Assessment Bonds SOLE 12/19/2002 N 2 Grand Elk Ranch Gen Imp Dt Ltd Tax General Obligation Bonds SOLE 12/16/2002 N 6.7 Fort Lupton -Colorado General Obligation Bonds SOLE Aaa AAA AAA INS 12/12/2002 N 85.44 Arapahoe Co (Littleton) SD #6 General Obligation Bonds CO-MGR Aaa AAA AAA INS 12/10/2002 N 9.7 Delta Cc Joint SD #50 General Obligation Bonds SOLE Aaa AAA AAA INS 12/10/2002 N 9.5 Montrose Co SO #RE-1J General Obligation Bonds SOLE Aaa AAA AAA INS 12/10/2002 N 4.675 Pagosa Area Water and Sanit Dt GO Water Bonds SOLE Aaa AAA AAA INS 12/10/2002 N 27.055 Colorado Springs City -Colorado Taxable Var Rte Dem Utils Bonds RA Aa2 AA NR 12/5/2002 N 43.005 Colorado Springs City -Colorado Airport System Rev Ref Bonds FA Aaa AAA AAA INS 12/4/2002 N 21.14 Garfield Co (Garfield) SO #RE-2 General Obligation Bonds SOLE Aaa NR AAA INS 1214/2002 N 5.755 Huerfano SD #RE-1 General Obligation Bonds SOLE Aaa NR AAA INS 12/4/2002 N 39.09 St Vrain Valley SO #RE-1J GO Refunding Bonds CO-MGR Aaa AAA AAA INS 12/3/2002 N 1.05 La Veta SO #RE-2 GO Capital Appreciation Bonds SOLE Aa3 NR NR 11/20/2002 N 24.5 La Plata Co (Durango) SO #9-R General Obligation Bonds SOLE Aaa NR AAA INS 11/20/2002 C 110 Colorado Springs City -Colorado Util Sys Sub Lien Imp Rev Bonds FA Aa2 AA 11/19/2002 N 3.1 West Point Metropolitan Dt GO Ltd Tax Bonds SOLE NR NR NR 11/14/2002 N 6.045 Colorado St Dept of Human Svc Enterprise Sys Rev Antic Warrants SOLE NR A NR INS 11/612002 N 5.13 St Charles Mesa Water Dt Water Rev Ref & Improv Bonds SOLE Aaa AAA AAA INS 10131/2002 N 7.575 Colorado Housing and Finance Auth Multi -Family Housing Rev Bonds CO-MGR Aaa AAA NR 10131/2002 N 10.92 Colorado Housing and Finance Auth Multi -Family Housing Rev Bonds RA Aaa AAA NR 10/31/2002 N 16.55 Colorado Housing and Finance Auth Multi -Family Housing Rev Bonds CO-MGR Aaa AAA NR 10/31/2002 N 31.96 Colorado Housing and Finance Auth Multi -Family Housing Rev Bonds RA Aaa AAA NR 10/31/2002 N 70.715 Colorado Housing and Finance Auth Multi -Family Housing Rev Bonds RA Aaa AAA NR 10/22/2002 N 4.085 Mid Valley Metropolitan Dt GO Refunding & Improv Bonds SOLE Aaa AAA AAA INS 10/10/2002 C 3.305 Little Thompson Water Dt Water Revenue Bonds FA Aaa NR AAA INS 10/3/2002 N 203.565 Denver City and Co -Colorado Airport System Revenue Ref Bonds LEAD Aaa AAA AAA INS 9/26/2002 N 17.435 Foothills Park & Rec Dt Ref & Improv Certs of Part SOLE Aaa AAA AAA INS 9/26/2002 N 67 Colorado Housing and Finance Auth Single Family Mortgage Rev Bonds RA Aaa AAA NR# INS 9/26/2002 N 105 Colorado Housing and Finance Auth Single Family Mortgage Rev Bonds RA Aaa AAA AAA INS 9/17/2002 C 11.61 Denver City Co Board of Water Comm GO Water Refunding Bonds FA Aal AA+ AA+ 9/16/2002 N 18.765 Delta Co Mem Hosp Dt Enterprise Revenue Bonds FA NR BBB NR 9/11/2002 N 4.42 La Plata Co (Durango) SO #9-R GO Refunding Bonds SOLE Aaa NR AAA INS 8/19/2002 N 6.99 Englewood -Colorado General Obligation Bonds SOLE Aaa AAA AAA INS 8/19/2002 N 10.58 Summit Co (Summit) SO #RE-1 TANs SOLE NR NR NR 8/15/2002 N 74.695 Colorado Springs City -Colorado Subordinate Lien Ref Rev Bonds FA Aaa AAA AAA INS 8/14/2002 C 2.5 Las Animas SD #1 General Obligation Bonds SOLE AA- 8/12/2002 N 11.35 Summit Co (Summit) SD #RE-1 TANs SOLE NR NR NR 8/7/2002 N 400.16 Colorado Dept of Transportation Refunding Transportation RANs CO-MGR Aaa AAA AAA INS 7/26/2002 N 3.205 Vail -Colorado GO Refunding Bonds SOLE Aa3 NR NR 7126/2002 N 5 Windsor -Colorado Sales & Use Tax Rev Bonds SOLE Aaa AAA AAA INS 7/2612002 N 9.43 Colorado Regional Trans Dt Sales Tax Rev Refunding Bonds LEAD Aaa AAA AAA INS 7/26/2002 N 5.57 Vail -Colorado Sales Tax Revenue Refunding Bonds SOLE Aaa NR AAA INS 7/22/2002 N 7 Carbon Valley Park and Rec Dt General Obligation Bonds SOLE Aaa AAA AAA INS 7/22/2002 N 3.11 Sedgwick Co -Colorado Sales & Use Tax Revenue Bonds AA INS 7/18/2002 N 14.625 Colorado Housing and Finance Auth Taxable Multi-Faimily Proj Bonds CO-MGR Aaa AAA NR 7/18/2002 N 49.975 Colorado Housing and Finance Auth Taxable Multi-Faimily Proj Bonds CO-MGR Aaa AAA NR STBY 6/27/2002 N 1.36 Foothills Park & Rao Dt General Obligation Bonds SOLE NR NR NR 6126/2002 N 75.72 Colorado Housing and Finance Auth Adj Rte Multi -Family Ins Bonds CO-MGR Aaa AAA AAA INS 6/26/2002 N 4.995 Pagosa Area Water and Sank Dt General Obligation Bonds SOLE Aaa AAA AAA INS 6/26/2002 N 2.8 Pagosa Fire Protect Dt General Obligation Bonds SOLE Aaa AAA AAA INS 6126/2002 N 2.72 Bayfield SO #10 Jt-R GO Refunding Bonds SOLE Aa3 NR NR 6/26/2002 N 20 Colorado Housing and Finance Auth Single Family Mortgage Rev Bonds CO-MGR Aa2 AA NR 6/26/2002 N 40 Colorado Housing and Finance Auth Single Family Mortgage Rev Bonds RA Aaa AA NR INV 6/26/2002 N 75 Colorado Housing and Finance Auth Single Family Mortgage Rev Bonds RA Aaa AA NR INV 6/12/2002 N 2.865 Crested Butte Fire Protection Dt General Obligation Bonds SOLE Aaa NR AAA INS 6/11/2002 N 208.3 Colorado Dept of Transportation Transportation RANs CO-MGR Aa3 AA AA 6/5/2002 C 20.52 E Cherry Creek Vlly Wtr Sank Dt Water Revenue Bonds LEAD Aaa AAA AAA INS 5/20/2002 N 0.44 Fraser -Colorado Sales & Use Tax Rev Ref Bonds SOLE NR NR NR 5/7/2002 N 35.3 Traer Creek Metropolitan District Var Rte Revenue Bonds SOLE NR AA- NR LC:D 4/24/2002 N 153.23 Colorado Regional Trans Dt Sales Tax Revenue Bonds CO-MGR Aaa AAA AAA INS 4/1212002 N 3.59 Colorado Housing and Finance Auth Multi -Family Proj Bonds CO-MGR Aaa AAA NR 4/1212002 N 5.735 Colorado Housing and Finance Auth Multi -Family Proj Bonds CO-MGR Aa2 AA NR 4/12/2002 N 9.41 Colorado Housing and Finance Auth Multi -Family Proj Bonds CO-MGR Aaa AAA NR 4/12/2002 N 9.82 Colorado Housing and Finance Auth Multi -Family Proj Bonds CO-MGR Aaa AAA NR 4/1212002 N 19.45 Colorado Housing and Finance Auth Multi -Family Proj Bonds CO-MGR Aaa AAA NR 3/28/2002 N 23.075 Colorado Housing and Finance Auth Single Family Mortgage Rev Bonds RA Aaa AAA AAA 3/28/2002 N 29.99 Colorado Housing and Finance Auth Single Family Mortgage Rev Bonds RA Aaa AAA AAA 3/28/2002 N 41 Colorado Housing and Finance Auth Single Family Mortgage Rev Bonds RA Aaa AAA AAA 312712002 N 5.69 Colorado Ed and Culture Auth Revenue Bonds SOLE NR BBB+ BBB+ 3/26/2002 N 6.785 Grand River Hospital Dt General Obligation Bonds SOLE Aaa AAA AAA INS 3/26/2002 N 2.41 Costilla (Sierra Grande) SD #R-30 GO Refunding Bonds SOLE NR AA NR 3/2112002 N 2.295 Omnipark Metropolitan Dt General Obli aflon Bonds SOLE NR NR NR 3/21/2002 N 30.895 Arapahoe Co Water & Wstwtr Auth GO Acquisition Bonds CO-MGR Aaa AAA AAA INS 3/21/2002 N 32.975 Arapahoe Co Water & Wstwtr Auth GO Project Bonds CO-MGR Aaa AAA AAA INS 3/19/2002 N 0.605 Haxtun SD #RE-2J GO Refunding Bonds SOLE NR NR AA- 3/1/2002 N 1.875 Foothills Park & Rec Dt Golf Course Rev Ref Bonds SOLE Baa2 NR NR 2/14/2002 N 1.4 Wray -Colorado Sales & Use Tax Rev Bonds SOLE NR NR NR 2/13/2002 N 8.915 Cortez -Colorado Sales Tax Rev Recreation Bonds SOLE Aaa NR AAA INS 1/28/2002 N 8.96 Garfield Cc (Garfield) SD #RE-2 General Obligation Bonds SOLE Aaa NR AAA INS 1/25/2002 N 2.1 Fowler SD#R4J General Obligation Bonds SOLE NR AA NR 1/24/2002 P 0.198 South Fork -Colorado Special Assessment Bonds SOLE 1/17/2002 N 1.331 North Routt Fire Protection Dt General Obligation Bonds SOLE Aaa AAA INS 1/17/2002 N 9.43 Colorado Regional Trans Dt Sales Tax Rev Ref Bonds LEAD Aaa AAA AAA INS 1/16/2002 N 1 Cheyenne Co SO #RE-5 General Obligation Bonds SOLE Aaa NR AAA INS 1/16/2002 N 6.33 Colorado Ed and Culture Auth Revenue Bonds SOLE Baa2 BBB BBB+ 1/11/2002 N 17.835 Weld Cc SD #RE4 General Obligation Bonds SOLE Aaa NR AAA INS 11912002 N 5 Rampart Regional Library Dt GO Library Bonds SOLE Aaa AAA AAA INS 12/17/2001 N 9.765 Weld Co SD #RE-4 General Obligation Bonds SOLE Aaa NR AAA INS 12/14/2001 N 44.1 Denver City and Cc SO #1 General Obligation Bonds CO-MGR Aaa AAA AAA INS 12/14/2001 N 1.1 Hinsdale Cc SO #RE-1 General Obligation Bonds SOLE NR AA- NR 12/13/2001 N 9 Cheyenne Cc SD #RE-5 General Obligation Bonds SOLE Aaa NR AAA INS 12/13/2001 N 5.81 Englewood -Colorado General Obligation Bonds SOLE Aaa AAA AAA INS 12/7/2001 N 0.66 Limon -Colorado GO Water Ref Bonds SOLE 1216/2001 N 8.9 Garfield Cc (Garfield) SD #RE-2 General Obligation Bonds SOLE Aaa NR AAA INS 12/5/2001 N 3 Basalt -Colorado General Obligation Bonds SOLE Aaa NR AAA INS 11/13/2001 C 28.83 Boulder -Colorado Water and Sewer Revenue Bonds CO-MGR Aa2 AAA 1102001 N 51.62 Colorado Wtr Res and Pwr Dev Auth Wstwtr Revolv Fund Ref Rev Bonds CO-MGR Aal AA AAA 10/26/2001 N 4.5 Silt -Colorado Water & Wastewater Rev Bonds SOLE NR NR NR 10/25/2001 N 2.17 Steamboat Springs -Colorado Sales Tax Refunding Rev Bonds SOLE Aaa AAA AAA INS 10/24/2001 N 4.495 Cherokee Metropolitan Dt Wtr & Wstwtr Rev Refunding Bonds SOLE Aaa AAA AAA INS 10/10/2001 N 1.915 Mesa Co -Colorado Residential Care Facs Mtg Bonds CO-MGR NR AA NR INS 10/10/2001 N 23.2 Mesa Co -Colorado Residential Care Fars Mtg Bonds CO-MGR NR AA NR INS 9/25/2001 N 1.675 Englewood -Colorado Storm Water Enterprise Rev Bonds SOLE NR NR NR 9/19/2001 N 10 Colorado Housing and Finance Auth Single Family Mortgage Rev Bonds CO-MGR Aa2 AA NR 9/19/2001 N 25 Colorado Housing and Finance Auth Single Family Mortgage Rev Bonds RA Aaa AAA NR 9/19/2001 N 46.84 Colorado Housing and Finance Auth Single Family Mortgage Rev Bonds RA Aaa AAA NR 911912001 N 50 Colorado Housing and Finance Auth Single Family Mortgage Rev Bonds RA Aaa AAA NR 8/24/2001 N 20.755 Colorado Health Facilities Auth Revenue Bonds SOLE NR BBB NR 8/16/2001 N 10.67 Summit Cc (Summit) SO #RE-1 TANs SOLE NR NR NR 8/10/2001 N 12.74 Aspen -Colorado GO Housing Bonds SOLE Aa3 NR NR 8/9/2001 N 10.78 Aspen -Colorado Parks & Open Space Sale Tax Bonds SOLE Aaa NR AAA INS 7/31/2001 N 70.54 Denver City and Co -Colorado Airport System Rev Ref Bonds CO-MGR Aaa AAA AAA INS 7/27/2001 N 300.79 Colorado Springs City -Colorado Subor Lien Improv & Ref Rev Bonds FA Aa2 AA NR 7/25/2001 C 11.215 Denver City Cc Board of Water Comm GO Water Refunding Bonds FA Aal AA+ AA+ 7/25/2001 C 77.99 Denver City Cc Board of Water Comm GO Water Refunding Bonds FA Aal AA+ AA+ 7/18/2001 N 4.8 Golden -Colorado Sales & Use Tax Improv Rev Bonds SOLE Aaa AAA AAA INS 7/11/2001 N 6.025 Colorado Housing and Finance Auth Single Family Mtg Prog Sr Bonds LEAD Aa2 AA NR 7/11/2001 N 20 Colorado Housing and Finance Auth Single Family Mtg Frog Sr Bonds LEAD Aa2 AA NR 7/11/2001 N 33.005 Colorado Housing and Finance Auth Single Family Mtg Prog Sr Bonds LEAD Aa2 AA NR 7/11/2001 N 2.335 Colorado Housing and Finance Auth Single Family Prog Subor Bonds LEAD Al A+ NR 6/27/2001 N 16.61 Lincoln Park Metropolitan Dt GO Ltd Tax Ref & Improv Bonds SOLE NR NR NR 6/27/2001 N 13.77 Colorado Ed and Culture Auth Revenue Bonds SOLE A3 A NR 612212001 N 16.675 Denver City and Co -Colorado Airport System Rev Ref Bonds CO-MGR Aaa AAA AAA INS 6/22/2001 N 395.635 Denver City and Co -Colorado Airport System Rev Ref Bonds CO-MGR Aaa# AAA# AAA# INS# 6/22/2001 N 11.94 Colorado Health Facilities Auth Revenue Refunding Bonds SOLE Baal NR NR 6/14/2001 N 52.465 Northwest Parkway Pub Hwy Auth First Tier Subordinate Rev Bonds LEAD Bat BB+ NR 6/14/2001 N 108.371 Northwest Parkway Pub Hwy Auth Senior Convertible Bonds LEAD Aaa AAA AAA INS 6/14/2001 N 79.866 Northwest Parkway Pub Hwy Auth Senior Revenue Bonds LEAD Aaa AAA AAA INS 6/14/2001 N 175.72 Northwest Parkway Pub Hwy Auth Senior Revenue Bonds LEAD Aaa AAA AAA INS 6/6/2001 N 5.1 Omnipark Metropolitan Dt GO Refunding Bonds SOLE NR NR NR 6l6/2001 N 11.725 Summit Co (Summit) SO #RE-1 GO Refunding Bonds SOLE Aaa NR AAA INS 5/23/2001 N 49.3 E-470 Public Highway Auth Vehicle Registration Fee Bonds RA Aaa AAA AAA INS 5/17/2001 N 18 Colorado Housing and Finance Auth Single Family Porg Senior Bonds LEAD Aa2 AA NR 5/17/2001 N 14.815 Colorado Housing and Finance Auth Single Family Prog Senior Bonds LEAD Aa2 AA NR 5/17/2001 N 20.55 Colorado Housing and Finance Auth Single Family Prog Senior Bonds LEAD Aa2 AA NR 5/17/2001 N 2.475 Colorado Housing and Finance Auth Single Family Prog Subor Bonds LEAD Al A+ NR 5115/2001 N 1 Starwood Metropolitan Dt General Obligation Bonds SOLE NR NR NR 5/11/2001 N 21.62 Golden -Colorado Sales & Use Tax Improv Rev Bonds SOLE Aaa AAA AAA INS 5/11/2001 N 1.87 Golden -Colorado Sales & Use Tax Ref Rev Bonds SOLE Aaa AAA AAA INS 5/212001 N 34.84 University of Colorado Regents Enterprise Sys Rev Ref Bonds SOLE Aa3 AA- AA 4/2012001 N 69.71 Colorado Wtr Res and Pwr Dev Auth Clean Water Revenue Bonds CO-MGR Aaa AAA AAA 4/20/2001 N 6.21 Aspen Valley Hospital Dt Revenue Bonds SOLE NR NR BBB 4/17/2001 N 1.175 Callan SD #RJ-1 Refunding Bonds SOLE NR AA- NR 4/4/2001 N 506.37 Colorado Dept of Transportation Transportation RANs CO-MGR Aaa# AAA# AAA# INS# 8456.647 Total Amount of Issues PROPOSAL TO City of Fort Collins Required Statement & Form Appendix 10: The proposal should include the following statement and signature form. V. SIGNATURE FORM "We propose to furnish a consultant in accordance with the terms, conditions, and specifications detailed in the City's Request for Proposal and in our accompanying written response without exception, deletion or qualification." Company Name George K. Baum & Company Business Address Telephone Number 717 Seventeenth Street, Suite 2500 Denver, Colorado 80202 800.722.1670 RFP No. P-936 Date of Proposal: 4/28/04 By Douglas Houston, Senior Vice President (Please print or type name and title) 0 GEORGE K. BAUM & COMPANY I Investment Bankers Since 1928 Page 22 Our Team Douglas Houston, SVP......................................................... Lead Banker Troy Bernberg, AVP..........................Transaction Management Assistance James Cleveland, SVP............................................. Quantitative Analysis Mary Katherine Sells, FVP................................ Research/Credit Analyses Bob Lombardi, EVP.......................................... Underwriting/Syndication Douglas Houston Team Leader • More than 30 years of municipal and governmental finance experience • Specialist in financial advisory services, certificates of participation/lease revenue financings, municipal utilities, airports, redevelopment, mass transit projects, credit evaluations, refundings and derivative and swap advisory services • Worked on Fort Collins financings since 1987 Troy Bernberg Transaction Management Assistance • Performs quantitative analysis including structuring of amortization schedules, cash flow analyses, financial assessments, and other transaction functions • Works on new issue and refunding transactions encompassing many types of taxable and tax-exempt municipal securities James Cleveland Manager, Quantitative Finance Group • More than 28 years of quantitative finance experience • Specializes in refunding bond issues, structured financings, and oth technically -driven bond issues • Performed quantitative analysis for more than $12 billion of tax-exE taxable financings involving more than 400 issuers during his caree • Worked on Fort Collins financings since 1987 Mary -Katherine Sells Research/Credit Analyses • Develops credit analyses for governmental and higher education iss credit rating and enhancement presentations • Considered an expert in evaluating COP credits • Developed key ratings presentations for Fort Collins in 1998 which rating upgrades Robert Lombardi Sales, Trading & Underwriting/Syndication • 30 years underwriting and trading experience • Priced over $15 billion in tax-exempt and taxable bonds • Priced nearly all Colorado financings underwritten by our firm durir last 20 years, including all COP and Fort Collins financings Our Team Approach The professionals serving the City of Fort Collins on a day-to-day basis a in Denver, providing local access to technical resources. We have a ve! interest in our home state and local Colorado communities. Presentation to City of Fort Collins George K. Baum & Company Invesunenc Bankers Since 1928 Key Considerations for COP Financing COP Financings in General • CON remain one of the most complex and often controversial financing methods. • Projects perceived as highly essential will be well received by rating agencies, insurers and investors. • CON are regarded as a state -by -state specialty product. Investors look to in -state firms for confidence to invest in a COP issue. • Community and political support is essential to COP projects. • Projects perceived by outsiders as somewhat less essential, may encounter rating and insurance difficulties, and could meet investor resistance. • Redemption provisions are an overlooked key for investors. • Disclosure regarding litigation and risk factors must be carefully considered. • COPS are often more successfully marketed via negotiated sale rather than through a competitive bid process. • Pricing a COP issue effectively requires experience, muscle and timing. Presentation to City of Fort Collins Key Questions • Should a "Master Lease" structure be used that incorporates all facilities financed under the same lease as the parking garage and city office building were? • Does the City have clear title to the improvements to be financed? Do some of the sites need to be purchased with COP funds? • Are there any title complications which may create difficulties in establishing collateral for the COPS? • For those sites already owned by the City, what is the best mechanism for incorporating the land into the project lease, e.g., sale to the leasing entity, ground lease tied to the length of the financing? Page 5 George K Baum & Company Investment Bankers Since 1928 COPs for Open Space Acquisition Special Considerations for Open Space COPS • Utilizing COPS to acquire open space is the most specialized type of COP financing. • There is often widespread misunderstanding of "essentiality" of an open space project. • Strong credit features are often discounted. • Environmental issues often need to be addressed and finessed. • The real estate deal often must be closed quickly to capitalize on a special opportunity. Presentation to City of Fort Collins Case Study In 2003, George K. Baum & Company publicly sold more than $15 million Open Space Acquisition COPS for the City of Colorado Springs. A number of difficulties typical to open space financing were encountered and overcome: • The COP financing, which involved a complex acquisition of open space, was executed in a short amount of time. • A 50-acre portion of the 732-acre project had been used as landfill, and a plan was developed for the City to purchase the 50-acre site separately with open space cash. This eliminated environmental risk from the project —a very important concern for the rating agencies and investors. • A city council composed of a majority of new members had never been through the COP process and were receiving negative input from the anti -tax community. Because of this negative input, some members did not want to use COPS for open space. Through meetings and education, a strong majority of council members voted to support the financing. • An extensive credit presentation was created by George K. Baum & Company and in person presentations and conference calls were held with Moody's and several bond insurers. Despite strong support from analysts, rating and insurance committees discounted the essentiality of the City's open space program and rated the COPS two notches below the GOs. Insurers declined coverage. • George K. Baum & Company worked with bond counsel to make sure the disclosure was made as "litigation" and not as a "risk factor" as had recently been done for other COP issues. • The above controversies, all beyond the control of the City, resulted in only two narrowly separated bids received, one of which was from George K. Baum & Company acting by itself. The winning bid was submitted by a syndicate of over ten firms. Good interest rates were received due to the strength of the overall bond market in 2003 and the issue closed in a timely manner, meeting the needs of the City and the Trust for Public Lands. Page 6 George K Baum & Company Investment Bankers Since 1928 Strategies for Fort Collins Based on direct and recent experience with open space and facility COPS in Colorado, George K. Baum & Company suggests the following strategies for utilizing COPS to acquire open space and the Police Services Building for the City of Fort Collins: • Retain George K. Baum & Company as Investment Banker. Our financing professionals have extensive experience structuring COP financings for facilities and open space acquisition in Colorado. Open space COPS have become product unique to Colorado, and require a concentrated effort by a proven Colorado underwriter to tell the "story" to investors through an extensive pre -sale marketing campaign. • Negotiated Sale. Structuring the COPS through a negotiated sale will provide the City with the most dependable access to the market, and greater flexibility in structuring to create greater demand from investors. • Market the COPS Quickly. The earlier the City completes the financing process, the less propaganda will come into play from Douglas Bruce and anti -tax activists as the November election approaches. • Include Open Space in Master lease. Every effort should be made to include open space in a master lease with the Police Services Building. • Extensive Credit Presentations. Thorough credit presentations should be developed for in -person meetings with Moody's, S&P and bond insurers in New York. These presentations should include a description of all open space programs in Colorado to demonstrate success, importance and support for these programs in our state. • Involve Multiple Members of Credit Committees. Credit presentations must involve multiple members of each entity's credit committee and will be held in the offices of each firm. It is not enough to convince individual analysts of the viability of Colorado's open space programs —rating agencies and insurance companies must be convinced to change firm -wide policies. • Go for "One Notch". Moody's rates open space COPS two rather than one notch below general obligation bonds. • Develop Convincing Argument. The argument that open space appreciates in value and essentiality should be developed. Rating agencies and insurers must be convinced that open space appreciates in value. • Bond Insurance. The City should aggressively seek bond insurance. • Capitalize on the City's Key Advantage. Fort Collins has both city and county taxes that are voter approved and earmarked, an advantage over other open space acquisition financing programs. Credit entities must be helped to appreciate the significance of this in a tax -resistant state like Colorado. • Prepare "Salient Features" Marketing Memorandum and Distribute Widely to Educate Investors. Presentation to City of Fort Collins George K Baum & Company Investment Bankers Since 1928 Conclusion George K. Baum & Company is uniquely positioned to successfully complete the City's COP program. Our advantages include: • Experience on point • Knowledge • Resources to get the job done • Strength in pricing and marketing COPS • Liquidity in secondary market = investor confidence • We can complete the financing with great speed Presentation to City of Fort Collins Key Facts Baum has served as underwriter on more than 1,340 tax-exempt revenue bond issues, and 130 certificate of participation (COP) issues since 1995, together totaling more than $51.8 billion. George K. Baum & Company is also active in the secondary market, trading approximately $400 million of housing bond annually. Since 1994, our firm has traded $7.1 billion of Colorado bonds. Page 8 George K Baum & Company Invesvncnt Bankers Since 1928