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06.12.20attachment2
5 YEAR TREND IN MUNICIPAL BOND INDICES Source: The Bond Buyer The Bond Buyer “20 Bond Index” (BBI) shows average yields on a group of municipal bonds that mature in 20 years and have an average rating equivalent to Moody’s Aa2 and S&P’s AA. June 9, 2020 Sale Day Report for City of Oshkosh, Wisconsin $10,425,000 General Obligation Corporate Purpose Bonds, Series 2020A Prepared by: Todd Taves, CIPMA Senior Municipal Advisor/ Principal Jon Cameron, CIPMA Senior Municipal Advisor Sale Day Report City of Oshkosh, Wisconsin June 9, 2020 Sale Day Report – June 9, 2020 City of Oshkosh, Wisconsin $10,425,000 General Obligation Corporate Purpose Bonds, Series 2020A Purpose: For public purposes including financing street and park improvements and refunding certain obligations of the City. Rating: Build America Mutual Non-Rated Underlying Rating: Moody's Investor's Service "Aa3" Number of Bids: 3 Low Bidder: Baird, Milwaukee, Wisconsin Comparison from Lowest to Highest Bid: (TIC as bid) Low Bid High Bid Interest Difference 1.6726% 1.9059% $165,776 Summary of Sale Results: Principal Amount*: $10,425,000.00 Underwriter’s Discount: $73,977 Reoffering Premium: $547,755 True Interest Cost: 1.6910% Costs of Issuance: $66,200 Yield: 0.400%-2.350% Total Net P&I**: $12,183,404 Notes: U.S. Bank National Association, St. Paul, Minnesota will serve as Paying Agent on the Bonds. The Bonds maturing June 1, 2029 and thereafter are callable June 1, 2028 or any date thereafter. * Subsequent to bid opening, the issue size was decreased from $10,870,000 to $10,425,000.00 to reflect reoffering premium received and unused discount. ** Net of reoffering premium to be deposited to the Debt Service Fund. Closing Date: July 1, 2020 City Council Action: Adopt a resolution awarding the sale of $10,425,000 General Obligation Corporate Purpose Bonds, Series 2020A. Page 1 Sale Day Report City of Oshkosh, Wisconsin June 9, 2020 Attachments: Bid Tabulation Sources and Uses of Funds Updated Debt Service Schedules Refunding Savings Analysis Rating Report Page 2 BID TABULATION $10,870,000* General Obligation Corporate Purpose Bonds, Series 2020A City of Oshkosh, Wisconsin SALE: June 9, 2020 AWARD: BAIRD Underlying Rating: Moody's Investor's Service "Aa3" Tax Exempt - Non-Bank Qualified NAME OF BIDDER MATURITY (June 1) RATE REOFFERING YIELD PRICE NET INTEREST COST TRUE INTEREST RATE BAIRD $11,376,633.40 $1,465,853.77 1.6726% Milwaukee, Wisconsin 2021 2.000% 0.400% 2022 2.000% 0.420% 2023 2.000% 0.460% 2024 2.000% 0.550% 2025 2.000% 0.700% 2026 2.000% 0.850% 2027 3.000% 1.000% 2028 3.000% 1.150% 2029 3.000% 1.300% 2030 3.000% 1.400% 20311 2.000% 2.000% 20321 2.000% 2.000% 20331 2.000% 2.000% 2034 2.000% 2.050% 2035 2.000% 2.100% 2036 2.125% 2.150% 2037 2.125% 2.200% 2038 2.250% 2.250% 2039 2.250% 2.300% 2040 2.250% 2.350% KEYBANC CAPITAL MARKETS INCORPORATED $11,401,079.80 $1,556,296.24 1.7833% Cleveland, Ohio UBS FINANCIAL SERVICES INC. $10,981,527.99 $1,631,630.01 1.9059% New York, New York *Subsequent to bid opening the issue size was decreased to $10,425,000. Adjusted Price - $10,898,778.00 Adjusted Net Interest Cost - $1,438,724.38 Adjusted TIC - 1.6910% 1 $1,260,000 Term Bond due 2033 with mandatory redemption in 2031-2032. Page 3 Presale Estimate Sale Results Est. Dated 7-2-2020 Dated 7-1-2020 G.O. Corporate Purpose Bonds G.O. Corporate Purpose Bonds Difference Series 2020A Series 2020A Capital Projects1 Tax-Exempt Tax-Exempt Comprehensive Streets/Utility Improvements Street Improvements 3,901,400$ 3,901,400$ -$ Sidewalks -$ -$ -$ Traffic Improvements -$ -$ -$ Public Infrastructure Improvements - Other Streets 750,000$ 750,000$ -$ Public Infrastructure Improvements - Sidewalks -$ -$ -$ Park Improvements 570,000$ 570,000$ -$ Public Property Improvements -$ -$ -$ Major Equipment -$ -$ -$ Major Equipment -Vehicles -$ -$ -$ Tax Increment Financing (TIF) District Improvements -$ -$ -$ Subtotal Capital Projects 5,221,400$ 5,221,400$ -$ Refinance Series 2011C G.O. Bonds Principal to be Redeemed 6,085,000$ 6,085,000$ -$ Accrued Interest 25,857$ 25,857$ -$ Less Debt Service Funds On Hand (643,241)$ (643,241)$ -$ Subtotal Refunding 5,467,617$ 5,467,617$ -$ Bid Premium Bid Premium Received (547,755)$ (547,755)$ Deposit to Debt Service Fund 154,098$ 154,098$ Subtotal (Used to Reduce Issue Size)(393,658)$ (393,658)$ Estimated Issuance Expenses Ehlers (Municipal Advisor)31,700$ 31,700$ -$ Chapman & Cutler (Bond Counsel)12,000$ 19,250$ 7,250$ Maximum Discount (Bid Item)2 135,875$ 73,977$ (61,898)$ Moody's Investors Service (Rating Fee)14,310$ 14,400$ 90$ U.S. Bank (Paying Agent)850$ 850$ -$ TOTAL TO BE FINANCED 10,883,752$ 10,435,537$ (448,216)$ Estimated Interest Earnings3 (14,185)$ (14,185)$ (0)$ Rounding 432$ 3,648$ 3,216$ NET BOND OR NOTE SIZE 10,870,000$ 10,425,000$ (445,000)$ NOTES: 1Capital projects amounts taken from City of Oshkosh Capital Improvement Program 2020-2024 approved November 12, 2019. 2Maximum allowable discount of 1.25% for the Series 2020A Bonds, and 1.0% for the Series 2020B Notes. 3Assumes temporary investment of available new money proceeds at 1.63% for 60 days. (December 2019 LGIP Rate). City of Oshkosh, WI 2020 General Obligation Sizing Worksheet 6/9/2020 File: Oshkosh Debt Base Case_2020-6-9/G.O. Sizing 2020 Page 4 TID No. 17 TID No. 21 TID No. 23 Year Prin (6/1)Est. Rate1 Interest Premium Total Prin (6/1)Rate Interest Premium Total Year 2020 4,101,329,348 21,182,891 (9,112,192)12,070,700 2.94 12,070,700 2.94 2020 2021 4,168,890,185 18,446,083 (7,375,957)11,070,126 2.66 810,000 2.000%328,358 (139,727)998,631 785,000 3.000%245,421 (245,421)785,000 (195,000)(109,225)(123,321)(160,275)(10,000)12,255,936 2.94 2021 2022 4,237,563,945 15,721,975 (5,681,170)10,040,804 2.37 800,000 2.000%213,300 (14,371)998,929 755,000 3.000%146,675 (108,315)793,360 (197,792)(105,100)(124,950)(161,000)(10,464)11,233,788 2.65 2022 2023 4,307,368,961 14,307,568 (4,495,163)9,812,405 2.28 800,000 2.000%197,300 0 997,300 660,000 3.000%125,450 0 785,450 (195,175)(108,250)(122,950)(162,950)(11,750)10,994,080 2.55 2023 2024 4,378,323,870 12,634,598 (3,476,167)9,158,431 2.09 820,000 2.000%181,100 1,001,100 675,000 3.000%105,425 780,425 (191,325)(111,300)(120,950)(164,800)(11,450)10,340,131 2.36 2024 2025 4,450,447,612 11,332,987 (2,950,628)8,382,359 1.88 825,000 2.000%164,650 989,650 700,000 3.000%84,800 784,800 (192,400)(109,300)(123,900)(161,600)(11,150)9,558,459 2.15 2025 2026 4,523,759,443 9,942,604 (2,573,372)7,369,232 1.63 680,000 2.000%149,600 829,600 715,000 2.000%67,150 782,150 (193,750)(107,300)(121,800)(10,900)8,547,232 1.89 2026 2027 4,598,278,933 8,491,672 (2,015,369)6,476,303 1.41 690,000 3.000%132,450 822,450 725,000 2.000%52,750 777,750 (190,025)(109,725)(119,175)(10,700)7,646,878 1.66 2027 2028 4,674,025,975 7,238,450 (1,779,272)5,459,178 1.17 710,000 3.000%111,450 821,450 745,000 2.000%38,050 783,050 (190,825)(106,575)(120,950)(10,500)6,634,828 1.42 2028 2029 4,751,020,792 4,987,544 (693,494)4,294,050 0.90 625,000 3.000%91,425 716,425 755,000 2.000%23,050 778,050 (191,500)(122,575)(10,300)5,464,150 1.15 2029 2030 4,829,283,938 4,921,866 (698,550)4,223,316 0.87 645,000 3.000%72,375 717,375 775,000 2.000%7,750 782,750 (192,050)(119,125)(10,100)5,402,166 1.12 2030 2031 4,908,836,306 4,187,275 (542,725)3,644,550 0.74 660,000 2.000%56,100 716,100 (103,850)(121,200)4,135,600 0.84 2031 2032 4,989,699,133 3,536,019 (352,150)3,183,869 0.64 295,000 2.000%46,550 341,550 (101,950)3,423,469 0.69 2032 2033 5,071,894,006 3,553,500 (356,288)3,197,213 0.63 305,000 2.000%40,550 345,550 (105,000)3,437,763 0.68 2033 2034 5,155,442,869 2,459,694 (266,000)2,193,694 0.43 310,000 2.000%34,400 344,400 (103,000)2,435,094 0.47 2034 2035 5,240,368,024 1,044,938 (55,363)989,575 0.19 310,000 2.000%28,200 338,200 (101,000)1,226,775 0.23 2035 2036 5,326,692,143 739,263 (53,675)685,588 0.13 215,000 2.125%22,816 237,816 0 923,403 0.17 2036 2037 5,414,438,273 501,425 (56,925)444,500 0.08 225,000 2.125%18,141 243,141 687,641 0.13 2037 2038 5,503,629,836 190,550 0 190,550 0.03 230,000 2.250%13,163 243,163 433,713 0.08 2038 2039 5,594,290,644 0 0 0 0.00 235,000 2.250%7,931 242,931 242,931 0.04 2039 2040 5,686,444,900 0 0 0 0.00 235,000 2.250%2,644 237,644 237,644 0.04 2040 TOTALS 145,420,900 (42,534,459)102,886,441 10,425,000 1,912,502 (154,098)12,183,404 7,290,000 896,521 (353,736)7,832,785 (2,444,642)(866,775)(1,340,896)(810,625)(107,314)117,332,379 TOTALS Presale Estimate 10,870,000 1,763,468 12,633,468 7,360,000 743,486 8,103,486 Difference (445,000)149,034 (154,098)(450,064)(70,000)153,035 (353,736)(270,700) Maturities Subject to Optional Redemption 2020 G.O. Bond and Note Structure Worksheet Final Sale Results Existing Debt Only (Excludes Debt to be Refunded)Proposed 2020 Issues Projected Equalized Value G.O. Debt P&I Total Abatement Sources Net Tax Levy for Debt Net Tax Rate for Debt G.O. Corporate Purpose Bonds, Series 2020A G.O. Promissory Notes, Series 2020B Projected Abatement Sources New Net Debt Service Levy Net Tax Rate for Debt$7,290,000 Special Assessments Oshkosh Centre Allocations of Refunded Bonds Dated 7-1-20 Dated 7-1-20 $10,425,000 6/9/2020 File: Oshkosh Debt Base Case_2020-6-9/G.O. Structure 2020 Page 5 YEAR Prin (6/1)Rate Interest Premium Total Prin (6/1)Rate Interest Premium Total Prin (6/1)Rate Interest Premium Total Prin (6/1)Rate Interest Total Prin (6/1)Rate Interest Premium Total YEAR 2021 105,000 2.000%42,583 (42,583)105,000 185,000 2.000%103,205 (82,706)205,499 30,000 2.000%17,966 (14,438)33,528 490,000 2.000%164,604 654,604 810,000 2.000%328,358 (139,727)998,631 2021 2022 95,000 2.000%27,750 (14,371)108,379 130,000 2.000%69,156 0 199,156 20,000 2.000%12,094 0 32,094 555,000 2.000%104,300 659,300 800,000 2.000%213,300 (14,371)998,929 2022 2023 80,000 2.000%26,000 0 106,000 130,000 2.000%66,556 0 196,556 25,000 2.000%11,644 0 36,644 565,000 2.000%93,100 658,100 800,000 2.000%197,300 0 997,300 2023 2024 80,000 2.000%24,400 104,400 135,000 2.000%63,906 198,906 25,000 2.000%11,144 36,144 580,000 2.000%81,650 661,650 820,000 2.000%181,100 1,001,100 2024 2025 80,000 2.000%22,800 102,800 135,000 2.000%61,206 196,206 25,000 2.000%10,644 35,644 585,000 2.000%70,000 655,000 825,000 2.000%164,650 989,650 2025 2026 85,000 2.000%21,150 106,150 140,000 2.000%58,456 198,456 25,000 2.000%10,144 35,144 430,000 2.000%59,850 489,850 680,000 2.000%149,600 829,600 2026 2027 85,000 3.000%19,025 104,025 145,000 3.000%54,881 199,881 25,000 3.000%9,519 34,519 435,000 3.000%49,025 484,025 690,000 3.000%132,450 822,450 2027 2028 85,000 3.000%16,475 101,475 150,000 3.000%50,456 200,456 25,000 3.000%8,769 33,769 450,000 3.000%35,750 485,750 710,000 3.000%111,450 821,450 2028 2029 90,000 3.000%13,850 103,850 155,000 3.000%45,881 200,881 25,000 3.000%8,019 33,019 355,000 3.000%23,675 378,675 625,000 3.000%91,425 716,425 2029 2030 90,000 3.000%11,150 101,150 160,000 3.000%41,156 201,156 30,000 3.000%7,194 37,194 365,000 3.000%12,875 377,875 645,000 3.000%72,375 717,375 2030 2031 95,000 2.000%8,850 103,850 165,000 2.000%37,106 202,106 30,000 2.000%6,444 36,444 370,000 2.000%3,700 373,700 660,000 2.000%56,100 716,100 2031 2032 95,000 2.000%6,950 101,950 170,000 2.000%33,756 203,756 30,000 2.000%5,844 35,844 295,000 2.000%46,550 341,550 2032 2033 100,000 2.000%5,000 105,000 175,000 2.000%30,306 205,306 30,000 2.000%5,244 35,244 305,000 2.000%40,550 345,550 2033 2034 100,000 2.000%3,000 103,000 180,000 2.000%26,756 206,756 30,000 2.000%4,644 34,644 310,000 2.000%34,400 344,400 2034 2035 100,000 2.000%1,000 101,000 180,000 2.000%23,156 203,156 30,000 2.000%4,044 34,044 310,000 2.000%28,200 338,200 2035 2036 185,000 2.125%19,391 204,391 30,000 2.125%3,425 33,425 215,000 2.125%22,816 237,816 2036 2037 190,000 2.125%15,406 205,406 35,000 2.125%2,734 37,734 225,000 2.125%18,141 243,141 2037 2038 195,000 2.250%11,194 206,194 35,000 2.250%1,969 36,969 230,000 2.250%13,163 243,163 2038 2039 200,000 2.250%6,750 206,750 35,000 2.250%1,181 36,181 235,000 2.250%7,931 242,931 2039 2040 200,000 2.250%2,250 202,250 35,000 2.250%394 35,394 235,000 2.250%2,644 237,644 2040 TOTALS 1,365,000 249,983 (56,954)1,558,029 3,305,000 820,933 (82,706)4,043,227 575,000 143,057 (14,438)703,619 5,180,000 698,529 5,878,529 10,425,000 1,912,502 (154,098)12,183,404 TOTALS Proposed G.O. Corporate Purpose Bonds, Series 2020A Debt Service Breakdown by Purpose Final Sale Results Street Improvements (Assessable)Street Improvements (Non-Assessable)Park Improvements Total Issue Estimated Debt ServiceCurrent Refund Series 2011C G.O. Bonds 6/9/2020 File: Oshkosh Debt Base Case_2020-6-9/2020A Bond Allocation Page 6 Prior Issue DS Funds Levy Savings TID 17 Savings TID 21 Savings TID 23 Savings Total Savings Amount Amount Dated Dated Call Date1 Call Date Call Amt Call Amt Rate/Term 3.000-4.000%2020-2031 Rate/Term 2.000 - 3.000%2021-2031 Year Prin (12/1)Rate Interest Total Year Prin (12/1)Rate Interest Total 2020 535,000 3.000%216,481 751,481 2020 (751,481) 2021 545,000 3.000%200,431 745,431 2021 490,000 2.000%164,604 654,604 41,679 15,663 17,698 15,788 90,827 2022 565,000 3.125%184,081 749,081 2022 555,000 2.000%104,300 659,300 39,063 16,938 18,219 15,563 89,781 2023 580,000 3.250%166,425 746,425 2023 565,000 2.000%93,100 658,100 41,644 15,819 17,094 13,769 88,325 2024 600,000 3.375%147,575 747,575 2024 580,000 2.000%81,650 661,650 38,844 14,519 20,844 11,719 85,925 2025 615,000 3.500%127,325 742,325 2025 585,000 2.000%70,000 655,000 40,650 12,975 19,350 14,350 87,325 2026 460,000 4.000%105,800 565,800 2026 430,000 2.000%59,850 489,850 42,050 16,300 17,600 0 75,950 2027 475,000 4.000%87,400 562,400 2027 435,000 3.000%49,025 484,025 43,075 14,475 20,825 0 78,375 2028 490,000 4.000%68,400 558,400 2028 450,000 3.000%35,750 485,750 40,175 13,025 19,450 0 72,650 2029 390,000 4.000%48,800 438,800 2029 355,000 3.000%23,675 378,675 42,100 0 18,025 0 60,125 2030 405,000 4.000%33,200 438,200 2030 365,000 3.000%12,875 377,875 38,850 0 21,475 0 60,325 2031 425,000 4.000%8,500 433,500 2031 370,000 2.000%3,700 373,700 43,300 0 16,500 0 59,800 Total 6,085,000 1,394,419 7,479,419 Total 5,180,000 698,529 5,878,529 451,429 119,713 207,079 71,188 849,408 Maturities Subject to Optional Redemption Plus Rounding (830) ESTIMATED FUTURE VALUE SAVINGS NET OF COSTS2 848,578 PRESALE SAVINGS ESTIMATE 612,178 NOTES: 1Present value savings of $724,025 or 11.899% of refunded principal.DIFFERENCE 236,400 $6,085,000 $1,540,000 Final Sale Results $9,965,000 $5,565,000 01-Nov-11 2-Jul-20 01-Dec-19 1-Dec-27 Existing Debt Service To Be Refunded Debt Service After Refunding Issue General Obligation Corporate Purpose Bonds, Series 2011C Issue General Obligation Corporate Purpose Bonds, Series 2020A Series 2011C General Obligation Corporate Purpose Bonds Refunding Savings 6/9/2020 File: Oshkosh Debt Base Case_2020-6-9/GO 2011C Savings Page 7 U.S. PUBLIC FINANCE CREDIT OPINION 3 June 2020 Contacts Benjamin J VanMetre +1.312.706.9951 AVP-Analyst ben.vanmetre@moodys.com Tatiana Killen +1.212.553.2895 VP-Senior Analyst tatiana.killen@moodys.com » Contacts continued on last page CLIENT SERVICES Americas 1-212-553-1653 Asia Pacific 852-3551-3077 Japan 81-3-5408-4100 EMEA 44-20-7772-5454 Oshkosh (City of) WI Update to credit analysis Summary The City of Oshkosh (Aa3) benefits from a sizable tax base supported by the presence of University of Wisconsin at Oshkosh and notable manufacturing companies. The city’s strengths also include a stable operating trend that continues to support an adequate reserve position. The city’s credit strengths are balanced against slightly below average socioeconomic characteristics and somewhat elevated leverage related to long-term debt and pension burdens. We regard the coronavirus outbreak as a social risk under our ESG framework, given the substantial implications for public health and safety. We do not see any material immediate credit risks for the city. However, the situation surrounding coronavirus is rapidly evolving and the longer term impact will depend on both the severity and duration of the crisis. If our view of the credit quality of the city changes, we will update our opinion at that time. Credit strengths » Large tax base that benefits from the presence of University of Wisconsin at Oshkosh » Stable operations with satisfactory reserves Credit challenges » Lack of industrial diversity » Somewhat elevated leverage related to long-term debt and pension burdens Rating outlook Outlooks are typically not assigned to local government credits with this amount of debt. Factors that could lead to an upgrade » Significantly improved reserves and liquidity » Reduced leverage related to long-term debt and pension burdens Factors that could lead to a downgrade » Sustained tax base or economic deterioration » Weakened resident income levels » Material declines in reserves or liquidity Page 8 MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE » Increased leverage related to long-term debt and pension burdens Key indicators Oshkosh (City of) WI 2014 2015 2016 2017 2018 Economy/Tax Base Total Full Value ($000)$3,748,828 $3,743,645 $3,776,225 $3,931,778 $4,073,683 Population 66,430 66,582 66,713 66,649 66,610 Full Value Per Capita $56,433 $56,226 $56,604 $58,992 $61,157 Median Family Income (% of US Median)91.4%89.9%91.5%90.2%90.3% Finances Operating Revenue ($000)$51,026 $51,971 $52,807 $54,820 $57,102 Fund Balance ($000)$10,300 $9,516 $8,430 $10,495 $12,703 Cash Balance ($000)$6,212 $7,910 $9,978 $16,103 $11,094 Fund Balance as a % of Revenues 20.2%18.3%16.0%19.1%22.2% Cash Balance as a % of Revenues 12.2%15.2%18.9%29.4%19.4% Debt/Pensions Net Direct Debt ($000)$101,316 $126,768 $116,730 $117,327 $115,996 3-Year Average of Moody's ANPL ($000)$47,428 $59,111 $79,704 $89,920 $105,215 Net Direct Debt / Full Value (%)2.7%3.4%3.1%3.0%2.8% Net Direct Debt / Operating Revenues (x)2.0x 2.4x 2.2x 2.1x 2.0x Moody's - adjusted Net Pension Liability (3-yr average) to Full Value (%)1.3%1.6%2.1%2.3%2.6% Moody's - adjusted Net Pension Liability (3-yr average) to Revenues (x)0.9x 1.1x 1.5x 1.6x 1.8x Sources: US Census Bureau, city's audited financial statements Profile The City of Oshkosh covers more than 24 square miles in the Fox River Valley on the western shore of Lake Winnebago and serves as the county seat of Winnebago County (Aa1). The city government provides municipal services including public safety, public works, health and human services, recreation and utility services to a population of more than 66,000 residents. Detailed credit considerations Economy and tax base: sizable tax base with institutional and manufacturing presence The coronavirus is driving an unprecedented economic slowdown. We currently forecast US GDP to decline significantly during 2020 with a gradual recovery commencing toward the end of the year. Local governments with the highest exposure to tourism, hospitality, healthcare, retail and oil and gas could suffer particularly severe impacts. Oshkosh has a relatively diverse tax base with residential real estate comprising a majority (60%) of the tax base followed by commercial property (33%) and manufacturing property (6%). A combination of appreciating values and new construction drove four consecutive years of tax base growth before the current economic slowdown. The tax base reached $4.2 billion in fiscal 2019. Despite the coronavirus pandemic, officials report generally stable operations and collections among larger employers and taxpayers as well as some continued development underway within the city. Approximately 20% of local employment is in manufacturing, with a significant exposure to federal procurement contracts. Oshkosh Corporation (Ba3 stable), a manufacturer of heavy duty vehicles for military and industrial uses, is the city's largest employer with about 3,600 employees. Favorably, the company was awarded a sizable $6.8 billion contract with the US Department of Defense in 2015 which is providing a degree of stability for the city's manufacturing employment. City officials report continued stability during the coronavirus pandemic. This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history. 2 3 June 2020 Oshkosh (City of) WI: Update to credit analysisPage 9 MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE Aside from Oshkosh Corporation, city officials report continued investments by other local employers within the light manufacturing and service sectors. Other notable employers within the city include Bemis Company, Inc. (Baa2 stable), a manufacturer of packaging products (2,600 employees) and the University of Wisconsin at Oshkosh (1,500 employees). The university is the third largest in the state system with an enrollment of approximately 14,000 students or about 21% of the city's total population. The city's resident income indices are below national medians, partly because of its significant university presence. The city's median family income stands at about 90% of the national figure. Financial operations and reserves: satisfactory financial position The city's conservative budgeting practices and adequate reserves will help mitigate near term impacts from the coronavirus pandemic, though the current revenue disruption and expenditure demands are driving negative variances for the year. General fund revenue is down by about 1.8% and management expects the full year revenue decline to total about $1.1 million. They city is also expecting about $300,000 in additional expenditures related to the coronavirus pandemic, which coupled with the revenue shortfalls will result in a decline in reserves between $1.3 million and $1.5 million. Favorably, the city had several years of operating surpluses before the current economic slowdown. Audited fiscal 2018 results reflect a $1.7 million surplus. Unaudited fiscal 2019 results reflect an additional $1.7 million surplus. The two years of large surpluses positioned the city well to absorb the expected deficit during the current fiscal year. Property taxes comprise the largest source of operating revenue (52%) followed by intergovernmental aid (29%). While Wisconsin municipalities are generally restricted to operating levy increases no greater than net new construction, Oshkosh benefits from certain exemptions and management reports roughly $3.8 million in unused operating levy capacity through its debt service levy limit exemption. LIQUIDITY The city maintains adequate liquidity. Combined cash totaled $11 million across the general fund and debt service fund at the close of fiscal 2018. As discussed above, the city's liquidity is likely to decline somewhat during the current year. Debt and pensions: elevated leverage related to long-term debt and pension burdens We expect the city's debt burden to moderate somewhat given the city's longer-term goals to reduce its debt burden. Net of the general obligation debt supported by the city's water, sewer and stormwater utilities, the city's net direct debt burden remains elevated at 3% of full value and 2.2x operating revenue. Going forward, the city expects to pay down existing debt at a faster rate than it issues new debt, ultimately reducing the burden over time. The city's fixed costs, inclusive of debt service and retirement contributions, consistently hover around 25% of operating revenue. DEBT STRUCTURE All of the city's governmental debt is fixed rate and amortizes over the long term, with about 83% of principal retired within 10 years. DEBT-RELATED DERIVATIVES The city has no exposure to any debt-related derivatives. PENSIONS AND OPEB The city participates in the Wisconsin Retirement System (WRS), a statewide cost-sharing plan. Contributions are determined using a level contribution actuarial method in an effort to keep employer and employee contribution rates at a level percentage of payroll over time, and are set at 100% of the plan’s funding requirement. As a result, WRS remains one of the best-funded public employee retirement systems in the country, with statewide employer contributions to WRS in 2018 totaling more than 150% of the amount needed to tread water.1 The city's three year adjusted net pension liability (ANPL) totals $105 million, equal to 1.8x operating revenue and 2.5% of full value. Moody's ANPL reflects the use of a market-based discount rate to value pension liabilities rather than the assumed rate of investment return on plan assets. In comparison, the reported net pension asset, based on the plan’s 7.0% discount rate, was about $10 million in fiscal 2018. 3 3 June 2020 Oshkosh (City of) WI: Update to credit analysisPage 10 MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE The city provides Other Post-Employment Benefits (OPEB) to eligible retirees which it currently funds on a pay-as-you-go basis. Both the city’s reported net OPEB liability our adjusted net OPEB liability for the city, based on the use of a different discount rate, total about $7 million. ESG considerations ENVIRONMENTAL Environmental factors have not had a material impact on the city's credit profile. According to data of Moody's affiliate, Four Twenty Seven, Winnebago County has notable exposure to extreme rainfall and has a relatively limited exposure to other various environmental risks going forward. SOCIAL Social factors a consideration in the city's credit profile. The median age of city residents is notably below the state and national figures while resident income levels are also below state and national figures, both of which are driven in part by the university presence. We regard the coronavirus outbreak as a social risk under our ESG framework, given the substantial implications for public health and safety. We do not see any material immediate credit risks for the city. However, the situation surrounding coronavirus is rapidly evolving and the longer term impact will depend on both the severity and duration of the crisis. If our view of the credit quality of the city changes, we will update our opinion at that time. GOVERNANCE Wisconsin cities have an Institutional Framework score of “A,” which is moderate. The sector's major revenue source, property tax revenue, is subject to a cap that restricts cities from increasing their operating property tax levies except to capture amounts represented by net new construction growth. Revenue and expenditures tend to be predictable. Across the sector, fixed and mandated costs are generally high. Many cities use tax increment districts to attract economic development, often issuing debt to fund initial infrastructure in undeveloped areas. While tax increment districts are ultimately expected to generate revenue sufficient to cover initial city outlay, cities are exposed to economic downturns which could halt development. Management has a demonstrated history maintaining satisfactory reserves. The city uses a conservative budgetary approach, along with a multiyear capital plan and borrowing strategy. Rating methodology and scorecard factors The US Local Government General Obligation Debt methodology includes a scorecard, a tool providing a composite score of a local government’s credit profile based on the weighted factors we consider most important, universal and measurable, as well as possible notching factors dependent on individual credit strengths and weaknesses. Its purpose is not to determine the final rating, but rather to provide a standard platform from which to analyze and compare local government credits. 4 3 June 2020 Oshkosh (City of) WI: Update to credit analysisPage 11 MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE Exhibit 2 Oshkosh (City of) WI Scorecard Factors Measure Score Economy/Tax Base (30%) [1] Tax Base Size: Full Value (in 000s)$4,211,596 Aa Full Value Per Capita $63,228 A Median Family Income (% of US Median)90.3%Aa Notching Factors:[2] Institutional Presence Up Finances (30%) Fund Balance as a % of Revenues 22.2%Aa 5-Year Dollar Change in Fund Balance as % of Revenues 4.5%A Cash Balance as a % of Revenues 19.4%Aa 5-Year Dollar Change in Cash Balance as % of Revenues 6.3%A Notching Factors:[2] Other Analyst Adjustment to Finances Factor: Additional revenue raising flexibility under operating levy Up Management (20%) Institutional Framework A A Operating History: 5-Year Average of Operating Revenues / Operating Expenditures (x)1.0x A Debt and Pensions (20%) Net Direct Debt / Full Value (%)3.0%A Net Direct Debt / Operating Revenues (x)2.2x A 3-Year Average of Moody's Adjusted Net Pension Liability / Full Value (%)2.5%A 3-Year Average of Moody's Adjusted Net Pension Liability / Operating Revenues (x)1.8x A Scorecard-Indicated Outcome Aa3 Assigned Rating Aa3 [1] Economy measures are based on data from the most recent year available. [2] Notching Factors are specifically defined in the US Local Government General Obligation Debt methodology. [3] Standardized adjustments are outlined in the GO Methodology Scorecard Inputs publication. Source: US Census Bureau, audited financial statements, Moody's Investors Service Endnotes 1 Employer contributions that tread water equal the sum of current year service cost and interest on reported net pension liabilities at the start of the year, using reported actuarial assumptions. If plan assumptions are met exactly, contributions equal to the tread water indicator will prevent the reported net pension liabilities from growing. 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REPORT NUMBER 1230125 6 3 June 2020 Oshkosh (City of) WI: Update to credit analysisPage 13 MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE Contacts Benjamin J VanMetre +1.312.706.9951 AVP-Analyst ben.vanmetre@moodys.com Tatiana Killen +1.212.553.2895 VP-Senior Analyst tatiana.killen@moodys.com CLIENT SERVICES Americas 1-212-553-1653 Asia Pacific 852-3551-3077 Japan 81-3-5408-4100 EMEA 44-20-7772-5454 7 3 June 2020 Oshkosh (City of) WI: Update to credit analysisPage 14 June 9, 2020 Sale Day Report for City of Oshkosh, Wisconsin $7,290,000 General Obligation Promissory Notes, Series 2020B Prepared by: Todd Taves, CIPMA Senior Municipal Advisor/ Principal Jon Cameron, CIPMA Senior Municipal Advisor Sale Day Report City of Oshkosh, Wisconsin June 9, 2020 Sale Day Report – June 9, 2020 City of Oshkosh, Wisconsin $7,290,000 General Obligation Promissory Notes, Series 2020B Purpose: For public purposes, including financing capital improvements and equipment. Rating: Rating: Moody's Investor's Service "Aa3" Number of Bids: 3 Low Bidder: Baird, Milwaukee, Wisconsin Comparison from Lowest to Highest Bid: (TIC as bid) Low Bid High Bid Interest Difference 1.3223% 1.5153% $73,659 Summary of Sale Results: Principal Amount*: $7,290,000.00 Underwriter’s Discount: $51,746 Reoffering Premium: $405,481 True Interest Cost: 1.3256% Costs of Issuance: $47,950 Yield: 0.400%-1.550% Total Net P&I**: $7,832,785 Notes: U.S. Bank National Association, St. Paul, Minnesota will serve as Paying Agent on the Notes. The Notes maturing June 1, 2027 and thereafter are callable June 1, 2026 or any date thereafter. * Subsequent to bid opening, the issue size was decreased from $7,360,000 to $7,290,000.00 to reflect reoffering premium received and unused discount. ** Net of reoffering premium to be deposited to the Debt Service Fund. Closing Date: July 1, 2020 City Council Action: Adopt a resolution awarding the sale of $7,290,000 General Obligation Promissory Notes, Series 2020B. Attachments: Bid Tabulation Sources and Uses of Funds Updated Debt Service Schedules Rating Report Page 1 BID TABULATION $7,360,000* General Obligation Promissory Notes, Series 2020B City of Oshkosh, Wisconsin SALE: June 9, 2020 AWARD: BAIRD Rating: Moody's Investor's Service "Aa3" Tax Exempt - Non-Bank Qualified NAME OF BIDDER MATURITY (June 1) RATE REOFFERING YIELD PRICE NET INTEREST COST TRUE INTEREST RATE BAIRD $7,725,588.90 $557,602.77 1.3223% Milwaukee, Wisconsin 2021 3.000% 0.400% C.L. King & Associates Fidelity Capital Markets Edward Jones Colliers Securities LLC Loop Capital Markets Crews & Associates, Inc. Davenport & Co. L.L.C. Sierra Pacific Securities Isaak Bond Investments, Inc Northland Securities, Inc. Oppenheimer & Co. Wintrust Investments, LLC SumRidge Partners Country Club Bank BNYMellon Capital Markets Stifel, Nicolaus & Company, Inc. Midland Securities BOK Financial Securities, Inc. FMS Bonds Inc. First Kentucky Securities Corp. Multi-Bank Securities Inc. First Southern LLC Dinosaur Securities First Bankers' Banc Securities, Inc. Mountainside Securities LLC INTL FCStone Securities, Inc. 2022 3.000% 0.420% 2023 3.000% 0.460% 2024 3.000% 0.550% 2025 3.000% 0.700% 2026 2.000% 0.900% 2027 2.000% 1.100% 2028 2.000% 1.250% 2029 2.000% 1.400% 2030 2.000% 1.550% KEYBANC CAPITAL MARKETS INCORPORATED $7,727,989.20 $599,281.63 1.4215% Cleveland, Ohio UBS FINANCIAL SERVICES INC. $7,547,071.67 $631,261.66 1.5153% New York, New York * Subsequent to bid opening the issue size was decreased to $7,290,000. Adjusted Price - $7,643,735.67 Adjusted Net Interest Cost - $542,785.17 Adjusted TIC - 1.3256% Page 2 Presale Estimate Sale Results Est. Dated 7-2-2020 Dated 7-1-2020 G.O. Promissory Notes G.O. Promissory Notes Difference Series 2020B Series 2020B Capital Projects1 Tax-Exempt Tax-Exempt Comprehensive Streets/Utility Improvements Street Improvements -$ -$ -$ Sidewalks 233,500$ 233,500$ -$ Traffic Improvements 485,000$ 485,000$ -$ Public Infrastructure Improvements - Other Streets -$ -$ -$ Public Infrastructure Improvements - Sidewalks 988,000$ 988,000$ -$ Park Improvements -$ -$ -$ Public Property Improvements 2,004,000$ 2,004,000$ -$ Major Equipment 494,100$ 494,100$ -$ Major Equipment -Vehicles 3,054,000$ 3,054,000$ -$ Tax Increment Financing (TIF) District Improvements -$ -$ -$ Subtotal Capital Projects 7,258,600$ 7,258,600$ -$ Bid Premium Bid Premium Received (405,481)$ (405,481)$ Deposit to Debt Service Fund 353,736$ 353,736$ Subtotal (Used to Reduce Issue Size)(51,746)$ (51,746)$ Estimated Issuance Expenses Ehlers (Municipal Advisor)22,500$ 22,500$ -$ Chapman & Cutler (Bond Counsel)14,000$ 15,000$ 1,000$ Maximum Discount (Bid Item)2 73,600$ 51,746$ (21,854)$ Moody's Investors Service (Rating Fee)9,690$ 9,600$ (90)$ U.S. Bank (Paying Agent)850$ 850$ -$ TOTAL TO BE FINANCED 7,379,240$ 7,306,550$ (72,690)$ Estimated Interest Earnings3 (19,719)$ (19,719)$ 0$ Rounding 480$ 3,169$ 2,689$ NET BOND OR NOTE SIZE 7,360,000$ 7,290,000$ (70,000)$ NOTES: 1Capital projects amounts taken from City of Oshkosh Capital Improvement Program 2020-2024 approved November 12, 2019. 2Maximum allowable discount of 1.25% for the Series 2020A Bonds, and 1.0% for the Series 2020B Notes. 3Assumes temporary investment of available new money proceeds at 1.63% for 60 days. (December 2019 LGIP Rate). City of Oshkosh, WI 2020 General Obligation Sizing Worksheet 6/9/2020 File: Oshkosh Debt Base Case_2020-6-9/G.O. Sizing 2020 Page 3 TID No. 17 TID No. 21 TID No. 23 Year Prin (6/1)Est. Rate1 Interest Premium Total Prin (6/1)Rate Interest Premium Total Year 2020 4,101,329,348 21,182,891 (9,112,192)12,070,700 2.94 12,070,700 2.94 2020 2021 4,168,890,185 18,446,083 (7,375,957)11,070,126 2.66 810,000 2.000%328,358 (139,727)998,631 785,000 3.000%245,421 (245,421)785,000 (195,000)(109,225)(123,321)(160,275)(10,000)12,255,936 2.94 2021 2022 4,237,563,945 15,721,975 (5,681,170)10,040,804 2.37 800,000 2.000%213,300 (14,371)998,929 755,000 3.000%146,675 (108,315)793,360 (197,792)(105,100)(124,950)(161,000)(10,464)11,233,788 2.65 2022 2023 4,307,368,961 14,307,568 (4,495,163)9,812,405 2.28 800,000 2.000%197,300 0 997,300 660,000 3.000%125,450 0 785,450 (195,175)(108,250)(122,950)(162,950)(11,750)10,994,080 2.55 2023 2024 4,378,323,870 12,634,598 (3,476,167)9,158,431 2.09 820,000 2.000%181,100 1,001,100 675,000 3.000%105,425 780,425 (191,325)(111,300)(120,950)(164,800)(11,450)10,340,131 2.36 2024 2025 4,450,447,612 11,332,987 (2,950,628)8,382,359 1.88 825,000 2.000%164,650 989,650 700,000 3.000%84,800 784,800 (192,400)(109,300)(123,900)(161,600)(11,150)9,558,459 2.15 2025 2026 4,523,759,443 9,942,604 (2,573,372)7,369,232 1.63 680,000 2.000%149,600 829,600 715,000 2.000%67,150 782,150 (193,750)(107,300)(121,800)(10,900)8,547,232 1.89 2026 2027 4,598,278,933 8,491,672 (2,015,369)6,476,303 1.41 690,000 3.000%132,450 822,450 725,000 2.000%52,750 777,750 (190,025)(109,725)(119,175)(10,700)7,646,878 1.66 2027 2028 4,674,025,975 7,238,450 (1,779,272)5,459,178 1.17 710,000 3.000%111,450 821,450 745,000 2.000%38,050 783,050 (190,825)(106,575)(120,950)(10,500)6,634,828 1.42 2028 2029 4,751,020,792 4,987,544 (693,494)4,294,050 0.90 625,000 3.000%91,425 716,425 755,000 2.000%23,050 778,050 (191,500)(122,575)(10,300)5,464,150 1.15 2029 2030 4,829,283,938 4,921,866 (698,550)4,223,316 0.87 645,000 3.000%72,375 717,375 775,000 2.000%7,750 782,750 (192,050)(119,125)(10,100)5,402,166 1.12 2030 2031 4,908,836,306 4,187,275 (542,725)3,644,550 0.74 660,000 2.000%56,100 716,100 (103,850)(121,200)4,135,600 0.84 2031 2032 4,989,699,133 3,536,019 (352,150)3,183,869 0.64 295,000 2.000%46,550 341,550 (101,950)3,423,469 0.69 2032 2033 5,071,894,006 3,553,500 (356,288)3,197,213 0.63 305,000 2.000%40,550 345,550 (105,000)3,437,763 0.68 2033 2034 5,155,442,869 2,459,694 (266,000)2,193,694 0.43 310,000 2.000%34,400 344,400 (103,000)2,435,094 0.47 2034 2035 5,240,368,024 1,044,938 (55,363)989,575 0.19 310,000 2.000%28,200 338,200 (101,000)1,226,775 0.23 2035 2036 5,326,692,143 739,263 (53,675)685,588 0.13 215,000 2.125%22,816 237,816 0 923,403 0.17 2036 2037 5,414,438,273 501,425 (56,925)444,500 0.08 225,000 2.125%18,141 243,141 687,641 0.13 2037 2038 5,503,629,836 190,550 0 190,550 0.03 230,000 2.250%13,163 243,163 433,713 0.08 2038 2039 5,594,290,644 0 0 0 0.00 235,000 2.250%7,931 242,931 242,931 0.04 2039 2040 5,686,444,900 0 0 0 0.00 235,000 2.250%2,644 237,644 237,644 0.04 2040 TOTALS 145,420,900 (42,534,459)102,886,441 10,425,000 1,912,502 (154,098)12,183,404 7,290,000 896,521 (353,736)7,832,785 (2,444,642)(866,775)(1,340,896)(810,625)(107,314)117,332,379 TOTALS Presale Estimate 10,870,000 1,763,468 12,633,468 7,360,000 743,486 8,103,486 Difference (445,000)149,034 (154,098)(450,064)(70,000)153,035 (353,736)(270,700) Maturities Subject to Optional Redemption 2020 G.O. Bond and Note Structure Worksheet Final Sale Results Existing Debt Only (Excludes Debt to be Refunded)Proposed 2020 Issues Projected Equalized Value G.O. Debt P&I Total Abatement Sources Net Tax Levy for Debt Net Tax Rate for Debt G.O. Corporate Purpose Bonds, Series 2020A G.O. Promissory Notes, Series 2020B Projected Abatement Sources New Net Debt Service Levy Net Tax Rate for Debt$7,290,000 Special Assessments Oshkosh Centre Allocations of Refunded Bonds Dated 7-1-20 Dated 7-1-20 $10,425,000 6/9/2020 File: Oshkosh Debt Base Case_2020-6-9/G.O. Structure 2020 Page 4 YEAR Prin (6/1) Rate Interest Premium Total Prin (6/1) Rate Interest Premium Total Prin (6/1) Rate Interest Premium Total Prin (6/1) Rate Interest Premium Total YEAR 2021 90,000 3.000%27,763 (27,763)90,000 685,000 3.000%214,267 (214,267)685,000 10,000 3.000%3,392 (3,392)10,000 785,000 3.000%245,421 (245,421)785,000 2021 2022 85,000 3.000%16,575 (12,162)89,413 660,000 3.000%128,050 (94,566)693,484 10,000 3.000%2,050 (1,586)10,464 755,000 3.000%146,675 (108,315)793,360 2022 2023 75,000 3.000%14,175 0 89,175 575,000 3.000%109,525 0 684,525 10,000 3.000%1,750 0 11,750 660,000 3.000%125,450 0 785,450 2023 2024 75,000 3.000%11,925 86,925 590,000 3.000%92,050 682,050 10,000 3.000%1,450 11,450 675,000 3.000%105,425 780,425 2024 2025 80,000 3.000%9,600 89,600 610,000 3.000%74,050 684,050 10,000 3.000%1,150 11,150 700,000 3.000%84,800 784,800 2025 2026 80,000 2.000%7,600 87,600 625,000 2.000%58,650 683,650 10,000 2.000%900 10,900 715,000 2.000%67,150 782,150 2026 2027 80,000 2.000%6,000 86,000 635,000 2.000%46,050 681,050 10,000 2.000%700 10,700 725,000 2.000%52,750 777,750 2027 2028 85,000 2.000%4,350 89,350 650,000 2.000%33,200 683,200 10,000 2.000%500 10,500 745,000 2.000%38,050 783,050 2028 2029 85,000 2.000%2,650 87,650 660,000 2.000%20,100 680,100 10,000 2.000%300 10,300 755,000 2.000%23,050 778,050 2029 2030 90,000 2.000%900 90,900 675,000 2.000%6,750 681,750 10,000 2.000%100 10,100 775,000 2.000%7,750 782,750 2030 TOTALS 825,000 101,538 (39,925)886,613 6,365,000 782,692 (308,833)6,838,859 100,000 0 12,292 (4,978)107,314 7,290,000 896,521 (353,736)7,832,785 TOTALS Final Sale Results Proposed G.O. Promissory Note, Series 2020B Debt Service Breakdown by Purpose Assessable Sidewalks Levy Oshkosh Centre Total Issue Estimated Debt Service 6/9/2020 File: Oshkosh Debt Base Case_2020-6-9/2020B Note Allocation Page 5 June 9, 2020 Sale Day Report for City of Oshkosh, Wisconsin $4,770,000 Storm Water Utility Revenue Bonds, Series 2020C Prepared by: Todd Taves, CIPMA Senior Municipal Advisor/ Principal Jon Cameron, CIPMA Senior Municipal Advisor Sale Day Report City of Oshkosh, Wisconsin June 9, 2020 Sale Day Report – June 9, 2020 City of Oshkosh, Wisconsin $4,770,000 Storm Water Utility Revenue Bonds, Series 2020C Purpose: To provide funds for the public purpose of financing improvements and extensions to the City’s Storm Water Utility System. Rating: Build America Mutual S&P Global Ratings "AA" Underlying Rating: Moody's Investor's Service "A1" Number of Bids: 2 Low Bidder: Baird, Milwaukee, Wisconsin Comparison from Lowest to Highest Bid: (TIC as bid) Low Bid High Bid Interest Difference 2.1543% 2.2533% $51,953 Summary of Sale Results: Principal Amount*: $4,770,000.00 Underwriter’s Discount: $69,526 Reoffering Premium: $289,274 True Interest Cost: 2.1624% Costs of Issuance: $59,650 Yield: 0.500%-2.400% Total P&I: $6,163,990 Notes: U.S. Bank National Association, St. Paul, Minnesota will serve as Paying Agent on the Bonds. The Bonds maturing May 1, 2030 and thereafter are callable May 1, 2029 or any date thereafter. * Subsequent to bid opening, the issue size was decreased from $5,055,000 to $4,770,000.00 to reflect reoffering premium received and a reduced debt service reserve requirement. Closing Date: July 1, 2020 City Council Action: Adopt a resolution awarding the sale of $4,770,000 Storm Water Utility Revenue Bonds, Series 2020C. Attachments: Bid Tabulation Sources and Uses of Funds Updated Debt Service Schedules Rating Report Page 1 BID TABULATION $5,055,000* Storm Water Utility Revenue Bonds, Series 2020C City of Oshkosh, Wisconsin SALE: June 9, 2020 AWARD: BAIRD **Build America Mutual Rating: "S&P Global Ratings "AA"" Underlying Rating: Moody's Investor's Service "A1" Tax Exempt - Non-Bank Qualified NAME OF BIDDER MATURITY (May 1) RATE REOFFERING YIELD PRICE NET INTEREST COST TRUE INTEREST RATE BAIRD $5,268,805.20 $1,237,918.60 2.1543% Milwaukee, Wisconsin 2021 4.000% 0.500% C.L. King & Associates Fidelity Capital Markets Edward Jones Colliers Securities LLC Loop Capital Markets Crews & Associates, Inc. Davenport & Co. L.L.C. Sierra Pacific Securities Isaak Bond Investments, Inc Northland Securities, Inc. Oppenheimer & Co. Wintrust Investments, LLC SumRidge Partners Country Club Bank BNYMellon Capital Markets Stifel, Nicolaus & Company, Inc. Midland Securities BOK Financial Securities, Inc. FMS Bonds Inc. First Kentucky Securities Corp. RBC Capital Markets Multi-Bank Securities Inc. First Southern LLC First Bankers' Banc Securities, Inc. Mountainside Securities LLC INTL FCStone Securities, Inc. 2022 4.000% 0.550% 2023 4.000% 0.600% 2024 4.000% 0.700% 2025 4.000% 0.850% 2026 4.000% 1.000% 2027 4.000% 1.150% 2028 4.000% 1.300% 2029 4.000% 1.450% 2030 4.000% 1.550% 20311 2.000% 2.000% 20321 2.000% 2.000% 2033 2.000% 2.050% 2034 2.000% 2.100% 2035 2.125% 2.150% 2036 2.125% 2.200% 2037 2.250% 2.250% 2038 2.250% 2.300% 2039 2.250% 2.350% 2040 2.375% 2.400% UBS FINANCIAL SERVICES INC. $5,193,583.11 $1,289,871.94 2.2533% New York, New York * Subsequent to bid opening the issue size was decreased to $4,770,000. Adjusted Price - $4,966,948.02 Adjusted Net Interest Cost - $1,197,041.61 Adjusted TIC - 2.1624% ** Build America Mutual insurance purchased by BAIRD. 1 $505,000 Term Bond due 2032 with mandatory redemption in 2031. Page 2 Presale Estimate Sale Results Sale 6-9-2020 Sale 6-9-2020 Est. Dated 7-2-2020 Dated 7-1-2020 Storm Water Utility Revenue Bonds Storm Water Utility Revenue Bonds Difference Series 2020C Series 2020C Capital Projects1 Tax-Exempt Tax-Exempt Comprehensive Streets/Utility Improvements 1,918,000$ 1,918,000$ -$ Public Infrastructure Improvements - Other Streets 518,000$ 518,000$ -$ Public Infrastructure Improvements - Other Utilities 50,000$ 50,000$ -$ Public Infrastructure Improvements 2,124,000$ 2,124,000$ -$ Public Property Improvements -$ -$ -$ Major Equipment -$ -$ -$ Major Equipment - Vehicles -$ -$ -$ Subtotal Capital Projects 4,610,000$ 4,610,000$ -$ Reserve Fund Adjustments New Reserve Fund Requirement 7,095,258$ 7,078,306$ (16,952)$ Less Current Reserve Requirement (6,769,481)$ (6,769,481)$ -$ Net Deposit to Reserve Fund Required 325,777$ 308,825$ (16,952)$ Premium Received (Used to Reduce Issue Size)(289,274)$ (289,274)$ Estimated Issuance Expenses Ehlers (Municipal Advisor)31,800$ 31,800$ -$ Chapman & Cutler (Bond Counsel)15,000$ 13,500$ (1,500)$ Maximum Discount (Bid Item) @ 1.25%63,188$ 69,526$ 6,338$ Moody's Investors Service (Rating Fee)18,000$ 13,500$ (4,500)$ U.S. Bank (Paying Agent)850$ 850$ -$ Build America Mutual (Bond Insurance)-$ 22,800$ 22,800$ TOTAL TO BE FINANCED 5,064,615$ 4,781,527$ (283,088)$ Estimated Interest Earnings2 (12,524)$ (12,524)$ -$ Rounding 2,909$ 997$ (1,912)$ NET BOND SIZE 5,055,000$ 4,770,000$ (285,000)$ NOTES: 1Capital projects amounts taken from City of Oshkosh Capital Improvement Program 2020-2024 approved November 12, 2019. 2Assumes temporary investment of available new money proceeds at 1.63% for 60 days. (December 2019 LGIP Rate). City of Oshkosh 2020 Revenue Bond Sizing Worksheet 6/9/2020 File: Oshkosh Debt Base Case_2020-6-9/Rev Sizing 2020 Page 3 Schedule of Storm Water Utility Revenue Debt Outstanding Plus Proposed 2020 Issue As of January 1, 2020 Amount Dated Paying Agent Callable Callable Amt Rate/Term 2.000 - 4.000%2021-2040 Year Principal Interest Total Prin (5/1) Rate Interest Total Total P&I Net Revs1 1.2X Req'd Rev P&I G.O. P&I Total Net Revs1 Year 2020 3,980,000 2,769,218 6,749,218 6,749,218 8,670,976 1.28 6,749,218 858,800 7,608,017 8,670,976 1.14 2020 2021 4,245,000 2,521,613 6,766,613 125,000 4.000%183,533 308,533 7,075,146 8,670,976 1.23 7,075,146 819,775 7,894,921 8,670,976 1.10 2021 2022 4,405,000 2,360,563 6,765,563 175,000 4.000%131,025 306,025 7,071,588 8,670,976 1.23 7,071,588 820,269 7,891,856 8,670,976 1.10 2022 2023 4,585,000 2,184,481 6,769,481 185,000 4.000%123,825 308,825 7,078,306 8,670,976 1.23 7,078,306 547,369 7,625,675 8,670,976 1.14 2023 2024 4,765,000 2,003,822 6,768,822 190,000 4.000%116,325 306,325 7,075,147 8,670,976 1.23 7,075,147 438,194 7,513,341 8,670,976 1.15 2024 2025 4,940,000 1,829,081 6,769,081 200,000 4.000%108,525 308,525 7,077,606 8,670,976 1.23 7,077,606 421,869 7,499,475 8,670,976 1.16 2025 2026 4,885,000 1,663,175 6,548,175 210,000 4.000%100,325 310,325 6,858,500 8,670,976 1.26 6,858,500 410,694 7,269,194 8,670,976 1.19 2026 2027 5,100,000 1,492,309 6,592,309 215,000 4.000%91,825 306,825 6,899,134 8,670,976 1.26 6,899,134 394,513 7,293,647 8,670,976 1.19 2027 2028 5,265,000 1,315,431 6,580,431 225,000 4.000%83,025 308,025 6,888,456 8,670,976 1.26 6,888,456 378,475 7,266,931 8,670,976 1.19 2028 2029 5,490,000 1,130,816 6,620,816 235,000 4.000%73,825 308,825 6,929,641 8,670,976 1.25 6,929,641 12,581 6,942,222 8,670,976 1.25 2029 2030 5,720,000 943,159 6,663,159 245,000 4.000%64,225 309,225 6,972,384 8,670,976 1.24 6,972,384 17,259 6,989,644 8,670,976 1.24 2030 2031 4,410,000 774,588 5,184,588 250,000 2.000%56,825 306,825 5,491,413 8,670,976 1.58 5,491,413 16,856 5,508,269 8,670,976 1.57 203120324,565,000 620,172 5,185,172 255,000 2.000%51,775 306,775 5,491,947 8,670,976 1.58 5,491,947 16,425 5,508,372 8,670,976 1.57 2032 2033 4,265,000 468,291 4,733,291 260,000 2.000%46,625 306,625 5,039,916 8,670,976 1.72 5,039,916 20,900 5,060,816 8,670,976 1.71 2033 2034 3,310,000 338,113 3,648,113 265,000 2.000%41,375 306,375 3,954,488 8,670,976 2.19 3,954,488 20,300 3,974,788 8,670,976 2.18 2034 2035 2,830,000 236,425 3,066,425 275,000 2.125%35,803 310,803 3,377,228 8,670,976 2.57 3,377,228 0 3,377,228 8,670,976 2.57 2035 2036 2,175,000 155,425 2,330,425 280,000 2.125%29,906 309,906 2,640,331 8,670,976 3.28 2,640,331 0 2,640,331 8,670,976 3.28 2036 2037 1,900,000 89,225 1,989,225 285,000 2.250%23,725 308,725 2,297,950 8,670,976 3.77 2,297,950 0 2,297,950 8,670,976 3.77 2037 2038 1,255,000 37,550 1,292,550 290,000 2.250%17,256 307,256 1,599,806 8,670,976 5.42 1,599,806 0 1,599,806 8,670,976 5.42 2038 2039 565,000 8,475 573,475 300,000 2.250%10,619 310,619 884,094 8,670,976 9.81 884,094 0 884,094 8,670,976 9.81 2039 2040 305,000 2.375%3,622 308,622 308,622 8,670,976 28.10 308,622 0 308,622 8,670,976 28.10 2040 TOTALS 78,655,000 22,941,930 101,596,930 4,770,000 1,393,990 6,163,990 107,760,920 107,760,920 5,194,278 112,955,197 Presale Estimate 5,055,000 1,431,895 6,486,895 Difference (285,000)(37,905)(322,905) NOTES: 1Net revenue calculation based the City's 2019 preliminary financial statements. = Maturities Subject to Optional Redemption Debt Service Coverage Total Utility DebtIssueExisting Stormwater Revenue Debt 01-May-29 Debt Service CoverageStorm Water Utility Revenue Bonds, Series 2020 Existing + Future Issues $4,770,000 01-Jul-20 Sale Results $3,010,000 6/9/2020 File: Oshkosh Debt Base Case_2020-6-9/Storm Rev Debt Page 4 U.S. PUBLIC FINANCE CREDIT OPINION 3 June 2020 Contacts Benjamin J VanMetre +1.312.706.9951 AVP-Analyst ben.vanmetre@moodys.com Tatiana Killen +1.212.553.2895 VP-Senior Analyst tatiana.killen@moodys.com » Contacts continued on last page CLIENT SERVICES Americas 1-212-553-1653 Asia Pacific 852-3551-3077 Japan 81-3-5408-4100 EMEA 44-20-7772-5454 Oshkosh (City of) WI Stormwater Enterprise Update to credit analysis Summary The City of Oshkosh's Storm Water Enterprise (A1) benefits from a stable service area covering the City of Oshkosh (Aa3), independent rate-setting authority, improved financial operations characterized by strong liquidity and adequate debt service coverage. The storm water enterprise is somewhat challenged by its modestly sized scale of operations and elevated leverage. We regard the coronavirus outbreak as a social risk under our ESG framework, given the substantial implications for public health and safety. We do not see any material immediate credit risks for the city's storm water enterprise. However, the situation surrounding coronavirus is rapidly evolving and the longer term impact will depend on both the severity and duration of the crisis. If our view of the credit quality of the city's storm water enterprise changes, we will update our opinion at that time. Credit strengths » Stable customer base » Independent rate-setting authority with a demonstrated history of increasing rates » Improved financial operations with strong liquidity » Moral obligation pledge by the City of Oshkosh to replenish the debt service reserve fund, subject to annual appropriation Credit challenges » Relatively weak total annual debt service coverage » Elevated leverage with additional borrowing expected Rating outlook Outlooks are typically not assigned to local governments credits with this amount of debt. Factors that could lead to an upgrade » Significant expansion and diversification of customer base » Sustained improvement of debt service coverage » Moderation of system leverage Page 5 MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE Factors that could lead to a downgrade » Contraction of the system's customer base or size of operations » Narrowed liquidity or debt service coverage » Increased leverage Key indicators Oshkosh (City of) WI Stormwater Enterprise System Characteristics Asset Condition (Net Fixed Assets / Annual Depreciation)52 years System Size - O&M (in $000s)$2,145 Service Area Wealth: MFI % of US median 90.31% Legal Provisions Rate Covenant (x) 1.20 Debt Service Reserve Requirement DSRF funded at MADS (Aaa) Management Rate Management A Regulatory Compliance and Capital Planning Aa Financial Strength 2014 2015 2016 2017 2018 Operating Revenue ($000)$7,232 $8,008 $8,762 $9,255 $9,986 System Size - O&M ($000)$2,106 $1,996 $2,121 $2,066 $2,145 Net Revenues ($000)$5,406 $6,026 $6,771 $7,331 $8,087 Net Funded Debt ($000)$54,566 $61,872 $62,452 $68,339 $74,006 Annual Debt Service ($000)$4,213 $5,052 $5,803 $5,839 $6,523 Annual Debt Service Coverage (x)1.3x 1.2x 1.2x 1.3x 1.2x Cash on Hand 346 days 1273 days 1808 days 1484 days 2804 days Debt to Operating Revenues (x)7.5x 7.7x 7.1x 7.4x 7.4x Source: US Census Bureau, city's audited financial statements Profile The Oshkosh storm water utility was created in 2002 and covers the entirety of the city. The enterprise collects storm water runoff and drains it into Lake Butte des Morts, the Fox River and Lake Winnebago. The purpose of the system is to address flooding in parts of the city and to comply with the Clean Water Act. The city is the county seat of Winnebago County (Aa1) and is also home to the University of Wisconsin at Oshkosh. The system bills according to equivalent runoff units (ERUs). Detailed credit considerations Service area and system characteristics: stable customer base The storm water system's service area and customer base are expected remain stable and management does not currently anticipate the impacts of the coronavirus pandemic to have a material impact on the enterprise performance. Commercial customers comprised the largest portion of users, accounting for about 46% of ERUs. Other customer categories include residential (36%), industrial (10%), and public authority (8%). Total ERUs declined annually from 2014 through 2017 though showed modest growth in 2018 and again in 2019. Total billings continue to increase and grew to more than $10.6 million in 2019 from $8 million in 2015. Concentration among major users is elevated, with the top 10 customers accounting for about 23% of total ERUs and 24% of total billings. This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history. 2 3 June 2020 Oshkosh (City of) WI Stormwater Enterprise: Update to credit analysisPage 6 MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE Major users include government entities, such as Winnebago County (5%), the City of Oshkosh (3%) and the State of Wisconsin (Aa1 stable; 2%). The system's largest private user is the Oshkosh Corporation (Baa3 stable), a manufacturer of heavy duty vehicles for military and industrial usage. Oshkosh Corporation is the city's largest employer (3,600 employees) and second largest user of the storm water system, accounting for about 4% of ERUs and total billing. Residential users of the system have slightly lower than average income levels, as the city's median family income stands at about 90% of national figure. Debt service coverage and liquidity: narrow coverage; strong liquidity The utility system's debt service coverage levels will likely remain somewhat narrow though satisfactory going forward, given management's unlimited rate-setting authority and demonstrated history of increasing rates as needed. Before fiscal 2011, the system had low levels of debt outstanding and very strong debt service coverage. However, sizable debt issuance beginning in fiscal 2010 grew total annual debt service from a moderate $1.4 million in 2010, to more than $6 million in fiscal 2018. During the initial years of the larger debt issuances, net revenue lagged the escalating debt service which resulted in total debt service coverage falling below sum sufficiency. Senior lien debt service coverage exceeded 1.5x in fiscal 2018 while total debt service coverage was closer to 1.2x, which includes payments on the general obligation (GO) bonds of the city. Although audited figures are not yet available, officials expect to maintain stable net revenue coverage supported by additional rate increases. Preliminary fiscal 2019 figures reflect net revenue of about $8.7 million, resulting in a coverage of approximately 1.2x which was consistent with the prior year. As the system takes on more debt in coming years, we expect management to proactively set rates accordingly. LIQUIDITY The system closed fiscal 2018 with a very healthy liquidity position of $16 million, equal to more than 2,800 days cash on hand. The strong cash reflects solid operational performance and consistent rate increases, along with management's desire to increase the system's liquidity position to cash finance capital projects in the future. Debt and legal covenants: elevated leverage with additional borrowing planned; legal provisions include service to city clause Inclusive of the 2020 bonds, the system's debt exceeds $79 million, equal to more than 7x operating revenue. In 2015, the city completed a utility rate study and long range cash flow analysis to examine the rate increases needed to sustain future capital borrowing. The current capital improvement plan projects about $95 million in additional projects over the next 10 years, which would require annual rate increases of about 5.3% to support the additional debt. Legal provisions include a rate covenant of 1.2x current annual debt service and an additional bonds test of 1.2x maximum annual debt service (MADS). The reserve requirement is equal to MADS on outstanding parity bonds. In addition to these legal provisions, the City of Oshkosh pledges to make up any revenue shortfall to pay bondholders on-time and in-full. The pledge includes a service to city clause under which the city agrees to pay for the services rendered to the city by the storm water utility fund, up to the lesser of MADS or 1.2x annual debt service requirements, subject to appropriation. To date, the city has not needed to support the storm water utility under this clause. The storm water debt backed by the city's GO pledge does not have a rate covenant or reserve requirement. DEBT STRUCTURE The storm water system's debt consist of senior lien revenue bonds that are long-term and fixed rate. In addition to the senior lien debt, the storm water utility supports debt service on approximately $5 million of the city's GO debt. DEBT-RELATED DERIVATIVES The stormwater system has no exposure to any debt-related derivatives. PENSIONS AND OPEB Employees of the storm water system, like most city employees, participate in the Wisconsin Retirement System (WRS), a statewide cost-sharing defined benefit pension plan. For more information on the City of Oshkosh's pension obligations, please see our most recent credit opinion on the city. ESG considerations ENVIRONMENTAL 3 3 June 2020 Oshkosh (City of) WI Stormwater Enterprise: Update to credit analysisPage 7 MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE Environmental factors have not had a material impact on enterprises credit profile. According to data of Moody's affiliate, Four Twenty Seven, Winnebago County has notable exposure to extreme rainfall and has a relatively limited exposure to other various environmental risks going forward. SOCIAL Social factors a consideration in the enterprises credit profile. The median age of city residents is notably below the state and national figures while resident income levels are also below state and national figures, both of which are driven in part by the university presence. We regard the coronavirus outbreak as a social risk under our ESG framework, given the substantial implications for public health and safety. We do not see any material immediate credit risks for the city's storm water enterprise. However, the situation surrounding coronavirus is rapidly evolving and the longer term impact will depend on both the severity and duration of the crisis. If our view of the credit quality of the city's storm water enterprise changes, we will update our opinion at that time. GOVERNANCE The City of Oshkosh's Storm Water Enterprise is a separate enterprise fund of the City of Oshkosh. City Council has the authority to enact rate increases through a simple majority vote of council and council typically acts on proposed rate increases in conjunction with the annual budgeting process. 4 3 June 2020 Oshkosh (City of) WI Stormwater Enterprise: Update to credit analysisPage 8 MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE © 2020 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved. CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. 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REPORT NUMBER 1230127 5 3 June 2020 Oshkosh (City of) WI Stormwater Enterprise: Update to credit analysisPage 9 MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE Contacts Benjamin J VanMetre +1.312.706.9951 AVP-Analyst ben.vanmetre@moodys.com Tatiana Killen +1.212.553.2895 VP-Senior Analyst tatiana.killen@moodys.com CLIENT SERVICES Americas 1-212-553-1653 Asia Pacific 852-3551-3077 Japan 81-3-5408-4100 EMEA 44-20-7772-5454 6 3 June 2020 Oshkosh (City of) WI Stormwater Enterprise: Update to credit analysisPage 10