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TO:Board of Directors <br />FROM:Bill D. Carnahan <br />SUBJECT:Finance Committee Report <br />DATE:May 6, 2013 <br />A meeting of the Finance Committee was held on May 6, 2013, at the SCPPA office in Glendora. <br />Committee members present were:Russell Dowell (Anaheim);Bob Liu (Burbank);Eric Campbell <br />(Glendale); Shari Thomas (Pasadena); Laura Nomura (Riverside) and Mario Ignacio (LADWP). <br />Others present were:Stephen Cole (Fulbright & Jaworski); Mike Berwanger and Will Frymann <br />(Public Financial Management);Therese Savery (LADWP/SCPPA); Vernon Oates and Rick Morillo <br />(SCPPA). <br />1.Investment Report <br />The Committee reviewed the Investment Reports for the month and quarter ended March 31, 2013. <br />The Committee recommended forwarding the reports to the Board for receipt and filing. <br />2.Gas Prepay Project Unsolicited Proposal <br />PFM (Public Financial Management) updated the Committee on the progress of the debt restructuring <br />as proposed by Goldman Sachs. Goldman Sachs has received tentative sign-off on the tax aspects. <br />Four or five firms are being considering for the new commodity swap provider and a Dodd-Frank issue <br />remains. Completion of the transaction is currently expected in August 2013. <br />3.STS Project 2001 Series Bonds <br />PFM updated the Committee on the fixed rate refinancing of the 2001 series bonds. Pricing was <br />completed on May 2nd. The deal was well received by the market, indicated by the 4.8 times overall <br />oversubscription. The related $79,795,000 swap with UBS was terminated with a very favorable 12 <br />bps value, eliminating SCPPA swap counterparty and bank liquidity risk with respect to those bonds. <br />The All-in TIC was 1.21% for an average of 5.6 years. The transaction is scheduled to close on June <br />5, 2013. <br />4.Proposed Acquisition of a Gas-fired Project <br />The Committee discussed the adoption of a Reimbursement Resolution for the possible acquisition of a <br />gas-fired project. The Committee recommended forwarding a Reimbursement to the Board for its <br />approval. <br />5.Market and VRDO Update <br />The Committee received a market and VRDO status report from PFM. The STS 2001 series VRDB <br />was trading slightly higher prior to the fixed-rate refinancing discussed above. The remaining VRDBs <br />are performing well.