$20,370,000 $465, Electric Revenue Refunding Bonds, Series A (Green Bonds)

Transcription

1 NEW ISSUE - FULL BOOK-ENTRY RATING: S & P: AA- See Rating In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however to certain qualifications described herein, under existing law, the interest on the Series A Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; it should be noted, however, that for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining certain income and earnings. In the further opinion of Bond Counsel, interest on the 2017 Bonds is exempt from California personal income taxes. See TAX MATTERS. Dated: Date of Delivery $20,370,000 Trinity Public Utilities District 2017 Electric Revenue Refunding Bonds, Series A (Green Bonds) $465,000 Trinity Public Utilities District 2017 Electric Revenue Refunding Bonds, Taxable Series B (Green Bonds) Due: April 1, as shown on inside cover Authority for Issuance. The bonds captioned above (the Series A Bonds, the Taxable Series B Bonds and, together, the 2017 Bonds ) are being issued by the Trinity Public Utilities District (the District ) under a resolution adopted by the Board of Directors of the District on September 25, 2017, Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, commencing with Section 53570, and an Indenture of Trust dated as of November 1, 2017 (the Indenture ), between the District and The Bank of New York Mellon Trust Company, N.A., as trustee for the 2017 Bonds (the Trustee ). See THE 2017 BONDS Authority for Issuance. Use of Proceeds. The 2017 Bonds are being issued to provide funds to (i) refund and defease, on an advance basis, a portion of the obligations of the District under an Installment Sale Agreement dated as of October 1, 2010, entered into with the Trinity Public Utilities District Financing Authority (the Authority ), and cause the defeasance and prepayment of a corresponding portion of the outstanding revenue bonds of the Authority captioned $19,940,000 Trinity Public Utilities District Financing Authority 2010 Electric Revenue Bonds, Series A (Bank Qualified) (the 2010 Bonds ), (ii) prepay in full, on a current basis, the District s obligations under a loan agreement entitled Enterprise Fund Installment Purchase Agreement dated as of April 1, 2003 (the 2003 Subordinate Loan Agreement ), with the California Infrastructure and Economic Development Bank, and (iii) pay the costs of issuing the 2017 Bonds. See FINANCING PLAN. Green Bonds. The District is issuing the 2017 Bonds as Green Bonds due to the intended use of the proceeds to refinance the Prior Projects (as defined herein); 100% of the power distributed and transmitted by the District is renewable hydroelectric energy. Security for the 2017 Bonds. Under the Indenture, the 2017 Bonds are payable from and secured by a first pledge of and lien on (i) Net Revenues of the District s electric utility system (the Electric System ), which are generally defined as gross Electric System Revenues for each fiscal year minus the amount required to pay all Maintenance and Operation Costs of the Electric System for each fiscal year, minus the amount of 2010 Installment Payments that are payable during such fiscal year with respect to the Non-Refunded 2010 Bonds (defined below), and (ii) amounts held in certain funds established under the Indenture. See SECURITY FOR THE 2017 BONDS. Outstanding Senior Obligations. The 2017 Bonds are payable on a subordinate basis to the 2010 Bonds maturing on April 1, 2018, April 1, 2019 and April 1, 2020 (the Non-Refunded 2010 Bonds ), which will remain outstanding following the issuance of the 2017 Bonds and will be the only other debt of the District. Once the Non-Refunded Bonds are repaid, the 2017 Bonds will be the only outstanding lien on revenues or funds of the District. See FINANCING PLAN, DEBT SERVICE SCHEDULE and SECURITY FOR THE 2017 BONDS Outstanding Senior Debt. The District has covenanted in the Indenture not to issue any additional debt payable on a senior basis to the 2017 Bonds. See SECURITY FOR THE 2017 BONDS Additional Debt Superior and Subordinate Obligations. Additional Obligations. The District may issue or incur additional obligations and bonds on parity with or subordinate to the 2017 Bonds, provided that the conditions set forth in the Indenture are met. See SECURITY FOR THE 2017 BONDS Additional Debt. Bond Terms; Book-Entry Only. The 2017 Bonds will bear interest at the rates shown on the inside cover page, payable semiannually on October 1 and April 1 of each year, commencing on April 1, 2018, and will be issued in fully registered form without coupons in the denomination of $5,000 or any integral multiple of $5,000. The 2017 Bonds will be issued in book-entry only form, initially registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ( DTC ). Purchasers of the 2017 Bonds will not receive certificates representing their interests in the 2017 Bonds. Payments of the principal of, premium, if any, and interest on the 2017 Bonds will be made to DTC, which is obligated in turn to remit such principal, premium, if any, and interest to its DTC Participants for subsequent disbursement to the beneficial owners of the 2017 Bonds. See THE 2017 BONDS General Provisions. Redemption. The Series A Bonds are subject to optional redemption prior to maturity. The Series B Bonds are not subject to redemption prior to maturity. See THE 2017 BONDS Redemption. NEITHER THE 2017 BONDS, NOR THE OBLIGATION OF THE DISTRICT TO PAY PRINCIPAL OF OR INTEREST THEREON, CONSTITUTE A DEBT OR A LIABILITY OF THE DISTRICT, TRINITY COUNTY, THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS WITHIN THE MEANING OF ANY CONSTITUTIONAL LIMITATION ON INDEBTEDNESS, OR A PLEDGE OF THE FULL FAITH AND CREDIT OF THE DISTRICT. THE 2017 BONDS ARE SECURED SOLELY BY THE PLEDGE OF NET REVENUES AND CERTAIN FUNDS HELD UNDER THE INDENTURE. THE 2017 BONDS ARE NOT SECURED BY A PLEDGE OF THE TAXING POWER OF THE DISTRICT. MATURITY SCHEDULE (see inside cover) THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THIS ISSUE OF BONDS. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION WITH RESPECT TO THE PURCHASE OF THE 2017 BONDS. The 2017 Bonds are offered when, as and if issued and received by the Underwriter and subject to the approval as to their legality by Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel. Certain legal matters will also be passed upon for the District by Jones Hall, A Professional Law Corporation, as Disclosure Counsel. Certain legal matters will be passed upon for the District by the District s general counsel and for the Underwriter by Hawkins Delafield & Wood LLP, Los Angeles, California. It is anticipated that the 2017 Bonds will be delivered in book-entry form through the facilities of DTC on or about November 1, The date of this Official Statement is: October 18, 2017.

2 MATURITY SCHEDULE Series A Bonds $20,370,000 Serial Bonds (Base CUSIP : 89656B) Maturity (April 1) Principal Amount Interest Rate Yield Price CUSIP 2019 $285, % 0.970% % AZ , BA , BB , BC , BD ,020, BE ,055, BF ,090, BG ,135, BH ,085, C BJ ,120, C BK ,165, C BL ,190, C BM ,230, BN , BP , BQ , BR , BS , BT ,005, BU ,035, BV6 Taxable Series B Bonds $465,000 Serial Bonds (Base CUSIP : 89656B) Maturity (April 1) Principal Amount Interest Rate Yield Price CUSIP 2018 $30, % 1.580% % BW , BX , BY0 Copyright 2017, S&P Global Services, managed by Standard & Poor s Capital IQ. CUSIP data are provided for convenience of reference only. Neither the District nor the Underwriter assumes any responsibility for the accuracy of these CUSIP data. C Priced to the optional par redemption date of April 1, 2027.

3 TRINITY PUBLIC UTILITIES DISTRICT DISTRICT BOARD Clarence Rose, President Richard Morris, Vice President Thomas Ludden, Clerk Kelli Gant, Director Mike Rourke, Director DISTRICT OFFICIALS Paul Hauser, General Manager Julie Catanese, Chief Financial Officer Karen Palmer, Office Administrator James Underwood, District General Counsel BOND COUNSEL AND DISCLOSURE COUNSEL Jones Hall, A Professional Law Corporation San Francisco, California MUNICIPAL ADVISOR Ross Financial San Francisco, California TRUSTEE The Bank of New York Mellon Trust Company, N.A. Los Angeles, California VERIFICATION AGENT Causey, Demgen & Moore, Inc., Certified Public Accountants, Denver, Colorado

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5 GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT No Offering May Be Made Except by this Official Statement. No dealer, broker, salesperson or other person has been authorized to give any information or to make any representations with respect to the 2017 Bonds other than as contained in this Official Statement, and if given or made, such other information or representation must not be relied upon as having been authorized. No Unlawful Offers or Solicitations. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy in any state in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation. Effective Date. This Official Statement speaks only as of its date, and the information and expressions of opinion contained in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale of the 2017 Bonds will, under any circumstances, create any implication that there has been no change in the affairs of the District or any other parties described in this Official Statement, or in the condition of the Electric System, since the date of this Official Statement. Use of this Official Statement. This Official Statement is submitted in connection with the sale of the 2017 Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement is not a contract with the purchasers of the 2017 Bonds. Preparation of this Official Statement. The information contained in this Official Statement has been obtained from sources that are believed to be reliable, but this information is not guaranteed as to accuracy or completeness. The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. Document References and Summaries. All references to and summaries of the Indenture or other documents contained in this Official Statement are subject to the provisions of those documents and do not purport to be complete statements of those documents. Stabilization of and Changes to Offering Prices. The Underwriter may overallot or take other steps that stabilize or maintain the market prices of the 2017 Bonds at levels above those that might otherwise prevail in the open market. If commenced, the Underwriter may discontinue such market stabilization at any time. The Underwriter may offer and sell the 2017 Bonds to certain securities dealers, dealer banks and banks acting as agent at prices lower than the public offering prices stated on the inside cover page of this Official Statement, and those public offering prices may be changed from time to time by the Underwriter. Bonds are Exempt from Securities Laws Registration. The issuance and sale of the 2017 Bonds have not been registered under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, in reliance upon exemptions for the issuance and sale of municipal securities provided under Section 3(a)(2) of the Securities Act of 1933 and Section 3(a)(12) of the Securities Exchange Act of Estimates and Projections. Certain statements included or incorporated by reference in this Official Statement constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as plan, expect, estimate, budget or other similar words. The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The District does not plan to issue any updates or revisions to those forward-looking statements if or when its expectations, or events, conditions or circumstances on which such statements are based occur. Internet Site. The District maintains an Internet website, but the information on the website is not incorporated in this Official Statement.

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7 TABLE OF CONTENTS INTRODUCTION... 1 FINANCING PLAN... 4 Refunding Plan 2010 Bonds... 4 Refunding Plan 2003 Subordinate Loan Agreement... 5 Estimated Sources and Uses of Funds... 6 DEBT SERVICE SCHEDULE... 7 THE 2017 BONDS... 8 Authority for Issuance... 8 General Provisions... 8 Redemption... 9 Registration, Transfer and Exchange Book-Entry Only System Issuance as Green Bonds SECURITY FOR THE 2017 BONDS Limited Obligations Pledge of Net Revenues Receipt, Deposit and Application of Electric System Revenues Covenants Regarding Rates and Charges.. 14 Outstanding Senior Debt Additional Debt Sale or Eminent Domain of Electric System 16 Covenant to Maintain Insurance Rate Stabilization Fund Investments THE DISTRICT General Management Structure Employees Retirement Plans Other Post-Employment Benefits Budget Process and Policies Investment Policy and Portfolio District Insurance ELECTRIC SYSTEM General Service Area Electric System Assets and Facilities Condition of Electric System Facilities Power Supply to Meet Customer Demand.. 32 Electric Rates Historical Energy Sales and Customers Largest Customers ELECTRIC SYSTEM FINANCIAL INFORMATION Financial Statements Historical Debt Service Coverage and Reserves Projected Debt Service Coverage and Reserves DEVELOPMENTS IN THE CALIFORNIA ENERGY MARKETS BOND OWNERS RISKS Net Revenues Operation and Maintenance Expenses California Constitution Future Rate Regulation No Debt Service Reserve Fund Limitations on Remedies Available to Bond Owners Loss of Tax-Exemption on Series A Bonds. 48 Secondary Market for Bonds Future Parity Obligations TAX MATTERS CERTAIN LEGAL MATTERS LITIGATION RATINGS CONTINUING DISCLOSURE UNDERWRITING PROFESSIONAL SERVICES VERIFICATION OF MATHEMATICAL COMPUTATIONS EXECUTION APPENDIX A: APPENDIX B: APPENDIX C: APPENDIX D: APPENDIX E: APPENDIX F: SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE AUDITED FINANCIAL STATEMENTS OF THE DISTRICT FOR THE FISCAL YEAR ENDED JUNE 30, 2016 FORM OF CONTINUING DISCLOSURE CERTIFICATE GENERAL INFORMATION REGARDING TRINITY COUNTY FORM OF OPINION OF BOND COUNSEL DTC AND THE BOOK-ENTRY ONLY SYSTEM i

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9 OFFICIAL STATEMENT $20,370,000 Trinity Public Utilities District 2017 Electric Revenue Refunding Bonds, Series A (Green Bonds) $465,000 Trinity Public Utilities District 2017 Electric Revenue Refunding Bonds, Taxable Series B (Green Bonds) INTRODUCTION This introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement, including the cover page and appendices hereto, and the documents summarized or described herein. A full review should be made of the entire Official Statement. The offering of the 2017 Bonds to potential investors is made only by means of the entire Official Statement. Capitalized terms used but not defined in this Official Statement have the meanings set forth in the Indenture (as defined below). See APPENDIX A. Authority for Issuance. The Trinity Public Utilities District (the District ) is issuing the bonds captioned above (the Series A Bonds, the Taxable Series B Bonds and, together, the 2017 Bonds ) under the following: (a) Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, commencing with Section (the Bond Law ), (b) a resolution adopted by the Board of Directors (the District Board ) of the District on September 25, 2017 (the District Resolution ), (c) an Indenture of Trust dated as of November 1, 2017 (the Indenture ), between the District and The Bank of New York Mellon Trust Company, N.A., as trustee (the Trustee ). Form of Bonds; Book-Entry Only. The 2017 Bonds will be issued in fully registered form, registered in the name of The Depository Trust Company, New York, New York ( DTC ), or its nominee, which will act as securities depository for the 2017 Bonds. Purchasers of the 2017 Bonds will not receive certificates representing the 2017 Bonds that are purchased. See THE 2017 BONDS - Book-Entry Only System and APPENDIX F DTC AND THE BOOK-ENTRY ONLY SYSTEM. 1

10 Purpose of the 2017 Bonds. The 2017 Bonds are being issued to provide funds to: (i) refund and defease, on an advance basis, a portion of the obligations of the District under an Installment Sale Agreement dated as of October 1, 2010 (the 2010 Installment Sale Agreement ), entered into with the Trinity Public Utilities District Financing Authority (the Authority ), and cause the defeasance and prepayment of a corresponding portion of the outstanding revenue bonds of the Authority captioned $19,940,000 Trinity Public Utilities District Financing Authority 2010 Electric Revenue Bonds, Series A (Bank Qualified) (the 2010 Bonds ), specifically, the 2010 Bonds maturing on and after April 1, 2021; (ii) prepay in full, on a current basis, the District s obligations under a loan agreement entitled Enterprise Fund Installment Purchase Agreement dated as of April 1, 2003 (the 2003 Subordinate Loan Agreement ), with the California Infrastructure and Economic Development Bank (the California I-Bank ); and (iii) pay the costs of issuing the 2017 Bonds. See "FINANCING PLAN." Security for the 2017 Bonds and Pledge of Revenues. Under the Indenture, the 2017 Bonds are payable from and secured by a first pledge of and lien on (i) Net Revenues of the District s electric utility system (the Electric System ), which are generally defined as gross Electric System Revenues for each fiscal year minus the amount required to pay all Maintenance and Operation Costs of the Electric System for such fiscal year, minus the amount of 2010 Installment Payments that are payable during such fiscal year with respect to the Non- Refunded 2010 Bonds (defined below), and (ii) amounts held in certain funds established under the Indenture. See SECURITY FOR THE 2017 BONDS. The Electric System. The Electric System is the electric utility system of the District, comprising all electric generation, transmission and distribution facilities and all general plant facilities related thereto. The Electric System currently serves approximately 2,126 square miles with approximately 7,300 customer accounts. See THE DISTRICT and THE ELECTRIC SYSTEM. Rate Covenants. The District will make certain covenants in the Indenture with respect to rates and charges for the Electric System, all as further described under SECURITY FOR THE 2017 BONDS Rate Covenants. Outstanding Senior Obligations. The 2017 Bonds are payable on a subordinate basis to the 2010 Bonds maturing on April 1, 2018, April 1, 2019 and April 1, 2020 (the Non-Refunded 2010 Bonds ), which will remain outstanding following the issuance of the 2017 Bonds and will be the only other debt of the District. After repayment of the Non-Refunded Bonds, the 2017 Bonds will become the only outstanding lien on revenues or funds of the District. See FINANCING PLAN, DEBT SERVICE SCHEDULE and SECURITY FOR THE 2017 BONDS Outstanding Senior Debt. The District has covenanted in the Indenture not to issue any additional debt payable on a senior basis to the 2017 Bonds. See SECURITY FOR THE 2017 BONDS Additional Debt Superior and Subordinate Obligations. 2

11 Additional Obligations. The District may issue or incur additional obligations and bonds on parity with or subordinate to the 2017 Bonds, provided that the conditions set forth in the Indenture are met. See SECURITY FOR THE 2017 BONDS Additional Debt. No Reserve Fund. The District will not establish a debt service reserve for the 2017 Bonds. See BOND OWNERS RISKS No Debt Service Reserve Fund. Risks of Investment. The 2017 Bonds are a limited obligation of the District payable solely from the Net Revenues of the Electric System. For a discussion of some of the risks associated with the purchase of the 2017 Bonds, see BOND OWNERS RISKS. 3

12 FINANCING PLAN Refunding Plan 2010 Bonds The District will apply a portion of the proceeds from the sale of the 2017 Bonds to establish an irrevocable escrow to refund and legally defease, on an advance basis, a portion of the obligations of the District under the 2010 Installment Sale Agreement and cause the defeasance and prepayment of a corresponding portion of the 2010 Bonds, which were originally issued in the principal amount of $19,940,000 and are currently outstanding in the principal amount of $17,955,000. The proceeds of the 2010 Bonds were generally used to finance (a) the Direct Tie Project, which consisted of approximately 21 miles of transmission lines and facilities, and certain associated land rights, previously owned by Pacific Gas and Electric Company and which the District acquired, and (b) additional improvements to the Electric System consisting generally of pole and distribution line replacements and additions (the Prior Projects ). The 2017 Bonds are being issued by the District to refund the outstanding maturities of the 2010 Bonds identified in the following table (the Refunded 2010 Bonds ): Maturities to be Refunded (April 1) Refunded 2010 Bonds Principal Amount Redeemed Redemption Price (% of Par Amount Redeemed) Redemption CUSIP Date B AL9 $575,000 April 1, % B AM7 600,000 April 1, B AN5 630,000 April 1, B AP0 665,000 April 1, B AQ8 690,000 April 1, B AR6 725,000 April 1, B AS4 755,000 April 1, B AT2 690,000 April 1, B AU9 720,000 April 1, B AV7 750,000 April 1, T 89656B AW5 1,585,000 April 1, T 89656B AX3 2,665,000 April 1, T 89656B AY1 5,300,000 April 1, $16,350,000 T Term Bond. Copyright 2017, S&P Global Services, managed by Standard & Poor's Capital IQ. CUSIP data are provided for convenience of reference only. Neither the District nor the Underwriter assumes any responsibility for the accuracy of these CUSIP data. The Non-Refunded 2010 Bonds listed below will remain outstanding following the issuance of the 2017 Bonds, and will be payable from Net Revenues on a senior basis to the 2017 Bonds. See DEBT SERVICE SCHEDULE and SECURITY FOR THE 2017 BONDS Outstanding Senior Debt. The District has covenanted in the Indenture not to issue any additional debt payable on a senior basis to the 2017 Bonds. See SECURITY FOR THE 2017 BONDS Additional Debt Superior and Subordinate Obligations. 4

13 Maturity Date (April 1) Non-Refunded 2010 Bonds Principal Amount CUSIP B AH8 $515, B AJ4 535, B AK1 555,000 $1,605,000 Copyright 2017, S&P Global Services, managed by Standard & Poor's Capital IQ. CUSIP data are provided for convenience of reference only. Neither the District nor the Underwriter assumes any responsibility for the accuracy of these CUSIP data. A portion of the proceeds of the 2017 Bonds, together with certain funds on hand with respect to the Refunded 2010 Bonds, will be transferred to The Bank of New York Mellon Trust Company, N.A., acting as escrow agent (the Escrow Agent ) for the 2010 Bonds, for deposit in an escrow fund (the Escrow Fund ) under an Escrow Deposit and Trust Agreement (the Escrow Agreement ), dated as of November 1, 2017, by and among the District, the Authority and the Escrow Agent. The amounts deposited and held in the Escrow Fund will be invested in noncallable Federal Securities (as described in the Escrow Agreement) consisting of United States Treasury Securities -- State and Local Government Series (SLGS), with the remainder held in cash, uninvested. The amounts in the Escrow Fund will be sufficient for the following purposes: (i) paying when due the District s installment payments under the 2010 Installment Sale Agreement related to the interest payable on the Refunded 2010 Bonds on April 1, 2018 through April 1, 2020, and (ii) prepaying, on April 1, 2020 (the Redemption Date ) the District s remaining installment payments under the 2010 Installment Sale Agreement maturing on and after April 1, 2021, and causing the corresponding redemption of the Refunded 2010 Bonds on the Redemption Date, at a redemption price equal to the principal amount thereof plus accrued and unpaid interest thereon, without premium. See VERIFICATION OF MATHEMATICAL COMPUTATIONS. The amounts held and invested by the Escrow Agent in the Escrow Fund are pledged solely to the payment of the District s obligations under the 2010 Installment Sale Agreement and the payment and redemption of the Refunded 2010 Bonds. Neither the funds deposited in the Escrow Fund nor the interest on the invested funds will be available for the payment of debt service on the 2017 Bonds. Refunding Plan 2003 Subordinate Loan Agreement The District will apply a portion of the proceeds from the sale of the 2017 Bonds to prepay in full, on a current basis, the District s obligations under the 2003 Subordinate Loan Agreement, which had an original principal amount of $7,803,800 and is currently outstanding in the principal amount of $5,174,362. 5

14 The proceeds of the 2003 Subordinate Loan Agreement were used by the District to finance improvements to the Electric System consisting generally of upgrades and expansion to the electric distribution and transmission grid. A portion of the proceeds of the 2017 Bonds, together with certain funds on hand with respect to the 2003 Subordinate Loan Agreement, will be transferred to the California I-Bank on the Closing Date as prepayment in full of the District s obligations under the 2003 Subordinate Loan Agreement as of the Closing Date. Estimated Sources and Uses of Funds The estimated sources and uses of funds relating to the 2017 Bonds are as follows: Sources: Series A Bonds Taxable Series B Bonds Total Principal Amount of 2017 Bonds $20,370, $465, $20,835, Plus Net Original Issue Premium 1,007, ,007, Plus Funds Related to Refunded 2010 Bonds [1] 718, , , Plus Funds Related to 2003 Subordinate Loan 455, , TOTAL SOURCES $22,551, $484, $23,036, Uses: Costs of Issuance [2] $207, $8, $216, Escrow Fund [3] 17,029, ,222, Transfer to California I-Bank [4] 5,222, , ,504, Underwriter s Discount 91, , , TOTAL USES $22,551, $484, $23, [1] Represents a portion of the debt service reserve fund attributable to the Refunded 2010 Bonds. The remaining amount of $573,050 will be retained by the Trustee and applied to interest on and principal of the April 1, 2020 maturity of the Non-Refunded 2010 Bonds. [2] Represents funds to be used to pay Costs of Issuance, which include legal fees, the municipal advisor s fee, printing costs, the rating agency fee and other miscellaneous expenses. [3] Represents funds to be transferred to the Escrow Agent and deposited in the Escrow Fund to be established under the Escrow Agreement, which will be used to defease the Refunded 2010 Bonds. See Refunding Plan 2010 Bonds above. [4] Represents funds to be transferred to the California I-Bank, which will be used to prepay the District s obligations under the 2003 Subordinate Loan Agreement. See Refunding Plan 2003 Subordinate Loan Agreement above. 6

15 Year Ending April 1 DEBT SERVICE SCHEDULE The table below shows annual debt service payments on the Non-Refunded 2010 Bonds and the 2017 Bonds. Taxable Series B Bonds Principal Taxable Series B Bonds Interest Taxable Series B Bonds Total Total 2017 Bonds Debt Service Non-Refunded 2010 Bonds Series A Bonds Principal Series A Bonds Interest Series A Bonds Total Total Debt Service 2018 $573,650 $0 $279,292 $279,292 $30,000 $3,980 $33,980 $313,272 $886, , , , ,300 30,000 9,078 39, ,378 1,567, , , ,750 1,176, ,000 8, ,505 1,590,255 2,160, , ,300 1,566, ,566,300 1,566, , ,500 1,564, ,564,500 1,564, , ,013 1,563, ,563,013 1,563, ,020, ,013 1,569, ,569,013 1,569, ,055, ,213 1,563, ,563,213 1,563, ,090, ,563 1,566, ,566,563 1,566, ,135, ,963 1,567, ,567,963 1,567, ,085, ,563 1,472, ,472,563 1,472, ,120, ,013 1,475, ,475,013 1,475, ,165, ,213 1,475, ,475,213 1,475, ,190, ,263 1,465, ,465,263 1,465, ,230, ,563 1,469, ,469,563 1,469, , ,663 1,067, ,067,663 1,067, , ,713 1,066, ,066,713 1,066, , ,013 1,070, ,070,013 1,070, , ,413 1,067, ,067,413 1,067, ,000 94,063 1,064, ,064,063 1,064, ,005,000 63,750 1,068, ,068,750 1,068, ,035,000 32,344 1,067, ,067,344 1,067,344 Total: $1,717,350 $20,370,000 $7,831,473 $28,201,473 $465,000 $21,563 $486,563 $28,688,036 $30,405,386 7

16 THE 2017 BONDS This section provides summaries of certain terms of the 2017 Bonds and certain provisions of the Indenture. See APPENDIX A Summary of Principal Legal Documents for a more complete summary of the Indenture. Capitalized terms used but not defined in this section have the meanings given in APPENDIX A. Authority for Issuance The 2017 Bonds are being issued under the Bond Law, the District Resolution (which was adopted by the District Board on September 25, 2017), and the Indenture. Under the District Resolution, the 2017 Bonds may be issued in an aggregate principal amount not to exceed $23,500,000. General Provisions Bond Terms. The 2017 Bonds will be dated their date of delivery and issued in fully registered form without coupons in denominations of $5,000 or any integral multiple of $5,000. The 2017 Bonds will mature in the amounts and on the dates, and bear interest at the annual rates, set forth on the inside cover page of this Official Statement. Payments of Principal and Interest. Interest on the 2017 Bonds will be payable on October 1 and April 1 in each year, beginning April 1, 2018 (each an "Interest Payment Date"). While the 2017 Bonds are subject to the book-entry system, the principal, interest and any redemption premium with respect to the 2017 Bonds will be paid by the Trustee to DTC for subsequent disbursement to beneficial owners of the 2017 Bonds. See Book-Entry Only System below. Interest is payable on each Interest Payment Date to the persons in whose names the ownership of the 2017 Bonds is registered on the Registration Books at the close of business on the immediately preceding Record Date, except as provided below. Interest on any 2017 Bond which is not punctually paid or duly provided for on any Interest Payment Date is payable to the person in whose name the ownership of such 2017 Bond is registered on the Registration Books at the close of business on a special record date for the payment of such defaulted interest to be fixed by the Trustee, notice of which is given to such Owner by first-class mail not less than 10 days prior to such special record date. The Trustee will pay interest on the 2017 Bonds by check of the Trustee mailed by firstclass mail, postage prepaid, on each Interest Payment Date to the Owners of the 2017 Bonds at their respective addresses shown on the Registration Books as of the close of business on the preceding Record Date. At the written request of the Owner of 2017 Bonds in an aggregate principal amount of at least $1,000,000, which is on file with the Trustee as of any Record Date, the Trustee will pay interest on such 2017 Bonds on each succeeding Interest Payment Date by wire transfer in immediately available funds to such account of a financial institution within the United States of America as specified in such written request, and such written request will remain in effect until rescinded in writing by the Owner. The Trustee will pay principal of the 2017 Bonds in lawful money of the United States of America by check of the Trustee upon presentation and surrender thereof at the Office of the Trustee. 8

17 Calculation of Interest. Interest on the 2017 Bonds is payable from the Interest Payment Date next preceding the date of authentication thereof unless: (a) a 2017 Bond is authenticated on or before an Interest Payment Date and after the close of business on the preceding Record Date, in which event it will bear interest from such Interest Payment Date, (b) a 2017 Bond is authenticated on or before the first Record Date, in which event interest thereon will be payable from the Closing Date, or (c) interest on any 2017 Bond is in default as of the date of authentication thereof, in which event interest thereon will be payable from the date to which interest has been paid in full, payable on each Interest Payment Date. Record Date. Under the Indenture, Record Date is defined, with respect to any Interest Payment Date, as the 15 th calendar day of the month preceding such Interest Payment Date. Redemption Series A Bonds Optional Redemption. The Series A Bonds maturing on or before April 1, 2027, are not subject to optional redemption prior to their respective stated maturity dates. The Series A Bonds maturing on or after April 1, 2028, are subject to redemption in whole, or in part among maturities on such basis as set forth in a Certificate of the District filed with the Trustee, and in any event by lot within a maturity, at the option of the District, from any available source of funds, on any Business Day on or after April 1, 2027, at a redemption price equal to 100% of the principal amount thereof to be redeemed together with accrued interest to the redemption date, without premium. Taxable Series B Bonds Not Subject to Redemption. The Taxable Series B Bonds are not subject to redemption prior to their respective stated maturity dates. Notice of Redemption. The Trustee on behalf and at the expense of the District will mail (by first class mail) notice of any redemption to the respective Owners of any Series A Bonds designated for redemption at their respective addresses appearing on the Registration Books and to the Securities Depositories, and will file such notice of redemption electronically with the Municipal Securities Rulemaking Board, at least 30 but not more than 60 days prior to the date fixed for redemption; provided, however, that neither failure to receive any such notice so mailed nor any defect therein will affect the validity of the proceedings for the redemption of such Series A Bonds or the cessation of the accrual of interest thereon. Selection of Bonds for Redemption. Whenever provision is made in the Indenture for the redemption of less than all of the Series A Bonds, the Trustee will select the Series A Bonds to be redeemed by lot in any manner that the Trustee in its sole discretion deems appropriate. For purposes of such selection, all Series A Bonds will be deemed to be comprised of separate $5,000 denominations and such separate denominations will be treated as separate Series A Bonds which may be separately redeemed. Rescission of Optional Redemption Notice. The District has the right to rescind any notice of the optional redemption of Series A Bonds as described above by written notice to the Trustee on or prior to the dated fixed for redemption. 9

18 Any notice of optional redemption will be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption for the payment in full of the Series A Bonds then called for redemption, and such cancellation will not constitute an Event of Default under the Indenture. The District and the Trustee have no liability to the Owners or any other party related to or arising from such rescission of redemption. The Trustee will cause notice of such rescission to be sent to the respective Owners of any Bonds designated for redemption, and to the Municipal Securities Rulemaking Board and the Securities Depositories, in the same manner in which notice of optional redemption was sent. Effect of Redemption. From and after the date fixed for redemption, if notice of redemption has been duly mailed and funds available for the payment of the principal of and interest (and premium, if any) on the Series A Bonds so called for redemption have been duly provided, such Series A Bonds so called will cease to be entitled to any benefit under the Indenture other than the right to receive payment of the redemption price, and no interest will accrue thereon from and after the redemption date specified in such notice. The Trustee will cancel and destroy all Series A Bonds redeemed under the Indenture. Registration, Transfer and Exchange The following provisions regarding the exchange and transfer of the 2017 Bonds apply only during any period in which the 2017 Bonds are not subject to DTC s book-entry system. While the 2017 Bonds are subject to DTC s book-entry system, their exchange and transfer will be effected through DTC and the Participants and will be subject to the procedures, rules and requirements established by DTC. See APPENDIX F DTC and the Book-Entry Only System. Registration. The Trustee will keep or cause to be kept, at its Office, sufficient records for the registration and registration of transfer of the 2017 Bonds, which will at all times during normal business hours, and upon reasonable notice, be open to inspection by the District; and, upon presentation for such purpose, the Trustee will, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on the Registration Books, 2017 Bonds as provided in the Indenture. Transfer. Any 2017 Bond may, in accordance with its terms, be transferred, upon the Registration Books, by the person in whose name it is registered, in person or by a duly authorized attorney of such person, upon surrender of such 2017 Bond to the Trustee at its Office for cancellation, accompanied by delivery of a written instrument of transfer in a form acceptable to the Trustee, duly executed. The Trustee will collect any tax or other governmental charge on the transfer of any 2017 Bonds under the Indenture. Whenever any 2017 Bond is or 2017 Bonds are surrendered for transfer, the District will execute and the Trustee will authenticate and deliver to the transferee a new 2017 Bond or 2017 Bonds of like series, interest rate, maturity and aggregate principal amount. The District will pay the cost of printing Bonds and any services rendered or expenses incurred by the Trustee in connection with any transfer of 2017 Bonds. Exchange. The 2017 Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount of 2017 Bonds of other authorized denominations and of the same series, interest rate and maturity. 10

19 The Trustee will collect any tax or other governmental charge on the exchange of any 2017 Bonds under the Indenture. The District will pay the cost of printing 2017 Bonds and any services rendered or expenses incurred by the Trustee in connection with any exchange of 2017 Bonds. Limitations on Transfer and Exchange. The Trustee may refuse to transfer or exchange, under the Indenture, any 2017 Bonds selected by the Trustee for redemption under the Indenture, or any 2017 Bonds during the period established by the Trustee for the selection of 2017 Bonds for redemption. Book-Entry Only System The 2017 Bonds will be issued as fully registered bonds in book-entry only form, registered in the name of Cede & Co. as nominee of DTC, and will be available to ultimate purchasers under the book-entry system maintained by DTC. While the 2017 Bonds are subject to the book-entry system, the principal, interest and any prepayment premium with respect to a 2017 Bond will be paid by the Trustee to DTC, which in turn is obligated to remit such payment to its DTC Participants for subsequent disbursement to Beneficial Owners of the 2017 Bonds. Purchasers of the 2017 Bonds will not receive certificates representing their interests therein, which will be held at DTC. See APPENDIX F DTC AND THE BOOK-ENTRY ONLY SYSTEM for further information regarding DTC and the book-entry system. Issuance as Green Bonds The District is issuing the 2017 Bonds as Green Bonds due to the intended use of the proceeds to refinance the Prior Projects; 100% of the power distributed and transmitted by the District is renewable hydroelectric energy. See FINANCING PLAN Refunding Plan 2010 Bonds. The designation of the 2017 Bonds as Green Bonds is intended to allow investors the opportunity to invest directly in bonds that finance or refinance environmentally beneficial projects. The term Green Bonds is not defined in the Indenture, and its use in this Official Statement is for identification purposes only and is not intended to provide or imply that the holders of the 2017 Bonds are entitled to any additional terms or security in addition to those provided in the Indenture. The proceeds of the 2017 Bonds will be fully expended on the Redemption Date. Accordingly, the District will not be filing any continuing disclosure with respect to the use of proceeds. 11

20 SECURITY FOR THE 2017 BONDS This section provides summaries of the security for the 2017 Bonds and certain provisions of the Indenture. See APPENDIX A Summary of Principal Legal Documents for a more complete summary of the Indenture. Capitalized terms used but not defined in this section have the meanings given in APPENDIX A. Limited Obligations NEITHER THE 2017 BONDS, NOR THE OBLIGATION OF THE DISTRICT TO PAY PRINCIPAL OF OR INTEREST THEREON, CONSTITUTE A DEBT OR A LIABILITY OF THE DISTRICT, TRINITY COUNTY, THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS WITHIN THE MEANING OF ANY CONSTITUTIONAL LIMITATION ON INDEBTEDNESS, OR A PLEDGE OF THE FULL FAITH AND CREDIT OF THE DISTRICT. THE 2017 BONDS ARE SECURED SOLELY BY THE PLEDGE OF NET REVENUES AND CERTAIN FUNDS HELD UNDER THE INDENTURE. THE 2017 BONDS ARE NOT SECURED BY A PLEDGE OF THE TAXING POWER OF THE DISTRICT. Pledge of Net Revenues Pledge. The 2017 Bonds are secured by a first pledge of all of the Net Revenues, on a parity basis with the pledge which secures all outstanding Parity Debt. In addition, the 2017 Bonds are secured by a pledge of all of the moneys in the Bond Service Fund, including all amounts derived from the investment of such moneys. The 2017 Bonds and all Parity Debt are equally secured by a pledge, charge and lien upon the Net Revenues without priority for series, issue, number or date, and the payment of the interest on and principal of the 2017 Bonds will be and are secured by an exclusive pledge, charge and lien upon moneys in the Bond Service Fund without priority for series, issue, number or date. So long as any of the 2017 Bonds are Outstanding, the Net Revenues and such moneys in the Bond Service Fund may not be used for any other purpose; except that out of the Net Revenues there may be apportioned such sums, for such purposes, as are expressly permitted by the provisions of the Indenture regarding the deposit and application of Electric System Revenues. Definition of Net Revenues. Net Revenues are defined in the Indenture as, for any Fiscal Year, Electric System Revenues less (a) Maintenance and Operation Costs that are payable during such Fiscal Year and (B) the amount of 2010 Installment Payments that are payable during such Fiscal Year and for which amounts are not available pursuant to the Escrow Agreement (i.e., the 2010 Installment Payments with respect to the Non-Refunded 2010 Bonds). Electric System Revenues are defined in the Indenture as all gross income and revenue received or receivable by the District from the ownership or operation of the Electric System, including all rates and charges received by the District for the Electric Service and the other services of the Electric System and all proceeds of insurance covering business interruption loss relating to the Electric System and all other money howsoever derived by the District from the ownership or operation of the Electric System, or arising from the Electric System, including investment earnings on such moneys, but excluding refundable deposits made to establish credit and advances or contributions in aid of construction and line extension fees. 12

21 Maintenance and Operation Costs are defined in the Indenture as the costs paid or incurred by the District for maintaining and operating the Electric System, including purchased power costs, all reasonable expenses of management and repair and other expenses necessary to maintain and preserve the Electric System in good repair and working order, and including all administrative costs of the District that are charged directly or apportioned to the operation of the Electric System, including but not limited to salaries, wages, pension costs and other postemployment benefit costs of employees, overhead, taxes (if any) and insurance premiums, fees of auditors, attorneys or engineers and including all other reasonable and necessary costs of the District or charges (other than Debt Service) required to be paid by it to comply with the terms of the 2017 Bonds, the 2010 Installment Sale Agreement or of any resolution authorizing the issuance of any Parity Debt or of such Parity Debt, including but not limited to compensation, reimbursement and indemnification of the trustee for any such Parity Debt; but excluding in all cases depreciation, replacement and obsolescence charges or reserves therefor and amortization of intangibles or other bookkeeping entries of a similar nature. Receipt, Deposit and Application of Electric System Revenues General. The District has previously established the Electric Revenue Fund, which it will continue to hold and maintain for the purposes and uses set forth in the Indenture. Under the Indenture, the District will deposit all Electric System Revenues in the Electric Revenue Fund promptly upon the receipt thereof, and shall apply amounts in the Electric Revenue Fund solely for the uses and purposes set forth in the Indenture and purposes set forth in the Parity Debt Documents. The District will apply moneys in the Electric Revenue Fund as follows: Maintenance and Operations Costs. The District will pay all Maintenance and Operation Costs (including amounts reasonably required to be set aside in contingency reserves for Maintenance and Operation Costs, the payment of which is not then immediately required) from the Electric Revenue Fund as they become due and payable Installment Payments. The District will pay the 2010 Installment Payments with respect to the Non-Refunded 2010 Bonds (i.e., that are not payable from moneys in the Escrow Fund) when due. Application of Net Revenues to Pay Debt Service on the 2017 Bonds and any Parity Debt. On or before the 3 rd Business Day of the month preceding each Interest Payment Date, so long as any 2017 Bonds remain Outstanding under the Indenture, the District will withdraw from the Electric Revenue Fund and pay to the Trustee for deposit into the Bond Service Fund (which the Trustee will establish and hold in trust under the Indenture) an amount of Net Revenues which, together with other available amounts then on deposit in the Bond Service Fund, is at least equal to the aggregate amount of principal of and interest coming due and payable on the 2017 Bonds on such Interest Payment Date. The Trustee will apply amounts in the Bond Service Fund solely for the purpose of (i) paying the interest on the Outstanding 2017 Bonds when due and payable (including accrued interest on any 2017 Bonds purchased or redeemed hereunder), and (ii) paying the principal of the 2017 Bonds at the maturity thereof. 13