$224,000,000 MARIN HEALTHCARE DISTRICT (Marin County, California) General Obligation Bonds Election of 2013, Series 2017A

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1 NEW ISSUE BOOK-ENTRY ONLY RATINGS : Fitch AAA Moody s Aa2 In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the District, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 and is exempt from State of California personal income taxes. In the further opinion of Bond Counsel, interest on the Bonds is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes, although Bond Counsel observes that such interest is included in adjusted current earnings when calculating corporate alternative minimum taxable income. Bond Counsel expresses no opinion regarding any other tax consequences relating to the ownership or disposition of, or the amount, accrual or receipt of interest on, the Bonds. See TAX MATTERS herein. $224,000,000 MARIN HEALTHCARE DISTRICT (Marin County, California) General Obligation Bonds Election of 2013, Series 2017A Dated: Date of Delivery Due: August 1, as set forth on the inside cover The Marin Healthcare District (Marin County, California) General Obligation Bonds, Election of 2013, Series 2017A in the aggregate principal amount of $224,000,000 (the Bonds ) are being issued by Marin Healthcare District (the District ), a local health care district located in Marin County, California. The Bonds were authorized at an election held in the District on November 5, 2013, at which more than the requisite two-thirds of the qualified electors voting on the proposition voted to authorize the issuance and sale of up to $394,000,000 principal amount of general obligation bonds of the District ( Measure F ). The District previously issued $170,000,000 of bonds pursuant to Measure F. The Bonds are the third and final series of bonds being issued pursuant to Measure F and are being issued for the purpose of financing health care facilities of the District authorized by Measure F, as more fully described herein. The Bonds represent general obligations of the District payable from certain ad valorem property taxes levied and collected by the county of Marin (the County ). The Bonds are not obligations of the County, the State of California (the State ) or any of their political subdivisions, other than the District. The Board of Supervisors of the County is empowered and is obligated to levy ad valorem property taxes without limitation as to rate or amount upon all property within the District subject to such taxation by the District (except certain personal property, which is taxable at limited rates), for the payment of principal of and interest on the Bonds when due. Interest on the Bonds will accrue from the date of delivery and is payable on February 1 and August 1 of each year, commencing February 1, Principal of the Bonds will be paid on August 1 in the years set forth on the inside cover page hereof. The Bonds will be issued in denominations of $5,000 or integral multiples thereof and are payable as to principal amount or redemption price at the office of The Bank of New York Mellon Trust Company, N.A., as bond registrar and paying agent for the Bonds (the Paying Agent ). The Bonds are issued in fully registered form and, when delivered, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ( DTC ). DTC will act as securities depository of the Bonds as described herein under the caption THE BONDS General. The Bonds are being sold by the District to the Underwriters identified below. Certain of the Bonds are subject to optional redemption and to mandatory sinking fund redemption, as described herein. This cover page contains certain information for quick reference only. It is not intended to be a summary of this issue. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. Maturity Schedule (See inside cover) The Bonds are offered when, as and if received by the Underwriters, subject to prior sale and to the approval as to their legality by Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the District. Certain legal matters will be passed upon for the District and the Corporation by Archer Norris, and for the Underwriters by Norton Rose Fulbright US LLP, San Francisco, California. Norton Rose Fulbright US LLP, San Francisco, California is also acting as Disclosure Counsel to the District. H2C Securities Inc. served as Municipal Advisor to the District in connection with delivery of the Bonds. It is expected that the Bonds in definitive book-entry form will be available for delivery through the facilities of DTC, on or about September 26, Morgan Stanley Date: September 7, 2017 For an explanation of the ratings, see RATINGS herein. Stifel

2 MATURITY SCHEDULE $224,000,000 MARIN HEALTHCARE DISTRICT (Marin County, California) General Obligation Bonds, Election of 2013, Series 2017A Maturity (August 1) Principal Amount Interest Rate Yield CUSIP 2018 $6,050, % 0.70% 56782TAW ,645, TAX , TAY , TAZ ,145, TBA ,605, c 56782TBB ,130, c 56782TBC ,715, c 56782TBD ,350, c 56782TBE ,040, c 56782TBF ,785, c 56782TBG6 $19,115, % Term Bonds due August 1, 2037; Priced to Yield 3.18% CUSIP : 56782TBH4 $38,885, % Term Bonds due August 1, 2041; Priced to Yield 2.72% c CUSIP : 56782TBJ0 $132,530, % Term Bonds due August 1, 2047; Priced to Yield 3.22% c CUSIP : 56782TBK7 CUSIP is a registered trademark of the American Bankers Association. CUSIP data is provided by Standard & Poor s CUSIP Service Bureau, a Standard & Poor s Financial Services business. CUSIP numbers are provided for convenience of reference only. None of the District, the Underwriters or their agents or counsel assumes responsibility for the accuracy of such numbers. c Yield to par call on August 1, 2027.

3 This Official Statement does not constitute an offer to sell the Bonds or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any state or other jurisdiction to any person to whom it is unlawful to make such offer, solicitation or sale in such state or jurisdiction. No dealer, salesman or any other person has been authorized to give any information or to make any representation other than those contained herein in connection with the offering of the Bonds, and, if given or made, such information or representation must not be relied upon. The information relating to DTC and the book-entry system set forth herein under the caption THE BONDS General and in APPENDIX D hereto has been furnished by DTC. Such information is believed to be reliable but is not guaranteed as to accuracy or completeness and is not to be construed as a representation by the Underwriters, the Municipal Advisor or the District. All other information set forth herein has been obtained from the District and other sources that are believed to be reliable. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale of the Bonds made hereunder shall create under any circumstances any indication that there has been no change in the affairs of the District or DTC since the date hereof. The Underwriters have provided the following sentence for inclusion in this Official Statement. The Underwriters reviewed the information in this Official Statement in accordance with and as part of their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS OFFERED HEREBY AT LEVELS ABOVE THAT WHICH OTHERWISE MIGHT PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS IN THIS OFFICIAL STATEMENT Certain statements included or incorporated by reference in this Official Statement constitute forward-looking statements. Such statements generally are 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 that 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. This Official Statement is in a form deemed final as of its date by the District for the purposes of Rule 15c2-12 of the Securities and Exchange Commission (except for the omission of certain information permitted to be omitted under Rule 15c2-12(b)(1)).

4 MARIN HEALTHCARE DISTRICT District Board of Directors Director Term Expires (December) Ann Sparkman, JD, Chair 2020 Harris Hank Simmons, MD, Vice Chair 2020 Jennifer Hershon, R.N., M.S.N., Secretary 2018 Larry Bedard, MD 2018 Jennifer Rienks, PhD 2018 District Officials Lee Domanico, Chief Executive Officer Jon Friedenberg, Chief Administrative Officer James McManus, Chief Financial Officer Bond Counsel Orrick, Herrington & Sutcliffe LLP District and Corporation Counsel Archer Norris Paying Agent The Bank of New York Mellon Trust Company, N.A. Municipal Advisor H2C Securities Inc.

5 TABLE OF CONTENTS INTRODUCTORY STATEMENT... 1 Purpose of this Official Statement... 1 The District... 1 Authority for Issuance of the Bonds... 1 Security for the Bonds... 2 Purpose of the Bonds... 2 Paying Agent... 2 THE BONDS... 2 General... 2 Redemption Provisions... 3 Defeasance... 6 Paying Agent... 6 Registration, Transfer and Exchange of Bonds... 7 PLAN OF FINANCE... 7 ESTIMATED SOURCES AND USES OF FUNDS... 8 ANNUAL DEBT SERVICE REQUIREMENTS... 9 SECURITY AND SOURCES OF PAYMENT FOR THE BONDS... 9 PROPERTY TAX INFORMATION Ad Valorem Property Taxation System Assessed Valuations Certain Risks Related to Ad Valorem Property Taxation; Potential Reductions to Assessed Valuations Delinquent Taxes (Teeter Plan) Tax Collection Procedure Article XIIIA of the State Constitution Legislation Implementing Article XIIIA Unitary Property Future Initiatives Typical Tax Rates Major Taxpayers Direct and Overlapping Debt THE DISTRICT History Governance Lease and Management of MGH Financial Information of the District CONTINUING DISCLOSURE TAX MATTERS CERTAIN RISKS RELATING TO TAX-EXEMPT STATUS AND OTHER TAX MATTERS Maintenance of the Tax-Exempt Status of Corporation Page i

6 State and Local Tax Exemption Unrelated Business Taxable Income Maintenance of Tax-Exempt Status of Interest on the Bonds Limitations on Contractual and Other Arrangements Imposed by the Internal Revenue Code LEGAL MATTERS AND RELATED INVESTMENT CONSIDERATIONS Litigation Limitation on Remedies; Bankruptcy Approval of Legality MUNICIPAL ADVISOR UNDERWRITING RATINGS MISCELLANEOUS APPENDIX A ECONOMIC AND DEMOGRAPHIC PROFILE OF MARIN COUNTY... A-1 APPENDIX B FORM OF CONTINUING DISCLOSURE CERTIFICATE... B-1 APPENDIX C PROPOSED FORM OF OPINION OF BOND COUNSEL... C-1 APPENDIX D BOOK-ENTRY SYSTEM... D-1 APPENDIX E AUDITED FINANCIAL STATEMENTS OF THE DISTRICT FOR THE YEAR ENDED DECEMBER 31, E-1 ii

7 OFFICIAL STATEMENT $224,000,000 MARIN HEALTHCARE DISTRICT (Marin County, California) General Obligation Bonds Election of 2013, Series 2017A INTRODUCTORY STATEMENT The following introductory statement is subject in all respects to the more complete information set forth in this Official Statement. The descriptions and summaries of various documents hereinafter set forth do not purport to be comprehensive or definitive and are qualified in their entirety by reference to each document. All capitalized terms used in this Official Statement and not otherwise defined herein have the same meaning as in the Bond Resolution (as defined below). Purpose of this Official Statement This Official Statement, including the cover page, the inside cover page and the appendices hereto, is provided to furnish information in connection with the sale and delivery of $224,000,000 aggregate principal amount of Marin Healthcare District (Marin County, California) General Obligation Bonds, Election of 2013, Series 2017A (the Bonds ). The District Marin Healthcare District (the District ) is a local health care district organized pursuant to Division 23 of the Health and Safety Code (the Local Health Care District Law ) of the State of California (the State ). The District s boundaries encompass all of the county of Marin (the County ) except for almost all of the City of Novato and certain portions of the western part of the County. See APPENDIX A ECONOMIC AND DEMOGRAPHIC PROFILE OF MARIN COUNTY. The District owns the Marin General Hospital facility ( MGH ), located in Greenbrae, California. MGH is a 235-bed tertiary care hospital that was built in The District also owns twelve medical care centers (the Clinics ). In November of 2014, the voters of the District passed a measure approving a Hospital Lease (the Hospital Lease ) between the District and the Marin General Hospital, a California non-profit public benefit corporation (the Corporation ) whereby the Corporation leases MGH (subject to certain exceptions) from the District. The term of the Hospital Lease runs until December 1, For more information on the District and the management and operation of MGH by the Corporation, see THE DISTRICT herein. Authority for Issuance of the Bonds At an election held on November 5, 2013, more than two-thirds of the votes cast by eligible voters within the District authorized the District to issue up to $394,000,000 principal amount of general obligation bonds ( Measure F ). The District previously issued $170,000,000 of bonds pursuant to Measure F in November of The Bonds constitute the third and final series of bonds issued under Measure F. The Bonds are issued pursuant to the provisions of (i) Article 4.5 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California, as amended, (ii) Chapter 4 of the Local Health Care District Law, and (iii) a resolution adopted by the Board of Directors of the District (the District Board ) on August 8, 2017 (the Bond Resolution ).

8 The Bonds will be sold by the District to Morgan Stanley & Co. LLC as representative (the Representative ) of the underwriters named on the cover of this Official Statement (collectively, the Underwriters ), as described under UNDERWRITING herein. Security for the Bonds The Bonds represent general obligations of the District payable from certain ad valorem property taxes levied and collected by the County. The Bonds are not obligations of the County, the State or any of their political subdivisions, other than the District. The Board of Supervisors of the County is empowered and is obligated to levy ad valorem property taxes without limitation as to rate or amount upon all property within the District subject to such taxation by the District (except certain personal property, which is taxable at limited rates), for the payment of principal of and interest on the Bonds when due. Purpose of the Bonds Proceeds from the sale of bonds issued pursuant to Measure F are authorized to be used to (a) make seismic upgrades to MGH to meet stricter California earthquake standards; to expand and enhance emergency and other medical facilities; to provide the latest lifesaving medical facilities for treatment of heart, stroke and other diseases and to reduce emergency room wait times and to improve MGH and related facilities with new construction, acquisitions, and renovations and (b) pay all necessary legal, financial, engineering and contingent costs in connection therewith. The District expects to use a portion of the net proceeds from the sale of the Bonds to finance projects authorized by Measure F. See PLAN OF FINANCE and ESTIMATED SOURCES AND USES OF FUNDS. Paying Agent The Bank of New York Mellon Trust Company, N.A., will serve as paying agent and bond registrar with respect to the Bonds (the Paying Agent ). General THE BONDS The Bonds will be issued in book-entry form only and will be initially issued and registered in the name of Cede & Co. as nominee for The Depository Trust Company ( DTC ). Purchasers will not receive bond certificates representing their interest in the Bonds. One fully-registered Bond will be issued for each series and maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. Interest on the Bonds accrues from their date of delivery and is payable semiannually on February 1 and August 1 of each year (each, an Interest Payment Date ), commencing February 1, Interest will be computed on the basis of a 360-day year of twelve 30-day months. Each Bond will bear interest from the Interest Payment Date next preceding the date of authentication thereof unless it is authenticated after the close of business on the 15th day of the calendar month immediately preceding such Interest Payment Date (the Record Date ), and on or prior to the succeeding Interest Payment Date, in which event it will bear interest from such Interest Payment Date, or unless it is authenticated on or before January 15, 2018, in which event it will bear interest from the date of delivery of the Bonds; provided, however, that if, at the time of authentication of any Bond, interest is in default on any outstanding Bonds, such Bonds shall bear interest from the Interest Payment Date to which interest has 2

9 previously been paid or made available for payment. The Bonds are issuable in denominations of $5,000 principal amount or any integral multiple thereof. The Bonds mature on August 1, in the years and amounts set forth on the inside cover page hereof. So long as Cede & Co. is the registered owner of the Bonds, principal of and interest and premium, if any, on the Bonds are payable by wire transfer by the Paying Agent to Cede & Co., as nominee for DTC, which, in turn, will remit such amounts to DTC Participants (as defined in APPENDIX D) for subsequent disbursement to the Beneficial Owners. See APPENDIX D BOOK- ENTRY SYSTEM. In addition, so long as Cede & Co. is the registered owner of the Bonds, references in this Official Statement to Owner or registered owner of the Bonds (other than under the caption TAX MATTERS and the statements on the cover of this Official Statement regarding interest on the Bonds being excludable/includable from gross income for purposes of state and/or federal taxation) means Cede & Co. and does not mean the Beneficial Owners of such Bonds. The District and the Paying Agent will treat the registered owner of the Bonds (which will be DTC so long as the book-entry system is in effect) as the absolute owner of the Bonds for the purposes of payment of debt service, giving all notices of redemption, and all other matters with respect to the Bonds. For a description of the method of payment of principal of and interest on the Bonds and matters pertaining to their exchange while the book-entry system is in place, see APPENDIX D BOOK- ENTRY SYSTEM. If the book-entry system for the Bonds is ever discontinued, payment of interest on any Interest Payment Date will be made to the person appearing on the registration books of the Paying Agent as the Owner thereof as of the Record Date for such Interest Payment Date, such interest to be paid by check or draft mailed to such Owner on such Interest Payment Date (if a business day or on the next business day if the Interest Payment Date does not fall on a business day), at such Owner s address as it appears on such registration books or at such other address as such Owner may have filed with the Paying Agent for that purpose on or before such Record Date. The Owner of Bonds in an aggregate principal amount of $1,000,000 or more may request in writing to the Paying Agent that such Owner be paid interest by wire transfer of immediately available funds if such request is made in writing prior to the close of business on the Record Date immediately preceding any Interest Payment Date. The principal of the Bonds will be payable upon maturity or earlier redemption upon surrender at the principal office of the Paying Agent, in lawful money of the United States of America. The Paying Agent is authorized to pay the Bonds when duly presented for payment at maturity or upon earlier redemption and to cancel all Bonds upon payment thereof. Redemption Provisions Optional Redemption. The Bonds maturing on or before August 1, 2027 are not subject to redemption prior to their respective stated maturity dates. The Bonds maturing on or after August 1, 2028 are subject to redemption prior to their respective stated maturity dates, at the option of the District, from any source of funds, in whole or in part, on August 1, 2027 or on any date thereafter at the par amount thereof, without premium, together with interest accrued thereon to the date of redemption. 3

10 Mandatory Sinking Fund Redemption. The Bonds maturing on August 1, 2037 shall be subject to redemption prior to maturity, without a redemption premium, in part by lot, from mandatory sinking fund payments in the amounts indicated in the following table: Maturity. Redemption Date (August 1) Mandatory Sinking Fund Payment 2035 $5,595, ,355, ,165,000 The Bonds maturing on August 1, 2041 shall be subject to redemption prior to maturity, without a redemption premium, in part by lot, from mandatory sinking fund payments in the amounts indicated in the following table: Maturity. Redemption Date (August 1) Mandatory Sinking Fund Payment 2038 $ 8,025, ,100, ,255, ,505,000 The Bonds maturing on August 1, 2047 shall be subject to redemption prior to maturity, without a redemption premium, in part by lot, from mandatory sinking fund payments in the amounts indicated in the following table: Maturity. Redemption Date (August 1) Mandatory Sinking Fund Payment 2042 $12,840, ,150, ,550, ,040, ,015, ,935,000 4

11 The principal amount of each mandatory sinking fund payment of any maturity shall be reduced proportionately or as otherwise directed by the District by the amount of that maturity optionally redeemed in accordance with the Bond Resolution prior to the mandatory sinking fund payment date. Selection of Bonds for Redemption. If less than all of the Bonds are subject to such redemption and are called for redemption, such Bonds shall be redeemed in inverse order of maturities or as otherwise directed by the District, and if less than all of the Bonds of any given maturity are called for redemption, the portions of such Bonds of a given maturity to be redeemed shall be determined by lot. Notice of Redemption. Notice of any redemption of the Bonds shall be mailed by the Paying Agent, postage prepaid, not less than 20 nor more than 60 days prior to the redemption date (i) by first class mail to the respective Owners thereof at the addresses appearing on the Registration Books, and (ii) as may be further required in accordance with the Continuing Disclosure Certificate. Each notice of redemption shall state (i) the date of such notice; (ii) the name of the Bonds and the date of issue of the Bonds; (iii) the redemption date; (iv) the redemption price; (v) the dates of maturity or maturities of Bonds to be redeemed; (vi) if less than all of the Bonds of any maturity are to be redeemed, the distinctive numbers of the Bonds of each maturity to be redeemed; (vii) in the case of Bonds redeemed in part only, the respective portions of the principal amount of the Bonds of each maturity to be redeemed; (viii) the CUSIP number, if any, of each maturity of Bonds to be redeemed; (ix) a statement that such Bonds must be surrendered by the Owners at the principal corporate trust office of the Paying Agent, or at such other place or places designated by the Paying Agent; (x) notice that further interest on such Bonds will not accrue after the designated redemption date; and (xi) in the case of a conditional notice, that such notice is conditioned upon certain circumstances and the manner of rescinding such conditional notice. Effect of Notice. A certificate of the Paying Agent that notice of redemption has been given to Owners in accordance with the Bond Resolution shall be conclusive as against all parties. Neither the failure to receive the notice of redemption in accordance with the Bond Resolution, nor any defect in such notice shall affect the sufficiency of the proceedings for the redemption of the Bonds or the cessation of interest on the date fixed for redemption. When notice of redemption has been given substantially as provided for in the Bond Resolution, and when the redemption price of the Bonds called for redemption is set aside for the purpose as described under Funds for Redemption, the Bonds designated for redemption shall become due and payable on the specified redemption date and interest shall cease to accrue thereon as of the redemption date, and upon presentation and surrender of such Bonds at the place specified in the notice of redemption, such Bonds shall be redeemed and paid at the redemption price thereof out of the money provided therefor. The Owners of such Bonds so called for redemption after such redemption date shall be entitled to payment thereof only from the interest and sinking fund of the District ( Interest and Sinking Fund ) or the trust fund established for such purpose. Right to Rescind Notice. The District may rescind any optional redemption and notice thereof for any reason on any date prior to the date fixed for redemption by causing written notice of the rescission to be given to the owners of the Bonds so called for redemption. Any optional redemption and notice thereof shall be rescinded if for any reason on the date fixed for redemption moneys are not available in the Interest and Sinking Fund or otherwise held in trust for such purpose in an amount sufficient to pay in full on said date the principal of and interest due on the Bonds called for redemption. Notice of rescission of redemption shall be given in the same manner in which notice of redemption was originally given. The actual receipt by the owner of any Bond of notice of such rescission shall not be a condition precedent to rescission, and failure to receive such notice or any defect in such notice shall not 5

12 affect the validity of the rescission, and any failure to redeem the Bonds when notice of rescission of redemption has been given shall not constitute a default under the Bond Resolution. Funds for Redemption. Prior to or on the redemption date of any Bonds there shall be available in the Interest and Sinking Fund, or held in trust for such purpose as provided by law, monies for the purpose and sufficient to redeem, at the applicable redemption prices, the Bonds designated in the notice of redemption. Such monies shall be applied on or after the redemption date solely for payment of principal of and interest on the Bonds to be redeemed upon presentation and surrender of such Bonds. Any interest due on or prior to the redemption date shall be paid from the Interest and Sinking Fund, unless otherwise provided to be paid from such monies held in trust. Defeasance If at any time the District shall pay or cause to be paid or there shall otherwise be paid to the Owners of any or all of the outstanding Bonds all or any part of the principal of and interest on the Bonds at the times and in the manner provided in the Bonds, or as provided in the following paragraph, or as otherwise provided by law consistent herewith, then all obligation and all agreements and covenants of the District to such Owners under the Bond Resolution and under the Bonds shall thereupon cease and be satisfied and discharged and shall terminate, except only that the District shall remain liable for payment of all principal of interest represented by the Bonds, but only out of monies on deposit in the Interest and Sinking Fund or otherwise held in trust for such payment. The District may pay and discharge any or all of the Bonds by depositing in trust with the Paying Agent or an escrow agent, selected by the District, at or before maturity, money or non-callable direct obligations of the United States of America (including zero interest bearing State and Local Government Series) or other non-callable obligations the payment of the principal of and interest on which is guaranteed by a pledge of the full faith and credit of the United States of America, in an amount which will, together with the interest to accrue thereon and available monies then on deposit in the Interest and Sinking Fund, be fully sufficient to pay and discharge the indebtedness on such Bonds (including all principal and interest) at or before their respective maturity dates. Paying Agent As long as DTC s book-entry system is used for the Bonds, the Paying Agent will send any notice of redemption or other notices to Owners only to DTC. Any failure of DTC to advise any DTC Participant, or of any DTC Participant to notify any Beneficial Owner, of any such notice and its content or effect will not affect the validity or sufficiency of the proceedings relating to the redemption of the Bonds called for redemption or of any other action premised on such notice. The Paying Agent, the District and the Underwriters of the Bonds have no responsibility or liability for any aspects of the records relating to or payments made on account of beneficial ownership, or for maintaining, supervising or reviewing any records relating to beneficial ownership of interests in the Bonds. So long as the outstanding Bonds are registered in the name of Cede & Co. or its registered assigns, the Paying Agent and the District will cooperate with Cede & Co., as sole registered owner, or its registered assigns in effecting payment of the principal of and interest on the Bonds by arranging for payment in such manner that funds for such payments are properly identified and are made immediately available on the date they are due. 6

13 Registration, Transfer and Exchange of Bonds Registration. The Paying Agent shall keep or cause to be kept at its principal corporate trust office sufficient books for the registration and transfer of the Bonds, and, upon presentation for such purpose, the Paying Agent shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred the Bonds on the books for registration and transfer of the Bonds ( Registration Books ) as provided in the Bond Resolution. The Paying Agent shall keep accurate records of all funds administered by it and of all Bonds paid and discharged by it. Transfer. If the book-entry system described in APPENDIX D is no longer used with respect to the Bonds, any Bond may, in accordance with its terms, be transferred, upon the Registration Books, by the Owner thereof, in person or by the duly authorized attorney of such Owner, upon surrender of such Bond to the Paying Agent for cancellation, accompanied by delivery of a duly executed written instrument of transfer in a form approved by the Paying Agent. Whenever any Bond or Bonds shall be surrendered for transfer, the designated District officials shall execute and the Paying Agent shall authenticate and deliver a new Bond or Bonds, of the same series and maturity, Interest Payment Date and interest rate or rates (for a like aggregate principal amount). The Paying Agent may require the payment by any Owner of Bonds requesting any such transfer of any tax or other governmental charge required to be paid with respect to such transfer. No transfer of any Bond shall be required to be made by the Paying Agent (i) during the period established by the Paying Agent for selection of the Bonds for redemption, and (ii) after any Bond has been selected for redemption. Exchange. If the book-entry system described in APPENDIX D is no longer used with respect to the Bonds, the Bonds may be exchanged for Bonds of other authorized denominations of the same series and maturity, Interest Payment Date and interest rate or rates, by the Owner thereof, in person or by the duly authorized attorney of such Owner, upon surrender of such Bond to the Paying Agent for cancellation, accompanied by delivery of a duly executed request for exchange in a form approved by the Paying Agent. Whenever any Bond or Bonds shall be surrendered for exchange, the designated District officials shall execute and the Paying Agent shall authenticate and deliver a new Bond or Bonds of the same series and maturity and Interest Payment Date and interest rate or rates (for a like aggregate principal amount). The Paying Agent may require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. No exchange of any Bonds shall be required to be made by the Paying Agent (i) during the period established by the Paying Agent for selection of the Bonds for redemption, and (ii) after any Bond has been selected for redemption. PLAN OF FINANCE The District expects to use a portion of the net proceeds from the sale of the Bonds, which constitute the third and final series of bonds authorized pursuant to Measure F, to finance projects authorized by Measure F. Such proceeds shall be deposited in the 2017 Marin Healthcare District General Obligation Bonds Building Fund (the Building Fund ) and shall be used only for purposes authorized by Measure F. A portion of the proceeds from the sale of the Bonds shall be used to pay all costs of issuance relating to the Bonds. A portion of the proceeds from the sale of the Bonds will be 7

14 deposited in the Interest and Sinking Fund established for the Bonds. See ESTIMATED SOURCES AND USES OF FUNDS herein. Any surplus moneys in the Building Fund, not needed for the purposes authorized by Measure F shall be transferred to the Interest and Sinking Fund and used only for payment of principal of and interest on the Bonds. If, after payment in full of the Bonds, there remain excess proceeds, any such excess amounts shall be transferred to the general fund of the District as provided and permitted by law. ESTIMATED SOURCES AND USES OF FUNDS The District expects to apply the proceeds from the sale of the Bonds as follows: Sources of Funds Bond Proceeds: Principal Amount $ 224,000, Plus: Net Original Issue Premium 20,436, Total Sources of Funds $ 244,436, Uses of Funds Deposit to Building Fund $ 223,218, Deposit to Interest and Sinking Fund 19,612, Costs of Issuance (1) 1,605, Total Uses of Funds $ 244,436, (1) Includes underwriters discount, legal, advisory, ratings and printing fees and other miscellaneous issuance costs. 8

15 ANNUAL DEBT SERVICE REQUIREMENTS The following table sets forth for each year ending August 1, the amounts required to be made available for the payment of principal due on the Bonds, including by mandatory sinking account redemption, and interest on the Bonds assuming no optional redemption. A portion of the proceeds from the sale of the Bonds will be deposited in the Interest and Sinking Fund established for the Bonds and used to pay debt service on the Bonds. See ESTIMATED SOURCES AND USES OF FUNDS herein. Year Ending (August 1) Debt Service on the Bonds Principal Interest (1) Total Debt Service on the Series 2015A Bonds Total Annual Debt Service (1) 2018 $6,050,000 $7,817,616 $6,510,000 $20,377, ,645,000 9,045,850 6,510,000 22,200, ,780,050 6,700,000 15,480, ,780,050 6,936,200 15,716, ,780,050 7,175,450 15,955, ,780,050 7,430,050 16,210, ,780,050 7,686,850 16,466, ,780,050 7,956,850 16,736, ,000 8,780,050 8,239,050 17,314, ,000 8,771,200 8,523,300 18,004, ,145,000 8,757,000 8,823,550 18,725, ,605,000 8,734,100 9,133,050 19,472, ,130,000 8,669,900 9,450,300 20,250, ,715,000 8,563,400 9,783,800 21,062, ,350,000 8,427,650 10,126,550 21,904, ,040,000 8,260,150 10,481,800 22,781, ,785,000 8,058,150 10,847,550 23,690, ,595,000 7,818,900 11,226,800 24,640, ,355,000 7,651,050 11,618,200 25,624, ,165,000 7,460,400 12,023,400 26,648, ,025,000 7,245,450 12,445,800 27,716, ,100,000 6,844,200 12,883,600 28,827, ,255,000 6,389,200 13,335,000 29,979, ,505,000 5,876,450 13,798,200 31,179, ,840,000 5,301,200 14,281,400 32,422, ,150,000 4,787,600 14,782,400 33,720, ,550,000 4,221,600 15,299,000 35,070, ,040,000 3,599,600 15,834,000 36,473, ,015,000 2,918, ,933, ,935,000 1,517, ,452,400 Total: $224,000,000 $218,196,416 $289,842,150 $732,038,566 (1) Amounts have been rounded to the nearest dollar value, and totals may not add due to rounding. SECURITY AND SOURCES OF PAYMENT FOR THE BONDS The Bonds are payable from certain ad valorem property taxes. The Board of Supervisors and officers of the County are obligated by statute to provide for the levy and collection of ad valorem property taxes in each year sufficient to pay all principal of and interest coming due on the Bonds in such year. Annually, on or before the date specified by law (unless such information is provided to the Auditor-Controller of the County ( Auditor-Controller ) for the full term of the Bonds following the sale 9

16 thereof), the District Board has covenanted to furnish to the Auditor-Controller an estimate in writing of the amount of money, if any, necessary to be raised by taxation for all purposes required under the provisions of the Local Health Care District Law during the next ensuing fiscal year, including a tax sufficient to pay the principal of and interest on all of the Bonds. Although the County is obligated to levy an ad valorem property tax for the payment of the Bonds, the Bonds are not obligations of the County, the State or any of their political subdivisions, other than the District. As and when collected by the County, the District shall cause the taxes levied for the payment of the principal of and interest on the Bonds to be transferred to the Paying Agent. The Paying Agent, in accordance with the Bond Resolution, will deposit all such taxes in the Interest and Sinking Fund held by the Paying Agent, which is required to be used by the Paying Agent solely for the payment of principal of and interest on the Bonds and the principal of, redemption premium, if any, and interest on any other bonds of the District, including refunding bonds, hereafter issued pursuant to voter approved measures of the District, including Measure F ( Parity District Bonds ) when due. All such Bonds and Parity District Bonds are required by State law to be paid from the Interest and Sinking Fund. Currently, the District s General Obligation Bonds, Election of 2013, Series 2015A are the only outstanding Parity District Bonds. The Interest and Sinking Fund shall be held by the Paying Agent and kept separate and distinct from all other District and Paying Agent funds and shall be applied solely for the payment of the principal of and interest on the Bonds and any Parity District Bonds. All ad valorem property taxes collected within the District for the payment of Bonds and any Parity District Bonds are pledged to the payment of principal of or redemption price and interest on the Bonds and any Parity District Bonds when due. On each Interest Payment Date, the Paying Agent shall withdraw, from the Interest and Sinking Fund for payment to the registered owners of the Bonds and any Parity District Bonds, an amount equal to the principal, if any, and interest on the Bonds and Parity District Bonds then due and payable, including principal due and payable by reason of mandatory sinking fund redemption of such Bonds and Parity District Bonds. In the event there is a shortfall in ad valorem property taxes to pay principal of and interest on the Bonds and any Parity District Bonds, the District is required by Section of the Local Health Care District Law to use moneys in its maintenance and operation fund of the District to make up any shortfall. The Bonds and any Parity District Bonds are payable from moneys in the District s maintenance and operation fund if there is a shortfall in ad valorem property taxes, but the Bonds and any Parity District Bonds are not secured by any of such revenues, which primarily consist of all revenues and receipts of any kind from the Hospital Lease and the District s operation of the Clinics. See THE DISTRICT Financial Information herein. See also APPENDIX E AUDITED FINANCIAL STATEMENTS OF THE DISTRICT FOR THE YEAR ENDED DECEMBER 31, In addition, pursuant to the Hospital Lease, the Corporation has not assumed the District s obligations to pay debt service on the District s general obligation bonds, including the Bonds. The Bonds are not payable from, and they are not secured by, the revenues or assets of the Corporation. Prospective investors, therefore, should base their investment decision solely on the property tax information relating to the District. Ad Valorem Property Taxation System PROPERTY TAX INFORMATION As required by State law, the District utilizes the services of the County for the levy and collection of taxes for District purposes. District taxes are collected at the same time and on the same tax 10

17 roll as are County, school district, city and other special district taxes. Taxes are levied by the County for each fiscal year on taxable real and personal property that is located in the District as of the preceding January 1. See Tax Collection Procedure and Typical Tax Rates below. Assessed valuations are the same for both District and County taxing purposes. The amount of the annual ad valorem property tax levied by the County to repay the Bonds will be based on the assessed valuation of taxable property in the District and the amount of debt service due on the Bonds. The District will calculate the tax rate on an annual basis (unless such information is provided to the Auditor-Controller for the full term of the Bonds following the sale of the Bonds) based on the assessed valuation of taxable property in the District and the amount of debt service due on the Bonds. The County will, in turn, levy and collect the ad valorem property taxes and transfer such ad valorem property taxes to the Paying Agent. See SECURITY AND SOURCES OF PAYMENT FOR THE BONDS. Assessed Valuations The assessed valuation of property in the District is established by the County Assessor, except for public utility property which is assessed by the State Board of Equalization. Assessed valuations are reported at 100% of the full value of the property, as defined further in Article XIIIA of the State Constitution. For a discussion of how properties currently are assessed and re-assessed, see Certain Risks Related to Ad Valorem Property Taxation; Potential Reductions to Assessed Valuations, Article XIIIA of the State Constitution and Legislation Implementing Article XIIIA herein. Certain classes of property, such as churches, nonprofit and public schools, colleges, universities and hospitals, charitable institutions and governmental property, are exempt from property taxation and do not appear on the tax rolls. Property located within the District has a total net taxable assessed valuation for fiscal year of $58,762,212,588. The following table presents the seven-year history of assessed valuations in the District. Assessed Valuations Fiscal Years through Fiscal Year Local Secured Utility Unsecured Total $ -- (1) $ -- (1) $ -- (1) $45,701,713, ,150,114,917 3,342, ,704,930 46,130,161, ,730,132,726 6,986, ,541,724 46,734,661, ,522,369,148 6,986,559 1,022,018,048 48,551,373, ,390,571,469 6,986,559 1,061,668,194 51,459,226, ,064,098,426 6,816,669 1,056,134,705 55,127,049, ,618,108,995 28,438,200 1,115,665,393 58,762,212,588 (1) Breakdown of total assessed valuation unavailable for fiscal year Source: California Municipal Statistics, Inc. The District s debt limit is 2.5% of the value of taxable property in the District and is equal to $1,469,055,315 based upon fiscal year assessed valuation. The District has $154,740,000 of outstanding debt that is subject to the debt limit. 11

18 The following table shows the assessed valuation of real property on the secured tax rolls within the District and the number of parcels by land use. Assessed Valuation and Parcels by Land Use Fiscal Year Assessed Valuation (1) No. of Parcels % of Total % of Total Non-Residential: Agricultural/Rural $ 432,352, % % Commercial/Office 5,287,770, , Vacant Commercial 73,866, Industrial 426,501, Vacant Industrial 10,123, Government/Social/Institutional 81,300, , Subtotal Non-Residential $ 6,311,914, % 7, % Residential: Single Family Residence $ 41,922,577, % 47, % Condominium/Townhouse 4,300,138, , Mobile Home 9,604, Houseboat 82,148, Residential Units/Apartments 4,475,345, , Miscellaneous Residential 1,146, Vacant Residential 515,233, , Subtotal Residential $ 51,306,194, % 66, % Total $ 57,618,108, % 74, % (1) Local Secured Assessed Valuation; excluding tax-exempt property. Source: California Municipal Statistics, Inc. 12

19 The table below shows the aggregate, average and median assessed valuations of single family homes within the District and a breakdown of single family homes by assessed valuation range. Per Parcel Assessed Valuation of Single Family Homes Fiscal Year No. of Parcels Assessed Valuation Average Assessed Valuation Median Assessed Valuation Single Family Residential 47,786 $41,922,577,769 $877,298 $659, Assessed Valuation No. of Parcels (1) % of Total Cumulative % of Total Total Valuation % of Total Cumulative % of Total $0 - $99,999 2, % 5.129% $ 188,389, % 0.449% $100,000 - $199,999 6, ,094, $200,000 - $299,999 3, ,780, $300,000 - $399,999 3, ,127,090, $400,000 - $499,999 3, ,468,288, $500,000 - $599,999 3, ,855,164, $600,000 - $699,999 3, ,135,200, $700,000 - $799,999 3, ,493,535, $800,000 - $899,999 3, ,557,630, $900,000 - $999,999 2, ,403,447, $1,000,000 - $1,099,999 1, ,009,803, $1,100,000 - $1,199,999 1, ,748,361, $1,200,000 - $1,299,999 1, ,575,313, $1,300,000 - $1,399,999 1, ,562,384, $1,400,000 - $1,499, ,356,717, $1,500,000 - $1,599, ,221,431, $1,600,000 - $1,699, ,212,298, $1,700,000 - $1,799, ,114, $1,800,000 - $1,899, ,533, $1,900,000 - $1,999, ,020, $2,000,000 and greater 3, ,579,974, Total 47, % $41,922,577, % (1) Improved single family residential parcels. Excludes condominiums and parcels with multiple family units. Source: California Municipal Statistics, Inc. Certain Risks Related to Ad Valorem Property Taxation; Potential Reductions to Assessed Valuations. A reduction in the assessed valuation of taxable property located in the District could necessitate an unanticipated increase in the annual tax levy necessary to pay debt service on the Bonds. Assessments may be adjusted during the course of the year when real property changes ownership or new construction is completed. Assessments may also be appealed by taxpayers seeking a reduction as a result of economic and other factors beyond the District s control, such as may be caused by economic recession, deflation of land values, a relocation out of the District by one or more major property owners, reclassification of property to a class exempt from taxation or the complete or partial destruction of such property caused by, among other events, an earthquake, flood or other natural disaster. The County assessor may also adjust valuations independently, without taxpayer appeal. A significant decrease in assessed valuation or a declaration of bankruptcy by the District could delay the payment of debt service on the Bonds. See LEGAL MATTERS AND RELATED INVESTMENT CONSIDERATIONS Limitation on Remedies; Bankruptcy herein. For purposes of calculating the annual tax rate, annually, on or before the date specified by law (unless such information is provided to the Auditor-Controller for 13