QUESTIONS and ANSWERS. Construction of a drive down float, commercial launch ramp and uplands staging and parking area at Auke Bay.

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1 OVER THE COUNTER BOND SALE $1,000,000 Local Capital Improvements General Obligation Bond Issue (Part of the $15,000,000 Bonds approved by the voters on 10/1/02) QUESTIONS and ANSWERS Q. What kind of bonds are these? A. These are General Obligation Bonds, backed by the full faith, credit, and resources of the City and Borough of Juneau (CBJ). Q. What is the City s bond rating? A. The last bond rating received was from Moody s in June The City was given a rating of A2 at that time. The current issue is not rated. Q. What are the bonds for? A. The bonds are being sold for the purpose of paying a portion of the costs of certain capital improvement projects specified in Ordinance Serial No These bonds represent $1 million of the $15 million authorized in the October 1, 2002 election. The projects, as listed in Ordinance Serial No consist of: Construction of a drive down float, commercial launch ramp and uplands staging and parking area at Auke Bay. Completion of Savikko Road at Douglas Harbor with asphalt paving, storm drains, curb, gutter and sidewalks and the purchase and installation of a new float system, and to construct the Army Corps of Engineers designed breakwater. Moorage reconfiguration of the Aurora/Harris Harbors including upgrading the existing electrical systems, maintenance of floats and replacement of some smaller floats with larger floats to accommodate vessels over 32 feet. Replacement of the water and sanitary sewer system for 3 rd Street in Douglas from St. Anne s Avenue to the Gastineau School. Extension of the water and sewer system at the Airport to provide potable water and sanitary sewer service to the Civilian Air Patrol building, 28 west end buildings and hangars and 25 east end hangars. Expansion of the water system from Tee Harbor to Cohen Drive including the subdivisions on Randall Road and Cohen Drive. Funding for the planning, design and first phase of construction of a neighborhood park to be developed on West Juneau property acquired by the City and Borough of Juneau. Expansion of food service seating and enlargement of the existing commercial kitchen facilities at Eaglecrest Day Lodge. Page 1 of 5

2 Q. What is the most/least I can buy? A. The bonds will be sold in $1,000 denominations. Each buyer can buy as little as $1,000 but may be restricted to a maximum of $50,000, depending on investor interest. If restricted to the maximum, husbands and wives can each buy $50,000. Q. What maturities are available? A. Maturities range between one and twenty years (2004 through 2023), with a certain number of bonds maturing in each year, on February 1. The estimated amounts maturing each year for the $1 million issue are as follows: Estimated Maturity Amount: Estimated Maturity Amount: 2004 $ 42, $ 48, , , , , , , , , , , , , , , , , , ,000 At the time of sale, the Finance Director may increase or decrease the estimated principal amounts in any year, depending upon the orders received for particular maturities, provided, however, the principal maturities in any one year not exceed $250,000 and the aggregate principal amount of Bonds issued not exceed $1,000,000. Q. How can I be sure to get the maturities I want? A. The bond maturities will be available on a first come, first serve basis according to the order people sign up the morning of the sale. (We will maintain a running list of maturities available the morning of the orders). Try to be here a little early so you can be one of the first to sign in. The sale will take place in the Assembly Chambers at the Municipal Building on Saturday, January 25 with sign up beginning at 9:00 a.m. Page 2 of 5

3 Q. How much interest will I earn? A. The amount of interest will depend upon the amount of bonds you buy and the maturity period. Bonds with earlier maturities pay a lower rate of interest. Bonds with longer maturities pay a higher rate. Preliminary interest rates will be published in the Juneau Empire on Friday, January 24. The CBJ retains the right to change the interest rates due to market fluctuations up to the order date of January 25. The most current rates we have available are noted below. These are subject to change depending on market conditions at time of sale on January 25. Estimated * Interest Rate: Estimated * Interest Rate: % % % % % % % % % % % % % % % % % % % % * Estimated interest rates as of January 8, 2003 Q. Is the interest taxable? A. No. The interest earned on these general obligation bonds is exempt from federal income tax and is not an item of tax preference for purposes of determining alternative minimum taxable income for individuals or corporations under the Internal Revenue Code. It is taken into account in the computation of adjusted current earnings for purposes of the corporate alternative minimum tax. For further information regarding tax exemption, see page 18 of the Preliminary Official Statement. Q. Are the bonds callable? A. No. Page 3 of 5

4 Q. How will the bonds be registered? A. The bonds can be registered in one of several ways which can be discussed at the time of the sale. They may be registered in an individual s name, jointly or as a gift to a minor. A representative of J.P. Morgan Trust Company, National Association, the bond registrar, will be available to answer questions. Q. How will I receive my interest payments? A. Interest will be paid twice yearly, on February 1 and August 1. Interest is paid by the CBJ s registrar and paying agent, J. P. Morgan Trust Company, National Association, by check to the name and address of the individual to whom the bond is registered. Q. What if I want to sell these bonds later? Will the City and Borough of Juneau buy them back from me? A. No. The City and Borough does not plan to offer any future markets for these bonds. The CBJ may assist in helping to find a buyer but will not be responsible for doing so. Q. Do I have to attend the bond sale to buy bonds? What if I am out of town on January 25? A. You do not have to attend the bond sale, however a representative must attend and possess the required documents filled out completely with notarized signature. The required documents would consist of a Bond Purchase form and a W-9 form. Q. Who is eligible to buy bonds? A. The bonds to be sold on January 25 will be offered to local real property owners and residents. If there are any bonds remaining unsold after the sale, the bonds will be offered to all individuals and businesses. Q. I own real property within the City and Borough of Juneau but I do not reside within the Borough limits. Am I considered a local real property owner qualified for the 1st offering? A. Yes, persons owning real property within the City and Borough of Juneau are considered local real property owners for this bond sale. Page 4 of 5

5 Q. Will you sell bonds to brokers? A. No. Brokers would not normally buy an inventory of bonds in this manner. Brokers would normally buy a larger block at a competitive sale and then break it up in smaller increments to sell to their customers. Q. When will I need to pay for the bonds? A. You will be required to make a three percent (3%) good faith deposit in the form of cash, personal check or cashiers check on the day of the sale. The deposit will not be refunded if you fail to complete the bond purchase. Payment of the full amount will be due in cash, cashiers check or money order no later than 4 p.m., Monday, February 10. The Bond closing date will be February 11. (At time of final payment, your original deposit check will be returned). Q. How will the remaining $14 million of the approved $15 million be offered? A. The present plan is for the remaining authorized amount to be competitively bid by institutional investors. Q. If I have other questions, who do I call? A. Barbara Rolfe, Treasurer ; or Craig Duncan, Finance Director, Page 5 of 5