Disclaimer - Dallas...Disclaimer This electronic Investor Presentation you are about to view is provided as of November 8, 2017, for a proposed issuance by the City of Dallas, Texas

DisclaimerThis electronic Investor Presentation you are about to view is provided as of November 8, 2017, for a proposed issuanceby the City of Dallas, Texas (the “City”) of its General Obligation and Refunding Bonds, Series 2017 (the “Series 2017Bonds”). If you are viewing this presentation after November 8, 2017, there may have been events that occurredsubsequent to such date that would have a material adverse effect on the financial information that is presented herein,and the City has not undertaken any obligation to update this electronic presentation. All market prices, financial dataand other information provided herein are not warranted as to completeness or accuracy and are subject to changewithout notice.

This Investor Presentation is provided for your information and convenience only and is subject in all respects to themore complete information contained in or incorporated into the Notice of Sale and Preliminary Official Statement for theSeries 2017 Bonds (collectively, the “Offering Documents”). Any investment decisions regarding the Series 2017 Bondsshould only be made after a careful review of the complete Offering Documents (including all appendices thereto) toobtain information essential to making an informed investment decision.

This Investor Presentation does not constitute a recommendation or an offer or solicitation for the purchase or sale ofany security or other financial instrument, including the Series 2017 Bonds, or to adopt any investment strategy. Anyoffer or solicitation with respect to the Series 2017 Bonds will be made solely by means of the Offering Documents.There shall be no sale of the Series 2017 Bonds referred to in this presentation by any person in any jurisdiction in whichit is unlawful to make such offer, solicitation or sale.

This Investor Presentation is not complete and presents in summary form only selected items of information relating tothe Series 2017 Bonds. This presentation is not, and is not intended as, a substitute for the more detailed discussions inthe Offering Documents, to which reference should be made. In no event shall the City be liable for any use by any partyof, for any decision made or action taken by any party in reliance upon, or for any inaccuracies or errors in, or omissionsfrom, the information contained herein, and such information may not be relied upon by you in evaluating the merits ofparticipating in any transaction mentioned herein. No assurance can be given that any transaction mentioned hereincould in fact be executed. Past performance is not indicative of future results, which will vary. Transactions involving theSeries 2017 Bonds may not be suitable for all investors. You should consult with your own advisors as to the suitability ofthe Series 2017 Bonds for your particular circumstances.

This investor presentation also contains “forward‐looking” statements that involve risks, uncertainties and assumptions. Ifthe risks or uncertainties ever materialize or the assumptions prove incorrect, the results may differ materially from thoseexpressed or implied by such forward‐looking statements. Accordingly, we caution you not to place undue reliance onthese statements. All statements other than the statements of historical fact could be deemed forward‐looking. Allopinions, estimates, projections, forecasts and valuations are preliminary, indicative and are subject to change withoutnotice.

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Dallas is a Vibrant City

City of Dallas, Texas

The city of Dallas is the urban core and largest city in the nation’s

fastest‐growing metropolitan economy and fourth most populous

metropolitan area with more than 7.4 million residents.

Credit: Urban Fabric Photography

4

Diverse and Developing Neighborhoods As North Texas’ urban lifestyle center, neighborhoods

in Dallas are truly diverse

• Funky downtown lofts

• Sophisticated high rises with concierge services

• Stately historic mansions

• Charming bungalows

• Ranch homes perfect for families

• Modern style, eco-friendly homes

• Homes with 1+ acre lots

Mixed-use and high-quality apartments in Dallas are

plentiful, with convenient amenities near

• Retail

• Restaurants

• Transportation services

• Nightlife and outdoor activities

• Major employment centers

• Transportation corridorsCredit: Parks for Downtown Dallas

Pacific Plaza Park 5

Thriving Entertainment and Tourism

Dallas is the center of the tourism and convention industry in

Dallas‐Fort Worth. Thirty-five percent of all hotel rooms in DFW

are located in the city of Dallas, more than twice as much as any

other city. Dallas is a Top 10 convention destination in the U.S.,

according to Cvent.

Aloft / Element Hotel at Dallas Love Field

Credit: Urban Fabric Photography

Kay Bailey Hutchison Convention Center Dallas

6

Multimodal Transportation Hub

Dallas has superior transportation

options and is the hub of the largest

transit network in DFW.

• City-owned Love Field Airport is only

six miles from Downtown, a short and

hassle‐free trip to and from the airport

for residents and visitors.

• Since October 2014, there has been

an 24% increase in flights from Love

Field and 47% increase in

passenger traffic.

• Dallas transit network consists of

45 passenger rail stations over 60

miles of track, 19,000 miles of bus

routes, including a direct rail link to

DFW Airport.

7

Fortune 500 CompaniesDallas is one of the world’s leading corporateheadquarters centers. It boasts:

• 9 Fortune 500 companies and 17 Fortune 1000companies in Dallas

• 10 companies on the 2018 Forbes list ofGLOBAL 2000: The World’s Largest PublicCompanies

• 386 total headquarters operations that employ atleast 1,000 globally

Dallas is efficient as a headquarters city based on:

• Quality transportation system with the air operationsto 170 U.S. and 56 international cities

• Large metro professional services workforce -616,700 jobs (DFW MSA 2018 average)

• Affordable cost of business with a cost of living closeto the national average (2018)

• Central location and dynamic business culture

Other Fortune 500 companies in DFW:

• Exxon mobile

• Fluor Corp.

• Gamestop

• Kimberly-Clark

• J.C. Penney

• D.R. Horton, Inc.

• Alliance Data Systems

• Yum China Holdings

• Dr Pepper Snapple Group

• Celanese

• Michaels Cos.

• Vistra Energy Source: Fortune, Forbes, Hoovers, City of Dallas Economic

Development, C2ER, and Texas Workforce Commission

8

Dallas-Headquartered CompaniesThe City of Dallas is home to:

• 101 publicly-traded companies

• 386 company headquarters

• 317 Class A office buildings

• Over 6,600 industrial/flex buildingsSource: Hoovers and CoStar, January 2019.

9

Major Projects

Credit: www.cypresswaters.com

The Cambria

RedBird Mall RedBird Mall RedBird Mall

Cypress Waters The Epic The Cambria

10

Major Projects - Downtown

Pacific Plaza Park

AT&T

Pacific Plaza ParkThe Butler Brothers BuildingAC Hotel Dallas Downtown - Residence Inn Marriott

1401 Elm St Project AT&T The Statler

11

The Dallas Economyis Strong

Fiscal Year 2020 Revenue

• With property values at an all-time high and robust sales taxreceipts, the overall Dallas economy remains strong.

• Property and sales tax revenue account for 77.4 percent ofGeneral Fund revenue in FY 2020

• Property tax base value rose 7.81% in FY 2020 to $140.2 billion,from $130.1 billion in FY 2019.

• New construction value rose 4.7% in FY 2020 to $3.7 billion, from$3.6 billion in FY 2019.

• FY 2020 represents the eighth consecutive year of growth afterthree years of declining values during the recession

• Sales tax revenue is projected to increase 4.5% in FY 2020 to$325.6 million, from $311.6 million budgeted in FY 2019.

• Other revenues include franchise fees, fines and forfeitures, andservice or use fees.

13

Fiscal Year 2020 Budget Focused on Fiscal Sustainability The budget is presented as a biennial budget, comprising FY 2020 adopted andFY 2021 planned budgets. The FY 2019-20 and FY 2020-21 biennial budgetincludes the services that are most important to the community.

• Lowers property tax rate – to 77.66 cents from 77.67 cents per $100 of assessedvalue

• City commitment to contribute at least $162 million to the Police & Fire pensionfund in FY 2020 to secure the retirements of our first responders.

• City Council approved a three-year Meet andConfer agreement based on a market-basedpay structure for police officers and firefighters.

• More pay-as-you-go funding for streetsand facilities, investing $85.5 million inFY 2020 to improve more than 710 street lanemiles.

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Fiscal Year 2020 Budget Highlights• Provides meaningful relief to residents 65 and older or disabled by

increasing property tax exemption from $90,000 to $100,000

• Offers temporary shelter to individuals experiencing homelessness

during extreme hot and cold weather or for up to 90 days through a pay-

to‐stay initiative. The inclement weather shelter program will begin with

$200,000 in FY 2019-20 and increase to $400,000 in the second year of the

biennial.

• Boost recreational opportunities by contributing $500,000 for the

Teen Recreation (TRec) program, investing $500,000 for after school

program expansion, and offering a free Youth Access passes citywide valued

at $975,000.

15

General Fund – Fund Balance History

* FY 2019 Forecast, FY 2020 Adopted, FY 2021 Planned values.

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

FY 2012-13 FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19* FY 2019-20* FY 2020-21*

Ending Fund Balance Ending Fund Balance as % of Revenue

16

Tax Base Assessed Value History

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

2014 2015 2016 2017 2018 2019 2020

Residential Commercial BPP

City of Dallas

Taxable Assessed Valuation by Category

Residential Commercial BPP Total

2014$39,126 $35,103 $13,023 $87,252

44.84% 40.23% 14.93% 100.00%

2015$41,462 $38,665 $13,010 $93,137

44.52% 41.51% 13.97% 100.00%

2016$44,396 $42,696 $13,226 $100,318

44.26% 42.56% 13.18% 100.00%

2017$49,108 $47,686 $13,593 $110,387

44.49% 43.20% 12.31% 100.00%

2018$52,268 $51,859 $14,186 $118,313

44.18% 43.83% 11.99% 100.00%

2019$57,796 $57,912 $14,373 $130,081

44.43% 44.52% 11.05% 100.00%

2020$63,167 $62,151 $14,920 $140,238

45.04% 44.32% 10.64% 100.00%

17

Tax Base Changes

• The value of new construction hasgrown an average of 23.7 percentsince the decline in FY 2011-12.

• Modest new construction growth isexpected in future years.

New Construction and Reappraisal history

($000)

Fiscal Reappraisal Total

Year Value Change

2011 1,014,356$ (4,852,972)$ (3,838,616)$

2012 731,025 (2,162,758) (1,431,733)

2013 792,860 895,115 1,687,975

2014 976,046 2,593,754 3,569,800

2015 1,561,131 4,325,558 5,886,689

2016 201,893 5,161,792 5,363,685

2017 2,535,856 7,532,836 10,068,692

2018 3,313,185 4,613,864 7,927,049

2019 3,574,851 8,191,457 11,766,308

2020 3,741,152 6,415,493 10,156,645

New

Construction

Value

18

Sales Tax Revenue• From May 2010 to May 2017, current period sales tax collection has

been up 82 out of 84 consecutive months when compared to the samemonth for the previous year.

• City’s sales tax revenue is projected to grow 4.5% in FY 2020, then slowbut not contract to approximately 2.4% in FY 2021 and FY 2022.

Fiscal

Year

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Actual

Forecast

Adopted

Planned

Total

Collections

$204,678,529

$215,893,042

$229,577,114

$241,946,139

$255,716,129

$273,499,270

$283,917,873

$293,610,564

$305,397,782

$313,460,749

$325,566,185

$333,379,773$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

$350,000,000

FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY19 FY 20 FY 21

Fo

rec

ast

Ad

op

ted

Pla

nn

ed

19

Pension / OPEB Updates

Dallas Police & Fire Pension System• According to the Plan actuary, Segal Consulting, with the changes made in HB 3158

the Dallas Police and Fire Pension will be 100 percent funded in 38 years. Prior to

the legislation, the fund was projected to be insolvent in less than 7 years.

• The funding level on an actuarial value assets basis is 48%. If all assumptions are

met, it is anticipated that the funding level will decline for 12 years before it begins to

increase.

• In 2024, the Pension and the City will look to an

independent third party actuary to determine if

the pension system meets state Pension

Review Board (PRB) guidelines and the

independent actuary will provide

recommendations regarding changes to

benefits or to member or City contribution rates

if the guidelines are not met.

• If the guidelines are not met, the Board is

required by statute to adopt rules to comply with

the PRB funding guidelines and report to the

legislature the results of the analysis and the

adopted changes.21

Dallas Police & Fire Pension System

Projected Funded Percentage – City Hiring PlanFunding Estimate – January 1, 2019 Actuarial Valuation

22

Dallas Police & Fire Pension System

Changes to Contributions:

• City’s contribution rate increased from approximately 30.5 percent of

computation pay to the greater of 34.5 percent of computation or a

minimum floor amount set forth in the bill based on certain hiring

assumptions. Additionally, the City contributes $13 million annually to the

Pension System.

• The minimum floor amounts and additional $13 million are in effect

through 2024, at which point the City’s contribution will be 34.5 percent of

computation pay.

• Member’s contribution rate increased from 8.5 percent to 13.5 percent for

80% of the employees in active service that are not in DROP and from

4% to 13.5% for the 20% of active employees in DROP, also calculated on

computation pay.

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Dallas Police & Fire Pension System2019 Meet and Confer Agreement Impacts on Pension

• Normal cost of benefit increases to 16.6% from 15.3%

• On average, for every 10% increase in pay for a non-DROP employee, the

value of the pension benefit increases by 6% (10% increase in present

value of pension benefit less 4% increase in present value of contributions)

• The closer the member is to retirement, the greater the net value of the pay

increase – as long as the member does not retire within 3 (or 5) years of the

increase

• City contributions begin exceeding floor in FY 2022

• Funded year improved by 5 years

• If headcount continues to increase such that projected payroll is consistent

with that assumed in HB 3158, the full funding year improves by another

3 years

• City would need to reach 5,260 (rather than 5,523) active employees in 2027

and beyond

Caveats: As with all actuarial work, this is based on certain assumptions – future estimates may differ, and actual experiencewill almost certainly be different than assumed, and those differences may be material. The scope of this analysis was limited.

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Other Post-Employment Benefits(OPEB)

• The City eliminated its subsidy of the retiree health plan for employees hired after

1/1/2010.

• As of September 30, 2018, total OPEB liability was determined to be $511,120 and

included a total of 10,448 plan participants covered by the benefit terms, including:

• 4,662 Inactive employees or beneficiaries currently receiving benefit payments

• 5,786 Active employees

• The City has continually increased retiree

contributions to keep up with medical

trends.

• The City moved the post-65 retirees to

fully-insured plans which use Medicare

money more efficiently than self-insured

options. This allowed for a lowering of the

claims cost assumption.

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Ratings

General Obligation Bond Ratings

The City maintains consistently strong and stable credit ratings due

to a robust and rapidly growing local economy, strong reserves and

prudent fiscal management and policies.

Fitch S&P Moody’s

Rating AA AA- A1

Date of Last Report 4/22/2019 4/18/2019 11/5/2019

Outlook/Status Stable Outlook Stable Outlook Stable Outlook

27

General Obligation Debt & Capital

Debt Service Chart

• 76.65% of principal projected to be paid off in 10 years

• Assumes:

• Current debt service

• I&S rate at 97.75% collection

• TAV assumed as $140.2 billion in FY20 with 6.22%

growth projected in FY2129

Debt Service as a Percentage of the General Fund Budget

FY General Fund Debt Service Total

2008-09 1,037,500,000 250,034,000 1,287,534,000

2009-10 1,015,432,000 288,802,000 1,304,234,000

2010-11 998,732,000 253,882,000 1,252,614,000

2011-12 1,001,271,000 248,823,000 1,250,094,000

2012-13 1,031,177,000 235,268,000 1,266,445,000

2013-14 1,119,249,000 233,780,000 1,353,029,000

2014-15 1,159,057,000 225,841,000 1,384,898,000

2015-16 1,140,474,000 253,908,000 1,394,382,000

2016-17 1,232,566,000 261,069,000 1,493,635,000

2017-18 Actual 1,276,420,942 259,623,000 1,536,043,942

2018-19 Estimate 1,368,601,000 296,200,000 1,664,801,000

2019-20 Adopted 1,438,089,000 305,451,298 1,743,540,298

History of General Fund and Debt Service Expenditures

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

$-

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

$350,000,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Debt Service Debt Service as a % of Exp

30

2017 Bond Package

31

2017 Bond Program Update Proposition Amount Authorized Amount Issued to Date Amount Unissued

Street and Transportation

Improvements$533,981,000 $49,540,000 $484,441,000

Parks and Recreation Facilities $261,807,000 $69,963,000 $191,844,000

Fair Park Improvements $50,000,000 $8,600,000 $41,400,000

Flood Protection and Storm

Drainage Improvements$48,750,000 $3,380,000 $45,370,000

Library Facilities and

Improvements$15,589,000 $7,500,000 $8,089,000

Cultural and Performing Arts

Facilities$14,235,000 $2,760,000 $11,475,000

Public Safety Facilities $32,081,000 $3,561,000 $28,520,000

City Hall and City Service and

Admin. Facilities Repairs and

Improvements

$18,157,000 $2,685,000 $15,472,000

Economic Development

Program$55,400,000 $13,013,000 $42,387,000

Housing Facilities for the

Homeless$20,000,000 $500,000 $19,500,000

TOTAL $1,050,000,000 $161,502,000 $888,498,000

32

City of DallasCapital Improvement Budget Forecast

Program FY20-FY22

Aviation Facilities $ 200,034,131

City Facilities 176,326,624

Convention and Event Services Facilities 24,270,163

Cultural Facilities 1,672,940

Economic Development 391,492,169

Flood Protection and Storm Drainage 75,802,126

Park and Recreation 128,393,583

Street and Transportation 472,174,156

Water Utilities 1,022,593,750

Grand Total $ 2,492,759,642

200,034,131Aviation Facilities

8.02%

176,326,624 City Facilities

7.07%

24,270,163 Convention and Event Services

Facilities0.97%

1,672,940 Cultural Facilities

0.07%

391,492,169 Economic

Development15.71%

75,802,126 Flood Protection

and Storm Drainage

3.04%

128,393,583 Park and

Recreation5.15%

472,174,156 Street and

Transportation18.94%

1,022,593,750 Water Utilities

Capital Improvement

41.02%

33

Future Planned Issuances

• Issue remaining approximately $890 million of voter approved bonds from

2017 Bond Program

• November 2020 - $230 million

• November 2021 - $230 million

• November 2022 - $270 million

• November 2023 - $160 million

34

Questions?