RTD series 2013A (FasTracks sales tax revenue refunding ...

NEW ISSUE—BOOK-ENTRY ONLY RATINGS: S&P: "AA+" Moody's: "Aa2"

Fitch: "AA" See "RATINGS"

In the opinion of Sherman & Howard L.L.C., Bond Counsel, dated as of the date of delivery of the Bonds, assuming continuous compliance with certain covenants described herein, interest on the Bonds is excluded from gross income under federal income tax laws pursuant to Section 103 of the Internal Revenue Code of 1986, as amended to the date of delivery of the Bonds (the "Tax Code"), interest on the Bonds is excluded from alternative minimum taxable income as defined in Section 55(b)(2) of the Tax Code, except that such interest is required to be included in calculating the "adjusted current earnings" adjustment applicable to corporations for purposes of computing the alternative minimum taxable income of corporations, and interest on the Bonds is excluded from Colorado taxable income and Colorado alternative minimum taxable income under Colorado income tax laws in effect on the date of delivery of the Bonds as described herein. See "TAX MATTERS."

$204,820,000 REGIONAL TRANSPORTATION DISTRICT

(Colorado) Sales Tax Revenue Refunding Bonds

(FasTracks Project) Series 2013A

Dated: Date of Delivery Due: November 1, as shown below

The Bonds are issued and secured pursuant to an Indenture of Trust dated May 16, 2013 (the "Indenture") between the Regional Transportation District (the "District" or "RTD") and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"). Interest on the Bonds is payable on November 1, 2013 and each May 1 and November 1 thereafter.

The Bonds are issuable in registered form and are initially to be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"), as securities depository for the Bonds. Purchases by beneficial owners of the Bonds are to be made in book-entry form in the principal amount of $5,000 or any integral multiple thereof. Beneficial owners are not to receive certificates evidencing their interests in the Bonds. See "THE BONDS – Book-Entry Form."

The Bonds mature, bear interest and are priced to yield as follows:

MATURITY SCHEDULE (CUSIP© 6-digit issue number: 759136(2))

Maturity (November 1)

Principal Amount

Interest Rate

Yield (1)

CUSIP©(2)

2027 $43,205,000 5.00% 2.92% RW6 2028 45,365,000 5.00 3.03 RX4 2029 47,630,000 5.00 3.13 RY2 2031 19,665,000 5.00 3.25 RZ9 2032 19,550,000 5.00 3.30 SB1 2036 29,405,000 4.25 3.50 SA3

_____________________ (1) This information is provided by the Underwriters. (2) Neither RTD nor the Underwriters take any responsibility for the accuracy of CUSIP numbers, which are included solely for the convenience of the owners of the Bonds.

The Bonds are subject to redemption prior to their respective maturity dates as more fully described in "THE BONDS – Prior Redemption."

The Bonds are issued for the purpose of refunding, paying and discharging certain of the District's outstanding sales tax revenue bonds as described herein and funding costs of issuance of the Bonds. See "PLAN OF FINANCE."

The Bonds are special and limited obligations of the District payable solely from and secured by (a) a non-exclusive first lien upon the revenues received by the District from its 0.4% sales tax, (b) a non-exclusive subordinate lien upon the revenues received by the District from an additional 0.6% sales tax and (c) proceeds of the Bonds and other legally available moneys and investments held in certain funds created under the Indenture. The Bonds do not constitute a general obligation of the District within the meaning of any constitutional or statutory debt limitation or provision and are not payable in whole or in part from the proceeds of ad valorem property taxes. See "SECURITY FOR THE BONDS."

The purchase and ownership of the Bonds involve investment risk. Prospective purchasers should give particular attention to the matters discussed under "RISK FACTORS."

This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors should read this entire Official Statement to obtain information essential to making an informed investment decision.

The Bonds are offered when, as and if executed and delivered and accepted by the Underwriters and subject to the approving legal opinion of Sherman & Howard L.L.C., Denver, Colorado, as Bond Counsel, and to certain other conditions. Hogan Lovells US LLP, Denver, Colorado, and Bookhardt & O'Toole, Denver, Colorado, have acted as Co-Disclosure Counsel to the District in connection with the Official Statement. Certain legal matters will be passed upon for the District by its General Counsel, Marla Lien, Esq., and for the Underwriters by Kutak Rock LLP, Denver, Colorado. First Southwest Company is serving as Financial Advisor to the District in connection with the issuance of the Bonds. It is expected that the Bonds in book-entry form will be available for deposit with delivery to DTC on or about May 16, 2013.

MORGAN STANLEY BofA MERRILL LYNCH

GEORGE K. BAUM & COMPANY LOOP CAPITAL MARKETS

The date of this Official Statement is May 8, 2013.

© Copyright 2013, American Bankers Association. CUSIP data herein is provided by Standard & Poor's, CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc.

No dealer, salesman or other person has been authorized to give any information or to make anyrepresentation with respect to the Bonds that is not contained in this Official Statement and, if given ormade, such other information or representation must not be relied upon as having been authorized by theDistrict, First Southwest Company (the "Financial Advisor") or the underwriters listed on the coverhereof (collectively, the "Underwriters"). The information contained in this Official Statement is subjectto change, and neither the delivery of this Official Statement nor any sale made after any such deliverycreates any implication that there has been no change since the date of this Official Statement. ThisOfficial Statement does not constitute an offer to sell or the solicitation of any offer to buy, and there is tobe no sale of any of, the Bonds by any person in any jurisdiction in which it is unlawful for such person tomake such offer, solicitation, or sale.

The information set forth herein has been furnished by the District and includes informationobtained from other sources, all of which are believed to be reliable. The information and expressions ofopinion herein are subject to change without notice and neither the delivery of this Official Statement norany sale made hereunder shall, under any circumstances, create any implication that there has been nochange in the affairs of the District since the date hereof. Such information and expressions of opinionare made for the purpose of providing information to prospective investors and are not to be used for anyother purpose or relied on by any other party.

The order and placement of materials in this Official Statement, including the appendices, are notto be deemed a determination of relevance, materiality or importance, and this Official Statementincluding the appendices, must be considered in its entirety. The captions and headings in this OfficialStatement are for convenience only and in no way define, limit or describe the scope or intent, or affectthe meaning or construction, of any provisions or sections of this Official Statement. The offering of theBonds is made only by means of this entire Official Statement.

The Underwriters have provided the following sentence for inclusion in this Official Statement.The Underwriters have reviewed the information in this Official Statement in accordance with, and as partof, their responsibilities to investors under the federal securities laws as applied to the facts andcircumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness ofsuch information.

In connection with the offering of the Bonds, the Underwriters may overallot or effecttransactions which stabilize or maintain the market price of such Bonds at levels above those which mightotherwise prevail in the open market. Such stabilization, if commenced, may be discontinued at any time.

THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATESECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THEFOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINEDTHE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS ACRIMINAL OFFENSE.

THIS OFFICIAL STATEMENT IS BEING PROVIDED TO PROSPECTIVE PURCHASERSEITHER IN BOUND PRINTED FORM ("ORIGINAL BOUND FORMAT") OR IN ELECTRONICFORMAT ON THE FOLLOWING WEBSITE: HTTP://WWW.MERITOS.COM. THIS OFFICIALSTATEMENT MAY BE RELIED UPON ONLY IF IT IS IN ITS ORIGINAL BOUND FORMAT OR IFIT IS PRINTED IN FULL DIRECTLY FROM SUCH WEBSITE.

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REGIONAL TRANSPORTATION DISTRICT1600 Blake Street

Denver, Colorado 80202

BOARD OF DIRECTORS

DirectorsDirectorDistricts

Lorraine Anderson, Chair District LKent Bagley, First Vice Chair District HLarry Hoy, Second Vice Chair District JBruce Daly, Secretary District NJeff Walker, Treasurer District DBarbara Deadwyler District BClaudia Folska District EBill James District AGary Lasater District GJudy Lubow District INatalie Menten District MAngie Rivera-Malpiede District CChuck Sisk District OPaul Daniel Solano District KTom Tobiassen District F

General ManagerPhillip A. Washington

General Counsel to Board of Directors and the DistrictMarla Lien

Bond CounselSherman & Howard L.L.C.

Denver, Colorado

Co-Disclosure CounselHogan Lovells US LLPBookhardt & O'Toole

Denver, Colorado

Financial AdvisorFirst Southwest Company

Dallas, Texas

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_________________________

TABLE OF CONTENTS_________________________

PageINTRODUCTION ................................................ 1THE BONDS ........................................................ 4

Authority ............................................................ 4Description ......................................................... 4Prior Redemption ............................................... 4Debt Service Requirements................................ 5Payment and Registration .................................. 7Transfer and Exchange....................................... 7Defeasance and Discharge ................................. 7Book-Entry Form ............................................... 8

SECURITY FOR THE BONDS......................... 10Flow of Funds .................................................. 10Debt Service Coverage..................................... 13Additional Securities........................................ 14Events of Default ............................................. 15Bondholders' Remedies.................................... 16

RISK FACTORS ................................................ 16Special and Limited Obligations...................... 17Economic Conditions....................................... 17Effect of Internet Sales..................................... 17Powers Subject to Change by Legislature or

by Initiative................................................... 17No Secondary Market ...................................... 17

PLAN OF FINANCE.......................................... 18General ............................................................. 18Sources and Uses of Funds .............................. 18The Refunding Escrow..................................... 18

THE SALES TAX .............................................. 19Manner of Collection of the Sales Tax............. 19Remedies for Delinquent Taxes ....................... 20Sales Tax Data ................................................. 21

RTD .................................................................... 24General Information......................................... 24Organization..................................................... 24Powers.............................................................. 24Board of Directors............................................ 25Principal Officials ............................................ 26Employee and Labor Relations ........................ 28Retirement Plans .............................................. 28Other Postemployment Benefits ...................... 29Insurance .......................................................... 30Intergovernmental Agreements........................ 30RTD Service Area Map.................................... 31

THE SYSTEM.................................................... 32Fleet Composition ............................................ 32Transit Services................................................ 32Passenger, Maintenance and Administrative

Facilities ....................................................... 34Long-Term Financial Planning ........................ 35

PageFasTracks......................................................... 36

DEBT STRUCTURE OF RTD .......................... 41FINANCIAL INFORMATION

CONCERNING RTD...................................... 44Budget Policy................................................... 44Major Revenue Sources ................................... 45Sales Tax.......................................................... 46Fare Structure................................................... 46Advertising and Ancillary Revenues ............... 48Federal Funding ............................................... 49Investment Income........................................... 50Financial Summary .......................................... 50Management's Discussion and Analysis of

Financial Trends........................................... 53ECONOMIC AND DEMOGRAPHIC

OVERVIEW.................................................... 53FORWARD LOOKING STATEMENTS .......... 53CONSTITUTIONAL REVENUE, SPENDING

AND DEBT LIMITATIONS .......................... 53LITIGATION ..................................................... 54GOVERNMENTAL IMMUNITY ..................... 54CONTINUING DISCLOSURE AGREEMENT 55LEGAL MATTERS ........................................... 56TAX MATTERS ................................................ 56RATINGS........................................................... 58VERIFICATION OF CERTAIN

CALCULATIONS .......................................... 58UNDERWRITING ............................................. 58FINANCIAL ADVISOR.................................... 59FINANCIAL STATEMENTS............................ 59MISCELLANEOUS........................................... 61

APPENDICES:

Appendix A – Form of Continuing DisclosureAgreement .................................... A-1

Appendix B – Regional TransportationDistrict Denver, ColoradoComprehensive AnnualFinancial Report for the FiscalYear ended December 31, 2011and 2010 ........................................B-1

Appendix C – An Economic andDemographic Overview of theDenver Metropolitan Area.............C-1

Appendix D – Form of Bond Counsel Opinion ... D-1Appendix E – Summary of Certain Provisions

of the Indenture..............................E-1

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OFFICIAL STATEMENT

$204,820,000REGIONAL TRANSPORTATION DISTRICT

(Colorado)Sales Tax Revenue Refunding Bonds

(FasTracks Project)Series 2013A

INTRODUCTION

This Official Statement, which includes the cover page and the appendices, provides certaininformation in connection with the offering of $204,820,000 aggregate principal amount of Sales TaxRevenue Refunding Bonds (FasTracks Project), Series 2013A (the "Bonds") of the RegionalTransportation District ("RTD" or the "District"), a public body politic and corporate and politicalsubdivision of the State of Colorado (the "State"), organized and existing under the terms of the RegionalTransportation District Act, Section 32-9-101 et seq., Colorado Revised Statutes, as amended (the "Act").The Bonds are being issued by the District pursuant to an Indenture of Trust, dated May 16, 2013 (the"Indenture") between the District and The Bank of New York Mellon Trust Company, N.A., as trustee(the "Trustee"). Capitalized terms used herein and not otherwise defined shall have the meanings setforth in Appendix E – "SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE."

At an election held within the District on November 2, 2004 (the "2004 Election"), voters in theDistrict approved a ballot referendum allowing for an increase in the RTD sales tax rate from 0.6% (the"0.6% Sales Tax") to 1.0% effective January 1, 2005. The additional four-tenths of one percent sales taxrate increase approved at the 2004 Election is referred to herein as the "0.4% Sales Tax Increase." Atthe 2004 Election, the District was also authorized to issue debt in the amount of $3.477 billion, with amaximum total repayment cost of $7.129 billion, and a maximum annual repayment cost of $309.738million, with the proceeds of such debt and increased taxes to be spent on the construction and operationof a transit expansion plan known as "FasTracks." The District has issued obligations in the aggregateprincipal amount of approximately $2.492 billion pursuant to the authorization of the 2004 Election.Since the Bonds are being issued to refund the Refunded Bonds (hereinafter defined) at a lower interestrate, the District will not utilize any remaining electoral authorization in connection with the issuance ofthe Bonds. The District has also committed under outstanding agreements to reserve certain amounts ofits electoral authority.

The Bonds are being issued for the purpose of refunding, paying and discharging certain of theDistrict's outstanding sales tax revenue bonds (as further described herein, the "Refunded Bonds") andfunding costs of issuance of the Bonds. See "PLAN OF FINANCE – The Refunding Escrow."

The Bonds are special and limited obligations of the District payable solely from and secured by(a) a non-exclusive first lien upon the revenues generated by the 0.4% Sales Tax Increase (the "0.4%Sales Tax Revenues"), (b) a non-exclusive subordinate lien upon the revenues received by the Districtfrom the 0.6% Sales Tax (the "0.6% Sales Tax Revenues") and (c) proceeds of the Bonds and otherlegally available moneys and investments held in certain funds created under the Indenture, and subjectonly to the provisions of the Indenture permitting application of such amounts for the purposes describedin the Indenture (collectively, the "Pledged Revenues"). The 0.4% Sales Tax Revenues and 0.6% SalesTax Revenues are collectively referred to herein as the "Sales Tax Revenues." The Bonds do not

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constitute a general obligation of the District within the meaning of any constitutional or statutory debtlimitation or provision, and are not payable in whole or in part from the proceeds of ad valorem propertytaxes. See "SECURITY FOR THE BONDS."

The District has previously pledged all of the proceeds from the imposition of the 0.6% Sales Taxto the payment of the following obligations of the District that have a lien on the 0.6% Sales TaxRevenues superior or senior to the lien thereon of the Bonds outstanding as of April 1, 2013 in theaggregate principal amount of $207,355,000: (a) the Sales Tax Revenue Refunding Bonds, Series 2007A;(b) the Sales Tax Revenue Refunding Bonds, Series 2010A; and (c) the Sales Tax Revenue RefundingBonds, Series 2013A (collectively, the "Senior Bonds"). The Senior Bonds were issued pursuant to aSales Tax Revenue Bond Resolution, adopted October 27, 1977, as amended and supplemented (the"Senior Bond Resolution"). See "DEBT STRUCTURE OF RTD" for additional information relating tothe Senior Bonds. The Board has covenanted in the Indenture that no additional securities are to beissued by the District with a pledge of and lien on the 0.6% Sales Tax Revenues that is senior to the lienthereon of the Bonds except for obligations issued by the District to refund Senior Bonds for interestexpense savings as more fully described herein. See "SECURITY FOR THE BONDS – AdditionalSecurities." The Senior Bonds and any such securities issued in the future secured by a lien on the 0.6%Sales Tax Revenues that are senior to the lien thereon of the Bonds are described herein as "Senior Debt"(and more specifically defined in Appendix E herein).

The Bonds are to be secured with a pledge of and lien on the Sales Tax Revenues on a parity withthe following obligations issued and outstanding as of April 1, 2013 in the aggregate principal amount of$1,731,130,000

1(collectively, the "Parity Bonds"): (a) Sales Tax Revenue Bonds (FasTracks Project),

Series 2006A which are the Refunded Bonds; (b) Sales Tax Revenue Refunding Bonds (FasTracksProject), Series 2007A (the "Series 2007A Bonds"); (c) Tax-Exempt Sales Tax Revenue Bonds(FasTracks Project), Series 2010A (the "Series 2010A Bonds"); (d) Taxable Sales Tax Revenue Bonds(FasTracks Project) (Direct Pay Build America Bonds), Series 2010B (the "Series 2010B Bonds");(e) Sales Tax Revenue Bond, Series 2011 (the "RTD TIFIA Bond")1; and (f) Sales Tax Revenue Bonds(FasTracks Project), Series 2012A (the "Series 2012A Bonds"). See "PLAN OF FINANCE – TheRefunding Escrow." The Series 2007A Bonds were issued pursuant to an Indenture of Trust, dated as ofMay 1, 2007, as amended, between the District and The Bank of New York Trust Company, N.A. (nowknown as The Bank of New York Mellon Trust Company, N.A.), as trustee (the "2007 Indenture"). TheSeries 2010A Bonds and the Series 2010B Bonds were issued pursuant to an Indenture of Trust, dated asof November 23, 2010 between the District and The Bank of New York Mellon Trust Company, N.A., astrustee (the "2010A-B Indenture"). The Series 2012A Bonds were issued pursuant to an Indenture ofTrust, dated as of December 20, 2012, between the District and The Bank of New York Mellon TrustCompany, N.A., as trustee (the "2012A Indenture"). The 2007 Indenture, 2010A-B Indenture and the2012A Indenture are referred to collectively herein as the "Parity Indentures." The RTD TIFIA Bondwas issued pursuant to a TIFIA Loan Agreement, dated as of December 1, 2011, between the District andthe United States Department of Transportation, an agency of the United States of America, acting by andthrough the Federal Highway Administrator (the "TIFIA Loan Agreement").

The Bank of New York Mellon Trust Company, N.A. is the successor in interest to The Bank ofNew York Trust Company, N.A., and therefore serves as trustee (the "Senior Debt Trustee") for theSenior Bonds, the four separate series of Parity Bonds (other than the RTD TIFIA Bond) and futureSenior Debt and Parity Bonds. The Indenture requires that any entity that serves as trustee for the SeniorDebt, the Parity Bonds or as trustee for any obligation payable on a parity with the Bonds will also serve

1To date, no draws have been made under the RTD TIFIA Bond. Accordingly, the principal balance outstanding and payable onthe Parity Bonds as of April 1, 2013 was $1,451,130,000. See "DEBT STRUCTURE OF RTD."

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as trustee under the Indenture, and the Senior Debt Trustee therefore has been selected to serve as Trusteefor the Bonds. The District, in accordance with the authority granted by the Act to pledge the Sales TaxRevenues to the payment of securities of the District, has assigned its rights to receive from the ColoradoDepartment of Revenue (the "Department of Revenue") payment of the 0.6% Sales Tax Revenues to theSenior Debt Trustee for the benefit of the owners of the Senior Debt. The District has also assigned to theTrustee its rights to receive payment from the Department of Revenue of the 0.4% Sales Tax Revenuesfor the benefit of the owners of the Bonds and any other securities payable from the 0.4% Sales TaxRevenues, including the Parity Bonds. In each month, after making in full all deposits or paymentsrequired by the Senior Bond Resolution, the Senior Debt Trustee is required to remit any remaining 0.6%Sales Tax Revenues to the Trustee to fund any requirements under the Parity Indentures, the Indentureand the TIFIA Loan Agreement not otherwise funded by the 0.4% Sales Tax Revenues. See "SECURITYFOR THE BONDS – Flow of Funds."

The Board of Directors of RTD (the "Board") has covenanted in the Indenture that no additionalsecurities are to be issued by the District with a pledge of and lien on the 0.6% Sales Tax Revenues or the0.4% Sales Tax Revenues that is superior or senior to the lien thereon of the Bonds, except for obligationsissued by the District to refund, in whole or in part, outstanding Senior Debt, provided that, after theissuance of such refunding bonds, the debt service payable in each Bond Year on all Senior Debt shall notexceed the debt service payable in such Bond Year on all Senior Debt outstanding prior to the issuance ofsuch refunding bonds. The Indenture also permits the District to enter into Senior Financial ProductsAgreements and Senior Credit Facility Obligations in connection with the Senior Debt. Upon satisfactionof certain conditions, the District may also, and expects to, issue additional securities with a pledge of andlien on the Sales Tax Revenues on a parity with the Bonds. See "SECURITY FOR THE BONDS –Additional Securities."

The District has previously pledged the Sales Tax Revenues on a basis subordinate to the Bondsin connection with its P3 Concession and Lease Agreement with Denver Transit Partners and with theissuance of the District’s Subordinate Lien Sales Tax Revenue Bond, Series 2010 (the "DUSPA Bond").See "DEBT STRUCTURE OF RTD" and "THE SYSTEM – FasTracks – Eagle P3 Project."

In connection with the issuance of the Bonds, the District will deliver a Continuing DisclosureAgreement in substantially the form attached as Appendix A. See "CONTINUING DISCLOSUREAGREEMENT."

This Official Statement includes financial, demographic and other information about the District.Prospective purchasers are encouraged to read this Official Statement and the appendices hereto in theirentirety. This Official Statement also contains descriptions of the Bonds, the Indenture and otherdocuments and information pertaining to the Bonds. The description of the Bonds, the Indenture andsuch other documents do not purport to be definitive or comprehensive, and all references to thosedocuments are qualified by reference to those documents. Copies of the above-mentioned documentsmay be obtained from Brenden Morgan, Manager of Debt and Investments, Regional TransportationDistrict, 1600 Blake Street, Denver, Colorado 80202 (303) 299-2313 or at the offices of the District'sfinancial advisor, First Southwest Company, 325 N. St. Paul Street, Suite 800, Dallas, Texas 75201-3852,Attention: Mike Newman (214) 953-8875.

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THE BONDS

Authority

The District is authorized by a resolution (the "Bond Resolution") adopted by the Board to enterinto the Indenture. The Bonds are issued pursuant to the Indenture, the Act and Section 11-57-201 et seq.,Colorado Revised Statutes, as amended. Pursuant to Art. X, § 20(4)(b) of the State Constitution, theBonds may be issued without voter approval for the purpose of refunding the Refunded Bonds at a lowerinterest rate. See "CONSTITUTIONAL REVENUE, SPENDING AND DEBT LIMITATIONS."

Description

The Bonds are dated, mature and bear interest and are subject to the other terms and conditions asdescribed on the cover page hereof.

Prior Redemption

Optional Redemption

The Bonds are subject to redemption prior to their respective maturity dates at the option of theDistrict on November 1, 2023, and on any date thereafter, in any order of maturity and by lot within amaturity (giving proportionate weight to Bonds in denominations larger than $5,000), at a redemptionprice equal to the Make-Whole Price. The Make-Whole Price shall be calculated by a qualified,independent entity appointed by the Chief Financial Officer.

The "Make-Whole Price" means the amount equal to the greater of the following:

(a) 100% of the Amortized Value (as defined below) of the Bonds to be redeemed, plusaccrued and unpaid interest to the date of redemption; or

(b) an aggregate amount equal to the sum of the present values of the remaining unpaidpayments of principal and interest to be paid on the Bonds to be redeemed from and including the date ofredemption to the stated maturity date of such Bonds, discounted to the date of redemption on asemiannual basis at a discount rate equal to the Applicable Tax-Exempt Municipal Bond Rate (as definedbelow) for such Bonds plus zero basis points.

For purposes of determining the Make-Whole Price, the "Amortized Value" will equal theprincipal amount of the Bonds to be redeemed multiplied by the price of such Bonds expressed as apercentage, calculated based on the industry standard method of calculating bond prices, with a deliverydate equal to the date of redemption, a maturity date equal to the stated maturity date of such Bonds and ayield equal to such Bonds' original reoffering yield as set forth on the cover of this Official Statement.

For purpose of determining the Make-Whole Price, the "Applicable Tax-Exempt MunicipalBond Rate" for such Bonds will be the "Comparable AAA General Obligations" yield curve rate for thestated maturity date of such Bonds as published by Municipal Market Data five business days prior to thedate of redemption. If no such yield curve rate is established for the applicable year, the "ComparableAAA General Obligations" yield curve rate for the two published maturities most closely correspondingto the applicable year will be determined, and the "Applicable Tax Exempt Municipal Bond Rate" will beinterpolated or extrapolated from those yield curve rates on a straight-line basis. This rate is madeavailable daily by Municipal Market Data and is available to its subscribers through its internet address:www.tm3.com.

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In calculating the Applicable Tax-Exempt Municipal Bond Rate, should Municipal Market Datano longer publish the "Comparable AAA General Obligations" yield curve rate, then the Applicable Tax-Exempt Municipal Bond Rate will equal the Consensus Scale yield curve rate for the applicable year.The Consensus Scale yield curve rate is made available daily by Municipal Market Advisors and isavailable to its subscribers through its internet address: www.mma-research.com. In the further eventMunicipal Market Advisors no longer publishes the Consensus Scale, the Applicable Tax-ExemptMunicipal Bond Rate will be determined by Morgan Stanley & Co. LLC, as the quotation agent, basedupon the rate per annum equal to the semiannual equivalent yield to maturity of those tax-exempt generalobligation bonds rated in the highest rating category by Moody's Investors Service and Standard & Poor'sRating Services with a maturity date equal to the stated maturity date of such Bonds having characteristics(other than the ratings) most comparable to those of such Bonds in the judgment of the quotation agent.In the event Morgan Stanley & Co. LLC is unable to perform such service, a primary dealer qualified toperform such service may be selected by the RTD's Chief Financial Officer. The quotation agent'sdetermination of the Applicable Tax-Exempt Municipal Bond Rate is final and binding in the absence ofmanifest error.

Notice of Redemption

Notice of the prior redemption of any Bonds shall be given by the Trustee in the name of theDistrict by mailing a copy of the redemption notice by certified or first-class postage prepaid mail, notmore than 60 nor less than 30 days prior to the redemption date to the registered owners of the Bonds tobe redeemed at their addresses as shown on the registration records kept by the Trustee, or in the eventthat the Bonds to be redeemed are registered in the name of the Securities Depository, such notice may, inthe alternative, be given by electronic means in accordance with the requirements of the securitiesdepository. Failure to give such notice by mailing to the registered owner of any Bond or any defecttherein shall not affect the validity of the proceedings for the redemption of any other Bonds.

Any notice of redemption may contain a statement that the redemption is conditioned upon thereceipt of funds on or before the redemption date sufficient to pay the principal of, interest on and anyredemption premium due on the Bonds so called for redemption, and that if such funds are not available,such redemption shall be cancelled by written notice to the registered owners of the Bonds called forredemption in the same manner as the original redemption notice was mailed.

If the Depository Trust Company ("DTC") or its nominee is the registered owner of anyBonds to be redeemed, notice of redemption will only be given to DTC or its nominee as theregistered owner of such Bond. Any failure on the part of DTC or failure on the part of a nomineeof a Beneficial Owner (having received notice from a DTC Participant or otherwise) to notify theBeneficial Owner of any Bond to be redeemed shall not affect the validity of the redemption of suchBond. See "Book-Entry Form" under this caption.

Debt Service Requirements

The Debt Service Requirements of the Bonds, the Parity Bonds (taking into account theanticipated refunding of the Refunded Bonds) and the Senior Bonds are set forth in the following table:

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20

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244

,842

$19

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1,39

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--$

4,59

2,7

12$

4,59

2,7

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23

,954

,106

$4

5,1

98,9

482

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28

,767

,87

15

9,7

38,4

63

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10

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,46

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63

69

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59

8,5

26,7

96

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8,7

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-6-

-7-

Payment and Registration

The Bonds are issuable in fully registered form and are initially to be registered in the name ofCede & Co., as nominee for DTC, as securities depository for the Bonds (the "Securities Depository").Purchases by beneficial owners ("Beneficial Owners") of the Bonds are to be made in book-entry form inthe principal amount of $5,000 or any integral multiple thereof. Principal of and final installment ofinterest on the Bonds are payable upon presentation and surrender thereof to, and all other interest ispayable by, the Paying Agent, by check or draft mailed to the registered owners at the addressesappearing on the registration records of the Paying Agent on the 15th day of the calendar month nextpreceding such interest payment date. The Paying Agent may make payments of interest on any Bond bysuch alternative means as may be mutually agreed to by the Paying Agent and the registered owner ofsuch Bond. Notwithstanding the foregoing, so long as the Bonds are registered in the name of DTC or itsnominee, payments to Beneficial Owners are to be made as described in "Book-Entry Form" under thiscaption. The Trustee is acting as Paying Agent under the Indenture.

Neither the District nor the Trustee has any responsibility or obligation for the payment to theparticipants of the Securities Depository ("Participants"), any Beneficial Owner or any other person ofthe principal of or interest on the Bonds.

Neither the District nor the Trustee has any responsibility or obligation with respect to theaccuracy of the records of the Securities Depository or its Participants regarding any ownership interest inthe Bonds or the delivery to any Participant, Beneficial Owner or any other person of any notice withrespect to the Bonds.

Transfer and Exchange

The Bonds are transferable only upon the registration books of the District, which are to be keptfor such purposes at the principal corporate trust office of the Registrar, by the registered owner or his,her or its duly authorized attorney. The registered owner of any Bond or Bonds may also exchange suchBond or Bonds for another Bond or Bonds of authorized denominations. The Registrar may imposereasonable charges in connection with such exchanges and transfers of Bonds, which charges (as well asany tax or other governmental charge required to be paid with respect to such exchange or transfer) are tobe paid by the registered owner requesting such exchange or transfer. In the case of every transfer orexchange, the Registrar is to authenticate and deliver to the new registered owner a new Bond or Bonds ofthe same aggregate principal amount, maturing in the same year and bearing interest at the same perannum interest rate as the Bond or Bonds surrendered. Notwithstanding the foregoing, so long as theBonds are registered in the name of DTC or its nominee, transfers by Beneficial Owners are to be made asdescribed in "Book-Entry Form" under this caption. The Trustee is acting as Registrar under theIndenture.

Neither the District nor the Trustee has any responsibility or obligation with respect to theaccuracy of the records of the Securities Depository or its Participants regarding any ownership interest inthe Bonds or transfers thereof.

Defeasance and Discharge

The Indenture provides the District with the right to discharge the pledge and lien created by theIndenture with respect to any Bonds by depositing in an escrow fund with the Trustee or other depositorysufficient moneys or Federal Securities which are direct obligations of, or obligations the principal of andinterest on which are unconditionally guaranteed by, the United States (or ownership interests in any ofthe foregoing) and which are not callable prior to their scheduled maturities by the issuer thereof, to pay

-8-

when due the Debt Service Requirements on such Bonds at the maturity or redemption thereof. SeeAppendix E – "SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – Defeasance."

Book-Entry Form

The following description of the procedures and record keeping with respect to beneficialownership interests in the Bonds, payment of interest and other payments on the Bonds, confirmation andtransfer of beneficial ownership interests in the Bonds and other related transactions is based solely oninformation furnished by DTC.

DTC will act as securities depository for the Bonds. The Bonds are to be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such othername as may be requested by an authorized representative of DTC. One fully registered Bond certificateis to be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity,and is to be deposited with DTC.

DTC, the world's largest depository, is a limited-purpose trust company organized under the NewYork Banking Law, a "banking organization" within the meaning of the New York Banking Law, amember of the Federal Reserve System, a "clearing corporation" within the meaning of the New YorkUniform Commercial Code and a "clearing agency" registered pursuant to the provisions of Section 17Aof the Securities Exchange Act of 1934, as amended. DTC holds and provides asset servicing for over 3.5million issues of U.S. and non U.S. equity, corporate and municipal debt issues, and money marketinstruments (from over 100 countries) that DTC's Participants ("Direct Participants") deposit with DTC.DTC also facilitates the post trade settlement among Direct Participants of sales and other securitiestransactions, in deposited securities, through electronic computerized book-entry transfers and pledgesbetween Participants' accounts. This eliminates the need for physical movement of securities certificates.Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies,clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of theDepository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, NationalSecurities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registeredclearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC systemis also available to others, such as both U.S. and non-U.S. securities brokers and dealers, banks, trustcompanies, and clearing corporations that clear through or maintain a custodial relationship with a DirectParticipant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating ofAA+. The DTC Rules applicable to its Participants are on file with the Securities and ExchangeCommission. More information about DTC can be found at www.dtcc.com and www.dtc.org. TheDistrict undertakes no responsibility for and makes no representations as to the accuracy or thecompleteness of the content of such material contained in such websites as described in the precedingsentence, including, but not limited to, updates of such information or links to other internet sites accessedthrough the aforementioned websites.

Purchases of Bonds under the DTC system must be made by or through Direct Participants,which are to receive a credit for the Bonds on DTC's records. The ownership interest of each BeneficialOwner is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners arenot to receive written confirmation from DTC of their purchases. Beneficial Owners are, however,expected to receive written confirmations providing details of the transactions, as well as periodicstatements of their holdings, from the Direct or Indirect Participants through which the Beneficial Ownersentered into the transactions. Transfers of ownership interests in the Bonds are to be accomplished byentries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners.Beneficial Owners are not to receive certificates representing their ownership interests in Bonds, except inthe event that use of the book-entry system for the Bonds is discontinued.

-9-

To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC areregistered in the name of DTC's partnership nominee, Cede & Co. or such other name as may berequested by an authorized representative of DTC. The deposit of Bonds with DTC and their registrationin the name of Cede & Co. or such other nominee do not affect any change in beneficial ownership. DTChas no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity ofthe Direct Participants to whose accounts such Bonds are credited, which may or may not be theBeneficial Owners. The Direct and Indirect Participants remain responsible for keeping account of theirholdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by DirectParticipants to Indirect Participants, and by Direct Participants and Indirect Participants to BeneficialOwners are governed by arrangements among them, subject to any statutory or regulatory requirements asmay be in effect from time to time. Beneficial Owners of the Bonds may wish to take certain steps toaugment transmission to them of notices of significant events with respect to the Bonds, such asredemptions, tenders, defaults, and proposed amendments to the underlying documents. For example,Beneficial Owners of the Bonds may wish to ascertain that the nominee holding the Bonds for theirbenefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, BeneficialOwners may wish to provide their names and addresses to the Trustee and request that copies of noticesbe provided directly to them.

Redemption notices are to be sent to DTC. If less than all of the Bonds within an issue are beingredeemed, DTC's practice is to determine by lot the amount of interest of each Direct Participant to beredeemed.

Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect toBonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under itsusual procedures, DTC mails an omnibus proxy to the District as soon as possible after the record date.The omnibus proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whoseaccounts the Bonds are credited on the record date (identified in a listing attached to the omnibus proxy).

Principal, interest and redemption payments on the Bonds are to be made to Cede & Co. or suchother nominee as may be requested by an authorized representative of DTC. DTC's practice is to creditDirect Participants' accounts upon DTC's receipt of funds and corresponding detail information from theDistrict or the Trustee on payment date in accordance with their respective holdings shown on DTC'srecords. Payments by Participants to Beneficial Owners are governed by standing instructions andcustomary practices, as is the case with securities held for the accounts of customers in bearer form orregistered in "street name" and are the responsibility of such Participants and not of DTC, its nominee, theTrustee or the District, subject to any statutory or regulatory requirements as may be in effect from timeto time. Payment of principal, interest and redemption payments to Cede & Co. (or such other nomineeas may be requested by an authorized representative of DTC) is the responsibility of the District or theTrustee, disbursement of such payments to Direct Participants is the responsibility of DTC, anddisbursement of such payments to the Beneficial Owners is the responsibility of Direct and IndirectParticipants.

DTC may discontinue providing its services as securities depository with respect to the Bonds atany time by giving reasonable notice to the District or the Trustee. Under such circumstances, in theevent that a successor securities depository is not obtained, the Bonds are required to be printed anddelivered.

-10-

The District may decide to discontinue use of the system of book-entry-only transfers throughDTC (or a successor securities depository). In that event, certificates will be printed and delivered toDTC.

The information in this section concerning DTC and DTC's book-entry system has beenobtained from sources that the District believes to be reliable, but neither the District nor theUnderwriters take any responsibility for the accuracy thereof.

SECURITY FOR THE BONDS

The Bonds are special and limited obligations of the District payable solely from and secured bythe Pledged Revenues. The Bonds are not general obligations of RTD. The Bonds are not payable inwhole or in part from the proceeds of general property taxes, nor is the full faith and credit of RTDpledged to pay the Bonds. See Appendix E – "SUMMARY OF CERTAIN PROVISIONS OF THEINDENTURE."

Flow of Funds

The Indenture provides for payments, in the sequence described below, into and out of thefollowing funds held by the Trustee and for the stated purposes.

0.4% Sales Tax Revenues

All amounts received by the Trustee from the 0.4% Sales Tax Revenues are to be deposited to the0.4% Sales Tax Increase Fund. Amounts deposited in the 0.4% Sales Tax Increase Fund are to be appliedeach month by the Trustee to the following purposes in the following order of priority:

Bond Fund. First, from moneys on deposit in the 0.4% Sales Tax Increase Fund, there isto be credited to the Bond Fund, concurrently on a pari passu basis with any payments required to bemade with respect to any parity obligations (including the Parity Bonds), the following amounts:

Interest Payments. Commencing with the month immediately succeeding thedelivery of the Bonds, an amount in equal monthly installments necessary, together with any othermoneys from time to time available therefor from whatever source, to pay the next installment of interestdue on the Bonds then outstanding.

Principal Payments. Commencing with the month immediately succeeding thedelivery of the Bonds, or commencing one year next prior to the first principal payment date of theBonds, whichever commencement date is later, an amount in equal monthly installments necessary,together with any other moneys from time to time available therefor from whatever source, to pay thenext installment of principal (whether at maturity or on a redemption date) due on the Bonds thenoutstanding.

Moneys on deposit in the Bond Fund secure only the payment of the Bonds.

Parity Bond Reserve Funds. Second, from any moneys remaining in the 0.4% Sales TaxIncrease Fund there shall be made any payments required to be made pursuant to any reserve fundsestablished in connection with any parity obligations and concurrently with any repayment or similarobligations payable to any surety provider issuing any reserve fund insurance policy with respect to anyParity Bonds.

-11-

Rebate Fund. Third, and concurrently with any payments required to be made pursuantto any rebate funds established for any parity obligations, from any moneys remaining on deposit in the0.4% Sales Tax Increase Fund, there shall be credited to the Rebate Fund the amount required, if any,until the amount on deposit in the Rebate Fund satisfies the requirements of the Indenture.

Interest on Reserve Fund Insurance Policy Draws on Parity Bonds. Fourth, from anymoneys remaining on deposit in the 0.4% Sales Tax Increase Fund, there shall be paid to any suretyprovider issuing any reserve fund insurance policy with respect to any Parity Bonds, interest on anyamounts drawn under any such reserve fund insurance policy until such interest has been paid in full.

Payment of Subordinate Lien Obligations. Fifth, and subject to the provisions of theIndenture, any moneys remaining on deposit in the 0.4% Sales Tax Increase Fund after the foregoingpayments have been made may be used by the District for the payment of Subordinate Lien Obligations,including reasonable reserves for such Subordinate Lien Obligations and for rebate of amounts to theUnited States Treasury with respect to such Subordinate Lien Obligations, and any Subordinate CreditFacility Obligations and any payments on Subordinate Financial Products Agreements which have a lienon Pledged Revenues subordinate and junior to the lien thereon of the Bonds.

Remaining Revenues. In each month, after making in full the deposits or paymentsrequired from moneys on deposit in the 0.4% Sales Tax Increase Fund, any amounts remaining on depositin the 0.4% Sales Tax Increase Fund are to be remitted by the Trustee to the District free and clear of thelien of the Indenture, unless otherwise directed by the District in writing. See "DEBT STRUCTURE OFRTD" for a description of outstanding and anticipated debt obligations of RTD.


All amounts received by the Senior Debt Trustee from the 0.6% Sales Tax Revenues are to beapplied first as required by the Senior Bond Resolution so long as any Senior Debt remains outstanding.In each month, after making in full all deposits or payments required by the Senior Bond Resolution, anyremaining 0.6% Sales Tax Revenues are to be remitted by the Senior Debt Trustee to the Trustee, free andclear of the lien of the Senior Bond Resolution, for deposit by the Trustee into the 0.6% Sales Tax Fund.Amounts on deposit in the 0.6% Sales Tax Fund are to be applied each month by the Trustee for thefollowing purposes in the following order of priority:

Insufficiency of Moneys on Deposit in 0.4% Sales Tax Increase Fund. First, to the extentthat moneys on deposit in the 0.4% Sales Tax Increase Fund are insufficient in any month to make any ofthe deposits or payments required to be made as set forth above, any moneys on deposit in the 0.6% SalesTax Fund are to be used in such month to make such deposits or payments in the order of priority set forthin "0.4% Sales Tax Revenues" under this caption.

Remaining Revenues. In each month, after making in full the deposits or paymentsrequired by the Indenture from moneys on deposit in the 0.6% Sales Tax Fund, any amounts remaining ondeposit in the 0.6% Sales Tax Fund are to be remitted by the Trustee to the District free and clear of thelien of the Indenture, unless otherwise directed by the District in writing. See "DEBT STRUCTURE OFRTD" for a description of outstanding and anticipated debt obligations of RTD.

The flow of funds under the Indenture is illustrated on the following page:

-12-

Bond Fund

Pay principal and intereston Parity Bonds and Bonds

Parity Bond Reserve Funds

Maintain reserve requirements forcertain Parity Bonds (The Bonds will

not be secured by a reserve fund.)

Rebate Fund

Pay rebate requirements (if any)

Reserve Surety Provider

Pay interest on draws on reservefund insurance policies (if any)

Subordinate Lien Obligations

Pay subordinate lien obligations

RTD

Apply to any legal purpose

Bond Service Account

Pay principal and intereston Senior Debt

Bond Reserve Account

Maintain Senior Debt reserve requirement

Rebate Account

Pay rebate requirement (if any)

BONDS, PARITY BONDS ANDOBLIGATIONS


SENIOR DEBT


RemainingRevenues Reserve Surety Provider

Pay interest on draws on reserve fundinsurance policies (if any)

-13-

Debt Service Coverage

Based upon the Debt Service Requirements of the Senior Bonds set forth in Table I, theCombined Maximum Annual Debt Service Requirements on the Senior Bonds is $28.769 million (inFiscal Year 2015). Based upon the Debt Service Requirements of the Bonds and Parity Bonds set forth inTable I, the Combined Maximum Annual Debt Service Requirements on the Bonds and Parity Bonds is$160.506 million (in Fiscal Year 2031) and the combined average annual Debt Service Requirements onthe Bonds and Parity Bonds is $102.168 million. Based upon the Debt Service Requirements of theSenior Bonds, the Bonds and the Parity Bonds set forth in Table I, the Combined Maximum Annual DebtService Requirements on the Senior Bonds, the Bonds and the Parity Bonds is $160.506 million (in FiscalYear 2031).

The District collected annual 0.4% Sales Tax Revenues and annual 0.6% Sales Tax Revenues of$179.915 million and $269.872 million, respectively, for 2012, totaling $449.787 million.

If the residual amount ($241.103 million) obtained by subtracting the Combined MaximumAnnual Debt Service Requirements of the Senior Bonds ($28.769 million) from the 2012 annual 0.6%Sales Tax Revenues ($269.872 million) is added to the 2012 annual 0.4% Sales Tax Revenues ($179.915million), the resulting approximation of Pledged Revenues in the amount of $421.018 million would yielda debt service coverage of the Combined Maximum Annual Debt Service Requirements on the Bonds andParity Bonds ($160.506 million) of 2.62x and a debt service coverage of the combined average annualDebt Service Requirements on the Bonds and Parity Bonds ($102.168 million) of 4.12x.

Based on the combined 0.6% Sales Tax Revenues and 0.4% Sales Tax Revenues collected for2012 of approximately $449.787 million, the District's combined maximum annual debt service coverageon the Senior Bonds, the Parity Bonds and the Bonds as set forth in Table I ($160.506 million) would be2.80x. However, as discussed elsewhere in this Official Statement, the Senior Bonds are not secured bythe 0.4% Sales Tax Revenues.

Based solely on the 0.4% Sales Tax Revenues collected for 2012 ($179.915 million), theDistrict's combined maximum annual debt service coverage on the Bonds and Parity Bonds ($160.506million) would be 1.12x and its combined average annual debt service coverage on the Bonds and ParityBonds ($102.168 million) would be 1.76x.

The following table sets forth historical debt service coverage on the Senior Bonds having a lienon the 0.6% Sales Tax that is senior to the lien thereon of the Bonds, the amount of Pledged Revenuesgenerated for the past five years and pro forma historical debt service coverage on the Bonds and ParityBonds based on estimated Combined Maximum Annual Debt Service Requirements on the Bonds andParity Bonds:

[Remainder of page left blank intentionally]

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TABLE IIHistorical and Pro Forma Debt Service Coverage and

Available Pledged Revenues(In Thousands of Dollars)

Year

0.6%Sales TaxRevenues

Total SeniorObligationsDebt Service

Requirements

SeniorObligationsDebt Service

Coverage

Remaining 0.6%Sales Tax

Revenues(1)

0.4%Sales TaxRevenues

TotalPledged

Revenues

Bonds and ParityBonds Combined

Maximum AnnualDebt ServiceRequirements(2)

Bonds and ParityBonds Pro Forma

Debt ServiceCoverage

2008 $247,694 $37,085 6.7x $210,609 $165,130 $375,739 160,506 2.34x2009 222,843 35,342 6.3 187,501 148,562 336,063 160,506 2.092010 238,529 34,738 6.9 203,791 159,020 362,811 160,506 2.262011 249,108 35,444 7.0 213,664 166,072 379,736 160,506 2.372012(3) 269,872 35,443 7.6 234,429 179,915 414,344 160,506 2.58

____________(1)

Such remaining amounts are required to be used to pay debt service on the Bonds and any Parity Bonds if the 0.4% Sales Tax Revenuesare not sufficient in a particular year. See "Flow of Funds" under this caption.

(2)See Table I.

(3)Based on unaudited financial information of the District.

Source: District 2008-2011 Comprehensive Annual Financial Reports; The District's unaudited financial records.

The Board has covenanted in the Indenture that no additional securities will be issued by theDistrict with a pledge of and lien on the 0.6% Sales Tax Revenues or the 0.4% Sales Tax Revenues that issuperior or senior to the lien thereon of the Bonds, except for obligations issued by the District to refundSenior Bonds, provided that after the issuance of such refunding bonds, the debt service payable on allSenior Bonds outstanding after the issuance of such refunding bonds in each Bond Year shall not exceedthe debt service payable on Senior Bonds outstanding prior to the issuance of such refunding bonds ineach Bond Year. The Indenture also permits the District to enter into Senior Financial ProductsAgreements and Senior Credit Facility Obligations in connection with the Senior Bonds. As discussedelsewhere in this Official Statement, any such refunding Senior Bonds to be issued by the District will besecured by the 0.6% Sales Tax Revenues and will not be secured by the 0.4% Sales Tax Revenues.Except for refunding Senior Bonds as described in this paragraph, no securities may be issued by theDistrict that have a lien on the 0.6% Sales Tax Revenues that is superior or senior to the lien thereon ofthe Bonds.

Additional Securities

The Indenture permits the issuance, upon certain conditions, of securities having a lien upon all ora portion of the Pledged Revenues on a parity with that of the Bonds (the "Additional Parity Bonds"),provided that all of the following conditions are met and a certificate signed by the District Representativeis received by the Trustee to the effect that: (a) RTD is not in default under any provisions of the SeniorBond Resolution, the Indenture or other resolution or indenture relating to Parity Bonds as of the date ofissuance of the proposed Additional Parity Bonds; and (b) during 12 consecutive calendar months of the18 calendar months next preceding the authentication and delivery of the proposed Additional ParityBonds, the Sales Tax Revenues, including any estimated revenues which would have been receivedduring said 12-month period from additional Sales Taxes imposed during said 12-month period, andcertain investment proceeds were at least equal to 200% of the Combined Maximum Annual Debt ServiceRequirements of the Senior Bonds, the Bonds, the outstanding Parity Bonds, and the proposed AdditionalParity Bonds. The Indenture sets forth the mechanics and assumptions to be applied in the case ofvariable rate bonds and Financial Products Agreements for purposes of the computations required prior to

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the issuance of Additional Parity Bonds. See Appendix E – "SUMMARY OF CERTAIN PROVISIONSOF THE INDENTURE." The District expects to issue Additional Parity Bonds in late 2013 as describedin "DEBT STRUCTURE OF RTD."

The District may enter into Parity Credit Facility Obligations and Parity Financial ProductsAgreements relating to the Bonds, any Parity Bonds and any Additional Parity Bonds without satisfyingthe above conditions and solely as is determined by the Board to be in the best interest of the District andin accordance with the provisions of the Act and the Constitution and laws of the State; provided that notermination payment required under any such Parity Financial Products Agreements shall be secured by alien on the Pledged Revenues that is senior to or on a parity with the lien thereon of the Bonds.

The Indenture also provides that the District may issue Additional Parity Bonds for the purpose ofrefunding less than all of the Bonds and other Parity Bonds without satisfying the conditions set forth insubparagraph (b) set forth on the preceding page, provided that the debt service payable on all Bonds andother Parity Bonds outstanding after the issuance of such Additional Parity Bonds in each Bond Yeardoes not exceed the debt service payable on all Bonds and other Parity Bonds outstanding prior to theissuance of such Additional Parity Bonds in each Bond Year. See Appendix E – "SUMMARY OFCERTAIN PROVISIONS OF THE INDENTURE."

While the District has agreed in the Indenture not to issue additional bonds with a lien on theSales Tax Revenues superior to the Bonds (except for bonds issued to refund Senior Bonds as describedherein), the District is permitted under the Indenture to enter into Senior Credit Obligations and SeniorFinancial Products Agreements with a lien on the 0.6% Sales Tax Revenues superior to the lien of theBonds so long as such obligations are entered into in connection with the Senior Bonds. The SeniorBonds and any Senior Credit Obligations or Senior Financial Products Agreements are not secured by orpayable from the 0.4% Sales Tax Revenues.

The District's authority to issue securities having a lien upon all or a portion of the PledgedRevenues is also restricted by the provisions of (a) the TIFIA Loan Agreement, (b) the Concession andLease Agreement dated as of July 9, 2010, between Denver Transit Partners, LLC, and the District and(c) the DUSPA/RTD Funding Agreement, dated as of February 1, 2010, between the Denver UnionStation Project Authority and the District.

Events of Default

The following events each constitute an Event of Default under the Indenture:

1. if payment of the principal of any Bond is not made when it becomes due and payable atmaturity or upon call for redemption;

2. if payment of interest on any Bond is not made when it becomes due and payable;

3. default in the performance or observance of any other covenants, agreements orconditions on the part of the District set forth in the Indenture (other than the covenant relating to thecontinuing disclosure agreement), or the Bonds and failure to remedy the same within 30 days after noticethereof pursuant to the Indenture; or

4. the District files a petition or answer seeking reorganization or arrangement under theUnited States Bankruptcy Code or any other applicable law of the United States of America, or if a courtof competent jurisdiction approves a petition, filed with or without the consent of the District, seekingreorganization of the District under the United States Bankruptcy Code or any other applicable law of the

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United States, or if, under the provisions of any other law for the relief or aid of debtors, any court ofcompetent jurisdiction shall assume custody or control of the District, or of any of the Pledged Revenuesand any such petition filed against the District or order or decree is not dismissed, stayed or otherwisenullified within sixty days after such action is taken.

No default in the performance or observance of any covenants, agreements or conditions by theDistrict as set forth in paragraph (3) above will constitute an Event of Default until actual notice of thedefault by registered or certified mail is given to the District by the Trustee or by the Owners of not lessthan 25% in aggregate principal amount of all outstanding Bonds, and the District has had 30 days afterreceipt of the notice to correct the default or cause the default to be corrected, and has not corrected thedefault or caused the default to be corrected within the applicable period; provided, however, if thedefault cannot be corrected within the applicable period, it will not constitute an Event of Default if theDistrict institutes corrective action within the applicable period and diligently pursues it until the defaultis corrected.

Bondholders' Remedies

The Indenture provides for specific remedies to be exercised by the Trustee, in its discretion, orupon the written request of the owners of not less than 25% in aggregate principal amount of the Bondsoutstanding. The debt service requirements of the Bonds may not be accelerated upon the occurrence ofan Event of Default or for any other reason. Neither the Trustee nor the bondholders may foreclose onRTD property or sell such property in order to pay the principal of or interest on the Bonds. Upon theoccurrence of an Event of Default under the Indenture, the rights and remedies of the owners of the Bondswill be subject to the superior rights and priority of the owners of any Senior Bonds then outstanding withrespect to the 0.6% Sales Tax Revenues if such Event of Default also constitutes an event of default underthe Senior Bond Resolution. See Appendix E – "SUMMARY OF CERTAIN PROVISIONS OF THEINDENTURE."

In addition, the opinion of Bond Counsel is expected to state that the obligations of the Districtpursuant to the Bonds and the Bond Resolution are subject to the application of equitable principles, tothe reasonable exercise in the future by the State of Colorado and its governmental bodies of the policepower inherent in the sovereignty of the State of Colorado, and to the exercise by the United States ofAmerica of the powers delegated to it by the Federal Constitution, including without limitation,bankruptcy powers. See "LEGAL MATTERS" and Appendix D – "FORM OF BOND COUNSELOPINION." Bankruptcy or other legal proceedings, if initiated, could subject the owners of the Bonds tojudicial discretion and interpretation of their rights in bankruptcy or otherwise, and consequently mayentail risks of delay, limitation, or modification of their rights.

RISK FACTORS

THE PURCHASE OF THE BONDS IS SUBJECT TO CERTAIN RISKS. EACHPROSPECTIVE INVESTOR IN THE BONDS IS ENCOURAGED TO READ THIS OFFICIALSTATEMENT IN ITS ENTIRETY, INCLUDING ALL APPENDICES HERETO. PARTICULARATTENTION SHOULD BE GIVEN TO THE FACTORS DESCRIBED BELOW, WHICH, AMONGOTHERS, COULD AFFECT THE PAYMENT OF PRINCIPAL OF AND INTEREST ON THE BONDSAND WHICH COULD ALSO AFFECT THE MARKET PRICE OF THE BONDS TO AN EXTENTTHAT CANNOT BE DETERMINED.

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Special and Limited Obligations

The Bonds are special and limited obligations of the District payable solely from and securedsolely by the Pledged Revenues. Therefore, the payment of the principal of and interest on the Bonds isdependent on the District's receipt of its Sales Tax Revenues. Bondholders may not look to any generalor other revenues of the District, including without limitation, the proceeds of ad valorem taxes, for thepayment of the principal of and interest on the Bonds, and the Bonds do not constitute general obligationsof the District.

Economic Conditions

Collection of Sales Tax Revenues is subject to the elastic nature of consumer spending. Thiscauses Sales Tax Revenues to increase along with the higher prices brought about by inflation, but alsocauses receipts to be vulnerable to adverse economic conditions and reduced consumer confidence, whichmay result in reduced consumer spending. The United States is currently experiencing a sluggishrecovery to a severe recession, with modest improvements in household spending and employment rates.Although Colorado employment rates and personal income levels have generally exceeded thoseexperienced on a national basis, retail sales in Colorado and the Denver metropolitan area haveexperienced only small gains during the post-recession recovery. Future drops in Sales Tax Revenuesresulting from a reduction in consumer spending levels, deflation, or a reduction in rate of growth, wouldnegatively affect the level of debt service coverage. See Appendix C – "AN ECONOMIC ANDDEMOGRAPHIC OVERVIEW OF THE DENVER METROPOLITAN AREA."

Effect of Internet Sales

The future level of taxable retail sales that occurs within the District may be affected by the levelof internet sales (also known as e-commerce). Such e-commerce vendors may compete with local retailbusinesses and may reduce the taxable retail sales which otherwise would occur within the District.Currently, taxes are often not collected from the vendor in connection with such internet sales and theDistrict is not in a position to enforce and collect the use tax in such situations. The ultimate impact ofinternet sales on the level of taxable retail sales which occurs within the District cannot be determined atthis time, but such impact could be material.

Powers Subject to Change by Legislature or by Initiative

RTD is an entity created by statute. See "RTD – Organization." All of RTD's powers arestatutorily-derived and accordingly may be changed by amendment to the Act approved by the StateGeneral Assembly or initiated by the voters. In particular, the transactions upon which RTD may levy itssales tax are limited by statute, with certain exceptions, to those transactions upon which the Stateimposes its sales tax. The State General Assembly has in the past created new exemptions from the State-imposed sales tax reducing RTD's sales tax base and may do so again in the future. See "RTD – Powers."

No Secondary Market

There can be no assurance that a secondary market for the Bonds will be established ormaintained. Accordingly, each purchaser should expect to bear the risk of the investment represented bythe Bonds to maturity.

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PLAN OF FINANCE

General

The District is undertaking a refunding and defeasance of the District's outstanding Sales TaxRevenue Bonds (FasTracks Project), Series 2006A in the total aggregate principal amount of$235,735,000 in order to realize economic savings. In connection with delivery of the Bonds, certainfunds currently on deposit in the Bond Fund and Reserve Fund relating to the Refunded Bonds will bereleased and deposited to the 2013A Escrow Account (as hereinafter defined). The Bonds will not besecured by a Reserve Fund.

Sources and Uses of Funds

The following table sets forth the estimated sources and uses of funds in connection with theexecution and delivery of the Bonds:

TABLE IIISources and Uses of Funds

SourcesPrincipal Amount of Bonds .............................................................. $204,820,000.00Prior Reserve Fund (Refunded Bonds)............................................. 21,031,986.52Prior Bond Fund (Refunded Bonds) ................................................. 989,945.25Original Issue Premium (1) ................................................................ 45,889,129.85

Total $272,731,061.62

Uses2013A Escrow Account(2) ................................................................. $271,488,893.30Costs of Issuance(3) ........................................................................... 1,242,168.32

Total $272,731,061.62____________(1) See "TAX MATTERS."(2) See "The Refunding Escrow" under this caption.(3) Includes Underwriters' discount. See "UNDERWRITING."

The Refunding Escrow

The Bond Resolution authorizes the execution and delivery of an Escrow Agreement, dated as ofthe date of delivery of the Bonds (the "Escrow Agreement"), between the District and The Bank of NewYork Mellon Trust Company, N.A., as escrow agent (the "Escrow Agent"). The Escrow Agreementdirects that net proceeds of the Bonds and moneys released from the Reserve Fund and Bond Fundrelating to the Refunded Bonds be deposited in an Escrow Account established under the EscrowAgreement (the "2013A Escrow Account") in an amount sufficient, together with any earnings on suchdeposit, to pay the principal of, interest on and redemption premium, if any, due in connection with theprior redemption of the Refunded Bonds. The Refunded Bonds consist of all of the District's outstandingSales Tax Revenue Bonds (FasTracks Project), Series 2006A in the total aggregate principal amount of$235,735,000. The Refunded Bonds are to be redeemed on November 1, 2016. An independent certifiedpublic accountant will verify that the deposit made to the 2013A Escrow Account, together with theearnings thereon, will be sufficient to pay all principal, interest and redemption premium, if any, on suchRefunded Bonds as the same become due upon prior redemption. See "VERIFICATION OF CERTAINCALCULATIONS."

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Amounts on deposit in the 2013A Escrow Account may not be used to pay debt servicerequirements on the Bonds.

THE SALES TAX

Pursuant to the Act, in September 1973, District voters authorized RTD to issue bonds for thepurpose of developing a public multi-modal mass transportation system for RTD, such bonds to bepayable from District-wide sales taxes imposed at the rate of 0.5% upon every taxable transaction.Effective May 1, 1983, after the State General Assembly eliminated food and utilities from the sales taxbase of RTD, the Act was amended to empower RTD to impose the sales tax at the rate of 0.6%throughout the District. At the 2004 Election, District voters approved a ballot measure authorizing RTDto increase the rate of the Sales Tax (as defined below) by 0.4%, up to a total of 1.0% in connection withfinancing FasTracks.

The sales tax, which has been imposed and collected in the District since January 1, 1974, isimposed upon every transaction or other incident with respect to which the State imposes a sales tax,except sales tax levied on certain transactions including vending machine sale of food, purchase ofmachinery or machine tools and sales of low-emitting motor vehicles, power sources for such motorvehicles, or parts used for converting such power sources. Reference is made to Article 26 of Title 39,Colorado Revised Statutes, as amended (the "Sales Tax Act") for a complete description of thetransactions subject to or exempt from the State sales tax. The sales tax must be collected at the time ofthe transaction. One exception to the sales tax being collected at the time of sale applies to the purchaseof used automobiles from private parties. If the buyer and seller both live within the District, the sales taxis collected by the county motor vehicle registrar in the county in which the buyer resides at the time thatthe vehicle is registered and remitted to RTD. If one or more parties live outside the District, no sales taxis collected, but a use tax will be collected by the County motor vehicle registrar in the County in whichthe buyer resides at the time the vehicle is registered and remitted to RTD. For discussion about theboundaries of the District in which the Sales Tax is levied, see "RTD – Organization."

In 1989, the Colorado Supreme Court held that the Act implicitly authorized RTD to impose ause tax. Under Colorado law, a use tax is considered supplementary to, and not separate from, a sales tax.Reference is made to the Sales Tax Act for a complete description of the transactions subject to or exemptfrom the State use tax. The components of use tax liability to RTD are (1) tangible personal property (2)purchased at retail (3) without prior payment of sales or use tax and (4) use or consumption in the District.Beginning in April 1989, the State Department of Revenue began collecting a use tax for RTD. The salestax and use tax imposed by RTD are collectively referred to herein as the "Sales Tax."

Legislation has recently been adopted in the Colorado legislature (awaiting signature by theGovernor) to conform the District's sales and use tax base to be the same as the State's sale and use taxbase, effective January 1, 2014. The District does not expect this legislation, if signed, will result in amaterial impact on Sales Tax Revenues.

Manner of Collection of the Sales Tax

The Sales Tax. The collection, administration and enforcement of the District's Sales Tax areperformed by the Executive Director of the Department of Revenue (the "Executive Director") in thesame manner as the collection, administration and enforcement of the State sales tax. Legislation enactedin 1987 requires the Executive Director to charge RTD for the cost of collection, administration andenforcement after crediting RTD with interest earnings on amounts collected. For the 12-month periodended December 31, 2012, RTD's net cost of collections was approximately $484,863.

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Any person engaged in the business of selling at retail must obtain a license therefor from theState. The State license is in force and effect until December 31 of the year following the year in which itis issued. Each individual vendor in the District is liable for the amount of tax due on all taxable salesmade by him. Before the twentieth day of each month, the vendor, if reporting monthly, must make areturn and remit the amount due for the preceding calendar month to the Executive Director. Some smallbusinesses are permitted to remit sales tax collections quarterly. The Executive Director may extend thetime for making a return and paying the taxes due. The vendor is entitled to withhold an amount equal to2.2% (increasing to 3.3% in 2014) of the total amount to be remitted to the Executive Director eachmonth in order to cover the vendor's expenses. If any vendor is delinquent in remitting the tax, other thanin unusual circumstances shown to the satisfaction of the Executive Director, the vendor will not beallowed to retain any amounts to cover the vendor's expenses.

The Executive Director is required to furnish the District a monthly listing of all returns filed byretailers in the District. The District must notify the Executive Director within 90 days of any retailersomitted from the listing or thereafter will be precluded from making any further claims based upon suchomission. The District receives sales taxes so collected in the form of monthly distributions made to theDistrict by the Executive Director. Historically, RTD has received sales tax proceeds about the fifthbusiness day of the second month following receipt thereof by the State Department of Revenue. TheDistrict has assigned its rights to receive the 0.6% Sales Tax Revenues and 0.4% Sales Tax Revenues tothe Trustee for the Senior Debt and the Trustee, respectively.

The Use Tax. All vehicles must be licensed in each county. Consequently, the motor vehicle usetax is collected by each county during its licensing process and is then remitted to the District periodicallypursuant to agreements entered into between such counties, the District and the Executive Director. Otheruse taxes are collected by the State Department of Revenue and distributed to the District on a monthlybasis.

Remedies for Delinquent Taxes

Failure by a retailer to pay the appropriate Sales Taxes collected is punishable pursuant to Statelaw. A statutorily prescribed rate of interest is due on deficiencies from the first date prescribed forpayment. Further, if any part of the deficiency is due to negligence or intentional disregard of theregulations with knowledge thereof, but without intent to defraud, 10% of the total amount of thedeficiency, plus interest, is to be added to the amount due. If the deficiency is due to fraud with intent toevade the tax, 100% of the total amount of the deficiency is to be added to the amount due, with anadditional 3% per month added from the date the return was due until paid. In both instances, theadditional amount and interest become due and payable 10 days after written notice and demand by theExecutive Director.

The sales tax imposed constitutes a first lien upon the goods and business fixtures of or used byany retailer under lease, title retaining contract or other contract arrangement, except for the stock ofgoods sold or for sale in the ordinary course of business. Such lien takes precedence over other liens orclaims of whatsoever kind or nature. Exempted from the lien are identifiable real or personal propertyleased to a retailer if the lessee has no right to become the owner and properly registered motor vehiclesto the extent an interest is not credited to the lessee.

If any tax, penalty or interest imposed and shown due by returns filed by the taxpayer, or shownas assessments duly made, are not paid within five days after the same are due, the Executive Directorissues a notice of the amount due, including a statement as to the lien claimed by the District on theproperty. If such amount remains unpaid, the Executive Director then issues a warrant to any authorizedrevenue collector or to the county sheriff commanding him to levy upon, seize and sell sufficient property

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of the tax debtor to satisfy the amount due, subject to valid preexisting claims or liens. A statutorylimitation provides that except in the case of the filing of a false or fraudulent return with the intent toevade tax, no action to collect Sales Taxes due may be commenced more than three years after the date onwhich the tax is payable.

Any vendor receiving a deficiency notice regarding the payment of Sales Taxes to the District hasthe right to request the Executive Director to conduct a hearing on the deficiency, and may thereafterappeal the decision to the district court. Conviction of a violation of any of the State's sales tax statutoryprovisions is punishable by a fine of no more than $300, or imprisonment for no more than 90 days, orboth. Violations also are subject to prosecution and punishment by the State for the violation of Statelaw.

Sales Tax Data

The following table sets forth the District's Sales Tax collections for the past five years:

TABLE IVHistorical Sales Tax Revenues

(In Thousands of Dollars)

Year0.6% Sales Tax

Collections0.4% Sales Tax

CollectionsTotal Sales Tax

CollectionsPercentChange

2008 $247,694 $165,130 $412,824 --%2009 222,843 148,562 371,405 (10.0)2010 238,529 159,020 397,549 7.02011 249,108 166,072 415,180 4.42012(1) 269,872 179,915 449,787 8.3

____________(1)

Based on unaudited financial information of the District.Source: District 2011 Comprehensive Annual Financial Report (attached as Appendix B hereto); The District's unaudited

financial records.

The District has budgeted that it will collect $475.267 million of Sales Tax Revenues in 2013,representing a 5.7% increase from 2012. However, there is no certainty that such collections will berealized in the amount the District currently budgets. See "FORWARD LOOKING STATEMENTS."

The following table of the District's principal Sales Tax generators by category is based on SalesTax Revenues remittances to the District for 2012. Because of the confidential nature of the gross salesof the individual entities, the identity of vendors may not be divulged under State law.

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TABLE VFifteen Largest Categories of Generators of Sales Tax 2012

Type of BusinessPercent of Total Sales

Tax Collections

Food Services and Drinking Places 12.2%

Motor Vehicle and Parts Dealers 10.1

General Merchandise Stores 8.4

Food and Beverage Stores 5.2

Telecommunications 5.1

Building Material and Garden Equipment and Supplies Dealers 5.0

Miscellaneous Store Retailers 4.9

Clothing and Clothing Accessories Stores 4.8

Merchant Wholesalers, Durable Goods 4.2

Utilities 4.0

Rental and Leasing Services 3.0

Professional, Scientific, and Technical Services 3.0

Accommodation 2.9

Sporting Goods, Hobby, Book, and Music Stores 2.7

Furniture and Home Furnishings Stores 2.7

Other 21.7

Total 100.0%

____________Source: State of Colorado, Department of Revenue; The District.

Certain counties, municipalities and special districts located within the District also impose salestaxes. A statutorily created special district, the Scientific and Cultural Facilities District, covers generallythe same geographical area as RTD and is empowered to levy a 0.1% sales tax. The total sales tax levy inthe District, including the State sales tax, RTD Sales Tax and any locally imposed sales tax, ranges from4.00% in Weld County to 8.75% in the City of Northglenn.

The following table shows taxable retail sales within RTD's service area for the years 2002through 2011:

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RTD

General Information

RTD is empowered to develop, maintain and operate a mass transportation system within itsboundaries. The RTD service area encompasses portions of an eight-county region comprising theDenver metropolitan area. Over one-half of the population of the State currently resides in the Denvermetropolitan area.

Organization

RTD was created in 1969 by the State General Assembly as a mass transportation planningagency for the Denver metropolitan area. RTD is a public body politic and corporate and a politicalsubdivision of the State, organized and existing under the terms of the Act. In 1974, the Act wasamended, and RTD became an operating entity charged with the responsibility for developing,maintaining and operating a mass transportation system (the "System") for the benefit of the inhabitantsin its service area.

Pursuant to the Act, in September 1973, the voters of RTD authorized RTD to issue bonds for thepurpose of developing a public multi-modal mass transportation system for RTD, such bonds to bepayable from the proceeds of a District-wide sales tax. Thereafter, RTD began negotiations for theacquisition of the existing public and private transit operations throughout the District. By the end of1976, RTD had consolidated seven public and private transit systems into a single system. The largest ofthese systems, Denver Metro Transit, owned by the City and County of Denver, was acquired in 1974.RTD's area consists of the City and County of Denver, most of the City and County of Broomfield, theCounties of Boulder and Jefferson, the western portions of Adams and Arapahoe Counties, thesouthwestern portions of Weld County, and the northeastern and Highlands Ranch areas of DouglasCounty. RTD currently services 2,348 square miles and 40 cities and towns. Over 2.8 million people, orapproximately 57% of the population of the State, reside within the District. The legislature can providefor elections within RTD's boundaries that, if successful, add territory to RTD. Territory may also beadded to the District in certain circumstances by petition of the owners of the land sought to be includedin the District or by a petition followed by an election held in the area sought to be included in theDistrict. See "RTD SERVICE AREA MAP."

Powers

As described under "THE SALES TAX," the District has the power to impose the Sales Tax.Under the Act, RTD's use of Sales Tax Revenues is restricted to paying the costs of operations of RTD, todefraying the cost of capital projects and to paying the principal and interest on securities of RTD.

Because RTD is an entity created by statute, its powers are susceptible to changes in statute. Inparticular, because the State General Assembly requires the Sales Tax imposed by RTD to be imposedupon the same transactions or incidents with respect to which the State imposes a sales tax, with certainexceptions, RTD is unable to prevent the State from enacting exemptions that would diminish its tax base.However, when the State enacted significant new sales tax exemptions in 1983, it also increased RTD'ssales tax rate. Historically, legislation that has broadened State sales tax exemptions has allowed RTD tocontinue to collect Sales Tax on such transactions.

RTD, with voter approval, also has the power to levy and cause to be collected general advalorem taxes not to exceed one-half of one mill on all taxable property within RTD whenever RTD

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anticipates a deficit in operating or maintenance expenses. See "FINANCIAL INFORMATIONCONCERNING RTD – Major Revenue Sources" and "CONSTITUTIONAL REVENUE, SPENDINGAND DEBT LIMITATIONS." Although the Act allows RTD to levy this tax, RTD has not exercised itspower to levy a general ad valorem property tax since 1976, and has no present intention of doing so inthe reasonably foreseeable future.

RTD also has the power to increase or decrease the fares for services and facilities provided byRTD; sue and be sued; purchase, trade, maintain and dispose of its real property and personal property;condemn property for public use; accept grants and loans from the Federal Government; and establish,maintain and operate a mass transportation system and all the necessary facilities relating to such system.

Board of Directors

RTD is governed by a fifteen-member elected Board with each member elected from one of thefifteen districts (the "Director Districts") comprising RTD's geographical area. Each Director Districtcurrently has approximately 180,000 residents and most Director Districts cross county boundaries. Aftereach federal census the fifteen Director Districts are apportioned so that each Director District represents,to the extent practicable, one-fifteenth of the total population of RTD.

The regular term of office for each Director is four years, with approximately one-half of theDirectors being elected every two years. If a vacancy arises on the Board, which vacancy can occur if aDirector from one Director District changes his or her residence to a place outside the Director District, orif a Director resigns, or if a Director is recalled from office by the electors of the Director District, thevacancy is to be filled by appointment for the balance of the term by the board of county commissionersof the county where the Director District is located or, in the case of a Director elected in Denver, by theMayor of the City and County of Denver with the approval of the City Council of the City and County ofDenver. If the vacancy occurs in a Director District that crosses county boundaries, the vacancy is to befilled by an appointee of the board of county commissioners of the county wherein the largest number ofregistered electors of the Director District reside; however, if the largest number of registered electorsreside in the City and County of Denver, the Mayor of the City and County of Denver, with the approvalof the City Council of the City and County of Denver, is to appoint someone to fill the vacancy.

The Board has the authority to exercise all the powers, duties, functions, rights and privilegesvested in RTD, including the power to delegate executive and administrative powers to officers andemployees of RTD. Most actions of the Board require the affirmative vote of a majority of the Board.Legislation enacted in the 1990 session of the State General Assembly requires an affirmative vote oftwo-thirds of the Board to approve any action relating to the authorization of the construction of a fixed-guideway mass-transit system and prohibits the Board from taking any such action until such systemshave been approved by the metropolitan planning organization, currently the Denver Regional Council ofGovernments.

The members of the Board of Directors are as follows:

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Current Board of Directors

Name District

Expiration ofPresent Term

(December 31) Occupation

Lorraine Anderson, Chair District L 2014 Retired Commercial Sales ExecutiveKent Bagley, First Vice Chair District H 2016 Urban Planner and Real Estate ConsultantLarry Hoy, Second Vice Chair District J 2014 Real Estate AppraiserBruce Daly, Secretary District N 2014 Retired Bus OperatorJeff Walker, Treasurer District D 2016 Utilities ManagerBarbara Deadwyler District B 2014 Retired, Project ConsultantClaudia Folska District E 2016 Architectural Planning and Design ConsultantBill James District A 2016 President, James Real Estate Services, Inc.Gary Lasater District G 2016 Business ExecutiveJudy Lubow District I 2016 Retired Government AttorneyNatalie Menten District M 2016 Family Business OwnerAngie Rivera-Malpiede District C 2014 Director of Stapleton Area Transportation

Management AssociationChuck Sisk District O 2014 AttorneyPaul Daniel Solano District K 2014 Recording Artist/Musician/SongwriterTom Tobiassen District F 2016 Senior Systems Engineer

Principal Officials

The following is a list of the current administrative and management personnel most involved inthe management of RTD, their background and experience, and a description of their jobs:

Mr. Phillip A. Washington – General Manager/Chief Executive Officer. Mr. Washington wasappointed to the position of General Manager in December 2009 after serving as Interim GeneralManager since June 2009. He holds a Bachelor of Arts degree in Business Administration fromColumbia College and a Master's Degree in Management from Webster University. Mr. Washington wasa highly decorated 24-year military professional, having attained the highest military noncommissionedofficer rank, that of Command Sergeant Major, E-9, before retiring from service in June 2000. He beganhis military career in Air Defense Artillery units and served in virtually every noncommissioned officerleadership role. He has also been a project manager, strategic planner, contract representative, humanresource director, trainer and budget technician. Prior to being appointed Interim General Manager, Mr.Washington was appointed Assistant General Manager, Administration in 2000, in which capacity hedirected the activities of the following divisions: Finance, Materials Management, Human Resources,Information Technology, Treasury, and the Small Business Opportunity Office.

Ms. Marla Lien – General Counsel. Ms. Lien was appointed General Counsel for the District inMay 2005 after having served as Acting General Counsel since November 2004. Ms. Lien has a Bachelorof Arts degree in History and a Juris Doctor degree from the University of Colorado. Prior to taking onthe responsibilities of Acting General Counsel, Ms. Lien's concentration at RTD had been in real estate,federal regulatory compliance, local government law and issues related to Colorado's Taxpayers' Bill ofRights (TABOR). Ms. Lien has been with the District since 1990.

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Mr. Terry L. Howerter – Chief Financial Officer. Mr. Howerter was appointed to the positionof Chief Financial Officer on June 30, 2008. He holds a Bachelor of Arts degree in Accountancy fromthe University of Illinois at Springfield and is member in good standing of the American Institute ofCertified Public Accountants. Mr. Howerter has over twenty-five years of progressive accounting andfinancial experience in both the public and private sector. He has held senior level finance andaccounting positions with the C&NW Transportation Company, Union Pacific Railroad, and The DentonCounty Transportation Authority. As the RTD Chief Financial Officer, he directs the activities of thefollowing divisions: Finance, Treasury, Human Resources and Information Technology.

Mr. Bill Van Meter – Assistant General Manager, Planning. Mr. Van Meter was appointed tothe position of Assistant General Manager, Planning for the District in April 2010 after being appointedas Acting Assistant General Manager, Planning in September 2008. Mr. Van Meter has over 20 years'experience in the transportation planning field, with extensive experience in public transit and roadwayplanning, managing multi-modal transportation studies, and Federal Transit Administration New Startsfunding processes. Mr. Van Meter has been with RTD since 1991, and prior to his appointment to hiscurrent position, he held progressively responsible positions at RTD, most recently in the position ofSenior Manager of Systems Planning. Prior to his employment with RTD, Mr. Van Meter was employedas a transportation planner with the South Central Regional Council of Governments in Connecticut. Heholds Bachelor's and Master's degrees in Economic Geography from the University of Illinois at Urbana-Champaign.

Mr. Bruce Abel – Assistant General Manager, Bus Operations. Mr. Abel joined RTD in 2001as Manager of Special Services and was appointed Assistant General Manager, Bus Operations in May2010. Prior to that appointment, Mr. Abel served as Assistant General Manager, Contracted Services. Mr.Abel holds a Bachelor of Arts degree in Economics from Wake Forest University and a Master's ofBusiness Administration degree with a concentration in marketing from the University of North Carolina-Greensboro. Mr. Abel has more than 30 years of public transportation management and consultingexperience in both the public and private sector, including positions in North Carolina, Texas, SouthDakota and Colorado. Mr. Abel is responsible for overseeing the provision of all of RTD's bus operationsincluding contracted services comprised of ADA paratransit service, traditional fixed-route services andnon-traditional services including general public paratransit, vanpooling and special event services.

Mr. Richard Clarke – Assistant General Manager, Capital Programs. Mr. Clarke wasappointed Assistant General Manager, Capital Programs in May 2010. Prior to that time, Mr. Clarke heldthe position of Assistant General Manager, FasTracks/Engineering. Mr. Clarke is responsible for corridorimplementation. He previously served as RTD's Project Director for the Transportation Expansion (T-REX) project. T-REX was a $1.7 billion, multi-modal (highway/light rail) project that included 19 milesof new light rail and 13 stations. It was completed ahead of schedule and under budget. He has previoustransit project experience in Dallas, New York, Boston, Cleveland and Philadelphia. Mr. Clarke hasBachelor's and Master's degrees in transportation engineering from the University of Pennsylvania.

Mr. Austin Jenkins – Assistant General Manager, Rail Operations. Mr. Jenkins began servingas Assistant General Manager, Rail Operations on August 2, 2010. Mr. Jenkins has over 30 years'experience in the management and operation of North American rail transit systems including the start-upof three rail systems and experience dealing with all elements of rail transit from construction throughoperations. Mr. Jenkins is the former Chair of the APTA Rail Operating Practices Subcommittee of theRail Standards Committee, past Chair of APTA's International Rail Rodeo Committee and APTA'sOperating Practices Standards Committee. He co-authored several APTA operating standards manuals.

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Mr. David A. Genova – Assistant General Manager, Safety, Security and Facilities.Mr. Genova was appointed Assistant General Manager, Safety, Security and Facilities in May 2007.Mr. Genova has a Bachelor of Arts degree in Geology from the University of Colorado and a Master'sdegree in Business Administration from Regis University. Mr. Genova has over 23 years of safety andenvironmental experience, and 16 years of transit experience including the start-up of four RTD light railprojects and participation in a number of transit industry peer reviews. He is a certified hazardousmaterials manager and certified safety and security director for bus and rail transit. Mr. Genova is activein APTA safety and security committees, served as the Vice Chair of the APTA Bus Safety Committee,served as Vice President and Board Director of the FBI InfraGard Denver Members Alliance, and is onthe Board of Directors of Colorado Operation Lifesaver. He is also a Senior Associate Staff Instructor forthe Transportation Safety Institute. Mr. Genova directs the Safety and Environmental ComplianceDivision, the Security and Emergency Management Division, and the Facilities Division. He has beenwith RTD since 1994.

Mr. Scott Reed – Assistant General Manager, Communications. Mr. Reed was promoted toAssistant General Manager in 2006, having previously served as Director of Public Affairs. The officialspokesperson for the agency, he is responsible for managing all media relations efforts, the GovernmentRelations unit, the Customer Information division including the Telephone Information Center and PassSales outlets, RTD marketing and the public outreach and public information programs for the FasTracksproject. He also administers the Internal Audit unit. Mr. Reed has been with RTD since 1991 and hisnearly 30-year professional career in communications includes work as a newspaper reporter and assistanteditor, Conference and Events Coordinator at the University of Colorado, and Director of Special Eventsfor the Cystic Fibrosis Foundation in Colorado Springs. He holds a Bachelor's degree in Journalism and aMaster's of Public Administration degree, both from the University of Colorado.

Employee and Labor Relations

RTD employs approximately 2,555 persons of whom about 1,895 are represented by Local 1001of the Amalgamated Transit Union (the "Union"), which bargains collectively on behalf of theseemployees. The Union members operate the bus and rail services and provide other administrativeservices. In November 2009, RTD and the Union arbitrated and entered into a collective bargainingagreement which expired on February 28, 2013. On February 27, 2013, the RTD negotiating team andthe Union reached a tentative agreement on all collective bargaining items. This agreement, which hasbeen ratified by the Union membership and RTD, represents an unprecedented five year agreement and isthe first time that the District and the Union have reached agreement prior to expiration of a Unioncontract. RTD does not expect the terms of this agreement to have a material impact on operations or thefinancial position of the organization. In addition to District employees, approximately 1,700 non-District employees provide contracted services including fixed-route and paratransit services.

Retirement Plans

Pension/retirement plans have been established covering substantially all of RTD's employees.Union-represented employees participate in a pension trust, established through a collective bargainingagreement, and administered by a Board of Trustees representing both the Union and RTD. Both RTDand the employees contribute to this plan (the "Union Plan"). As of January 1, 2011, the Union Plan hadunfunded actuarial liabilities of $101.954 million as described in Note F to the 2011 ComprehensiveAnnual Financial Report attached as Appendix B hereto. The actuarial valuations have been performedby Gabriel Roeder Smith & Company for the Union Plan. The previous collective bargaining agreementrequired RTD to contribute 8% (and the employees to contribute 3%) of eligible employees' qualifyingwages to the Union Plan each year through expiration of the collective bargaining agreement onFebruary 28, 2013. Under the new collective bargaining agreement, RTD is required to contribute 12%,

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12% and 13% (and the employees to contribute 4%, 4% and 5%) of eligible employees' qualifying wagesto the Union Plan respectively for the years 2013, 2014 and 2015 through 2017. RTD's obligations underthe Union Plan based on the new collective bargaining agreement are limited to its defined contributions,and RTD is current with respect to its obligation to pay such defined contributions. See "Employee andLabor Relations" under this caption for a discussion of the status of the existing collective bargainingagreement.

Non-represented salaried personnel hired prior to January 1, 2008 are covered under a non-contributory defined benefit plan to which RTD has in the past contributed 9% of payroll costs annuallycomputed on an actuarial basis (the "Salaried Pension Plan"). Through 2008, the amounts contributedby RTD fully funded the Salaried Pension Plan. Due to the loss in investments in the Salaried PensionPlan starting in 2009 caused by the recession, the actuary recommended contributions of percentageshigher than 9% in years 2010, 2011 and 2012. Accordingly, the 9% contributions made by RTD to theSalaried Pension Plan during those years were less than the actuarially recommended amounts.Beginning in 2013, RTD contributes a fixed dollar amount of $3.1 million to the Salaried Pension Plan,rather than a percentage of payroll costs. This annual fixed contribution to the Salaried Pension Planrepresents the amount actuarially recommended as the periodic contribution designed to ensure there aresufficient assets to pay benefits when due. The Salaried Pension Plan is qualified with the InternalRevenue Service, with the cost to RTD for the Salaried Pension Plan for the year ended December 31,2012 of $2.8 million. As of January 1, 2012, the funded ratio of the actuarial value of assets to theactuarial accrued liability for the Salaried Pension Plan was 93.72%. The most recent actuarial valuationfor the Salaried Pension Plan dated January 1, 2012 was performed by Rael & Letson. For furtherinformation regarding the District's Salaried Pension Plan, see Note F to the 2011 Comprehensive AnnualFinancial Report attached as Appendix B hereto.

Non-represented salaried personnel hired on or after January 1, 2008 are covered under a non-contributory defined contribution plan providing for a 7% to 9% contribution by RTD based on theearnings of the employee. The Board adopts a percentage amount for contributions each year. RTDclosed the Salaried Pension Plan and initiated this defined contribution plan to ensure the long-term fiscalsoundness of both plans while controlling the cost of pension benefits.

RTD also has a deferred compensation plan, created in accordance with §457 of the InternalRevenue Code of 1986, as amended, which is available to substantially all employees and permitsemployees to defer a portion of their compensation to future years.

Other Postemployment Benefits

Employees of state and local governments may be compensated in a variety of forms in exchangefor their services. In addition to a salary, many employees earn benefits over their years of service thatwill not be received until after their employment with the government ends. As the name suggests, OtherPostemployment Benefits ("OPEBs") are postemployment benefits other than pensions.

Although OPEBs may not have the same legal standing as pensions in some jurisdictions, theGovernmental Accounting Standards Board ("GASB") believes that OPEBs are a part of thecompensation that employees earn each year, even though these benefits are not received until afteremployment has ended. Therefore, the cost of these future benefits is part of the cost of providing publicservices today.

The District is not presently obligated to contribute funds towards OPEBs for any of itsemployees and therefore does not have an unfunded liability relating to OPEBs.

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Insurance

Under the provisions of the State Governmental Immunity Act, the maximum liability to RTD fora personal injury claim is $150,000 per individual, or $600,000 per incident under the current law. Thatamount is to increase to $350,000 per individual or $990,000 per incident for claims rising on or afterJuly 1, 2013. However, RTD may be unable to rely upon the defense of governmental immunity andmight be subject to liability in excess of the maximum limits established by the State GovernmentalImmunity Act in the event of suits alleging causes of action founded upon various federal laws, such assuits filed pursuant to 42 U.S.C. Section 1983 alleging the deprivation of federal constitutional orstatutory rights of an individual and suits alleging anti-competitive practices and violation of the anti-trustlaws by RTD in the exercise of its delegated powers. See "GOVERNMENTAL IMMUNITY."

RTD also holds excess liability insurance for bodily, personal and advertising injury, publicofficials' liability, and property damage. The limit for District operations and personnel in most situationsis $25 million, less RTD's self-insured retention of $500,000 per claim. However, RTD maintains higherlimits on portions of railroad rights of way that it owns or to which it has operating rights. Additionally,RTD carries property insurance on buildings and other physical assets at an aggregate coverage level ofup to $600 million based on the replacement value of such property.

RTD's policy is to recognize claims as they arise, not when they are resolved. RTD anticipatesclaims by budgeting the expected losses in the current year, including an actuarially determined amountfor "Incurred But Not Reported" ("IBNR") claims; such amounts are reflected as liabilities in RTD'scomprehensive annual financial reports. For 2012, RTD recognized insurance costs of $4.8 million.RTD maintains reserve funds for existing liabilities (as of December 31, 2012) in the amount of $2.15million and workers' compensation claims (as of December 31, 2012) in the amount of $3.57 million.

Under State law, the insurer of a private motor vehicle has a cause of action for benefits actuallypaid by the insurer against the owner or operator of a nonprivate motor vehicle responsible for theaccident. There is an exception, however, for accidents involving motor vehicles of RTD.

Intergovernmental Agreements

Under State law, intergovernmental relationships and agreements are permitted among politicalsubdivisions, agencies, departments of the United States, the State and any political subdivision of anadjoining state. Governments may cooperate or contract with one another for the provision of anyfunction, service or facility that each of them is authorized to provide separately. At any given time, RTDhas numerous intergovernmental agreements ("IGAs") for various purposes with municipalities, the Stateor its agencies such as the Department of Transportation, and the federal government, particularly theFederal Transit Administration ("FTA"). The various agreements cover areas including, but not limitedto, RTD support for the provision of additional bus service in the City of Boulder through the HOPagreement with Boulder, construction and/or maintenance of joint facilities such as roads, bridges or bikepaths, and various funding and operational agreements with the City of Denver and the ColoradoDepartment of Transportation with respect to the Denver Union Station project. Agreements with FTAusually involve grant funding and application of grant funds. Other than full funding grant agreementswith FTA and annual grant agreements with FTA for Section 5307 funds, no other financially oroperationally significant IGAs exist at this time.

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RTD Service Area Map

The following map shows the service area of the District.

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THE SYSTEM

Fleet Composition

As of December 2012, the District owned 969 fixed-route transit buses (457 of which are leasedto private carriers), 172 light rail vehicles, 327 Access-a-Ride paratransit vehicles and 42 Call-n-Ridevehicles. The RTD fleet includes 22-, 30- and 40-foot transit coaches, 60-foot articulated coaches, over-the-road coaches, specially designed low-floor coaches for use on the 16th Street Mall, 85-foot articulatedlight rail vehicles and vans and buses used for Access-a-Ride paratransit service mandated by theAmericans with Disabilities Act of 1990. As of December 2012, the System had a peak fleet requirementof 797 fixed-route buses and 99 light rail vehicles.

The following table shows the composition of RTD's active vehicle fleet as of December 2012:

TABLE VIIRTD Active Fleet as of December 2012

Fixed Route Bus Fleet Number

RTD Owned – Fixed Route Buses40' Transit Coaches 541Articulated Coaches 118Intercity Coaches 157Mall Shuttles 3830' Transit Buses 10122' Cutaway Buses 14

Total RTD-Owned Fixed Route Buses 969

Access-a-Ride Fleet(1) 327

Call-n-Ride Fleet(2) 42

Light Rail Vehicle Fleet 172

TOTAL ACTIVE FLEET 1,510____________(1) All paratransit vehicles are owned by RTD and operated by private operators under contract with

RTD.(2) Call-n-Ride vehicles are owned by RTD and operated by private operators under contract with RTD.Source: The District.

Transit Services

In order to meet the needs of the residents of RTD, RTD provides ten types of service on 155routes, including those operated by private contractors:

1. Local – routes operating along major streets within the Denver metropolitan area and thecities of Boulder and Longmont, making frequent stops for passengers.

2. Limited – routes serving high-density corridors with less frequent stops than local routes.

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3. Express – routes providing non-stop service from suburban areas to downtown Denverand other employment centers.

4. Regional – routes connecting outlying areas of RTD to downtown Denver, Boulder, andother employment centers.

5. SkyRide – routes serving Denver International Airport.

6. Light Rail – rail service for approximately 35 miles of light rail track in the SoutheastCorridor and between Mineral Avenue in Littleton to either 30th and Downing Streets in Denver orDenver Union Station. This does not include the service on the West Corridor which opened for revenueservice on April 30, 2013. See "FasTracks – FasTracks Corridors – West Corridor" under this caption.

7. Mall Shuttle – a free shuttle service operating along the 16th Street Mall in downtownDenver.

8. Access-a-Ride – door-to-door paratransit service for people with disabilities providedunder the requirements of the Americans with Disabilities Act of 1990.

9. Call-n-Ride – curb-to-curb service that responds to passenger requests. Typicallyoperated in lieu of fixed route service with small vehicles in areas and/or times of low demand.

10. Special – for example, SeniorRide – pre-scheduled trips in off-peak hours to recreationalevents for elderly persons in the Denver metropolitan area, Boulder and Longmont, seven days a week;BroncoRide – shuttle service from the Auraria campus, Federal Boulevard and selected Park-n-Rides toDenver Broncos home games; RockiesRide – shuttle service from selected Park-n-Rides to ColoradoRockies home games.

State law permits RTD to contract with private operators for the provision of up to 58% of itsvehicular services. RTD is in compliance with this requirement with 58% of its services currentlyoperated by private operators.

RTD may, but currently does not, provide charter service to the extent that such service cannot beprovided by private operators. Pursuant to federal regulations, charter service operated by RTD cannotinterfere with its regularly scheduled services, and the rate charged by RTD must recover the fullyallocated cost of operating the service.

RTD, upon action of its Board, has the authorization to reduce services with no other approvalrequired. In response to declining sales tax revenues, RTD instituted service reductions in 2009-2011 aswell as an 8% reduction in January 2012.


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The following table shows additional operating data concerning the System as of December 31,2012:

TABLE VIIIOperating Data

(As of December 31, 2012)

Total Miles(1) 38,999,300Active bus stops 9,698Number of routes 155

Local 79Limited 11Express 16Regional 16SkyRide 5Light Rail 5Mall Shuttle 1Call-n-Ride 21

Ridership average weekday, revenue service 283,164Ridership average weekday, all services 328,029Total annual boardings, revenue service 85,442,280Weekday regular fixed-route scheduled miles, including

16th Street Mall and Light Rail(2)126,849

Annual diesel fuel consumption, gallons 5,385,000Total active buses 969Wheelchair lift equipped buses 969Number of employees (actual staff)(3)

Salaried 660Represented (includes part-time drivers) 1,895

Fleet requirements (during peak hours) 797Operating facilities(3) 6

____________(1) January 2012 service levels annualized (including Light Rail)(2) District-operated buses only.(3) Excludes purchased transportation services.Source: The District's unaudited financial records.

Passenger, Maintenance and Administrative Facilities

Patrons who are residents of the District using RTD service may park at no charge in Park-n-Ridelots for up to 24 hours. Patrons residing outside of the District boundaries or District residents parking formore than 24 hours must pay a nominal parking fee. By providing the Park-n-Ride lots, RTD can provideexpress and regional services in low-density areas and more frequent long-haul services for patrons. Asof December 31, 2012, RTD had 74 Park-n-Ride lots, providing a total of 26,530 parking spaces.

RTD currently owns four bus maintenance facilities. RTD also owns two light rail maintenancefacilities, two administrative buildings and three passenger terminals located throughout the District.

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Long-Term Financial Planning

Regional Transportation Plan

The long-term goals and policies of RTD are incorporated in a plan known as the Metro VisionRegional Transportation Plan (the "Regional Plan"). The Regional Plan is mandated by the United StatesDepartment of Transportation which has recognized the Denver Regional Council of Governments("DRCOG"), a voluntary association of Denver metropolitan area county and municipal governments, asthe entity charged with preparing the Regional Plan. DRCOG, in coordination with the ColoradoDepartment of Transportation ("CDOT"), RTD and local governments, has developed the Regional Planto provide a coordinated system of transit and roadway improvements to meet the transportation needs ofthe Denver metropolitan area through the year 2035 within projected available revenues. By inclusion inthe Regional Plan, RTD's capital projects may become eligible for federal assistance.

The Regional Plan includes those regional transportation facilities that can be provided throughthe year 2035, based on reasonably expected revenues. The Regional Plan focus is on improving facilitiesfor a variety of transportation modes; improving the intermodal connections between the varioustransportation modes; and providing programs and services to support the transportation system. TheRegional Plan consists of a network of highways of various roadway classifications, high occupancyvehicle and rail rapid transit facilities, bus service, specialized services for the elderly and disabled,airports of various classifications, provisions for freight travel, a regional bicycle network, sidewalks forpedestrians, and intermodal facilities to provide connections among and between transportation modes.In August 2012, RTD made the decision that it would not pursue a Sales Tax election in November 2012.As a result of this determination, RTD was required under federal law to submit an amendment to theRegional Plan to set forth a "fiscally constrained" Plan which reflected this change in anticipated funding.Accordingly, RTD submitted to DRCOG a 2035 Regional Transportation Plan Amendment request datedAugust 30, 2012 (the "RTP Amendment") with a financial plan update relating to the FasTracks system,and this amendment was approved by DRCOG on February 20, 2013. On March 1, 2013, RTD submitteda subsequent RTP Amendment Request. See "FasTracks Plan" under this caption.

Strategic Budget Plan

The Strategic Budget Plan ("SBP") is RTD's six-year capital and operating plan adopted annuallyby the Board in connection with the District's estimated capital and operational expenditures for allprograms other than FasTracks. Planning and coordination of FasTracks expenditures are describedunder "THE SYSTEM – FasTracks."

The SBP includes projections of annual service levels, the capital requirements to maintain theseservice levels, and the funding mechanisms through which the operating and capital programs are to beachieved. In addition, the SBP is a component of the comprehensive six-year TransportationImprovement Program (the "TIP") adopted biennially by DRCOG for the Denver metropolitan area, asrequired by federal regulations. An RTD capital project must be included in the TIP in order to beeligible for federal funds. The six-year SBP is revised annually by the Board in response to factors suchas changes in RTD's goals and objectives, changes in demographics and development in RTD's servicearea, or unforeseen circumstances affecting forecast revenues. As a result, the six-year SBP may includesubstantial changes from year to year, with projects being added, deleted and modified on a regular basis.

An SBP was adopted on July 17, 2012, and covers the period from 2013 through 2018. The2013-2018 SBP contemplates that over such six year period, RTD intends to replace a total of 303 transitbuses, 113 articulated buses, 75 intercity buses, 26 mall shuttle vehicles, 14 cut-away buses and 46 Call-n-Ride vehicles as they reach the end of their useful lives.

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FasTracks Plan

In addition to the SBP, the District is planning and constructing the build-out of the FasTrackstransit expansion plan described in "FasTracks" under this caption. Each year, RTD conducts acomprehensive evaluation of the entire FasTracks program called an Annual Program Evaluation. InFebruary 2013, the DRCOG Board of Directors approved the RTP Amendment described in "RegionalTransportation Plan" under this caption. The RTP Amendment changes the timing of the build out of theNorthwest Rail Corridor, the North Metro Corridor and the Central and Southwest Corridor Extensionsdue to financial constraints which would prohibit all of the FasTracks projects from being completed by2035. The RTP Amendment assumes that no additional sales tax vote would be pursued and that therewould be no additional tax revenues for FasTracks projects beyond the existing 1.0% Sales Tax. Futurefunding sources identified in the RTP Amendment include proceeds of additional revenue bonds andcertificates of participation, certain federal grants and local match funding. In March 2013, RTDsubmitted an additional RTP Amendment request to further modify the construction schedule for theNorth Metro Corridor. The Regional Plan as so amended represents RTD's current plans and expectationsbut can be further amended over time as new funding alternatives become available. See "FasTracks –FasTracks Corridors" under this caption.

Unsolicited Proposals

A third party may, from time to time, provide an unsolicited proposal ("Unsolicited Proposal")to the District on its own initiative for the purpose of obtaining a contract with RTD. An UnsolicitedProposal is distinguishable from a project that is already part of the District's long-term budget planningprocess if it uses innovative and unique solutions to offer added value such as enhanced financing optionsor materially advanced delivery dates. The District's policy regarding Unsolicited Proposals provides thatonce an Unsolicited Proposal is received by the District, it is analyzed to determine whether it meetscertain threshold requirements. If such requirements are met, the Unsolicited Proposal is evaluated todetermine whether, among other things, the proposal: (a) offers benefits to the District, its passengers, andthe community; (b) can be accommodated in the District's long-term budget without displacing otherplanned expenditures; (c) is consistent with the District's and the Board's objectives and goals; and (d)offers unique goods and services that the District did not intend to purchase through the normal contractprocess. If it is determined that the Unsolicited Proposal satisfies these evaluation requirements, theDistrict will (unless the Unsolicited Proposal offers a proprietary concept that is essential to contractdelivery) publicize its interest in acquiring the property or services described in the Unsolicited Proposaland seek competing proposals from other interested parties. No Unsolicited Proposal is selected forcontract award unless and until the process described above has been undertaken by the District. TheDistrict has received and expects in the future to receive Unsolicited Proposals. Most recently, theDistrict has received an Unsolicited Proposal in connection with the North Metro Corridor of theFasTracks Plan. Such Unsolicited Proposal was determined to satisfy these evaluation requirements andthe District anticipates issuing a request for proposals with respect to the North Metro Corridor inapproximately June 2013. See "FasTracks" under this caption. All such proposals have been and will behandled as outlined herein.

FasTracks

General

Prior to January 1, 2005, the District received the 0.6% Sales Tax. At the 2004 Election, voters inthe District approved a ballot question allowing for the 0.4% Sales Tax Increase effective January 1,2005. In connection therewith, the ballot question also authorized RTD to issue up to $3.477 billion of

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additional debt obligations to finance the District's multi-year comprehensive transit expansion planknown as "FasTracks."

The FasTracks Plan consists of nine rail corridors (new or extended); one bus rapid transit("BRT") corridor; redevelopment of Denver Union Station; a new Commuter Rail Maintenance Facility("CRMF") and an expanded light rail maintenance facility. At completion, the Plan will addapproximately 93 miles of commuter rail (East, Gold Line, North Metro, and Northwest Rail Corridors);approximately 28 miles of light rail (Southeast and Southwest Corridor Extensions, Central CorridorExtension, I-225 Corridor, and West Corridor); Park-n-Ride improvements at and/or relocations ofexisting Park-n-Ride lots along U.S. 36 (US 36 BRT – Phase 1), and 18 miles of BRT (U.S. 36 BRT –Phase 2). The nine corridors further described in "FasTracks Corridors" under this caption are currentlymoving forward in various stages of design and construction. Since 2004, however, projected capital andoperating expenses have increased while projections for available revenues have decreased. The Districthas represented that it is committed to building as many corridors in the shortest timeframe possible,while ensuring that it can meet all current and future projected obligations. In November 2012, theDistrict Board approved the establishment of the FasTracks Internal Savings Account into which certainfunds made available by the reduction of existing budgeted items will be deposited to be used to fund thefuture FasTracks capital program.

In April 2004, CDOT and RTD executed an intergovernmental agreement that is intended toestablish a coordinated process to facilitate the implementation of the FasTracks plan and preserve theability to pursue planned highway and transit improvements in corridors where both highway and transitimprovements are likely to occur. The Board has formally resolved to analyze the FasTracks planannually to determine both local and federal sources and adjust the corridor improvements accordingly.The Board has further resolved that construction of FasTracks improvements within a corridor are not tostart until there is a firm commitment of all required funding sources and intergovernmental agreementsare in place with local governments concerning permits, design and plan review.

FasTracks Corridors

I-225 Corridor. Improvements, facilities, vehicles and equipment for the I-225 Corridor, aproposed 10.5-mile light rail transit extension which will connect the existing Southeast Corridor with theplanned East Corridor and will include eight stations, were approved by the Board in October 2009.Construction of the Corridor from Nine Mile Station to Iliff began in early 2012 as a joint project withCDOT. In August 2012, the District completed negotiations with Kiewit Infrastructure Co. ("Kiewit") ona design build contract to complete the I-225 Corridor from Iliff to Peoria Station. Kiewit has been givena notice to proceed and construction is expected to begin in spring 2013. Completion is scheduled byNovember 2015, with the I-225 rail line to open in 2016.

West Corridor. The West Corridor line is a 12.1-mile light rail transit corridor between DenverUnion Station and the Jefferson County Government Center in Golden, serving Denver, Lakewood, theDenver Federal Center, Golden and Jefferson County. In June 2001, the District began preliminaryengineering and an environmental impact statement for the West Corridor. The final environmentalimpact statement was issued in October 2003 with a Record of Decision from the FTA received in April2004. In 2005, the District began final design for the West Corridor. In January 2009, the District wasawarded a full funding grant agreement through the FTA's New Starts program for the West Corridor.Under the award, the District is expected to receive approximately $308.68 million over several years.The funds are to be expended on the light rail line approved as part of the District's FasTracks program.Major construction commenced in the West Corridor in 2009 and the line opened for revenue service onApril 30, 2013.

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East Corridor. The East Corridor is designed to be a 22.8-mile commuter rail transit corridorextending from Denver Union Station to Denver International Airport with six proposed intermediatestations in locations throughout the City and County of Denver and the City of Aurora. The District hascompleted an EIS for the East Corridor, covering rapid transit improvement and a Record of Decision wassigned with FTA in November 2009. In August 2010, the District purchased certain property and rights-of-way from the Union Pacific Corporation that are required for construction of the East Corridor. TheEast Corridor is being delivered as part of the first phase of the Eagle P3 Project described in "Eagle P3Project" under this caption. Final design of the East Corridor began in 2010, and construction began in2011, with completion scheduled for January 2016. On August 31, 2011, the FTA granted a combined$1.03 billion Full Funding Grant Agreement for the East Corridor and the Gold Line Rail Corridor(described below).

U.S. 36 Bus Rapid Transit Corridor. The U.S. 36 Bus Rapid Transit Corridor is designed todeliver 18 miles of bus rapid transit service between downtown Denver and Boulder along U.S. Highway36. The District and CDOT jointly conducted an EIS for the U.S. 36 Bus Rapid Transit Corridor in thegeneral area between downtown Denver and Boulder. A final EIS was released in 2009. RTD is workingwith CDOT and the Colorado High-Performance Transportation Enterprise ("HPTE"), which areconstructing managed lanes from Federal Boulevard to Table Mesa Drive along U.S. 36. RTD has agreedto provide $120 million of funding for Phase 1, from Federal Boulevard to 88th Street, and an additional$15 million for Phase 2 from 88th Street to Table Mesa Drive. CDOT has contracted with Ames/GraniteJoint Venture to design, build, finance, operate and maintain ("DBFOM") Phase 1. Design andconstruction on that segment began in May 2012, with the segment scheduled to open in January 2015.HPTE and CDOT have recently selected a team led by The Plenary Group to enter into a DBFOMcontract on Phase 2, with financial close for the contract expected by the end of 2013. Phase 2 is currentlyprojected to open by the end of 2015, and RTD expects to operate Bus Rapid Transit service on the fullmanaged lane to Boulder starting in January 2016.

Northwest Rail Corridor. The Northwest Rail Corridor is a proposed 41-mile rail transit corridorbetween Denver Union Station and Longmont. An environmental evaluation for this corridor wascompleted in May 2010. The District currently plans to build the Northwest Rail Corridor in phases. Theconstruction of the first phase of the Northwest Rail Corridor, running from Denver Union Station toWestminster referred to as the Northwest Rail Electrified Segment began in August 2011, withcompletion of such first phase scheduled for March 2016. The Northwest Rail Corridor is part of theEagle P3 Project described in "Eagle P3 Project" under this caption. RTD also will construct the end-of-line station in Longmont to be used as an interim bus Park-n-Ride until the full rail line is constructed.Design on the Longmont station is expected to begin in 2013, with construction completed in 2015.

North Metro Corridor. The North Metro Corridor is a proposed 18-mile transit corridor betweenDenver Union Station and 162nd Avenue passing through Denver, Commerce City, Thornton, Northglennand unincorporated Adams County. The District has completed an EIS for the North Metro Corridor anda Record of Decision was signed with FTA in April 2011. Final design on the initial segments, fromDenver Union Station to the National Western Stock Show ("NWSS") and from the NWSS to 72ndAvenue, began in August 2012 and is expected to be completed in late 2013. Construction of the twoinitial segments is expected to be completed in 2017. The District anticipates funding the construction ofthe segment from NWSS to 72nd Avenue with cash on hand and proceeds of Additional Parity Bondsexpected to be issued in the fourth quarter 2013 (subject to change). Timing of construction andimplementation of revenue service on the North Metro Corridor is being evaluated.

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Gold Line Rail Corridor. The Gold Line is a proposed 11.2-mile commuter rail corridor fromDenver Union Station passing through northern Denver, unincorporated Adams County, Arvada andWheat Ridge. The District has completed a final EIS for the Gold Line and a Record of Decision wasissued by the FTA in November 2009. The Gold Line will be delivered as part of the second phase of theEagle P3 Project described in "Eagle P3 Project" under this caption. On August 31, 2011 the FTAgranted a combined $1.03 billion Full Funding Grant Agreement to the Gold Line Rail Corridor and theEast Corridor (described above). Construction on the Gold Line Rail Corridor began in 2011, withcompletion of construction scheduled for July 2016.

Corridor Extensions. The Southwest Corridor Extension is designed to add 2.5 miles of light railto an existing 8.7-mile light rail line. The Southeast Corridor Extension is designed to add 2.3 miles oflight rail to an existing 19.1-mile line. Environmental evaluation studies of the Southwest and SoutheastCorridor Extensions were completed in February 2010. These studies include basic engineering design aswell as planning and environmental evaluations. The Central Corridor Extension is designed to add 0.8miles of light rail to connect the existing 5.3-mile downtown light rail service to a station on the plannedEast Corridor. Environmental evaluation studies of the Southwest, Central and Southeast CorridorExtensions were approved by the Board in February 2010. These studies include base engineering designas well as planning and environmental evaluations. RTD is currently performing additional planningstudies on the Southeast and Central Corridor Extensions. Construction of the Southeast CorridorExtension is programmed for the early 2030s, with revenue service projected in January 2035.

Eagle P3 Project

The District has served as the "conduit issuer" of its Tax-Exempt Private Activity Bonds (DenverTransit Partners Eagle P3 Project), Series 2010 (the "P3 Conduit Bonds") in the aggregate principalamount of $397,835,000. The proceeds of the P3 Conduit Bonds have been loaned to Denver TransitPartners LLC, a Delaware limited liability company ("Denver Transit Partners") pursuant to a LoanAgreement (the "P3 Loan Agreement") between the District and Denver Transit Partners to pay aportion of the costs of a FasTracks project (the "Eagle P3 Project"). The P3 Conduit Bonds are securedsolely by loan payments required under the P3 Loan Agreement to be made by Denver Transit Partners inamounts and on the dates required to pay the principal and interest on the P3 Conduit Bonds. The P3Conduit Bonds do not constitute indebtedness of RTD or a multiple-fiscal year obligation of RTDwithin the meaning of the provisions of the State Constitution or the laws of the State.

The District and Denver Transit Partners entered into a Concession and Lease Agreement (the"P3 Concession Agreement") in July 2010 in order to generate the revenues necessary to meet DenverTransit Partners' obligations under the P3 Loan Agreement. Under the P3 Concession Agreement,Denver Transit Partners has agreed to design, construct, finance, operate and maintain the Eagle P3Project in return for payments by the District in the form of construction payments (the "ConstructionPayments") and service payments (the "Service Payments"). The District has agreed to make monthlyConstruction Payments to Denver Transit Partners during the design and construction phase of the EagleP3 Project and, commencing with the beginning of revenue service of the Eagle P3 Project, to makemonthly Service Payments to Denver Transit Partners. Construction payments are expected to be fundedfrom federal grants and from local funds available to the District and are subject to annual appropriationby the District. Service Payments have two components. One portion (the "TABOR Portion of ServicePayments"), structured to exceed scheduled debt service on the P3 Conduit Bonds, is secured by asubordinate pledge of Sales Tax Revenues available after payment of the Bonds. See "DEBTSTRUCTURE OF RTD." Payment of the TABOR Portion of Service Payments by the District utilizes$589,913,540 of the principal electoral authorization received at the 2004 Election. The TABORPortion of Service Payments is payable on a subordinate lien basis to the Bonds. The second portion(the "Appropriation Portion") is structured to cover operations and maintenance costs of the Eagle P3

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Project and will be subject to annual appropriation by the District. The P3 Concession Agreementprovides that any TABOR Portion not paid due to insufficiency of Sales Tax Revenues is to be paid fromavailable funds of the District, if appropriated. The District's obligation to make Construction Paymentsand Service Payments depends upon Denver Transit Partners' performance of its obligations under the P3Concession Agreement, including completion of the design, construction and start up of the portions ofthe Eagle P3 Project when required and the operation of the Eagle P3 Project in accordance with thestandards set forth in the P3 Concession Agreement. As required by the P3 Concession Agreement, RTDhas reserved a certain amount of its electoral authority received pursuant to the 2004 Election to secureRTD's obligation to pay a termination amount to Denver Transit Partners upon the occurrence of certainevents under, and in the amounts calculated in accordance with, the P3 Concession Agreement. In theevent of a termination of the P3 Concession Agreement, any payment obligation by RTD for suchtermination amount under the P3 Concession Agreement will be subordinate to the Bonds.

In order to assist in the financing of a portion of the costs of the Eagle P3 Project, the Districtentered into a loan agreement with the United States Department of Transportation (the "USDOT") inDecember 2011 (the "TIFIA Loan Agreement") pursuant to which the USDOT agreed to loan amountsto the District to be evidenced by a bond (the "RTD TIFIA Bond") as further described in "DEBTSTRUCTURE OF RTD."

Denver Union Station

Under the FasTracks program, the existing Denver Union Station will be developed into amultimodal transportation hub, integrating light rail, commuter rail and intercity rail (Amtrak) as well asregional, express and local bus service, the 16th Street Mall shuttle, and intercity buses, taxis, shuttles,vans, limousines, bicycles and pedestrians (the "DUS Project"). In August 2001, the District completedthe acquisition of Denver Union Station and certain adjacent land. The District, in cooperation with theCity and County of Denver, DRCOG, and CDOT, worked together to prepare a Master Plan and anenvironmental impact statement ("EIS") for the DUS Project. The Master Plan and EIS work began inMay 2002 and the Master Plan components were approved by all four agency partners in the fall of 2004.The Record of Decision was issued by the FTA on October 17, 2008. The DUS Project also includesrezoning of the 19.85-acre site to Denver's new transit mixed use district and designation of the historicstructure as a Denver historic landmark.

In 2006, the partners solicited proposals for, and selected, a master developer to enter into apublic-private partnership to develop the public transportation infrastructure and the vertical, private,transit-supported development on the site. Construction at Denver Union Station started in 2009 under alimited Notice to Proceed. Certain improvements to Denver Union Station and related facilities are beingdelivered as part of the Eagle P3 Project described in "Eagle P3 Project" under this caption.

In July 2010, RTD entered into a DUSPA/RTD Funding Agreement (the "DUSPA Agreement")with the Denver Union Station Project Authority ("DUSPA") in order to support DUSPA's financing ofthe Denver Union Station mixed-use and multi-modal project, including transit elements which are to beconstructed on RTD owned property and will be owned and operated by RTD. Such transit elementsinclude a new light rail terminal, a new commuter rail station, a regional and commercial bus facility andnew tracks. See "DEBT STRUCTURE OF RTD" for additional information regarding the DUSPAtransaction which involved issuance of the DUSPA Bond with a lien on Sales Tax Revenues subordinateto the Senior Bonds, the Bonds and to the TABOR Portion of Service Payments. The light rail stationwas opened to passengers on August 15, 2011. Approximately 85% of the bus facility has beenconstructed to date, and the bus facility is expected to open in May 2014. Commuter rail platforms areunder construction, and Amtrak service is expected to begin out of a permanent location in February2014. The District expects commuter rail operations to begin in 2016.

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Commuter Rail Maintenance Facility

A commuter rail maintenance facility is being designed to service the four planned commuter railcorridors (East Corridor, Gold Line, North Metro and Northwest Corridor) included in the FasTracksprogram. Such facility will cover approximately 31 acres, will be located northwest of downtown Denverand is expected to include facilities to allow for command and control of the commuter rail operations andsecurity with communication links to the District's light rail transit operation control center and securitycommand center. The commuter rail maintenance facility is being delivered as part of the Eagle P3Project described in "Eagle P3 Project" under this caption. Completion of the Commuter RailMaintenance Facility is scheduled for August 2014.

DEBT STRUCTURE OF RTD

Subject to certain exceptions, including refinancing at a lower interest rate, the State Constitutionprovides that local governmental entities such as RTD may not issue bonds or other multiple-fiscal yearfinancial obligations without the approval of the voters at an election called to approve the debt. See"CONSTITUTIONAL REVENUE, SPENDING AND DEBT LIMITATIONS." The Act does notprovide any limitation as to the amount of debt which may be issued by RTD. Lease purchaseagreements subject to annual appropriation are not debt or other multiple-fiscal year financial obligationsfor purposes of State law and therefore do not require voter approval. The following table summarizesthe District's authorized and outstanding Sales Tax Revenue Bonds and Lease Purchase Agreements as ofMay 1, 2013:


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TABLE IXStatement of Obligations

As of May 1, 2013 (except as noted)

Sales Tax Revenue Bonds (0.6% Sales Tax)(1) – Senior Bonds Outstanding(2) (11)

RTD Sales Tax Revenue Refunding Bonds, Series 2007A $ 69,825,000RTD Sales Tax Revenue Refunding Bonds, Series 2010A 40,950,000RTD Sales Tax Revenue Refunding Bonds, Series 2013A 96,580,000

TOTAL $207,355,000

Sales Tax Revenue Bonds (FasTracks – 0.4% Sales Tax Increase)(3) – Parity BondsRTD Sales Tax Revenue Bonds (FasTracks Project), Series 2006A(4) $ 235,735,000RTD Sales Tax Revenue Refunding Bonds (FasTracks Project), Series 2007A 361,320,000RTD Tax-Exempt Sales Tax Revenue Bonds (FasTracks Project), Series 2010A 79,140,000RTD Taxable Sales Tax Revenue Bonds (FasTracks Project) (Direct Pay Build

America Bonds), Series 2010B 300,000,000RTD Sales Tax Revenue Bonds (FasTracks Project), Series 2012A 474,935,000RTD TIFIA Bond(5) 280,000,000 (5)

TOTAL $1,731,130,000

Eagle P3 ProjectTABOR Portion of Service Payments(6) $589,913,540

DUSPADUSPA Bond(7) $161,020,334

Lease Purchase Agreements(8)(10)

Adjustable Rate Certificates of Participation (2002A Transit Vehicle Project), Series 2002A(9) $108,775,000Lease Purchase Agreement II (Fixed Rate Certificates of Participation 2004A Refunding

Project), Series 2004A 16,525,000Certificates of Participation, Series 2005A (10) 14,890,000Lease Purchase Agreement II (Taxable Refunding Certificates of Participation),

Series 2007A 12,340,000Tax-Exempt Certificates of Participation, Series 2010A 204,330,000Taxable Certificates of Participation, Series 2010B 100,000,000Certificates of Participation, Series 2013A 224,045,000 (10)

TOTAL $680,905,000____________(1)

Secured by a first lien on the 0.6% Sales Tax and any additional revenues legally available to RTD that the Board in its discretionpledges by supplemental resolution to the payment of such bonds. The Board has not pledged any additional revenues to securethese outstanding Senior Bonds.

(2)RTD is current on payment of its outstanding obligations.

(3)Secured by a first lien on the 0.4% Sales Tax Increase and a subordinate lien on the 0.6% Sales Tax. Does not reflect the Bonds.See the discussion following this TABLE IX regarding the District's plans to issue Additional Parity Bonds depending onfinancial and market conditions.

(4)These are the Refunded Bonds.

(5)This amount is not actually outstanding, but instead represents the maximum amount that can be drawn under the TIFIA LoanAgreement. The District has not made any draws under the TIFIA Loan Agreement to date, but expects to draw down the loan infull between 2013 and 2016.

(6)See "THE SYSTEM – FasTracks – Eagle P3 Project." Secured by a lien on the Sales Tax Revenues that is subordinate to the lienthereon of the Parity Bonds and the Bonds.

(7)Secured by Sales Tax Revenues after payment of Senior Bonds, Parity Bonds, Bonds and TABOR Portion of Service Payments.

(8)Paid with annually appropriated lease payments by the District. Not secured by Sales Tax Revenues.

(9)The interest on these certificates has been converted to a fixed rate.

(10) Delivered on May 9, 2013. Certain proceeds of the Series 2013A Certificates refunded $38,030,000 of the Series 2005ACertificates currently outstanding in the principal amount of $52,920,000, resulting in Series 2005A Certificates remainingoutstanding in a principal amount of $14,890,000.

(11)See the discussion following this Table IX regarding the District's expectations as to interim financing arrangements, certificatesof participation and Additional Parity Bonds to be incurred and issued in the future.

Source: The District.

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On November 2, 1999, the electors of the District authorized the District to incur $457,000,000 ofindebtedness, with no new taxes, exclusively to finance the Southeast Corridor light rail project. The fullamount of this authorized indebtedness has been issued or incurred.

At the 2004 Election, the electors of the District authorized the District to incur $3.477 billion ofindebtedness to finance FasTracks. See "THE SYSTEM – FasTracks." The District has issuedobligations in the aggregate principal amount of approximately $2.492 billion pursuant to suchauthorization. Since the Bonds are being issued to refund the Refunded Bonds at a lower interest rate, theDistrict will not utilize any remaining electoral authorization in connection with the issuance of theBonds. The District has also committed under outstanding agreements to reserve certain amounts of itselectoral authority.

Taking into account savings achieved from the refunding of certain outstanding Senior Bonds andcertificates of participation, and the anticipated refunding of the Refunded Bonds, in the fourth quarter of2013 the District anticipates the issuance of Additional Parity Bonds in a principal amount ofapproximately $120 million (subject to change), together with other funds made available by the Districtfrom cash on hand, to finance construction of the North Metro Corridor from Denver Union Station to theNWSS and from the NWSS to 72nd Avenue. See "THE SYSTEM – FasTracks – FasTracks Corridors –North Metro Corridor."

RTD also has pledged both the 0.4% Sales Tax Revenues and 0.6% Sales Tax Revenues (to theextent needed) in connection with the Eagle P3 Project. See "THE SYSTEM – FasTracks – Eagle P3Project." In connection with the Eagle P3 Project, the District has issued $397,835,000 aggregateprincipal amount of the P3 Conduit Bonds. The P3 Conduit Bonds do not constitute indebtedness ofRTD as a multiple-fiscal year obligation of RTD within the meaning of any provisions of the StateConstitution or the laws of the State.

As described under "THE SYSTEM – FasTracks – Denver Union Station," RTD entered into theDUSPA Agreement with DUSPA in July 2010 in order to support DUSPA's financing of the DenverUnion Station mixed-use and multi-modal project, including transit elements which are to be constructedon RTD owned property and will be owned and operated by RTD. Such transit elements include a newlight rail terminal, a new commuter rail station, a regional and commercial bus facility and new tracks.Under the DUSPA Agreement, RTD issued the DUSPA Bond to DUSPA payable from pledged SalesTax Revenues on a lien basis subordinate to the Senior Bonds, the Parity Bonds, the Bonds and theTABOR Portion of Service Payments. The DUSPA Bond was outstanding in the aggregate principalamount of $161,020,334 as of May 1, 2013, bears interest at an annual rate of 5.85%, and is amortizedover a 30-year term resulting in level annual debt service not exceeding $12,006,489. In the event thatthere are not sufficient revenues to pay the debt service requirements on the DUSPA Bond, no event ofdefault shall be deemed to occur under the DUSPA Agreement or the DUSPA Bond, but the DUSPABond shall continue to bear interest at 5.85% per annum, without interest on accrued but unpaid interest.

Under the authority conferred at the 2004 Election and in order to assist in the financing of aportion of the costs related to Eagle P3 Project, the District entered into the TIFIA Loan Agreementpursuant to which the USDOT will loan a maximum amount of $280,000,000 to the District, which loanis evidenced by the RTD TIFIA Bond. To date, the District has not made any draws under the TIFIALoan Agreement, but expects to draw down the loan in full between 2013 and 2016. See "THE BONDS– Debt Service Requirements."

As part of the Eagle P3 Project, the District received a Federal New Starts Grant in the amount of$1.03 billion. Future appropriations are expected to be received by the District through 2018. TheDistrict intends to accelerate the receipt of $240 million (which amount may be more or less depending

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on market conditions and other factors) anticipated to be received from 2016 to 2018 through the use ofan interim financing arrangement. The interim financing may be provided by a commercial bank andstructured as a non-revolving credit facility (the "GARVEE Credit Facility") with drawings bearing atax-exempt fixed rate of interest. Security will be comprised of (a) a first and exclusive lien on theFederal New Starts Grant expected between 2016 and 2018, (b) a non-exclusive third lien on revenuesgenerated by the 0.4% Sales Tax (after payment of the Bonds, the Parity Bonds and the TABOR portionof Service Payments and on parity with the DUSPA Bond) and (c) a non-exclusive fourth lien on therevenues generated by the 0.6% Sales Tax (after payment of the Senior Debt, the Bonds and the ParityBonds, and the TABOR portion of Service Payments and on parity with the DUSPA Bond). Closing ofthe GARVEE Credit Facility is anticipated to occur by the third quarter of 2013, with an anticipatedmaturity date of November 1, 2019. The District may also enter into a second similar facility to financeup to $200 million in anticipation of the receipt of future appropriations, or increase the GARVEE CreditFacility in such amount, with such financing only to be executed in the event of need.

RTD currently contemplates the issuance of additional certificates of participation in the amountof approximately $305.230 million between 2015 and 2021 to finance the delivery of additional buses andfare collection equipment as it completes the replacement of its bus fleet used to serve its base system.However, the District may issue certificates of participation in an aggregate principal amount greater orless than such principal amount depending on market conditions and other related factors.

The District has entered into a number of transactions in which certain of its light rail vehicleshave been leased to and subleased back from certain U.S. and foreign companies and has entered into atransaction in which its maintenance facilities have been sold to and leased back from one of thesecompanies. As part of each of these transactions, the District irrevocably set aside certain moneys (whichwere received from each counterparty as payment for its leasing of the buses, light rail vehicles and thereal property) with a third-party trustee. The moneys held by such trustee will be utilized to make thelease payments owed by the District with respect to its leasing of these assets and the lease paymentsowed by the District under the transactions are therefore considered fully funded and economicallydefeased. See Appendix B – "REGIONAL TRANSPORTATION DISTRICT DENVER, COLORADOCOMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDEDDECEMBER 31, 2011 AND 2010."

FINANCIAL INFORMATION CONCERNING RTD

Budget Policy

RTD annually prepares and adopts an official budget in accordance with the State LocalGovernment Budget Law. RTD's Fiscal Year begins on January 1 and ends on December 31 (the "FiscalYear"). Prior to October 15 of each Fiscal Year, the General Manager submits an operating and capitalbudget for the ensuing Fiscal Year to the Board for its approval. The Board may accept the budget with amajority vote or may vote to override all or any part of the proposed budget. After the budget is approved(on or before December 31), in conjunction with an appropriation resolution by the Board, which mustalso approve subsequent amendments thereto, the General Manager is empowered to administer theoperating and capital budget. If the Board fails to adopt a budget by the required date, RTD has authorityto begin making expenditures limited to 90% of the prior year's approved appropriation for operations andmaintenance.

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RTD also maintains budgetary controls. These controls ensure compliance with legal provisionsembodied in the annual appropriated budget approved by the Board. The budget sets forth proposedoutlays for operation, planning, administration, development, debt service, and capital outlays. The levelof budgetary control (that is, the level at which expenditures may not legally exceed the appropriatedamount) is established at the fund level.

Unused appropriations lapse at year-end, except that the Board has the authority, as stated in theadopted appropriation resolution, to carry-over the unused portions of the funds for capital projects notcompleted for a period, not to exceed three years. RTD's policy also authorizes the General Manager toapprove certain line-item transfers within the budget.

RTD administration utilizes multi-year planning and forecasting methods for budgeting and forcapital projects planning. They are believed to be effective in more accurately forecasting RTD'sfinancial needs and in programming the capital improvements program to meet its infrastructurerequirements. The use of six-year operating and capital improvement forecasts in financial planning hasenabled RTD to plan necessary revenue measures to meet future operational needs. See "THE SYSTEM– Long-Term Financial Planning – Strategic Budget Plan."

Major Revenue Sources

According to its unaudited financial statements for the year ended December 31, 2012, RTDderived 69% of its combined operating and non-operating income from Sales Tax Revenues, 18% fromtransit operating revenues, 11% from federal operating assistance, 1% from investment income and 1%from other sources. RTD has not levied any ad valorem taxes since 1976, although it has the power to doso, subject to certain State constitutional restrictions. See "CONSTITUTIONAL REVENUE,SPENDING AND DEBT LIMITATIONS."

The following table summarizes certain information relating to RTD's primary sources of revenueand capital receipts, including Sales Tax Revenues, for the years 2002 to 2012:


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TABLE XRevenue and Capital Receipts by Source(1)


YearOperatingRevenues(2)

SalesTax

Revenues

FederalOperatingAssistance

InvestmentIncome Other

TotalRevenue

FederalCapitalGrants

Local CapitalContributions

TotalRevenue

and CapitalReceipts

2002 $52,613 $213,668 $35,096 $18,815 $3,493 $323,685 $46,984 $3,587 $ 374,2562003 54,547 210,447 37,803 10,095 3,550 316,442 135,917 4,019 456,3782004 61,023 221,276 39,649 9,439 3,621 335,008 54,446 17,309 406,7632005 62,741 386,427(3) 41,322 15,624 3,484 509,598 86,523 10,861 606,9822006 69,521 399,557 42,805 29,936 4,032 545,851 57,413 4,123 607,3872007 81,510 418,407 47,041 57,471 4,706 609,135 107,577 7,556 724,2682008 92,329 412,824 50,814 52,456 3,106 611,529 39,220 169 650,9182009 101,247 371,405 68,146 29,379 3,283 573,460 129,211 2,500 705,1712010 102,356 397,549 92,655 8,065 3,653 604,278 102,213 5,265 711,7562011 113,379 415,180 89,592 6,484 11,356 635,991 186,073 52,219 874,2832012(4) 117,265 449,787 69,314 2,612 10,934 649,912 213,001 86,831 949,7442012% 12.3% 47.4% 7.3% 0.3% 1.2% 68.5% 22.4% 9.1% 100%

____________(1) Data is taken from the financial records of RTD and is presented on the accrual basis.(2) Comprised almost entirely of passenger fare revenues and advertising revenues.(3) The District began collecting the 0.4% Sales Tax Revenues in 2005.(4) Based on unaudited financial information of the District.Source: District Comprehensive Annual Financial Reports for the years ended December 31, 2002-2011; The District's unaudited

financial records.

Sales Tax

Both the Sales Tax and property tax are subject to legislative control in that both the tax base andthe tax rates are prescribed by statute and may only be changed by amendments to the Act approved bythe State General Assembly or initiated by the voters. See "THE SALES TAX" for a detailed discussionof the sales tax.

Fare Structure

Passenger fare revenues are derived from fares charged to the users of the RTD system. Faresmay be paid in exact change, by tokens that were purchased prior to December 31, 2011, by prepaidtickets, by using a monthly pass valid for unlimited rides during the month for the level of servicepurchased, or by using annual passes sold to specific groups. These include passes sold to employers foruse by all employees ("EcoPass"), passes sold to organized neighborhood groups ("NeighborhoodEcoPass"), and passes sold to all students at participating colleges or universities ("CollegePass"). TheRTD fare structure includes free transfers between routes in the same or lower fare classes. Discountedfares also are available for youth, students, seniors, and the disabled; RTD also sells ten-ride ticket booksand monthly passes to social service agencies at a discounted rate. RTD does not refund or replace lost orstolen ticket books or passes. Most RTD prepaid fare media are available through various outletsthroughout the District at no charge to RTD. EcoPass, Neighborhood EcoPass, and CollegePass programannual passes are sold directly to participating organizations, and each individual participant is given aphoto ID pass.

-47-

RTD may adjust fares on the system without the approval or consent of any other body or entity.As a recipient of federal grants, RTD is obligated to consider comments arising from a publicinvolvement process prior to implementing any fare increases. The current SBP assumes future fareincreases every three years corresponding to the projected increase in the Denver-Boulder ConsumerPrice Index. The District implemented a fare increase on March 3, 2002, which was the first majorchange in the fare structure since 1997. Fares were adjusted further on January 1st of 2003, 2004, 2006,2008, 2009 and 2011. On July 1, 2006, RTD initiated a new fare system for light rail based upon thenumber of zones a passenger travels in for each one-way trip.

The following table shows the current RTD fares that became effective on January 1, 2011:

TABLE XISingle Trip Fares

FareSenior/Disabled/

Student(1)

Mall Shuttle Free FreeDenver, Boulder, Longmont and $2.25 $1.10

Light RailLight Rail and Bus Express(2) 4.00 2.00Light Rail and Bus Regional(3) 5.00 2.50SkyRide

Zone 1 13.00 6.50Zone 2 11.00 5.50Zone 3 9.00 4.50

_________(1) Seniors include age 65 and older.(2) Trips consisting of three fare zones.(3) Trips consisting of four fare zones.Source: The District's unaudited financial records.

TABLE XIIMultiple Trip Fares

Regular10-Ride

Other10-Ride

RegularMonthly

OtherMonthly(1)

Local - Denver, Boulder andLongmont and Light Rail $20.00 $10.00 $79.00 $39.50

Light Rail and Bus Express 36.00 18.00 140.00 70.00Light Rail and Bus Regional 45.00 22.50 176.00 88.00_________(1) Includes monthly fares for youth, student, disabled and senior patrons. Youth patrons include children ages 6-19. Student

includes any student with a school identification card. Seniors include age 65 and older.Source: The District's unaudited financial records.

-48-

The following table summarizes RTD's ridership and fare revenue for the years 2002 to 2012:

TABLE XIIIRTD Annual Ridership and Fare Revenue


YearRevenue

Boardings(1) Fare Revenue

PercentChange in

Fare Revenue

2002 64,167 $49,967 6.8%2003 61,235 50,459 1.02004 64,720 55,442 9.92005 67,994 57,638 4.02006 69,867 66,211 14.92007 81,714 77,128 16.52008 89,254 88,205 14.42009 83,337 96,890 9.82010 83,732 97,942 1.12011 83,442 108,497 10.82012 (2) 85,442 112,927 4.1

_________(1) Includes Access-a-Ride boardings and vanpool boardings. Totals for 2007-2012 include Southeast

Corridor light rail.(2) Based on unaudited financial information of the District.Source: The District's Comprehensive Annual Financial Reports for the fiscal years ended December 31,

2002-2011; The District's unaudited financial records.

Advertising and Ancillary Revenues

RTD receives additional operating revenue from advertising on its buses. RTD sells signs on theexterior and interior of its vehicles, and allows advertisers to wrap buses with advertising themes. RTDalso receives ancillary non-operating revenue from parking fees and charges, rent received pursuant to anair rights lease at its Civic Center facility (under contract for sale by RTD expected to be completedduring 2013), leases of retail space at facilities, cross border leases, and other sources.


-49-

The following table shows RTD's advertising income and ancillary revenues for the years 2002 to2012:

TABLE XIVRTD Advertising and Ancillary Revenues


YearAdvertising

RevenueAncillaryRevenues

2002 $2,419 $3,4932003 2,886 3,5502004 3,047 3,6212005 3,196 3,4842006 2,800 4,0322007 3,194 4,7062008 2,854 3,1062009 2,866 3,2432010 3,301 2,8922011 3,992 2,5282012(1) 3,524 2,247____________(1) Based on unaudited financial information of the District.Source: District Comprehensive Annual Financial Reports for the years ended

December 31, 2002-2011; The District's unaudited financial records.

Federal Funding

RTD is a designated recipient of federal funds from the FTA. These grants are reserved forcapital, planning, technical assistance or operating assistance projects. The following table shows RTD'sgrant receipts from FTA for the years 2002 to 2012:

TABLE XVRTD Federal Grant Receipts


YearFederalCapital

Other LocalContributions

Operations,Planning

and Other

2002 $ 46,983 $ 3,587 $35,0962003 135,917 4,020 37,8032004 54,446 17,309 39,6492005 86,523 10,861 41,3222006 57,413 4,124 42,8052007 107,577 7,556 47,0412008 39,220 169 50,8142009 129,211 2,500 68,1462010 102,213 5,265 92,6552011 186,073 52,219(2) 89,5922012(1) 202,499 86,831(2) 69,314

____________(1) Based on unaudited financial information of the District.(2) Increase is largely due to the District recognizing the delivery of the Denver Union Station Project as

construction is completed by the Denver Union Station Project Authority.Source: District Comprehensive Annual Financial Reports for the years ended December 31,

2002-2011; The District's unaudited financial records.

-50-

As a condition of receipt of FTA grants, RTD is typically required to augment these grants withcertain amounts of its own locally generated funds. As of December 31, 2012, RTD had an estimatedcommitment to provide $31,347,911 in local funds in order to receive $85,194,344 in federal grant funds.RTD will be required to provide approximately $16,659,000 in local funds to match 2013 federalappropriations of $66,634,558. FTA operating assistance is allocated nationally on a formula basis, andcannot exceed 50% of an agency's total operating budget.

As a designated recipient, RTD must comply with prevailing statutes, regulations, administrativerequirements, executive orders, and FTA guidance. These include, but are not limited to, requirements inthe areas of labor, seniors and disabled, civil rights, charter bus service, financial reporting, privatization,public participation, and environmental regulations. The grant agreements contain substantial conditionsand limitations concerning the payment of federal funds, and such payments also may be subject tocontinuing appropriations by the United States Congress.

RTD expects the Budget Control Act of 2011 to have a minor impact on the cash flow fromfederal funds. With the sequestration reductions which have gone into effect as of March 1, 2013, RTDcould lose 8.7 percent of the Build America Bond subsidy relating to certain outstanding Bonds andcertificates of participation, resulting in a reduction of approximately $767,462 per year. The RTDannual operating assistance grants of approximately $62 million in 2013 are exempt from sequestration.While the RTD Full Funding Grant Agreements ("FFGAs"), such as the Eagle Project FFGA, are subjectto sequestration, it has not yet been determined how a potential spending reduction from sequestrationwould be allocated among New Starts and FFGA projects. That determination will either be made by theCongress or the FTA after appropriations for the remainder of Fiscal Year 2013 are provided. FTA'sstated policy is to honor existing FFGA commitments before new funding recommendations, whichwould mitigate impacts for projects with existing FFGAs. RTD expects any reduction in cash flow froman award to be temporary, and receipts would most likely be made whole over the remainder of theannual FFGA allocation. Overall RTD does not anticipate that sequestration will have a material impacton cash flows over time and will not impact its ability to complete the projects on time.

Investment Income

For the year ended December 31, 2011, RTD earned investment income in the amount of$6,484,000, representing approximately 1.0% of 2011 revenues. For the year ended December 31, 2012,RTD earned investment income in the amount of $2,612,000, representing approximately 0.4% of 2012revenues. See TABLE X herein.

Financial Summary

The following tables summarize certain financial information regarding RTD. The data for thefour years ended December 31, 2011 has been prepared by RTD from its audited financial statements forthe years ended December 31, 2008-2011. The data for the year ended December 31, 2012 has beenprepared from RTD's unaudited financial records. For detailed financial information, see Appendix B –"REGIONAL TRANSPORTATION DISTRICT DENVER, COLORADO COMPREHENSIVEANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2011 AND2010."

-51-

TABLE XVISummary of Statements of Revenues and Expenses and Changes in Net Position

For the Years Ended December 31, 2008-2012(1)


Years ended December 31

2008 2009 2010 20112012

UnauditedOperating Revenues:

Passenger Fares $88,205 $96,890 $97,942 $108,497 $112,927Other 4,124 4,357 4,414 4,882 4,338Total Operating Revenues 92,329 101,247 102,356 113,379 117,265

Operating Expenses:Salaries, wages, fringe benefits 155,799 161,747 160,498 166,332 174,084Materials and supplies 61,056 56,835 48,310 52,015 57,092Services 36,835 42,783 60,553 48,357 112,748Utilities 10,575 9,512 10,977 11,627 11,432Insurance 5,333 3,767 5,429 6,089 4,850Purchased transportation 102,743 103,975 104,514 108,865 111,100Leases and rentals 2,464 2,680 2,515 1,964 2,374Miscellaneous 2,619 6,866 3,315 2,082 15,679Total Operating Expenses 377,424 388,165 396,111 397,331 489,359

Operating loss beforedepreciation (285,095) (286,918) (293,755) (283,952) (372,094)

Depreciation 102,252 106,025 104,176 104,280 112,582

Operating Loss (387,347) (392,943) (397,931) (388,232) (484,677)

Nonoperating income (expense):Sales and use tax revenues 412,824 371,405 397,549 415,180 449,787Grant operating assistance 50,814 68,146 92,655 89,592 69,314Investment income 52,456 29,379 8,065 6,484 2,612Other income 3,106 3,243 3,653 11,356 10,934Gain/loss capital assets 1 40 (3,474) (6,101) (6)Investment expense (56,273) (34,179) (48,735) (51,274) (64,641)Other expense/Unrealized loss (977) (23,037) (1,671) (3,895) (667)Total Nonoperating Income 461,951 414,997 448,042 461,342 467,333

Net income before capital grantsand local contributions 74,604 22,054 50,111 73,110 (17,343)

Federal capital grants and localcontributions 39,389 131,711 107,478 238,292 299,830

Increase in Net Position 113,993 153,765 157,589 311,402 282,487

Net Position at Beginning of Year 1,778,417 1,892,410 2,046,175 2,203,764 2,515,166Prior Period Adjustment -- -- -- -- --Net Position at End of Year $1,892,410 $2,046,175 $2,203,764 $2,515,166 $2,797,653

____________(1) The financial data for the fiscal years ended December 31, 2008–2011 is from the Comprehensive Annual Financial Reports of the

District for the fiscal years ended December 31, 2008-2011. The financial data for the fiscal year ended December 31, 2012 is fromthe District's unaudited financial records.

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-52-

-53-

Management's Discussion and Analysis of Financial Trends

An overview and analysis of the District's financial activities is provided under "FINANCIALSECTION – Management's Discussion and Analysis" in Appendix B.

ECONOMIC AND DEMOGRAPHIC OVERVIEW

Appendix C contains an economic and demographic overview of the Denver Metropolitan Areaas of April 2013 (the "Overview"). The Overview has been prepared at the request of RTD byDevelopment Research Partners which has consented to the inclusion of the Overview in this OfficialStatement. Neither RTD nor the Underwriters assumes responsibility for the accuracy, completeness orfairness of the information contained in the Overview. The information in Appendix C – "ANECONOMIC AND DEMOGRAPHIC OVERVIEW OF THE DENVER-METROPOLITAN AREA" hasbeen included in this Official Statement in reliance upon the authority of Development Research Partnersas experts in the preparation of economic and demographic analyses. Potential investors should read theOverview in its entirety for information with respect to the economic and demographic status of theDenver Metropolitan Area.

FORWARD LOOKING STATEMENTS

This Official Statement, and particularly the information contained under the captions "THESYSTEM – FasTracks" and "– Long-Term Financial Planning – Strategic Budget Plan," containsstatements relating to future results that are "forward-looking statements" as defined in the PrivateSecurities Litigation Reform Act of 1995. When used in this Official Statement, the words "estimate,""forecast," "intend," "expect" and similar expressions identify forward-looking statements. Suchstatements are subject to risks and uncertainties that could cause actual results to differ materially fromthose contemplated in such forward-looking statements. Inevitably, some assumptions used to developthe forecasts will not be realized and unanticipated events and circumstances may occur. Therefore, thereare likely to be differences between forecasts and actual results, and those differences may be material.

CONSTITUTIONAL REVENUE, SPENDING AND DEBT LIMITATIONS

On November 3, 1992, the voters of the State approved an amendment to the State Constitution(the "Amendment") that limits the powers of public entities to borrow, tax and spend.

The Amendment requires voter approval prior to the imposition by RTD of a new tax, tax rateincrease, mill levy increase, valuation for assessment ratio increase, tax extension or other change in taxpolicy that results in a net gain of tax revenues or the creation by RTD of any multiple-fiscal year director indirect debt or other financial obligation, subject to certain exceptions, including refinancing at alower interest rate. Elections for such voter approval may be held only at a State general election or onthe first Tuesday of November of odd-numbered years.

In the absence of voter approval, the Amendment also limits, with certain adjustments, annualpercentage increases in RTD property tax revenues and total revenues, subject to certain exceptions, tothe total of inflation plus changes in the actual value of real property within its boundaries. Revenuescollected by RTD in excess of the limit are required to be refunded during the next calendar year. Inaddition, in the absence of voter approval, the Amendment limits, with certain adjustments, annual

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percentage increases in RTD spending, subject to certain exceptions, to the total of inflation plus thechanges in the actual value of real property within its boundaries. If revenues fall in any calendar year,the lower total becomes the new RTD base for computing the next year's limits. On November 2, 1999,the voters of the District voted to exempt RTD from the revenue and spending limitations of theAmendment for the purpose of repaying any debt incurred to finance the Southeast Corridor light railproject or operating such project, for as long as any such debt remains outstanding, but in no eventbeyond December 31, 2026. On November 4, 2004, the voters of the District also exempted the Districtfrom any revenue and spending limitations on the 0.4% Sales Tax Revenues and related investmentincome.

LITIGATION

There is no litigation pending or threatened in writing relating in any manner to the authorization,execution or delivery or the legality of the Bonds or the power of RTD to apply Sales Tax Revenuesunder the Indenture.

RTD and the City and County of Denver ("CCD") have an intergovernmental agreement for thedesign and construction of RTD's East Corridor commuter rail line at CCD's Denver International Airport("DIA"). The parties have a dispute under the agreement related to responsibilities regarding earthwork,walls, roads and other elements of the DIA project. The dispute has been submitted to an arbitrator. Thearbitrator has ruled on some elements and will issue a final decision on all items. That decision will besubject to appeal only based on showing an abuse of discretion, and CCD has indicated that it may appealthe ruling. RTD's responsibility under the interim decision, and negotiations/resolution consistent withthat decision, could possibly result in RTD's responsibility for $10 million in additional costs, but suchamount would not result in exposure in excess of RTD's budgeted reserve for the project, which is itself asub-project of the Eagle P3 Project. See "THE SYSTEM – FasTracks – Eagle P3 Project."

The District is involved in various other claims and lawsuits arising in the ordinary course of theDistrict's business. The District believes that its insurance coverage is adequate and that any liabilityassessed against the District as a result of claims or lawsuits that are not covered by insurance would notmaterially adversely affect the financial condition of the District or its ability to perform its obligationsunder the Indenture.

GOVERNMENTAL IMMUNITY

The Colorado Governmental Immunity Act, Title 24, Article 10, Part 1, Colorado RevisedStatutes, as amended (the "Governmental Immunity Act"), provides in part, that public entities areimmune from liability in all claims for injury which lie in tort or could lie in tort (regardless of the type ofaction of the form of relief chosen by the claimant), except to the extent specifically excluded by theGovernmental Immunity Act. These exclusions include claims resulting from: (a) the operation, by apublic employee during the course of his or her employment, of a motor vehicle that is owned or leasedby a public entity; (b) the operation by a public entity of a public hospital, correctional facility or jail; (c)a dangerous condition of a public building or public facility operated by a public entity, including apublic water, gas, sanitation, electrical, power or swimming facility; (d) a dangerous condition of a publichighway, road or street which physically interferes with the movement of traffic, a dangerous conditioncaused by a failure to realign traffic signs turned without authorization in a manner which reassigns theright-of-way on intersecting public highways, roads or streets or by a failure to repair traffic controlsignals on which conflicting directions are displayed or a dangerous condition caused by an accumulationof snow and ice which interferes with access to public buildings when a public entity has actual notice of

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such condition, has a reasonable time to act and fails to use existing means available to it for removal ormitigation; or (e) the operation and maintenance by a public entity of any public water, gas, sanitation,electrical, power or swimming facility. The Governmental Immunity Act defines "dangerous condition"as a physical condition or use which constitutes an unreasonable risk to the health or safety of the publicwhich is or should have been known to exist and which is proximately caused by the negligent act oromission of the public entity. The maximum amount that may be recovered in any single occurrence on aclaim based on one of the exclusions of the Governmental Immunity Act is limited to $150,000 for injuryto one person in a single occurrence and $600,000 for an injury to two or more persons in a singleoccurrence, except that no person may recover in excess of $150,000. For claims arising on or afterJuly 1, 2013, such limits are to increase to $350,000 for injury to one person in a single occurrence and$990,000 for an injury to two or more persons in a single occurrence except that no person may recover inexcess of $350,000. The Governmental Immunity Act also specifies the sources from which judgmentsagainst public entities may be collected and provides that public entities are not liable either directly or byindemnification for punitive or exemplary damages or for damages for outrageous conduct, except as maybe otherwise determined by a public entity pursuant to the Governmental Immunity Act.

RTD may be subject to civil liability and may not be able to claim sovereign immunity for actionsfounded upon various federal laws. Examples of such civil liability include, but are not limited to, suitsfiled pursuant to 42 U.S.C. Section 1983 alleging the deprivation of federal constitutional or statutoryrights of an individual. In addition, RTD may be enjoined from engaging in anti-competitive practiceswhich violate the antitrust laws. However, the Governmental Immunity Act provides that it applies to anyaction brought against a public entity or a public employee in any Colorado state court having jurisdictionover any claim brought pursuant to any federal law, if such action lies in tort or could lie in tort.

Pursuant to the Governmental Immunity Act, a public entity may prospectively waive itsimmunity. RTD has waived sovereign immunity for certain types of claims. Specifically, RTD haswaived immunity for claims arising from its negligent operation of light rail vehicles and for claimsarising from the construction of the Southwest Corridor light rail line, up to the limits of its insurancepolicy covering such claims. See "RTD – Insurance."

CONTINUING DISCLOSURE AGREEMENT

Pursuant to the requirements of the Securities and Exchange Commission Rule 15c2-12 (17C.F.R. Part 240, § 240.15c2-12) ("Rule 15c2-12"), RTD has agreed in a Continuing DisclosureAgreement, dated May 16, 2013 (the "Continuing Disclosure Agreement"), between RTD and DigitalAssurance Certification, L.L.C., as dissemination agent (the "Dissemination Agent"), to provide certainfinancial information, other operating data and notices of material events for the benefit of the owners ofthe Bonds. A form of the Continuing Disclosure Agreement is attached hereto as Appendix A. A failureby RTD or the Dissemination Agent to comply with the Continuing Disclosure Agreement does notconstitute an Event of Default under the Indenture. Nevertheless, such a failure must be reported inaccordance with Rule 15c2-12 and must be considered by any broker, dealer or municipal securitiesdealer before recommending the purchase or sale of the Bonds in the secondary market. Consequently,such a failure may adversely affect the transferability and liquidity of the Bonds and their market price.Except as disclosed in the following paragraph, RTD is in substantial compliance with its continuingdisclosure agreements under Rule 15c2-12.

RTD has filed its annual reports, audited financial statements and event notices on a timely basisas required by its existing continuing disclosure agreements under Rule 15c2-12. However, in 2011,RTD became aware that certain information required by its continuing disclosure agreements to beupdated in the annual report was not included in the annual report in certain prior years in the format

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required or was included in the audited financial statements rather than the annual report. RTD undertookin 2011 to consolidate its annual updated information (including information for the noncompliant years)in the annual report filed that year and anticipates following such a consolidated disclosure process in thefuture. The District has also recently discovered that in 2008 and 2009 it did not file event notices withrespect to certain bond insurer downgrades.

LEGAL MATTERS

Legal matters relating to the execution and delivery of the Bonds are subject to the approvingopinion of Sherman & Howard L.L.C., Denver, Colorado, as Bond Counsel, which is to be delivered withthe Bonds.

Hogan Lovells US LLP and Bookhardt & O'Toole, Denver, Colorado, as Co-Disclosure Counsel,have been retained to assist the District in the preparation of this Official Statement.

Certain legal matters will be passed upon for RTD by Marla Lien, Esquire, General Counsel forthe District, and for the Underwriters by Kutak Rock LLP, Denver, Colorado.

The legal fees to be paid to Sherman & Howard L.L.C. in connection with the execution anddelivery of the Bonds are contingent upon the sale and delivery of the Bonds. The legal fees to be paid toHogan Lovells US LLP and Bookhardt & O'Toole in connection with the preparation of this OfficialStatement are also contingent upon the sale and delivery of the Bonds.

TAX MATTERS

In the opinion of Bond Counsel, assuming continuous compliance with certain covenantsdescribed below, interest on the Bonds is excluded from gross income under federal income tax lawspursuant to Section 103 of the Internal Revenue Code of 1986, as amended to the date of delivery of theBonds (the "Tax Code"), interest on the Bonds is excluded from alternative minimum taxable income asdefined in Section 55(b)(2) of the Tax Code except that such interest is required to be included incalculating the "adjusted current earnings" adjustment applicable to corporations for purposes ofcomputing the alternative minimum taxable income of corporations as described below, and interest onthe Bonds is excluded from Colorado taxable income and Colorado alternative minimum taxable incomeunder Colorado income tax laws in effect on the date of delivery of the Bonds.

The Tax Code and Colorado law impose several requirements which must be met with respect tothe Bonds in order for the interest thereon to be excluded from gross income, alternative minimumtaxable income (except to the extent of the aforementioned adjustment applicable to corporations),Colorado taxable income and Colorado alternative minimum taxable income. Certain of theserequirements must be met on a continuous basis throughout the term of the Bonds. These requirementsinclude: (a) limitations as to the use of proceeds of the Bonds; (b) limitations on the extent to whichproceeds of the Bonds may be invested in higher yielding investments; and (c) a provision, subject tocertain limited exceptions, that requires all investment earnings on the proceeds of the Bonds above theyield on the Bonds to be paid to the United States Treasury. The District will covenant and represent inthe Indenture that it will not take any action or omit to take any action with respect to the Bonds, theproceeds thereof, any other funds of the District, or the Project financed with the proceeds of the Bonds ifsuch action or omission (i) would cause the interest on the Bonds to lose its exclusion from gross incomefor federal income tax purposes under Section 103 of the Tax Code, (ii) would cause interest on the

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Bonds to lose its exclusion from alternative minimum taxable income as defined in Section 55(b)(2) ofthe Tax Code (except to the extent of the aforementioned adjustment applicable to corporations), or (iii)would cause interest on the Bonds to lose its exclusion from Colorado taxable income or Coloradoalternative minimum taxable income under present Colorado law. Bond Counsel's opinion as to theexclusion of interest on the Bonds from gross income, alternative minimum taxable income (to the extentdescribed above), Colorado taxable income and Colorado alternative minimum taxable income isrendered in reliance on these covenants, and assumes continuous compliance therewith. The failure orinability of the District to comply with these requirements could cause the interest on the Bonds to beincluded in gross income, alternative minimum taxable income, Colorado taxable income or Coloradoalternative minimum taxable income, or a combination thereof, from the date of issuance. BondCounsel's opinion also is rendered in reliance upon certifications of the District and other certificationsfurnished to Bond Counsel. Bond Counsel has not undertaken to verify such certifications byindependent investigation.

Section 55 of the Tax Code contains a 20% alternative minimum tax on the alternative minimumtaxable income of corporations. Under the Tax Code, 75% of the excess of a corporation's "adjustedcurrent earnings" over the corporation's alternative minimum taxable income (determined without regardto this adjustment and the alternative minimum tax net operating loss deduction) is included in thecorporation's alternative minimum taxable income for purposes of the alternative minimum tax applicableto the corporation. "Adjusted current earnings" includes interest on the Bonds.

The Tax Code contains numerous provisions which may affect an investor's decision to purchasethe Bonds. Owners of the Bonds should be aware that the ownership of tax-exempt obligations byparticular persons and entities, including, without limitation, financial institutions, insurance companies,recipients of Social Security or Railroad Retirement benefits, taxpayers who may be deemed to haveincurred or continued indebtedness to purchase or carry tax-exempt obligations, foreign corporationsdoing business in the United States and certain "subchapter S" corporations may result in adverse federaland Colorado tax consequences. Under Section 3406 of the Tax Code, backup withholding may beimposed on payments on the Bonds made to any owner who fails to provide certain required information,including an accurate taxpayer identification number, to certain persons required to collect suchinformation pursuant to the Tax Code. Backup withholding may also be applied if the ownerunderreports "reportable payments" (including interest and dividends) as defined in Section 3406, or failsto provide a certificate that the owner is not subject to backup withholding in circumstances where such acertificate is required by the Tax Code. All of the Bonds were sold at a premium, representing adifference between the original offering price of those Bonds and the principal amount thereof payable atmaturity. Under certain circumstances, an initial owner of such bonds (if any) may realize a taxable gainupon their disposition, even though such bonds are sold or redeemed for an amount equal to the owner'sacquisition cost. Bond Counsel's opinion relates only to the exclusion of interest on the Bonds from grossincome, alternative minimum taxable income, Colorado taxable income and Colorado alternativeminimum taxable income as described above and will state that no opinion is expressed regarding otherfederal or Colorado tax consequences arising from the receipt or accrual of interest on or ownership of theBonds. Owners of the Bonds should consult their own tax advisors as to the applicability of theseconsequences.

The opinions expressed by Bond Counsel are based on existing law as of the delivery date of theBonds. No opinion is expressed as of any subsequent date nor is any opinion expressed with respect topending or proposed legislation. Amendments to the federal or state tax laws may be pending now orcould be proposed in the future that, if enacted into law, could adversely affect the value of the Bonds, theexclusion of interest on the Bonds from gross income or alternative minimum taxable income or bothfrom the date of issuance of the Bonds or any other date, the tax value of that exclusion for differentclasses of taxpayers from time to time, or that could result in other adverse tax consequences. In addition,

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future court actions or regulatory decisions could affect the tax treatment or market value of the Bonds.Owners of the Bonds are advised to consult with their own tax advisors with respect to such matters.

The Internal Revenue Service (the "Service") has an ongoing program of auditing tax-exemptobligations to determine whether, in the view of the Service, interest on such tax-exempt obligations isincludable in the gross income of the owners thereof for federal income tax purposes. No assurances canbe given as to whether or not the Service will commence an audit of the Bonds. If an audit iscommenced, the market value of the Bonds may be adversely affected. Under current audit procedures,the Service will treat the District as the taxpayer and the Owners may have no right to participate in suchprocedures. The District has covenanted in the Indenture not to take any action that would cause theinterest on the Bonds to lose its exclusion from gross income for federal income tax purposes or lose itsexclusion from alternative minimum taxable income except to the extent described above for the ownersthereof for federal income tax purposes. None of the District, the Underwriters or Bond Counsel isresponsible for paying or reimbursing any Bond owner with respect to any audit or litigation costsrelating to the Bonds.

RATINGS

Standard & Poor's Rating Service, Inc. ("S&P"), Moody's Investor Service, Inc. ("Moody's") andFitch Inc. ("Fitch") have assigned the ratings shown on the cover page hereof to the Bonds.

Such ratings reflect only the views of the rating agencies and are not a recommendation to buy,sell or hold the Bonds. Any explanation of the procedures and methods used by each rating agency andthe significance of their respective ratings may be obtained from Moody's at 7 World Trade Center,250 Greenwich Street, New York, New York 10007, from Fitch at 111 Congress Avenue, Suite 2010,Austin, Texas 78701 and from S&P at 55 Water Street, New York, New York 10041. Generally, a ratingagency bases its rating on the information and materials furnished to it and on investigations, studies andassumptions of its own. There is no assurance that the ratings will continue for any given period of timeor that the ratings will not be revised downward or withdrawn entirely by such rating agencies, if, in thejudgment of such rating agencies, circumstances so warrant. Any such downward revision or withdrawalof the ratings may have an adverse effect on the market price of the Bonds.

VERIFICATION OF CERTAIN CALCULATIONS

Causey Demgen & Moore P.C., independent certified public accountants, will verify from theinformation provided to them the mathematical accuracy of the computations contained in the providedschedules as of the delivery date of the Bonds to determine that the anticipated receipts from the securitiesand cash deposits to be held in escrow will be sufficient to pay, when due, the principal, interest andredemption premium, if any, with respect to the Refunded Bonds. The independent certified publicaccountants will express no opinion on the assumptions provided to them, nor as to the exemption fromtaxation of the interest on the Bonds.

UNDERWRITING

The Bonds were purchased by the Underwriters at a price equal to $249,878,196.55 (consisting of$204,820,000 aggregate principal amount of the Bonds, plus original issue premium of $45,889,129.85less underwriting discount of $830,933.30).

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The Underwriters and their respective affiliates are full service financial institutions engaged invarious activities, which may include sales and trading, commercial and investment banking, advisory,investment management, investment research, principal investment, hedging, market making, brokerageand other financial and non-financial activities and services. Certain of the Underwriters and theirrespective affiliates have provided, and may in the future provide, a variety of these services to theDistrict and to persons and entities with relationships with the District, for which they received or willreceive customary fees and expenses.

In the ordinary course of their various business activities, the Underwriters and their respectiveaffiliates, officers, directors and employees may purchase, sell or hold a broad array of investments andactively trade securities, derivatives, loans, commodities, currencies, credit default swaps and otherfinancial instruments for their own account and for the accounts of their customers, and such investmentand trading activities may involve or relate to assets, securities and/or instruments of the District (directly,as collateral securing other obligations or otherwise) and/or persons and entities with relationships withthe District. The Underwriters and their respective affiliates may also communicate independentinvestment recommendations, market color or trading ideas and/or publish or express independentresearch views in respect of such assets, securities or instruments and may at any time hold, orrecommend to clients that they should acquire, long and/or short positions in such assets, securities andinstruments.

Morgan Stanley, parent company of Morgan Stanley & Co. LLC, an underwriter of the Bonds,has entered into a retail brokerage joint venture with Citigroup Inc. As part of the joint venture, MorganStanley & Co. LLC will distribute municipal securities to retail investors through the financial advisornetwork of a new broker-dealer, Morgan Stanley Smith Barney LLC. This distribution arrangementbecame effective on June 1, 2009. As part of this arrangement, Morgan Stanley & Co. LLC willcompensate Morgan Stanley Smith Barney LLC for its selling efforts with respect to the Bonds.

Loop Capital Markets LLC ("Loop Capital Markets"), one of the Underwriters of the Bonds,has entered into an agreement (the "Loop Distribution Agreement") with UBS Financial Services Inc.for the retail distribution of certain municipal securities offerings at the original issue prices. Pursuant tothe Loop Distribution Agreement, Loop Capital Markets will share a portion of its underwritingcompensation with respect to the Bonds with UBS Financial Services Inc.

FINANCIAL ADVISOR

RTD has retained First Southwest Company, Dallas, Texas as Financial Advisor in connectionwith the sale of the Bonds. The Financial Advisor is not obligated to undertake, and has not undertakento make an independent verification of or to assume any responsibility for the accuracy, completeness orfairness of the information contained in this Official Statement.

FINANCIAL STATEMENTS

The financial statements of RTD for the years ended December 31, 2011 and 2010, included inAppendix B have been audited by RubinBrown LLP, independent certified public accountants, as statedin their report appearing herein. Such financial statements represent the most current audited financialinformation for the District. RubinBrown LLP has agreed to the use of their name and the auditedfinancial report for the District in this Official Statement. RubinBrown LLP has not performed any

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procedures with respect to the unaudited financial information of the District included in this OfficialStatement.

RTD anticipates that the District's audited financial statements for the year ended December 31,2012 will be accepted by the Board and made publicly available on or about May 21, 2013, at which timeRTD will file such audited financial statements as required by the District's outstanding continuingdisclosure agreements.


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MISCELLANEOUS

The financial data and other information contained herein have been obtained from RTD'srecords, audited financial statements and other sources that are believed to be reliable. There is noguarantee that any of the assumptions or estimates contained herein will be realized. All of thesummaries of the statutes, documents, and resolution provisions contained in this Official Statement aremade subject to all of the provisions of such statutes, documents and resolution provisions. Thesesummaries do not purport to be complete statements of such provisions and reference is made to suchdocuments for further information. The authorization, agreements and covenants of RTD are set forth inthe Indenture, and neither this Official Statement nor any advertisement of the Bonds is to be construed asa contract with the owners of the Bonds.

So far as any statements made in this Official Statement involve matters of opinion, forecasts orestimates, whether or not expressly stated, they are set forth as such and not as representations of fact.

The Appendices are integral parts of this Official Statement and must be read together with allother parts of the Official Statement.

REGIONAL TRANSPORTATION DISTRICT

By: /s/ Lorraine AndersonChair, Board of Directors

(THIS PAGE INTENTIONALLY LEFT BLANK)

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Appendix A

FORM OF CONTINUING DISCLOSURE AGREEMENT

CONTINUING DISCLOSURE AGREEMENT

This Continuing Disclosure Agreement (the "Disclosure Agreement"), dated as of May 16,2013, is executed and delivered by the Regional Transportation District (the "Issuer") and DigitalAssurance Certification, L.L.C., as exclusive Disclosure Dissemination Agent (the "DisclosureDissemination Agent" or "DAC") for the benefit of the Owners (hereinafter defined) of the Bonds(hereinafter defined) and in order to provide certain continuing disclosure with respect to the Bonds inaccordance with the Rule (hereinafter defined).

The services provided under this Disclosure Agreement solely relate to the execution ofinstructions received from the Issuer through use of the DAC system and do not constitute "advice"within the meaning of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Act").DAC will not provide any advice or recommendation to the Issuer or anyone on the Issuer's behalfregarding the "issuance of municipal securities" or any "municipal financial product" as defined in the Actand nothing in this Disclosure Agreement shall be interpreted to the contrary.

SECTION 1. Definitions. Capitalized terms not otherwise defined in this DisclosureAgreement shall have the meaning assigned in the Rule or, to the extent not in conflict with the Rule, inthe Indenture (hereinafter defined). The capitalized terms shall have the following meanings:

"Annual Filing Date" means the date, set in Sections 2(a) and 2(f), by which the Annual Report isto be filed with the MSRB.

"Annual Financial Information" means annual financial information as such term is used inparagraph (b)(5)(i) of the Rule and specified in Section 3(a) of this Disclosure Agreement.

"Annual Report" means an Annual Report described in and consistent with Section 3 of thisDisclosure Agreement.

"Audited Financial Statements" means the financial statements (if any) of the Issuer for the priorfiscal year, certified by an independent auditor as prepared in accordance with generally acceptedaccounting principles or otherwise, as such term is used in paragraph (b)(5)(i) of the Rule and specified inSection 3(b) of this Disclosure Agreement.

"Board" means the Board of Directors of the Issuer.

"Bonds" means the Issuer's Sales Tax Revenue Refunding Bonds (FasTracks Project), Series2013A, in the aggregate principal amount of $204,820,000, issued pursuant to the Indenture, as listed onthe attached Exhibit A, with the 9-digit CUSIP numbers relating thereto.

"Certification" means a written certification of compliance signed by the DisclosureRepresentative stating that the Annual Report, Audited Financial Statements, Notice Event notice, Failureto File Event notice, Voluntary Event Disclosure or Voluntary Financial Disclosure delivered to theDisclosure Dissemination Agent is the Annual Report, Audited Financial Statements, Notice Eventnotice, Failure to File Event notice, Voluntary Event Disclosure or Voluntary Financial Disclosure

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required to be submitted to the MSRB under this Disclosure Agreement. A Certification shall accompanyeach such document submitted to the Disclosure Dissemination Agent by the Issuer and include the fullname of the Bonds and the 9-digit CUSIP numbers for all Bonds to which the document applies.

"Disclosure Dissemination Agent" means Digital Assurance Certification, L.L.C, acting in itscapacity as Disclosure Dissemination Agent hereunder, or any successor Disclosure Dissemination Agentdesignated in writing by the Issuer pursuant to Section 9 hereof.

"Disclosure Representative" means the General Manager or Chief Financial Officer of the Issuer,or his or her designee, or such other person as the Issuer shall designate in writing to the DisclosureDissemination Agent from time to time as the person responsible for providing Information to theDisclosure Dissemination Agent.

"Failure to File Event" means the Issuer's failure to file an Annual Report on or before theAnnual Filing Date.

"Force Majeure Event" means: (i) acts of God, war, or terrorist action; (ii) failure or shut-down ofthe Electronic Municipal Market Access system maintained by the MSRB; or (iii) to the extent beyondthe Disclosure Dissemination Agent's reasonable control, interruptions in telecommunications or utilitiesservices, failure, malfunction or error of any telecommunications, computer or other electrical,mechanical or technological application, service or system, computer virus, interruptions in internetservice or telephone service (including due to a virus, electrical delivery problem or similar occurrence)that affect internet users generally, or in the local area in which the Disclosure Dissemination Agent or theMSRB is located, or acts of any government, regulatory or any other competent authority the effect ofwhich is to prohibit the Disclosure Dissemination Agent from performance of its obligations under thisDisclosure Agreement.

"Indenture" means the Indenture of Trust, dated as of May 16, 2013, between the Issuer and theTrustee.

"Information" means, collectively, the Annual Reports, the Audited Financial Statements (if any),the Notice Event notices, the Failure to File Event notices, the Voluntary Event Disclosures and theVoluntary Financial Disclosures.

"MSRB" means the Municipal Securities Rulemaking Board established pursuant to Section15B(b)(1) of the Securities Exchange Act of 1934. As of the date hereof, the MSRB's required method offiling is electronically via its Electronic Municipal Market Access (EMMA) system available on theInternet at http://emma.msrb.org.

"Notice Event" means any of the events enumerated in paragraph (b)(5)(i)(C) of the Rule andlisted in Section 4(a) of this Disclosure Agreement.

"Obligated Person" means any person, including the Issuer, who is either generally or through anenterprise, fund, or account of such person committed by contract or other arrangement to supportpayment of all, or part of the obligations on the Bonds (other than providers of municipal bond insurance,letters of credit, or other liquidity facilities).

"Official Statement" means the final Official Statement dated May 8, 2013, together with anysupplements thereto, delivered in connection with the original issuance and sale of the Bonds.

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"Owner" means any person (a) having the power, directly or indirectly, to vote or consent withrespect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees,depositories or other intermediaries) or (b) treated as the owner of any Bonds for federal income taxpurposes.

"Participating Underwriter" means the original underwriter of the Bonds required to comply withthe Rule in connection with an offering of the Bonds.

"Rule" means Rule 15c2-12(b)(5) adopted by the SEC under the Securities Exchange Act of1934, as the same may be amended from time to time (17 C.F.R. Part 240 § 240.15c2-12).

"SEC" means the Securities and Exchange Commission.

"Trustee" means The Bank of New York Mellon Trust Company, N.A., and its successors andassigns, as trustee under the Indenture.

"Voluntary Event Disclosure" means information of the category specified in any of subsections(e)(vi)(1) through (e)(vi)(11) of Section 2 of this Disclosure Agreement that is accompanied by aCertification of the Disclosure Representative containing the information prescribed by Section 7(a) ofthis Disclosure Agreement.

"Voluntary Financial Disclosure" means information of the category specified in any ofsubsections (e)(vii)(1) through (e)(vii)(9) of Section 2 of this Disclosure Agreement that is accompaniedby a Certification of the Disclosure Representative containing the information prescribed by Section 7(b)of this Disclosure Agreement.

SECTION 2. Provision of Annual Reports.

(a) The Issuer shall provide, annually, an electronic copy of the Annual Report andCertification to the Disclosure Dissemination Agent, together with a copy for the Trustee, not later thanthe Annual Filing Date. Promptly upon receipt of an electronic copy of the Annual Report and theCertification, the Disclosure Dissemination Agent shall provide an Annual Report to the MSRB not laterthan nine months after the end of each fiscal year of the Issuer, commencing with the fiscal year endingDecember 31, 2012. Such date and each anniversary thereof is the Annual Filing Date. The AnnualReport may be submitted as a single document or as separate documents comprising a package, and maycross-reference other information as provided in Section 3 of this Disclosure Agreement.

(b) If on the fifteenth (15th) day prior to the Annual Filing Date, the DisclosureDissemination Agent has not received a copy of the Annual Report and Certification, the DisclosureDissemination Agent shall contact the Disclosure Representative by telephone and in writing (which maybe by e-mail) to remind the Issuer of its undertaking to provide the Annual Report pursuant to Section2(a). Upon such reminder, the Disclosure Representative shall either (i) provide the DisclosureDissemination Agent with an electronic copy of the Annual Report and the Certification no later than two(2) business days prior to the Annual Filing Date, or (ii) instruct the Disclosure Dissemination Agent inwriting that the Issuer will not be able to file the Annual Report within the time required under thisDisclosure Agreement, state the date by which the Annual Report for such year will be provided andinstruct the Disclosure Dissemination Agent that a Failure to File Event has occurred and to immediatelysend a notice to the MSRB in substantially the form attached as Exhibit B, accompanied by a cover sheetcompleted by the Disclosure Dissemination Agent in the form set forth in Exhibit C-1.

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(c) If the Disclosure Dissemination Agent has not received an Annual Report andCertification by 6:00 p.m. Eastern time on the Annual Filing Date (or, if such Annual Filing Date falls ona Saturday, Sunday or holiday, then the first business day thereafter) for the Annual Report, a Failure toFile Event shall have occurred and the Issuer irrevocably directs the Disclosure Dissemination Agent toimmediately send a notice to the MSRB in substantially the form attached as Exhibit B without referenceto the anticipated filing date for the Annual Report, accompanied by a cover sheet completed by theDisclosure Dissemination Agent in the form set forth in Exhibit C-1.

(d) If Audited Financial Statements of the Issuer are prepared but not available prior to theAnnual Filing Date, the Issuer shall, when the Audited Financial Statements are available, provide in atimely manner an electronic copy to the Disclosure Dissemination Agent, accompanied by a Certification,together with a copy for the Trustee, for filing with the MSRB.

(e) The Disclosure Dissemination Agent shall:

(i) verify the filing specifications of the MSRB each year prior to the Annual FilingDate;

(ii) upon receipt, promptly file each Annual Report received under Sections 2(a) and2(b) with the MSRB;

(iii) upon receipt, promptly file each Audited Financial Statement received underSection 2(d) with the MSRB;

(iv) upon receipt, promptly file the text of each Notice Event received under Sections4(a) and 4(b)(ii) with the MSRB, identifying the Notice Event as instructed bythe Issuer pursuant to Section 4(a) or 4(b)(ii) (being any of the categories setforth below) when filing pursuant to Section 4(c) of this Disclosure Agreement:

1. "Principal and interest payment delinquencies;"

2. "Non-Payment related defaults, if material;"

3. "Unscheduled draws on debt service reserves reflecting financialdifficulties;"

4. "Unscheduled draws on credit enhancements reflecting financialdifficulties;"

5. "Substitution of credit or liquidity providers, or their failure to perform;"

6. "Adverse tax opinions, IRS notices or events affecting the tax status ofthe security;"

7. "Modifications to rights of securities holders, if material;"

8. "Bond calls, if material;"

9. "Defeasances;"

10. "Release, substitution, or sale of property securing repayment of thesecurities, if material;"

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11. "Rating changes;"

12. "Tender offers;"

13. "Bankruptcy, insolvency, receivership or similar event of the obligatedperson;"

14. "Merger, consolidation, or acquisition of the obligated person, ifmaterial;" and

15. "Appointment of a successor or additional trustee, or the change of nameof a trustee, if material;"

(v) upon receipt (or irrevocable direction pursuant to Section 2(c) of this DisclosureAgreement, as applicable), promptly file a completed copy of Exhibit B to thisDisclosure Agreement with the MSRB, identifying the filing as "Failure toprovide annual financial information as required" when filing pursuant to Section2(b)(ii) or Section 2(c) of this Disclosure Agreement;

(vi) upon receipt, promptly file the text of each Voluntary Event Disclosure receivedunder Section 7(a) with the MSRB, identifying the Voluntary Event Disclosureas instructed by the Issuer pursuant to Section 7(a) (being any of the categoriesset forth below) when filing pursuant to Section 7(a) of this DisclosureAgreement:

1. "amendment to continuing disclosure undertaking;"

2. "change in obligated person;"

3. "notice to investors pursuant to bond documents;"

4. "certain communications from the Internal Revenue Service;"

5. "secondary market purchases;"

6. "bid for auction rate or other securities;"

7. "capital or other financing plan;"

8. "litigation/enforcement action;"

9. "change of tender agent, remarketing agent, or other on-going party;"

10. "derivative or other similar transaction;" and

11. "other event-based disclosures;"

(vii) upon receipt, promptly file the text of each Voluntary Financial Disclosurereceived under Section 7(b) with the MSRB, identifying the Voluntary FinancialDisclosure as instructed by the Issuer pursuant to Section 7(b) (being any of thecategories set forth below) when filing pursuant to Section 7(b) of this DisclosureAgreement:

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1. "quarterly/monthly financial information;"

2. "change in fiscal year/timing of annual disclosure;"

3. "change in accounting standard;"

4. "interim/additional financial information/operating data;"

5. "budget;"

6. "investment/debt/financial policy;"

7. "information provided to rating agency, credit/liquidity provider or otherthird party;"

8. "consultant reports;" and

9. "other financial/operating data."

(viii) provide the Issuer evidence of the filings of each of the above when made, whichshall be by means of the DAC system, for so long as DAC is the DisclosureDissemination Agent under this Disclosure Agreement.

(f) The Issuer may adjust the Annual Filing Date upon change of its fiscal year by providingwritten notice of such change and the new Annual Filing Date to the Disclosure Dissemination Agent,Trustee (if any) and the MSRB, provided that the period between the existing Annual Filing Date and newAnnual Filing Date shall not exceed one year.

(g) Any Information received by the Disclosure Dissemination Agent before 6:00 p.m.Eastern time on any business day that it is required to file with the MSRB pursuant to the terms of thisDisclosure Agreement and that is accompanied by a Certification and all other information required bythe terms of this Disclosure Agreement will be filed by the Disclosure Dissemination Agent with theMSRB no later than 11:59 p.m. Eastern time on the same business day; provided, however, the DisclosureDissemination Agent shall have no liability for any delay in filing with the MSRB if such delay is causedby a Force Majeure Event provided that the Disclosure Dissemination Agent uses reasonable efforts tomake any such filing as soon as possible.

SECTION 3. Content of Annual Reports.

(a) Each Annual Report shall contain Annual Financial Information with respect to theIssuer, including updates of the type of information identified in Exhibit D hereto, which is contained inthe indicated tables in the Official Statement.

(b) Audited Financial Statements prepared in accordance with generally accepted accountingprinciples ("GAAP") as described in the Official Statement will be included in the Annual Report. Ifaudited financial statements are not available, then, unaudited financial statements, prepared inaccordance with GAAP as described in the Official Statement will be included in the Annual Report.Audited Financial Statements (if any) will be provided pursuant to Section 2(d).

Any or all of the items listed above may be included by specific reference from other documents,including official statements of debt issues with respect to which the Issuer is an "obligated person" (as

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defined by the Rule), which have been previously filed with the Securities and Exchange Commission oravailable on the MSRB Internet Website. If the document incorporated by reference is a final officialstatement, it must be available from the MSRB. The Issuer will clearly identify each such document soincorporated by reference.

Any Annual Financial Information containing modified operating data or financial information isrequired to explain, in narrative form, the reasons for the modification and the impact of the change in thetype of operating data or financial information being provided.

SECTION 4. Reporting of Notice Events.

(a) The occurrence of any of the following events with respect to the Bonds constitutes aNotice Event:

1. Principal and interest payment delinquencies;

2. Non-payment related defaults, if material;

3. Unscheduled draws on debt service reserves reflecting financial difficulties;

4. Unscheduled draws on credit enhancements reflecting financial difficulties;

5. Substitution of credit or liquidity providers, or their failure to perform;

6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposedor final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status ofthe Bonds, or other material events affecting the tax status of the Bonds;

7. Modifications to rights of Bond holders, if material;

8. Bond calls, if material, and tender offers;

9. Defeasances;

10. Release, substitution, or sale of property securing repayment of the Bonds, ifmaterial;

11. Rating changes;

12. Bankruptcy, insolvency, receivership or similar event of the Obligated Person;

Note to subsection (a)(12) of this Section 4: For the purposes of the eventdescribed in subsection (a)(12) of this Section 4, the event is considered to occurwhen any of the following occur: the appointment of a receiver, fiscal agent orsimilar officer for an Obligated Person in a proceeding under the U.S.Bankruptcy Code or in any other proceeding under state or federal law in which acourt or governmental authority has assumed jurisdiction over substantially all ofthe assets or business of the Obligated Person, or if such jurisdiction has beenassumed by leaving the existing governing body and officials or officers inpossession but subject to the supervision and orders of a court or governmentalauthority, or the entry of an order confirming a plan of reorganization,

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arrangement or liquidation by a court or governmental authority havingsupervision or jurisdiction over substantially all of the assets or business of theObligated Person.

13. The consummation of a merger, consolidation, or acquisition involving anObligated Person or the sale of all or substantially all of the assets of theObligated Person, other than in the ordinary course of business, the entry into adefinitive agreement to undertake such an action or the termination of a definitiveagreement relating to any such actions, other than pursuant to its terms, ifmaterial; and

14. Appointment of a successor or additional trustee or the change of name of atrustee, if material.

The Issuer shall, in a timely manner not in excess of seven business days after its occurrence,notify the Disclosure Dissemination Agent in writing of the occurrence of a Notice Event. Such noticeshall instruct the Disclosure Dissemination Agent to report the occurrence pursuant to subsection (c) andshall be accompanied by a Certification. Such notice or Certification shall identify the Notice Event thathas occurred (which shall be any of the categories set forth in Section 2(e)(iv) of this DisclosureAgreement), include the text of the disclosure that the Issuer desires to make, contain the writtenauthorization of the Issuer for the Disclosure Dissemination Agent to disseminate such information, andidentify the date the Issuer desires for the Disclosure Dissemination Agent to disseminate the information(provided that such date is not later than the tenth business day after the occurrence of the Notice Event).

(b) The Disclosure Dissemination Agent is under no obligation to notify the Issuer or theDisclosure Representative of an event that may constitute a Notice Event. In the event the DisclosureDissemination Agent so notifies the Disclosure Representative, the Disclosure Representative will withintwo business days of receipt of such notice (but in any event not later than the tenth business day after theoccurrence of the Notice Event, if the Issuer determines that a Notice Event has occurred), instruct theDisclosure Dissemination Agent that (i) a Notice Event has not occurred and no filing is to be made or (ii)a Notice Event has occurred and the Disclosure Dissemination Agent is to report the occurrence pursuantto subsection (c) of this Section 4, together with a Certification. Such Certification shall identify theNotice Event that has occurred (which shall be any of the categories set forth in Section 2(e)(iv) of thisDisclosure Agreement), include the text of the disclosure that the Issuer desires to make, contain thewritten authorization of the Issuer for the Disclosure Dissemination Agent to disseminate suchinformation, and identify the date the Issuer desires for the Disclosure Dissemination Agent todisseminate the information (provided that such date is not later than the tenth business day after theoccurrence of the Notice Event).

(c) If the Disclosure Dissemination Agent has been instructed by the Issuer as prescribed insubsection (a) or (b)(ii) of this Section 4 to report the occurrence of a Notice Event, the DisclosureDissemination Agent shall file a notice of such occurrence with MSRB in accordance with Section 2(e)(iv) hereof within three business days of receiving such instruction from the Issuer. This notice will befiled with a cover sheet completed by the Disclosure Dissemination Agent in the form set forth inExhibit C-1.

SECTION 5. CUSIP Numbers. Whenever providing information to the DisclosureDissemination Agent, including but not limited to Annual Reports, documents incorporated by referenceto the Annual Reports, Audited Financial Statements, Notice Event notices, Failure to File Event notices,Voluntary Event Disclosures and Voluntary Financial Disclosures, the Issuer shall indicate the full nameof the Bonds and the 9-digit CUSIP numbers for the Bonds as to which the provided information relates.

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SECTION 6. Additional Disclosure Obligations. The Issuer acknowledges and understandsthat other state and federal laws, including but not limited to the Securities Act of 1933 and Rule 10b-5promulgated under the Securities Exchange Act of 1934, may apply to the Issuer, and that the duties andresponsibilities of the Disclosure Dissemination Agent under this Disclosure Agreement do not extend toproviding legal advice regarding such laws. The Issuer acknowledges and understands that the duties ofthe Disclosure Dissemination Agent relate exclusively to execution of the mechanical tasks ofdisseminating information as described in this Disclosure Agreement.

SECTION 7. Voluntary Filing.

(a) The Issuer may instruct the Disclosure Dissemination Agent to file a Voluntary EventDisclosure with the MSRB from time to time pursuant to a Certification of the Disclosure Representative.Such Certification shall identify the Voluntary Event Disclosure (which shall be any of the categories setforth in Section 2(e)(vi) of this Disclosure Agreement), include the text of the disclosure that the Issuerdesires to make, contain the written authorization of the Issuer for the Disclosure Dissemination Agent todisseminate such information, and identify the date the Issuer desires for the Disclosure DisseminationAgent to disseminate the information. If the Disclosure Dissemination Agent has been instructed by theIssuer as prescribed in this Section 7(a) to file a Voluntary Event Disclosure, the DisclosureDissemination Agent shall promptly file such Voluntary Event Disclosure with the MSRB in accordancewith Section 2(e)(vi) hereof. This notice will be filed with a cover sheet completed by the DisclosureDissemination Agent in the form set forth in Exhibit C-2.

(b) The Issuer may instruct the Disclosure Dissemination Agent to file a Voluntary FinancialDisclosure with the MSRB from time to time pursuant to a Certification of the Disclosure Representative.Such Certification shall identify the Voluntary Financial Disclosure (which shall be any of the categoriesset forth in Section 2(e)(vii) of this Disclosure Agreement), include the text of the disclosure that theIssuer desires to make, contain the written authorization of the Issuer for the Disclosure DisseminationAgent to disseminate such information, and identify the date the Issuer desires for the DisclosureDissemination Agent to disseminate the information. If the Disclosure Dissemination Agent has beeninstructed by the Issuer as prescribed in this Section 7(b) to file a Voluntary Financial Disclosure, theDisclosure Dissemination Agent shall promptly file such Voluntary Financial Disclosure with the MSRBin accordance with Section 2(e)(vii) hereof. This notice will be filed with a cover sheet completed by theDisclosure Dissemination Agent in the form set forth in Exhibit C-3.

(c) The parties hereto acknowledge that the Issuer is not obligated pursuant to the terms ofthis Disclosure Agreement to file any Voluntary Event Disclosure pursuant to Section 7(a) hereof or anyVoluntary Financial Disclosure pursuant to Section 7(b) hereof.

(d) Nothing in this Disclosure Agreement shall be deemed to prevent the Issuer fromdisseminating any other information through the Disclosure Dissemination Agent using the means ofdissemination set forth in this Disclosure Agreement or including any other information in any AnnualReport, Audited Financial Statements, Notice Event notice, Failure to File Event notice, Voluntary EventDisclosure or Voluntary Financial Disclosure, in addition to that required by this Disclosure Agreement.If the Issuer chooses to include any information in any Annual Report, Audited Financial Statements,Notice Event notice, Failure to File Event notice, Voluntary Event Disclosure or Voluntary FinancialDisclosure in addition to that which is specifically required by this Disclosure Agreement, the Issuer shallhave no obligation under this Disclosure Agreement to update such information or include it in any futureAnnual Report, Audited Financial Statements, Notice Event notice, Failure to File Event notice,Voluntary Event Disclosure or Voluntary Financial Disclosure.

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SECTION 8. Termination of Reporting Obligation. The obligations of the Issuer and theDisclosure Dissemination Agent under this Disclosure Agreement shall terminate with respect to theBonds upon the earliest of: (i) the legal defeasance, prior redemption or payment in full of all of theBonds, (ii) the date when the Issuer is no longer an "obligated person" within the meaning of the Rulewith respect to the Bonds, or (iii) upon delivery by the Disclosure Representative to the DisclosureDissemination Agent of an opinion of counsel expert in federal securities laws to the effect thatcontinuing disclosure is no longer required.

SECTION 9. Disclosure Dissemination Agent. The Issuer has appointed Digital AssuranceCertification, L.L.C. as exclusive Disclosure Dissemination Agent under this Disclosure Agreement. TheIssuer may, upon thirty days written notice to the Disclosure Dissemination Agent and the Trustee,replace or appoint a successor Disclosure Dissemination Agent. Upon termination of DAC's services asDisclosure Dissemination Agent, whether by notice of the Issuer or DAC, the Issuer agrees to appoint asuccessor Disclosure Dissemination Agent or, alternately, agrees to assume all responsibilities ofDisclosure Dissemination Agent under this Disclosure Agreement for the benefit of the Owners of theBonds. Notwithstanding any replacement or appointment of a successor, the Issuer shall remain liableuntil payment in full for any and all sums owed and payable to the Disclosure Dissemination Agent. TheDisclosure Dissemination Agent may resign at any time by providing thirty days' prior written notice tothe Issuer. The new Disclosure Dissemination Agent or the Issuer, as the case may be, shall forthwith givenotice thereof to the MSRB.

SECTION 10. Remedies in Event of Default. In the event of a failure of the Issuer or theDisclosure Dissemination Agent to comply with any provision of this Disclosure Agreement, the Owners'rights to enforce the provisions of this Agreement shall be limited solely to a right, by action inmandamus or for specific performance, to compel performance of the parties' obligation under thisDisclosure Agreement. Any failure by a party to perform in accordance with this Disclosure Agreementshall not constitute a default on the Bonds or under the Indenture or any other document relating to theBonds, and all rights and remedies shall be limited to those expressly stated herein.

SECTION 11. Duties, Immunities and Liabilities of Disclosure Dissemination Agent.

(a) The Disclosure Dissemination Agent shall have only such duties as are specifically setforth in this Disclosure Agreement. The Disclosure Dissemination Agent's obligation to deliver theinformation at the times and with the contents described herein shall be limited to the extent the Issuer hasprovided such information to the Disclosure Dissemination Agent as required by this DisclosureAgreement. The Disclosure Dissemination Agent shall have no duty with respect to the content of anydisclosures or notice made pursuant to the terms hereof. The Disclosure Dissemination Agent shall haveno duty or obligation to review or verify any Information or any other information, disclosures or noticesprovided to it by the Issuer and shall not be deemed to be acting in any fiduciary capacity for the Issuer,the Owners of the Bonds or any other party. The Disclosure Dissemination Agent shall have noresponsibility for the Issuer's failure to report to the Disclosure Dissemination Agent a Notice Event or aduty to determine the materiality thereof. The Disclosure Dissemination Agent shall have no duty todetermine, or liability for failing to determine, whether the Issuer has complied with this DisclosureAgreement. The Disclosure Dissemination Agent may conclusively rely upon Certifications of the Issuerat all times.

The obligations of the Issuer under this Section shall survive resignation or removal of the DisclosureDissemination Agent and defeasance, redemption or payment of the Bonds.

(b) The Disclosure Dissemination Agent may, from time to time, consult with legal counsel(either in-house or external) of its own choosing in the event of any disagreement or controversy, or

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question or doubt as to the construction of any of the provisions hereof or its respective duties hereunder,and shall not incur any liability and shall be fully protected in acting in good faith upon the advice of suchlegal counsel. The reasonable fees and expenses of such counsel shall be payable by the Issuer, subject toannual appropriation by the Board of the Issuer.

(c) All documents, reports, notices, statements, information and other materials provided tothe MSRB under this Agreement shall be provided in an electronic format and accompanied byidentifying information as prescribed by the MSRB. As of the date of this Disclosure Agreement, alldocuments submitted to the MSRB must be in portable document format (PDF) files configured to permitdocuments to be saved, viewed, printed and retransmitted by electronic means. In addition, such PDFfiles must be word-searchable, provided that diagrams, images and other non-textual elements are notrequired to be word-searchable.

SECTION 12. Amendment; Waiver. Notwithstanding any other provision of this DisclosureAgreement, the Issuer and the Disclosure Dissemination Agent may amend this Disclosure Agreementand any provision of this Disclosure Agreement may be waived, if such amendment or waiver issupported by an opinion of counsel expert in federal securities laws acceptable to both the Issuer and theDisclosure Dissemination Agent to the effect that such amendment or waiver does not materially impairthe interests of Owners of the Bonds and would not, in and of itself, cause the undertakings herein (oraction of any Participating Underwriter in reliance on the undertakings herein) to violate the Rule if suchamendment or waiver had been effective on the date hereof but taking into account any subsequentchange in or official interpretation of the Rule; provided neither the Issuer or the DisclosureDissemination Agent shall be obligated to agree to any amendment modifying their respective duties orobligations without their consent thereto. The Disclosure Dissemination Agent shall provide notice ofsuch amendment or waiver to the MSRB and the Participating Underwriter.

Notwithstanding the preceding paragraph, the Disclosure Dissemination Agent shall have theright to adopt amendments to this Disclosure Agreement necessary to comply with modifications to andinterpretations of the provisions of the Rule as announced by the Securities and Exchange Commissionfrom time to time by giving not less than 20 days written notice of the intent to do so together with a copyof the proposed amendment to the Issuer. No such amendment shall become effective if the Issuer shall,within 10 days following the giving of such notice, send a notice to the Disclosure Dissemination Agentin writing that it objects to such amendment.

SECTION 13. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of theIssuer, the Trustee of the Bonds, the Disclosure Dissemination Agent, the Participating Underwriter, andthe Owners from time to time of the Bonds, and shall create no rights in any other person or entity.

SECTION 14. Governing Law. This Disclosure Agreement shall be governed by the laws of theState of Colorado.

SECTION 15. Counterparts. This Disclosure Agreement may be executed in severalcounterparts, each of which shall be an original and all of which shall constitute but one and the sameinstrument.

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The Disclosure Dissemination Agent and the Issuer have caused this Continuing DisclosureAgreement to be executed, on the date first written above, by their respective officers duly authorized.

DIGITAL ASSURANCE CERTIFICATION, L.L.C., asDisclosure Dissemination Agent

By:_______________________________________Name:____________________________________Title:_____________________________________


By:_______________________________________Name:____________________________________Title: Chair, Board of Directors

[SEAL]

Attest:

Secretary, Board of Directors

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EXHIBIT A

NAME AND CUSIP NUMBERS OF BONDS

Name of Issuer Regional Transportation District (the "Issuer")

Name of Bond Issue: Regional Transportation District (Colorado), Sales Tax RevenueRefunding Bonds (FasTracks Project), Series 2013A, dated as of theirdate of delivery, in the aggregate principal amount of $204,820,000 (the"Bonds").

Date of Issuance: May 16, 2013.

Date of Official Statement: May 8, 2013.

MATURITY CUSIP COUPON

2027 759136 RW6 5.00%2028 759136 RX4 5.002029 759136 RY2 5.002031 759136 RZ9 5.002032 759136 SB1 5.002036 759136 SA3 4.25

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EXHIBIT B

NOTICE TO MSRB OF FAILURE TO FILE ANNUAL REPORT

Issuer: Regional Transportation District (the "Issuer")

Obligated Person: ________________________

Name of Bond Issue: Regional Transportation District (Colorado), Sales Tax RevenueRefunding Bonds (FasTracks Project), Series 2013A, dated as of theirdate of delivery, in the aggregate principal amount of $204,820,000 (the"Bonds").

Date of Issuance: May 16, 2013.

Date of Disclosure May 16, 2013.Agreement:

CUSIP Number: 759136 ___.

NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect tothe above-named Bonds as required by the Disclosure Agreement between the Issuer and DigitalAssurance Certification, L.L.C., as Disclosure Dissemination Agent. The Issuer has notified theDisclosure Dissemination Agent that it anticipates that the Annual Report will be filed by______________.

Dated: _____________________________

Digital Assurance Certification, L.L.C., as DisclosureDissemination Agent, on behalf of the Issuer

__________________________________________

cc:

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EXHIBIT C-1EVENT NOTICE COVER SHEET

This cover sheet and accompanying "event notice" will be sent to the MSRB, pursuant to Securities andExchange Commission Rule 15c2-12(b)(5)(i)(C) and (D).

Issuer and/or Other Obligated Person's Name: Regional Transportation District (Colorado) (the "Issuer")

Issuer's Six-Digit CUSIP Number: 759136

or Nine-Digit CUSIP Number(s) of the bonds to which this event notice relates: 759136 ___

Number of pages attached: _____

____ Description of Notice Events (Check One):

1. "Principal and interest payment delinquencies;"2. "Non-Payment related defaults, if material;"3. "Unscheduled draws on debt service reserves reflecting financial difficulties;"4. "Unscheduled draws on credit enhancements reflecting financial difficulties;"5. "Substitution of credit or liquidity providers, or their failure to perform;"6. "Adverse tax opinions, IRS notices or events affecting the tax status of the security;"7. "Modifications to rights of securities holders, if material;"8. "Bond calls, if material;"9. "Defeasances;"10. "Release, substitution, or sale of property securing repayment of the securities, ifmaterial;"11. "Rating changes;"12. "Tender offers;"13. "Bankruptcy, insolvency, receivership or similar event of the obligated person;"14. "Merger, consolidation, or acquisition of the obligated person, if material;" and15. "Appointment of a successor or additional trustee, or the change of name of a trustee, ifmaterial."

____ Failure to provide annual financial information as required.

I hereby represent that I am authorized by the issuer or its agent to distribute this information publicly:

Signature:

___________________________________________________________________________________

Name: _________________________________Title: ________________________________________

Digital Assurance Certification, L.L.C.390 N. Orange Avenue

Suite 1750Orlando, FL 32801

407-515-1100

Date:

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EXHIBIT C-2VOLUNTARY EVENT DISCLOSURE COVER SHEET

This cover sheet and accompanying "voluntary event disclosure" will be sent to the MSRB, pursuant tothe Continuing Disclosure Agreement dated as of May 16, 2013 between the Issuer and DAC.

Issuer's and/or Other Obligated Person's Name: Regional Transportation District (Colorado) (the "Issuer")




____ Description of Voluntary Event Disclosure (Check One):

1. "amendment to continuing disclosure undertaking;"2. "change in obligated person;"3. "notice to investors pursuant to bond documents;"4. "certain communications from the Internal Revenue Service;"5. "secondary market purchases;"6. "bid for auction rate or other securities;"7. "capital or other financing plan;"8. "litigation/enforcement action;"9. "change of tender agent, remarketing agent, or other on-going party;"10. "derivative or other similar transaction;" and11. "other event-based disclosures."


Signature:

___________________________________________________________________________________

Name: _________________________________Title: ________________________________________



407-515-1100

Date:

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EXHIBIT C-3VOLUNTARY FINANCIAL DISCLOSURE COVER SHEET

This cover sheet and accompanying "voluntary financial disclosure" will be sent to the MSRB, pursuantto the Continuing Disclosure Agreement dated as of May 16, 2013 between the Issuer and DAC.

Issuer and/or Other Obligated Person's Name: Regional Transportation District (Colorado) (the "Issuer")




____ Description of Voluntary Financial Disclosure (Check One):

1. "quarterly/monthly financial information;"2. "change in fiscal year/timing of annual disclosure;"3. "change in accounting standard;"4. "interim/additional financial information/operating data;"5. "budget;"6. "investment/debt/financial policy;"7. "information provided to rating agency, credit/liquidity provider or other third party;"8. "consultant reports;" and9. "other financial/operating data."


Signature:

___________________________________________________________________________________

Name: _________________________________Title: ________________________________________



407-515-1100

Date:

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EXHIBIT D

INDEX OF OFFICIAL STATEMENT TABLES TO BE UPDATED

Table Number Table TitleTable II – Historical and Pro Forma Debt Service Coverage

and Available Pledged Revenues

Table IV – Historical Sales Tax Revenues

Table VIII – Operating Data

Table IX – Statement of Obligations

Table X – Revenue and Capital Receipts by Source

Table XIII – RTD Annual Ridership and Fare Revenue

Table XIV – RTD Advertising and Ancillary Revenues

Table XV – RTD Federal Grant Receipts

Table XVI – Summary of Statements of Revenues and Expensesand Changes in Net Position

Table XVII – Comparison of Budgeted and Actual Revenues andExpenses

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Appendix B

REGIONAL TRANSPORTATION DISTRICT DENVER, COLORADOCOMPREHENSIVE ANNUAL FINANCIAL REPORT

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2011 AND 2010


Comprehensive AnnuAlFinAnCiAl report

regional transportation District1600 Blake Street, Denver, Colorado303.299.6000 rtd-denver.com

Fiscal year endedDecember 31, 2011

REGIONAL TRANSPORTATION DISTRICT DENVER, COLORADO

COMPREHENSIVE ANNUAL FINANCIAL REPORT

Fiscal Year Ended December 31, 2011 and 2010

Prepared by Finance Division

Chief Financial Officer

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TABLE OF CONTENTS

INTRODUCTORY SECTION Page Letter from Chair of Financial, Administration and Audit Committee .............................................7 Letter of Transmittal .................................................................................................................................9 Board of Directors .................................................................................................................................. 15 District Service Area Map...................................................................................................................... 16 Organization Chart ................................................................................................................................. 17 Department Officials ............................................................................................................................. 17 GFOA Certificate of Achievement ...................................................................................................... 18 FINANCIAL SECTION Report of Independent Certified Public Accountants ...................................................................... 21 Management’s Discussion and Analysis .............................................................................................. 25 Basic Financial Statements Statement of Net Position ..................................................................................................................... 40 Statement of Revenues, Expenses and Changes in Net Position .................................................... 42 Statement of Cash Flow ......................................................................................................................... 43 Notes to Financial Statements .............................................................................................................. 46

Required Supplementary Information

Pension Plan Summary……………………………………………………………..….…….78

Supplemental Information Schedule of Expense and Revenue – Budget and Actual - Budgetary Basis ................................................................................................... 80

Fund Financial Statements (Unaudited).……………………………………………….……81

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TABLE OF CONTENTS

(CONTINUED)

STATISTICAL SECTION Page Net Position by Component ................................................................................................................. 84 Summary of Statement of Revenues, Expenses and Changes in Net Position .............................. 85 Operating and Other Expenses and Capital Outlays ........................................................................ 86 Revenue by Source ................................................................................................................................. 87 Debt Coverage Ratios ............................................................................................................................ 88 Demographic and Operating Data ....................................................................................................... 90 Largest Private Employers – Denver Metro Area ............................................................................. 91 DEBT DISCLOSURE TABLES Strategic Budget Plan - Operations ...................................................................................................... 93 Strategic Budget Plan - Capital Program ............................................................................................. 94 Additional Operating Data .................................................................................................................... 95 Statement of Debt .................................................................................................................................. 96 Annual Ridership and Fare Revenue ................................................................................................... 97 Advertising and Ancillary Revenues .................................................................................................... 97 Grant Receipts ......................................................................................................................................... 97 Five-Year Summary of Statement of Revenues, Expenses

and Changes in Net Position ................................................................................................ 98 Five-Year Schedule of Expenses and Revenues –

Budget and Actual - Budgetary Basis .................................................................................. 99 2011 and 2012 Budget .......................................................................................................................... 100

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INTRODUCTORY SECTION

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Regional Transportation District May 4, 2012 Board of Directors Regional Transportation District Denver, Colorado In accordance with Colorado statutes and Regional Transportation District (RTD) bylaws, the enclosed Comprehensive Annual Financial Report of the Regional Transportation District as of December 31, 2011, has been compiled. Responsibility for the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with RTD. Management believes the data, as presented, fairly sets forth the financial position and operating results of RTD. Disclosures necessary to enable the reader to gain the maximum understanding of the financial affairs of RTD have been included. In developing and evaluating RTD’s accounting system, consideration has been given to the adequacy of internal accounting controls. These controls are discussed by the Chief Financial Officer in the Letter of Transmittal. Within that framework, we believe RTD’s internal accounting controls adequately safeguard assets and provide reasonable assurance of the proper recording of financial transactions. This report has been prepared according to the guidelines recommended by the Government Finance Officers Association of the United States and Canada. In accordance with these guidelines, the accompanying report is presented in three parts: 1. Introductory Section, including the Chief Financial Officer’s Letter of Transmittal. 2. Financial Section containing the independent auditor’s report, Management’s Discussion and

Analysis, the financial statements, notes thereto and supplemental information. In addition, the supplementary information contains unaudited financial information by fund.

3. Statistical Section, including selected tables of unaudited data depicting the financial history of

RTD, demographics, and other miscellaneous information. Colorado law requires the governing bodies of local governments to have an independent audit of RTD’s financial statements performed. RTD has complied with this requirement and has included the report of the independent auditors in the Financial Section of this report. Preparation of this Comprehensive Annual Financial Report could not have been accomplished without the dedicated efforts of the entire financial staff. Should you have any questions or comments, please contact me or Terry Howerter, Chief Financial Officer. Respectfully submitted, Bill James Chair, Financial, Administration and Audit Committee

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Regional Transportation District May 4, 2012 Mr. Bill James Chair, Financial, Administration and Audit Committee Regional Transportation District State law requires that all general-purpose local governments publish within seven months of the close of each fiscal year a complete set of financial statements presented in conformance with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants. Pursuant to that requirement, we hereby issue the Comprehensive Annual Financial Report of the Regional Transportation District for the fiscal year ended December 31, 2011. This report consists of management’s representations concerning the finances of RTD. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of RTD has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of RTD’s financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, RTD’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. RTD’s financial statements have been audited by RubinBrown, LLP, a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of RTD for the fiscal year ended December 31, 2011, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that RTD’s financial statements for the fiscal year ended December 31, 2011, are fairly presented in conformity with GAAP. The independent auditor’s report is presented as the first component of the Financial Section of this report. The independent audit of the financial statements of RTD was part of a broader, federally mandated “Single Audit” designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government’s internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are in RTD’s separately issued Single Audit Report. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis

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(MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. RTD’s MD&A can be found immediately following the report of the independent auditors. REGIONAL TRANSPORTATION DISTRICT (RTD) RTD provides public mass transit service to the Denver metropolitan area. In 1969, the Colorado General Assembly (Assembly) found that public transit was a necessary part of the growing Denver Metropolitan Region. The Assembly found that public sector involvement was the best method to ensure the continuation of this vital component. Thus, the Regional Transportation District was created as a political subdivision of the State effective July 1969 “to develop, maintain, and operate a public mass transportation system for the benefit of the inhabitants of the District.” RTD boundaries now include Jefferson, Boulder, and Denver counties, most of the City and County of Broomfield, and portions of Adams, Douglas, Weld, and Arapahoe counties. Over 2.8 million people, or approximately 57% of the population of Colorado, reside within RTD’s 2,348 square mile area. Since 1983, a fifteen-member Board of Directors, they are elected by their constituents to serve four-year terms, has governed RTD. There are approximately 180,000 voters per director district. The RTD Board of Directors is responsible for setting policy, overseeing the agency’s annual budget, and establishing short and long-range transit goals and plans in concert with local, state, and federal agencies. The agency employs over 2,400 men and women, making it one of the largest employers in the eight county areas. Besides its administrative headquarters in Denver, RTD has six operating facilities, including three in Denver, one in Aurora, one in Englewood, and one in Boulder. The financial reporting entity includes all of the financial activities of RTD, as well as those activities of its component unit, the RTD Equipment Acquisition Authority, Inc. (the Authority), a nonprofit corporation established to facilitate RTD’s use of lease/purchase financing. RTD also maintains budgetary controls. These controls ensure compliance with legal provisions embodied in the annual appropriated budget approved by RTD’s Board of Directors. The budget sets forth proposed outlays for operations, planning, administration, development, debt service, and capital assets. The level of budgetary control (that is, the level at which expenditures cannot legally exceed the appropriated amount) is established at the project level. The annual budget serves as the foundation for RTD’s financial planning and control. All departments of RTD are required to submit requests for appropriation to the General Manager on or before August 1st of each year. The General Manager uses these requests as the starting point for developing a proposed budget. The General Manager then presents this proposed budget to the Board of Directors for review prior to October 15th. The Board of Directors is required to hold a public hearing on the proposed budget and to adopt a final budget no later than December 31st. Unused appropriations lapse at year end, except that the Board of Directors has the authority, as stated in the adopted appropriation resolution, to carry-over the unused portion of the funds for capital projects not completed, for a period not to exceed three years.

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RTD’s policy also authorizes the General Manager to approve certain line-item transfers within the budget. Budget-to-actual comparisons are provided in the Supplementary Information Section of this report. Factors Affecting Financial Condition The information presented in the financial statements is perhaps best understood when it is considered in the broader perspective of the specific environment within which RTD operates. RTD serves the eight-county region considered the Denver metropolitan area. It is the most populated area of the state and the economic barometer of Colorado. Employment in the Denver Metro area is dominated by small businesses. These companies represent a diverse mix of industries and are located throughout the Denver metropolitan area, providing a geographic balance in employment centers. The 10 largest private employers are listed in the Statistical Section of this report. The Colorado Legislative Council (CLC) in its December 2011 report forecasts that the economic recession has subsided and a modest recovery has begun. Economists for CLC reported the following key economic indicators. Key Economic Indicators 2010 Actual 2011 Forecast 2012 ForecastJob Growth -1.1% 1.4% 1.0%Unemployment 8.9% 8.6% 8.3%Personal Income Growth 3.8% 5.4% 2.9%Population Growth 1.5% 1.5% 1.6%Inflation 1.9% 4.1% 3.7% On November 3, 1992, the voters of Colorado approved a Constitutional Amendment (the “Amendment”) that limits taxes, revenue, and spending for state and local governments effective December 31, 1992. On November 7, 1995, the voters of the District exempted RTD from the revenue and spending limitations concerning the Amendment through December 31, 2005. On November 2, 1999, the voters of the District further exempted RTD from the revenue and spending limitations outlined in the Amendment for the purpose of paying any debt incurred to finance the construction of the Southeast and Southwest light rail lines or to operate such for as long as any debt remains outstanding, but in no event beyond December 31, 2026. On November 2, 2004, the voters of the District authorized an increase in the District’s sales and use tax rate from 0.6% to 1.0%, effective January 1, 2005, to finance the FasTracks transit improvement program. This authorization also exempted the District from any revenue and spending limitations on the additional tax and on any investment income generated by the increased tax revenue, and allowed RTD to incur debt to finance the capital improvements included in the FasTracks program. At the time that all FasTracks debt is repaid, the District’s sales and use tax rate will be reduced to a rate sufficient to operate the transit system financed through FasTracks. Long-term Financial Planning

Each year the Board of Directors adopts a financially constrained Strategic Budget Plan (SBP) which is the six-year operating and capital improvement plan of RTD. It reflects RTD’s plans for service and capital improvements excluding FasTracks. In November 2010, the Board of Directors convened a Fiscal Sustainability Task Force for the purpose of developing a formal written report,

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to be submitted to the Board of Directors in June 2011, detailing opportunities for operating efficiencies and revenue enhancements to ensure RTD’s fiscal sustainability in the long term. The Task Force consisted of 21 members from RTD management, the Board of Directors and the public and private sector. The Board of Directors gave approval to management to pursue implementation of the Task Force’s recommendations. The SBP includes those recommendations that have been implemented in the SBP timeframe, most notably an operational service adjustment, enhanced sales and use tax forecasts and implementation of a revised fund balance policy beginning in 2012. On August 16, 2011, the Board adopted the 2012-2017 SBP. In addition to the SBP, RTD is planning and constructing the build-out of the FasTracks transit expansion plan. FasTracks entails the addition of six new light-rail lines and diesel-powered commuter rail lines, 21,000 new parking spaces, the redevelopment of Denver Union Station, and expanded bus service throughout the eight county District. Each year, RTD conducts a comprehensive evaluation of the entire FasTracks program, called an Annual Program Evaluation. RTD has worked closely with elected officials, local governments, corridor stakeholders and the public to identify how to move the FasTracks program forward. FINANCIAL INFORMATION RTD management is responsible for establishing and maintaining an internal control structure designed to ensure that assets are protected from loss, theft, or misuse and that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. RTD has designed its internal control structure to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the costs of a control should not exceed the benefits likely to be derived and (2) the valuation of costs and benefits requires estimates and judgment by management. Single Audit: As a recipient of federal assistance, RTD is responsible for ensuring that an adequate internal control structure is instituted to ensure compliance with applicable laws and regulations related to those programs. This internal control structure is subject to periodic evaluation by management and the RTD internal audit staff. As part of RTD’s single audit, tests are made to determine the adequacy of the internal control structure, including that portion related to federal financial assistance programs, as well as to evaluate RTD’s compliance. RTD’s single audit for the fiscal year ended December 31, 2011 found no instances of material weakness in the internal control structures or significant violations of applicable laws and regulations. A separate report was prepared for this purpose. Debt Administration: RTD formulates its debt policy to protect its credit ratings and soundly manage its assets and liabilities. Included in this policy is a requirement that debt will not be used to finance current operations. Another requirement precludes financing capital projects beyond the useful life of the project. Additional policies go beyond these essential guidelines and result in further protection. RTD has a dual rating for its 1.0% sales tax credit. Moody’s Investors Service rates the sales tax credit as “Aa2”, Standard and Poor’s Corporation rates the sales tax credit “AAA” and Fitch Ratings rates the sales tax credit “AA+” that are secured by the 0.6% sales tax. Moody’s Investors Service rates the sales tax credit as “Aa2”, Standard and Poor’s Corporation rates the sales tax credit “AA+” and Fitch Ratings rates the sales tax credit “AA” that are secured by the 0.4% sales tax.

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Cash Management: The main objective of RTD’s cash management program is the protection of investment principal while providing optimal levels of cash throughout the year. The RTD investment policy is modified periodically to adapt to changes in eligible investments, benchmarks, and specific objectives. During the year, RTD invested its cash in various investment vehicles including money market funds, U.S. Treasury securities, agency securities, discount notes, commercial paper, repurchase agreements, and variable and fixed rate mortgage-backed securities. The total average return on investments for the year was 1.7%. Risk Management: RTD employs a combination of self-insurance and purchased insurance in its efforts to protect assets and control and prevent losses. The areas of self-insurance are worker’s compensation and general liability. RTD is self-insured for liability, the limits of which are $150,000 per person and $600,000 per occurrence as specified under the Colorado Governmental Immunity statute. The self-insured retention for worker’s compensation claims is $2,000,000 per claim, with any amounts above this covered by purchased insurance up to the legal limits of liability under the Colorado worker’s compensation statute. Commercial insurance policies provide property coverage up to $300,000,000 for buildings, their contents, and rolling stock (other than collision); a Commercial Crime Policy and Faithful Performance Bond; a $3,500,000 Workers’ Compensation Bond; Felonious Assault Policy; travel insurance for employees on RTD business; fidelity coverage on the Trustees of the Union Pension Trust, Salaried Pension Trust, Represented Health and Welfare Union Trust, Legal Trust, and the employees administering the health benefits program for salaried employees. With the addition of Light Rail Transit (LRT), RTD has added Railroad Protective and Railroad Liability commercial insurance policies that provide coverage when required under operational needs. The Risk Management division coordinates these programs internally for RTD. OTHER INFORMATION Independent Audit: State statutes require an annual audit by independent certified public accountants. The accounting firm of RubinBrown LLP was selected to perform the 2011 audit. This audit also was designated to meet the requirements of the Federal Single Audit Act amendments of 1996 and related OMB Circular A-133. The auditor’s report on the financial statements and schedules are included in the Financial Section of this report. The auditor’s report related specifically to the single audit is included in a separate report. Awards: The Government Finance Officers Associations (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to RTD for its Comprehensive Annual Financial Report for the fiscal year ended December 31, 2010. This is the nineteenth consecutive year, after a two-year absence from the program, that RTD has been awarded this prestigious award. In order to receive the Certificate of Achievement for Excellence in Financial Reporting, RTD must publish an easily readable and efficiently organized Comprehensive Annual Financial Report, the contents of which must conform to program standards. This report must also satisfy both generally accepted accounting principles and applicable legal requirements.

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The Certificate of Achievement is valid for one year only. We believe our current Comprehensive Annual Financial Report meets the program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. Acknowledgements: Preparation of the Comprehensive Annual Financial Report on a timely basis was made possible by the dedicated services of the entire staff of the Finance Division. Each member of the division has our sincere appreciation for the contributions made in the preparation of this report. Finally, without the leadership and support of the members of the RTD’s Board of Directors, preparation of this report would not have been possible. Sincerely, Terry L. Howerter Chief Financial Officer

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Board of Directors RTD’s governing body is a 15-member elected Board of Directors, with each member elected from one of the fifteen districts comprising RTD’s service area. Each district is apportioned equally by population and most districts cross county boundaries. The districts are assigned letter designations from “A” to “O”. The following are the members of the Board of Directors as of January 2012: District A Bill James Denver/Arapahoe Counties

District I Lee Kemp, Chairman Boulder/Broomfield/Adams/Weld Counties

District B Barbara Deadwyler Denver/Adams Counties

District J Larry Hoy Adams/Jefferson/Broomfield Counties

District C Angelina Malpiede, Secretary Denver/Adams/Jefferson Counties

District K Kathi Williams Adams County

District D Jeff Walker Denver/Jefferson/Arapahoe Counties

District L Lorraine Anderson Jefferson/Boulder/Broomfield Counties

District E William G. McMullen Denver/Arapahoe Counties

District M Matt Cohen, Second Vice Chairman Jefferson County

District F Tom Tobiassen Arapahoe County

District N Bruce Daly Jefferson/Denver Counties

District G Jack O’Boyle Arapahoe/ Douglas Counties

District O John Tayer, First Vice Chairman Boulder County

District H Kent Bagley, Treasurer Arapahoe/ Douglas Counties

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Taxpayers and Customers

Board of Directors

General Manager

Administration

Finance

Planning

Communications

Capital Programs

General Counsel

Rail Operations

Bus Operations

Safety, Security & Facilities

Organization Chart

Department Officials General Manager/Chief Executive Officer Phillip A. Washington

AGM, Planning William C. Van Meter

AGM, Bus Operations Bruce Abel

AGM, Capital Programs Richard Clarke

Chief Financial Officer Terry Howerter

General Counsel Marla L. Lien

AGM, Rail Operations Dale Jenkins (Austin)

AGM, Administration Carla Perez

AGM, Safety, Security & Facilities Dave Genova

AGM, Communications Scott Reed

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Certificate of Achievement for

Excellence in Financial Reporting

Presented to

Regional Transportation District

Colorado

For its Comprehensive Annual

Financial Report

For the Fiscal Year Ended

December 31, 2010

A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the

United States and Canada to Government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs)

achieve the highest standards in government accounting and

financial reporting.

President

Executive Director

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FINANCIAL SECTION

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REGIONAL TRANSPORTATION DISTRICT Management’s Discussion and Analysis (Unaudited) December 31, 2011 and 2010 (Dollars in Thousands)

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The management of the Regional Transportation District (RTD) offers users of our financial statements this narrative overview and analysis of the financial activities for the years ended December 31, 2011 and 2010. This discussion and analysis is designed to assist the reader to focus on significant financial activities and identify any significant changes in the financial position of RTD. It should be read in conjunction with the financial statements that follow this section. All amounts, unless otherwise indicated, are expressed in thousands of dollars. Financial Highlights As of December 31, 2011 and 2010, total assets of RTD exceeded total liabilities $2,515,166 and $2,203,764, respectively. The amount of unrestricted net position as of December 31, 2011 was $134,671 compared to $166,299 in 2010. The net position of RTD increased by $311,402 during the current year compared to an increase of $157,589 in the previous year. The increases in both years are due to higher operating revenues, and grant revenue, net of increases in operating expenses and non-operating expenses. RTD’s total debt decreased $53,882 (2.7%) and increased $763,795 (62.3%) in 2011 and 2010, respectively. The decrease in 2011 is due to payments made on principal and no additional debt incurred. The increase in 2010 is due to new funding for Fastrack projects and Base System paratransit vehicles, farebox and CAD/AVL projects. RTD’s sales and use tax revenue increased $17,631 (4.4%) in 2011 and increased $26,144 (7.0%) in the previous year. Capital grants and local contributions increased $130,814 (121.7%) in 2011 and decreased $24,233 (18.4%) in the previous year. The increase for 2011 is attributed to the Eagle P3 Full Funding Grant Agreement executed in 2011, the West Corridor Full Funding Grant Agreement additional year appropriation and the Denver Union Station project capital contributions. The decrease in 2010 was primarily due to a decrease in receipts of grant funds and local contributions for the West Corridor project and other capital projects. For 2011, total operating expenses exceeded total revenues resulting in a loss before non-operating revenue and expenses of $388,232 compared to a loss of $397,931 for 2010. The loss in 2011 is lower than 2010 due to the West Corridor project reaching 90% completion in 2011 with more expense being incurred in prior periods in addition to increased operating revenue. RTD anticipates operating losses, as these losses are subsidized by non-operating sales and use tax, grant revenues and other miscellaneous income. Basic Financial Statements Management’s Discussion and Analysis serves as an introduction to RTD’s basic financial statements. RTD’s financial statements are prepared using proprietary fund (enterprise fund) accounting that uses the same basis of accounting as private-sector business enterprises. Under this method of accounting, an economic resources measurement focus and an accrual basis of accounting is used. Revenue is recorded when earned and expenses are recorded when incurred.


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The basic financial statements are comprised of four components: statement of net position; statement of revenues, expenses and changes in net position; statement of cash flows; and notes to the financial statements. The statement of net position presents information on assets and liabilities, with the difference between the two reported as the net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of RTD is improving or deteriorating. The statement of revenues, expenses, and changes in net position presents information on operating revenues and expenses and non-operating revenues and expenses of RTD for the fiscal year with the difference, the net income or loss, combined with any capital grants to determine the change in net position for the year. That change combined with the previous year-end total net position reconciles to the net position total at the end of the current fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the changes occurs, regardless of the timing of the related cash flows. The statement of cash flows reports cash and cash equivalent activities for the fiscal year resulting from operating activities, capital, and related financing activities, noncapital and related financing activities and investing activities. The result of these activities added to the beginning of the year cash balance reconciles to the cash and cash equivalents balance at the end of the current fiscal year. The statement of cash flows, along with the related notes and information in other financial statements, can be used to assess the following: RTD’s ability to generate positive future cash flows and pay its debt as the debt matures; the reasons for differences between RTD’s operating cash flows and operating income (loss); and the effect of investing, capital, and financing activities on RTD’s financial position. The notes to the financial statements provide additional information that is essential to fully understand the data provided in the statement of net position, statement of revenues, expenses, and changes in net position, and statement of cash flows. RTD provides bus, paratransit, and light rail service in a 2,348 square mile area in and around Denver, Colorado. The activities of RTD are supported by a 0.6% and 0.4% sales and use tax collected within the District. The 0.6% sales and use tax is used to fund the Base System operations of RTD. The Base System operations provide the bus and current light rail services in the Denver area. The 0.4% sales and use tax funds the FasTracks build out program and provides for enhanced transit services in the District. Additional revenue sources include fare collections, federal, state, and local financial assistance, interest income, and other income such as advertising and rental income. Financial Analysis Condensed Financial Information - Condensed financial information from the statement of net position and statement of revenues, expenses, and changes in net position is presented below. Statement of Net Position - As of December 31, 2011 and 2010, total assets of RTD exceeded total liabilities by $2,515,166 and $2,203,764, respectively. The largest portion of this excess, 74.5% in 2011 and 72.5% in 2010, was invested in capital assets, net of related debt. RTD uses these capital assets to provide public transportation services to customers; consequently, these assets are not available for future spending. Although the RTD investment in capital assets is reported net of


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related debt, it should be noted that funding required to repay this debt will be obtained from other sources such as sales and use tax, since the capital assets themselves cannot be used to pay the related debt. The amount of unrestricted net position as of December 31, 2011 was $134,671 compared to $166,299 in 2010. Substantially all of the unrestricted net position, although not legally restricted, has been appropriated or reserved by the RTD Board for future capital acquisition, operating reserve policy, and debt liquidation during the budget process.

2011 2010 2009Assets:

Current assets 738,374$ 595,848$ 457,402$ Current assets - restricted 454,671 694,018 393,339 Capital assets (net of accumulated depreciation) 3,472,133 2,969,149 2,361,845 Other noncurrent assets 202,157 249,577 213,873

Total assets 4,867,335 4,508,592 3,426,459

Liabilities:Current liabilities 433,980 228,909 199,107 Noncurrent liabilities 1,918,189 2,075,919 1,181,177

Total liabilities 2,352,169 2,304,828 1,380,284

Net position:Invested in capital assets, net of related debt 1,872,790 1,597,631 1,456,493 Restricted 507,705 439,834 457,647 Unrestricted 134,671 166,299 132,035 Total net position 2,515,166$ 2,203,764$ 2,046,175$

Condensed Summary of Assets, Liabilities, and Net Position

Current assets, unrestricted, increased $142,526 (23.9%) in 2011 which was primarily attributed to the Eagle P3 Full Funding Grant Agreement executed in 2011, the West Corridor Full Funding Grant Agreement additional year appropriation and the DUS project capital contributions. Current assets, restricted and other noncurrent assets decreased $286,767 (30.4%) in 2011 due to the use of funds for the FasTracks build-out and increased $336,383 (55.4%) in 2010 from proceeds due to the issuance of debt. In 2011, capital assets net of accumulated depreciation increased $502,984 (16.9%) primarily due to the acquisition of revenue equipment, land, and construction in progress for the FasTracks program. Current liabilities increased $205,071 (89.6%) in 2011 primarily due to a scheduled construction payment for the FasTracks Eagle P3 to the project concessionaire in early 2012. Noncurrent liabilities decreased $157,730 (7.6%) due to payment of debt principal and a scheduled construction payment to the Eagle P3 concessionaire made in 2011. RTD’s net position increased $311,402 (14.1%) in 2011. The increase was primarily due to increased investments in capital assets, net of related debt from the acquisition of equipment, land, design, and construction cost related to the FasTracks programs.


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Statement of Revenues, Expenses, and Changes in Net Position – The following summary of revenues, expenses, and changes in net position shows the activities of RTD resulted in an increase in net position. The net position of RTD increased by $311,402 during the current year compared to an increase of $157,589 in the previous year. The increases in both years were due to higher operating revenues and grant revenue income, net of increases in operating expenses and non-operating expenses. The key elements of the changes in net position for the fiscal years ended December 31, 2011 and 2010 with comparative information for 2009 are shown in the following table:

Summary of Revenues, Expenses, and Changes in Net Position2011 2010 2009

Operating revenue:Passenger fares 108,497$ 97,942$ 96,890$ Advertising and other 4,882 4,414 4,357

Total operating revenue 113,379 102,356 101,247Operating expenses:

Salaries and wages 123,704 119,422 117,355Fringe benefits 42,628 41,076 44,392Materials and supplies 52,015 48,310 56,835Services 48,357 60,553 42,783Utilities 11,627 10,977 9,512Insurance 6,089 5,429 3,767Purchased transportation 108,865 104,514 103,975Leases and rentals 1,964 2,515 2,680Miscellaneous 2,082 3,315 6,866Depreciation 104,280 104,176 106,025

Total operating expenses 501,611 500,287 494,190Operating loss (388,232) (397,931) (392,943)

Nonoperating revenues (expenses):Sales and use tax 415,180 397,549 371,405Grant operating assistance 89,592 92,655 68,146Investment income 6,484 8,065 29,379Other income/Gain on Sale of Assets 5,255 179 3,283Interest expense (51,274) (48,735) (34,179)Other expense/ Unrealized Loss on Assets (3,895) (1,671) (23,037)

Net nonoperating revenue (expenses) 461,342 448,042 414,997Income before capital contribution 73,110 50,111 22,054Capital grants and local contributions 238,292 107,478 131,711Increase in net position 311,402$ 157,589$ 153,765$

The information contained in the condensed information table is used as the basis for the revenue and expense discussion presented below, surrounding RTD’s activities for the fiscal years ended December 31, 2011, 2010 and 2009.


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Revenues Passenger fares – Passenger fares provided 12% and 14% of RTD’s total revenues in 2011 and 2010, respectively. Farebox receipts, monthly and annual pass revenue, and special event fares for bus and rail services are included in passenger fares. Passenger fares increased by $10,555 (10.8%) in 2011 compared to an increase of $1,052 (1.1%) in 2010. The increase in 2011 was due to a 12.5% fare increase effective January 1, 2011 which was partially offset by a decrease in revenue service passengers of -0.4%. The increase in 2010 was due to higher participation in fare media programs due to economic hardships. Advertising and other – Advertising income includes revenues from advertisements primarily on RTD’s buses and external wraps on light rail vehicles. Advertising and other income increased $468 (10.6%) in 2011 compared to a $57 (1.3%) increase in 2010. The increase in 2011 and 2010 was primarily due to RTD establishing light rail vehicle wrap advertisements. Sales and Use Tax – Sales and use tax provided 48% and 56% of RTD’s total revenues in 2011 and 2010 respectively. Sales and use tax is a dedicated 1.0% tax imposed on certain sales within the service area. Sales and use tax increased $17,631 (4.4%) in 2011 compared to an increase of $26,144 (7.0%) in 2010. RTD experienced an economic downturn in 2009 resulting in a decrease in sales and use tax revenue. In 2011 and 2010, the District experienced some growth in tax revenues due to increased consumer and business spending activity in addition to the suspension of a 3.3% vendor allowance for timely payment of taxes which was restored in July 2011 allowing the vendors to retain 2.2% of the sales and use tax collections.. Grant operating assistance – Grant operating assistance decreased $3,063 (3.3%) in 2011 compared to an increase of $24,509 (36.0%) in 2010. The operating assistance primarily is a federal grant revenue program used to perform capital maintenance and maintain RTD’s revenue fleet of bus, paratransit, and rail vehicles. The U. S Congress adoption of the American Recovery and Reinvestment Act of 2009 (ARRA) increased funds available for 2010 and decreased funds available when the program ended creating significant fluctuations between grant years 2009 - 2011. Investment Income – Investment income decreased $1,581 (19.6%) in 2011 compared to a $21,314 (72.5%) decrease in 2010. The decrease in 2011 and 2010 was due to lower interest rates and a smaller investment balance with invested funds being utilized in 2011 and 2010 primarily for the build-out of the FasTracks project. Other Income/ Loss on sale of Assets – Other income increased $5,076 (2835.8%) in 2011 compared to a decrease of $3,104 (94.5%) increase in 2010. Other income includes subsidy income, rental income from retail space, parking, air-rights, and miscellaneous other items. Capital grants and local contributions - Capital grants and local contributions increased $130,814 (121.7%) in 2011 and decreased $24,233 (18.4%) in the previous year. The increase for 2011 is attributed to the Eagle P3 Full Funding Grant Agreement executed in 2011, the West Corridor Full Funding Grant Agreement additional year appropriation and the DUS project capital contributions. The decrease in 2010 was primarily due to a decrease in receipts of grant funds and local contributions for the West Corridor project and other capital projects.


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The following schedule and charts show the major sources of revenue for the years ended December 31, 2011, 2010 and 2009.

Revenue Analysis

2011 2010 2009Revenues

Passenger fares 108,497$ 97,942$ 96,890$ Advertising and other 4,882 4,414 4,357Sales and use tax 415,180 397,549 371,405Grant operating assistance 89,592 92,655 68,146Investment income 6,484 8,065 29,379Other income/Gain Sale of Assets 5,255 179 3,283Capital grants and local contributions 238,292 107,478 131,711

Total Revenues 868,182$ 708,282$ 705,171$

$- $50,000

$100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000

Revenue Analysis

2011

2010

2009


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Expenses The following schedule and charts shows the major sources of operating expenses for the years ended December 31, 2011, 2010 and 2009.

Expense Analysis

2011 2010 2009Expenses

Salaries and wages 123,704$ 119,422$ 117,355$ Fringe benefits 42,628 41,076 44,392Materials and supplies 52,015 48,310 56,835Services 48,357 60,553 42,783Utilities 11,627 10,977 9,512Insurance 6,089 5,429 3,767Purchased transportation 108,865 104,514 103,975Leases and rentals 1,964 2,515 2,680Miscellaneous 2,082 3,315 6,866Depreciation 104,280 104,176 106,025Interest expense 51,274 48,735 34,179Other expense / Unrealized loss 3,895 1,671 23,037

Total Expenses 556,780$ 550,693$ 551,406$

Passenger fares12%

Advertising and other

0.6%

Sales and use tax

48%

Grant operating assistance

10%

Investment income

1%

Other income/Sale

of Assets1%

Capital grants and local

contributions27%

2011 Revenue Passenger fares14%

Advertising and other

0.6%

Sales and use tax

56%

Grant operating assistance

13%

Investment income

1%

Other income/Sale

of Assets0.7%

Capital grants and

local contribution

s14%

2010 Revenue


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$-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

Expense Analysis

2011 2010 2009

Salaries and wage expense accounted for 22.2% and 21.7 % of RTD’s total expenses in 2011 and 2010, respectively, and were the largest expense category in operating expenses. This is common in the public transportation industry as the provision of service is extremely labor intensive. Unlike many other transit districts, RTD has a substantial portion of its transit vehicle service contracted to private providers. In 2011, approximately 57.0% of RTD’s transit services, fixed route, and demand response ADA service were operated by private contractors and categorized as purchased transportation expenses. Due to the large investments RTD has in capital assets, depreciation continues to be a large operating expense.

Salaries and wages22%

Fringe benefits8%

Materials and supplies

9%Services9%Utilities

2%Insurance

1%

Purchased transportation

20%Leases and rentals0.4%

Miscellaneous0%

Depreciation19%

Interest expense

9%

Other expense / Unrealized

loss on assets0.7%

2011 Expenses

Salaries and wages22%

Fringe benefits7%

Materials and supplies

9%

Services11%Utilities

2%Insurance

1%

Purchased transportation

19%Leases and

rentals0.5%

Miscellaneous1%

Depreciation19%

Interest expense

9%

Other expense / Unrealized

loss on assets0%

2010 Expenses


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Salary and wages – Salary and wage expense is the largest expense category accounting for 22.2% and 21.7% of the total RTD expenses in 2011 and 2010, respectively. Salary and wage expenses increased by $4,282 (3.6%) in 2011 compared to an increase of $2,067 (1.8%) in 2010. The increase in both years for salary and wages is due to an increase of salaried headcount for Fastrack projects and support departments. Benefits – Fringe benefits increased by $1,552 (3.8%) compared to a decrease of $3,316 (7.5%) in 2010. The increase in 2011 fringe benefit costs is related to an increase in the Net Pension Obligation (NPO) which was partially offset by favorable health benefit claims. The decrease in 2010 fringe benefits is related to increased usage of part-time operators and fewer full time operators resulting in fringe benefit savings. Materials and supplies – The materials and supplies expense category accounted for 9.3% and 8.8% of the total RTD expenses in 2011 and 2010 respectively. Materials and supplies expenses increased $3,705 (7.7%) in 2011 compared to a decrease of $8,525 (15.0%) in 2010. The increase in 2011 is due to the average price of diesel fuel increasing from $2.25 per gallon to $2.36 per gallon and average gas prices increasing from $2.70 per gallon to $3.43 per gallon in addition to a light rail maintenance campaign. The decrease in 2010 was due to a lower price for diesel fuel and gasoline. Services – Services expense includes contracted services such as security services; vehicle, equipment and right of way maintenance services; advertising and marketing services, and legal services. Services expense decreased $12,196 (20.1%) in 2011 compared to an increase of $17,770 (41.5%) in 2010. The decrease in 2011 services expense was primarily due to decreased West Corridor activity, with construction reaching 90% completion in 2011. Utilities – Utilities expense includes electric, telecommunications, water and sewer, and natural gas for facilities and rail service. Utilities expense increased $650 (5.9%) in 2011 compared to an increase of $1,465 (15.4%) in 2010. The increase in both 2011 and 2010 are due to the increase in electricity rates driving traction power cost for light rail services higher. Insurance – Insurance expense includes RTD’s self-insured cost for general liability and worker’s compensation claims. In addition, RTD purchased insurance in its efforts to protect assets and control and prevent losses. Insurance expense increased $660 (12.2%) in 2011 compared to an increase of $1,662 (44.1%) in 2010. The change was primarily due a reserve established in 2011 for incurred but not reported (IBNR) claims for worker’s compensation. Purchased transportation – The purchased transportation expense category accounted for 19.6% and 18.9% of the total RTD expenses in 2011 and 2010. Purchased transportation represents the costs of contracted transportation services for bus, access-a-Ride, and call-n-Ride services. Purchased transportation costs increased $4,351 (4.2%) in 2011 compared to $539 (0.5%) in 2010. The increase in both years was primarily due to negotiated contract increases and an increase in the hours of service provided. Leases and rentals – Leases and rentals include lease expense for office space, office equipment, park-n-Ride facilities, and use of communication towers. Leases and rentals expense decreased $551 (21.9%) in 2011 compared to a decrease of $165 (6.2%) in 2010.


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Miscellaneous – Miscellaneous expense includes other incidental operating expenses not included in other defined categories. Miscellaneous expenses decreased $1,233 (37.2%) in 2011 compared to a decrease of $3,551 (51.7%) in 2010. This category includes additional one-time project expenses creating fluctuations between years. Depreciation – The depreciation expense category accounted for 18.7% and 18.9% of the total RTD expenses in 2011 and 2010, respectively. Depreciation expense is a non-cash systematic allocation of the cost of capital assets over the estimated useful life of the assets. Depreciation expense increased $104 (0.1%) in 2011 compared to a decrease of $1,849 (1.77%) in 2010. The increase in 2011 is primarily due to placing the light rail mode into service for the Denver Union Station project. The decrease in 2010 is due to asset retirements and reduced allocation for assets that had reached the end of life based on the accounting depreciation period. Interest expense – The interest expense category accounted for 9.2% and 8.8% of the total RTD expenses in 2011 and 2010 respectively. Interest expense increased $2,539 (5.2%) in 2011 compared to an increase of $14,556 (42.6%) in 2010 due to the issuance of additional debt in late 2010. Other expense /Unrealized loss on assets – Other expense includes miscellaneous non-operating expenses not classified in other expense categories. Other expense increased $2,224 (133.1%) in 2011 compared to a decrease of $21,366 (92.7%) in 2010. The increase in 2011 was the result of additional debt amortization costs. Capital Assets – Investments in capital assets include: land and rights-of-way; buildings and improvements; leasehold improvements; revenue and non-revenue vehicles; shop and service equipment; security and surveillance equipment; computer equipment; and furniture. RTD’s investment in capital assets, net of accumulated depreciation, in 2011 was $3,472,133 compared to $2,969,149 in 2010. The increase in capital assets during the current year is $502,984 (16.9%) compared to an increase of $607,304 (25.7%) in 2010. RTD acquires its assets with sales and use tax revenues, farebox revenue, federal capital grants, and proceeds from the sale of revenue bonds, certificates of participation and commercial paper. The increases during 2011 and 2010 were primarily due to the cost of planning, design and construction of FasTracks projects. The following table summarizes capital assets, net of accumulated depreciation, as of December 31, 2011 and 2010 with comparative information for 2009.

Capital Assets (Net of Depreciation)2011 2010 2009

Land 187,985$ 173,884$ 172,537$ Land improvements 922,118 908,104 939,202 Buildings 91,274 96,736 102,789 Revenue earning equipment 395,125 423,664 362,186 Shops, maintenance and other equipment 23,464 15,563 19,933 Construction in progress 1,852,167 1,351,198 765,198

Total 3,472,133$ 2,969,149$ 2,361,845$


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Major capital asset events during the 2011 fiscal year included the following:

FasTracks Denver Union Station (DUS) – RTD, with assistance from the City and County of Denver (CCD), the Denver Regional Council of Governments (DRCOG), and the Colorado Department of Transportation (CDOT) acquired historic Denver Union Station (DUS) in August 2001. DUS and the surrounding property are being developed as a mixed-use, multi-modal transportation center located at and in the vicinity of the original Denver Union Station. The master plan was adopted by all the participating agencies in September and October 2004. In addition, RTD acquired approximately two acres of property to relocate light rail tracks adjacent to the Consolidated Mainline. Expenditures for 2011 were $125,177 for the construction of assets.

FasTracks West Corridor - The West Corridor is a 12.1 mile light rail transit corridor between the Auraria Campus in downtown Denver and the Jefferson County Government Center in Golden, serving Denver, Lakewood, the Denver Federal Center, Golden and Jefferson County. It will be the first corridor completed in the FasTracks program. In 2007, RTD submitted an initial Full Funding Grant Agreement (FFGA) application to FTA. In 2011, expenditures related to the West Corridor were approximately $144,152.

FasTracks North Metro Corridor - The North Metro Corridor is an 18 mile rail transit corridor between Denver Union Station and 162nd Avenue, passing through Denver, Commerce City, Thornton, Northglenn and unincorporated Adams County. In 2011, expenditures related to the North Metro Corridor were approximately $2,353.

FasTracks Northwest Rail Corridor - The Northwest Rail Corridor is a 41 mile rail transit corridor between Denver Union Station and Longmont, passing through Denver, Westminster, Broomfield, Louisville, Boulder, Longmont, unincorporated Adams County, and unincorporated Boulder County and was constituted as a project separate from the ongoing environmental work in the US 36 Bus Rapid Transit (BRT) corridor. In 2011, expenditures related to the Northwest Rail Corridor were $12,838.

East and Gold Line Public-Private Partnership (Eagle P3) –

RTD was selected for inclusion in the FTA Public-Private Partnership Pilot Program (Penta-P). In 2010, RTD entered into a public-private partnership to design, build, finance, operate and maintain several of the transit improvements contemplated under the FasTracks program. The Eagle P3 project is a $2,185,000 project that includes a Commuter Rail Maintenance Facility, the East and Gold Line Corridors as well as the Northwest Rail Electrified Segment. The Eagle P3 partnership was awarded to a concessionaire, Denver Transit Partners (DTP), through a competitive bid process culminating in a contract price that was $305,000 below internal estimates. The Eagle P3 project will be completed in two phases. Phase I includes the East Corridor, Commuter Rail Maintenance Facility and design work for Phase II. Phase II includes the Gold Line Corridor and the Northwest Electrified Rail Segment. In 2011, construction expenditures related to the Eagle P3 project were $191,405. The Eagle P3 Project elements are described below:

FasTracks East Corridor - The East Corridor is a 23.6-mile commuter rail transit corridor between Denver Union Station and Denver International Airport. In 2010, RTD issued notice to proceed with construction on this portion of Phase I of the Eagle P3 construction.

FasTracks Commuter Rail Maintenance Facility – The Commuter Rail Maintenance Facility is being designed to service the four planned commuter rail corridors (East Corridor, Gold Line,


36

North Metro, and Northwest Rail) included in the FasTracks plan. In 2010, RTD issued notice to proceed with construction on this portion of Phase I of the Eagle P3 construction.

FasTracks Gold Line Corridor - The Gold Line Corridor is an 11.2 mile rail transit corridor between Denver Union Station to the vicinity of Ward Road, passing through northwest Denver, unincorporated Adams County, Arvada, and Wheat Ridge. A notice to proceed with construction of this portion of Phase II was issued in 2011.

FasTracks Northwest Electrified Rail Segment – The Northwest Rail Corridor, described previously, includes a project segment, referred to as the Northwest Electrified Rail Segment, extending from Denver Union Station to Westminster which will be completed under the Eagle P3 Project Phase II which was issued a notice to proceed in 2011.

Additional information on RTD’s capital assets can be found in footnote C of this report. Debt Administration Outstanding debt – Outstanding debt includes sales tax revenue bonds, certificates of participation, and commercial paper. The 2011 outstanding principal was $1,903,563 compared to $1,954,528 in 2010. Outstanding debt decreased by $50,965 (6.6%) in 2011 and increased by $759,548 (63.6%) in 2010. The decrease in 2011 is due to scheduled principal payments. The increase in 2010 is due to new funding for FasTrack projects and Base System paratransit, farebox and CAD/AVL. Sales tax revenue bonds – RTD issues sales tax revenue bonds to fund the acquisition and construction of assets. The sales tax revenue bonds were $1,380,038 and $1,405,048 as of December 31, 2011 and 2010, respectively. The sales tax revenue bonds decreased $25,010 (1.8%) in 2011 compared to an increase of $523,203 (59.3%) in 2010. The decrease in 2011 is due to scheduled principal payments for the year and no new debt acquired. The sales tax revenue bonds are payable from RTD’s sales and use tax revenue. RTD is required to maintain certain minimum deposits, as defined in bond resolutions, to meet debt service requirements. The bonds may be redeemed prior to maturity, at a price equal to the principal amount plus accrued interest thereon to the date of redemption and a premium. Certifications of participation - Certifications of participation relate to financial obligations issued by the Regional Transportation District Asset Acquisition Authority, Inc. (Authority), a nonprofit corporation. The Authority issued Certificates of Participation (Certificates) with the proceeds being used to acquire certain equipment and facilities to be used by RTD. RTD leases the equipment acquired with the proceeds from the Certificates under two separate Master Lease Purchase Agreements. For financial reporting purposes, RTD accounts for the Certificates as its own debt. Certificates outstanding were $523,525 and $549,480 as of December 31, 2011 and 2010, respectively. The certificates outstanding decreased $25,955 (4.7%) in 2011 compared to an increase of $258,345 (88.7%) in 2010. The decrease in 2011 is due to scheduled principal payments for the year and no new debt acquired.


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Commercial Paper - RTD has issued commercial paper (CP) in order to provide bridge financing for the federal share of the Southeast Corridor light rail project. In August 2001, RTD was authorized to issue up to $118.5 million of commercial paper for this purpose. The final principal reduction took place in 2010. In 2011, RTD had no commercial paper outstanding. The following table summarizes outstanding debt obligations as of December 31, 2011 and 2010 with comparative information for 2009.

Outstanding Debt

2011 2010 2009Bonds payable:

Sales Tax Revenue Bonds 1,380,038$ 1,405,048$ 881,845$ Certificates of Participation 523,525 549,480 291,135 Commercial Paper - - 22,000

Total Principal 1,903,563 1,954,528 1,194,980 Less unearned amounts:

Issuance premiums and discounts 42,599 47,381 40,357 Unearned loss on refunding (10,557) (12,422) (9,645)

Debt net of issuance and refunding $ 1,935,605 $ 1,989,487 $ 1,225,692

RTD maintains credit ratings from Standard & Poor Corporation, Moody’s Investor Services, and Fitch Ratings. Credit ratings vary based on the type of debt and the source of funds used for repayment. RTD’s ratings are presented in the following table:

Rating Agency Base System Bonds

0.6% Sales & UseTax

FasTracks Bonds 0.4% Sales & Use

Tax Certificates of Participation

Standard & Poor’s AAA AA+ A- Moody’s Aa2 Aa2 AA3 Fitch AA+ AA AA-

Additional information on RTD’s debt can be found in footnote E of this report. Economic Factors and Subsequent Events after the adoption of the 2011 Budget Sales and use taxes are the largest source of revenue for RTD, representing 47.5% and 56.1% of the total revenues in 2011 and 2010 respectively. Sales and use tax revenues are affected by changes in the local economy. RTD’s sales and use tax revenue grew an average of 4.3% each year from 2004 through 2007 as the Colorado economy expanded. Beginning in the fourth quarter of 2008 sales and use tax revenues fell below 2007 levels, resulting in an annual decrease of $5,583 (1.3%) in 2008 followed by an annual decrease of $41,419 (10.0%) in 2009. RTD experienced an economic downturn in 2009 as consumer and business optimism reached record low levels and unemployment continued to move upward further depressing consumer spending. Economic conditions began to


38

stabilize during 2010 with some signs of optimism during the latter half of the year. Actual sales and use tax revenue for 2010 was $397,549 and increase of $26,144 (7.0%) from 2009. Of this amount, $11,985 was attributable to a temporary discontinuance of a 3.3% vendor allowance with the remaining increase attributable to increased consumer and business spending. The vendor allowance was partially restored to 2.2% in July 2011. Sales and use tax levels continued to recover in 2011 with an increase of $17,631 (4.4%) over 2010 with $8,351 attributable to the reduced vendor allowance. Increases in expenditures are expected in future years due to expansion of RTD’s FasTracks program. The FasTracks program is a 12-year plan to build a comprehensive, integrated region-wide transit network that will provide a reliable and safe system, enhance mobility and respond to the growing transportation needs within the eight-county Regional Transportation District. The FasTracks program includes 122 miles of new light rail and commuter rail, 18 miles of bus rapid transit infrastructure, 57 new stations, 31 new park-n-Rides, and redevelopment of Denver Union Station. Funding for the FasTracks program will be secured through Federal Transit Administration (FTA) grants, sales and use taxes and other revenues, issuance of long term debt, and public-private partnerships. Due to the continuing recession, sales tax revenues have also declined significantly and are projected over the long-term to leave a gap in funding necessary to complete the program. Requests for Information This financial report is intended to provide an overview of RTD’s finances for those with an interest in this organization. Questions concerning any information contained in this report may be directed to the Chief Financial Officer.

39

BASIC FINANCIAL STATEMENTS

40

REGIONAL TRANSPORTATION DISTRICTSTATEMENT OF NET POSITIONYear Ended December 31,(In Thousands)

2011 2010ASSETS

Current Assets:Cash and cash equivalents (note B) 151,923$ 116,226$ Marketable interest bearing investments (note B) 213,174 132,513Receivables:

Sales tax 74,361 75,360Other, less allowance for doubtful accounts of $861 and

$687 at December, 31 2011 and 2010, respectively 16,849 78,059Grants 151,463 52,087

Inventories 28,049 30,151Other current assets (note C) 102,555 111,452Cash and cash equivalents - restricted (note B) 256,763 656,340Marketable interest bearing investments - restricted (note B) 197,908 37,678

Total current assets 1,193,045 1,289,866

Noncurrent Assets:Capital assets (note D):

Land 187,985 173,884Land improvements 1,345,825 1,296,854Buildings 250,255 259,553Revenue earning equipment 744,732 730,295Shop, maintenance and other equipment 101,429 88,495Construction in progress 1,852,167 1,351,198

Total capital assets 4,482,393 3,900,279Less accumulated depreciation (1,010,260) (931,130)

Net capital assets 3,472,133 2,969,149

Other Noncurrent Assets:Long-term marketable interest bearing investments (note B) 113,502 157,339

Long-term receivable (note H) - 110 Other long-term assets (note C) 88,655 92,128

Total other noncurrent assets 202,157 249,577

Total noncurrent assets 3,674,290 3,218,726

Total assets 4,867,335$ 4,508,592$

The accompanying notes are an integral part of these statements.

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REGIONAL TRANSPORTATION DISTRICTSTATEMENT OF NET POSITION (CONTINUED)Year Ended December 31,(In Thousands)

2011 2010 LIABILITIES

Current LiabilitiesAccounts and contracts payable 313,368$ 116,367$ Current portion of long-term debt payable from restricted assets (note E) 54,786 50,965Accrued compensation (note F) 18,279 17,194Accrued interest payable from restricted assets 16,636 14,887Other accrued expenses 30,801 29,394Unearned revenue (note H) 110 102

Total current liabilities 433,980 228,909

Noncurrent Liabilities Long-term debt, net (note E) 1,880,819 1,938,522Other liabilities (note E and F) 37,370 137,287Unearned revenue (note H) - 110 Total noncurrent liabilities 1,918,189 2,075,919

Total liabilities 2,352,169 2,304,828

NET POSITION

Invested in capital assets, net of related debt (note J) 1,872,790 1,597,631Restricted debt service and project related (note J) 101,656 60,419Resticted tabor reserve (note J) 16,392 15,486Restricted FasTracks (note J) 389,657 363,929Unrestricted (note J) 134,671 166,299

Total net position 2,515,166$ 2,203,764$


42

(In Thousands)

2011 2010OPERATING REVENUE

Passenger fares 108,497$ 97,942$ Advertising, rent, and other 4,882 4,414

Total operating revenue 113,379 102,356

OPERATING EXPENSESSalaries and wages 123,704 119,422Fringe benefits 42,628 41,076Materials and supplies 52,015 48,310Services 48,357 60,553Utilities 11,627 10,977Insurance 6,089 5,429Purchased transportation 108,865 104,514Leases and rentals 1,964 2,515Miscellaneous 2,082 3,315Depreciation 104,280 104,176

Total operating expenses 501,611 500,287

OPERATING LOSS (388,232) (397,931)

NONOPERATING REVENUE (EXPENSES)Sales and use tax 415,180 397,549Grant operating assistance 89,592 92,655Investment income 6,484 8,065Other income 11,356 3,653Loss on capital assets (6,101) (3,474)Interest expense (51,274) (48,735)Other expense (3,895) (1,671)

Net nonoperating revenue (expenses) 461,342 448,042

INCOME BEFORE CAPITAL GRANTSAND LOCAL CONTRIBUTIONS 73,110 50,111

Capital grants and local contributions (note A) 238,292 107,478

INCREASE IN NET POSITION 311,402 157,589

NET POSITION, beginning of year 2,203,764 2,046,175

NET POSITION, end of year 2,515,166$ 2,203,764$

REGIONAL TRANSPORTATION DISTRICTSTATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITIONYear ended December 31,


43

(In Thousands)

2011 2010Cash flows from operating activities

Receipts from customers 175,745$ 117,075$ Payments to suppliers (123,189) (255,297)Payments to employees (165,247) (159,377)Other receipts 11,356 8,535

Net cash used in operating activities (101,335) (289,064)

Cash provided from noncapital financing activitiesGrant operating assistance 89,592 92,655Sales and use tax collections 416,179 392,452

Net cash provided by noncapital financing activities 505,771 485,107

Cash flows from capital and related financing activitiesPrincipal paid on long-term debt (53,882) (74,101)Proceeds from issuance of debt - 748,521Capital grant funds and other contributions received 139,026 119,094Proceeds from sale of assets 3,588 (2,402)Acquisition and construction of capital assets (570,212) (554,238)Payment to defease debt - (78,579)Interest paid on long-term debt (96,266) (78,500)

Net cash provided/(used) in capital andrelated financing activities (577,746) 79,795

Cash flows from investing activitiesPurchases of investments (767,167) (395,308)Proceeds from sales and maturities of investments 570,113 526,964Interest and dividends on investments 6,484 8,065

Net cash provided/(used) by investing activities (190,570) 139,721

INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (363,880) 415,559

Cash and cash equivalents - January 1 772,566 357,007

Cash and cash equivalents - December 31 408,686$ 772,566$

REGIONAL TRANSPORTATION DISTRICTSTATEMENT OF CASH FLOWYear ended December 31,


44

(In Thousands)

RECONCILIATION OF OPERATING LOSS TO NET CASH 2011 2010 USED IN OPERATING ACTIVITIES:

Operating loss (388,232)$ (397,931)$ Adjustment to reconcile operating loss to

net cash used in operating activitiesDepreciation expense 104,280 104,176Amortization expense (3,746) (1,359)Other revenue 11,356 8,535Bad debt expense (149) (312)Changes in operating assets and liabilities:

(Increase)/decrease in other accounts receivable 61,210 (36,913)(Increase)/decrease in inventories 2,102 (11,504)(Increase)/decrease in other current assets 8,897 (71,913)Increase in accounts payable 97,084 193,196Increase in accrued compensation and expenses 1,085 1,121Increase/(decrease) in long-term other assets 3,473 (81,997)Decrease in deferred revenue (212) (94)Increase in other accrued expenses 1,517 5,931

Net cash used in operating activities (101,335)$ (289,064)$

RECONCILIATION OF CASH and CASH EQUIVALENTS Cash and cash equivalents 151,923$ 116,226$ Cash and cash equivalents - restricted 256,763 656,340 Total cash and cash equivalents 408,686$ 772,566$

Noncash investing, capital and financing activities:RTD had unrealized losses on investments of $445and $651 for 2011 and 2010, respectively.

RTD issued a DUSPA bond to fund the constuction of capitalassets in 2010 for $167,954. Assets received were $46,107 and $121,847 for 2011 and 2010, respectively.


STATEMENT OF CASH FLOWS (CONTINUED)Year ended December 31,


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NOTES TO FINANCIAL STATEMENTS

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NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. Organization

The Regional Transportation District (RTD) was created as a transportation planning agency, a political subdivision of the State of Colorado, by an Act of the Colorado General Assembly (the Act), effective July 1969 (Title 32, Article 9, C.R.S., 1973, as amended). In 1974, the Act was amended and RTD became an operating entity charged with the responsibility for development, operation and maintenance of a public mass transportation system for the benefit of the citizens of the District. The District is comprised of 15 separate districts located in Denver, Boulder, Broomfield and Jefferson counties, and certain portions of Adams, Arapahoe, Douglas, and Weld counties.

RTD is governed by a publicly elected board of directors consisting of 15 members. Each board member is elected to serve a term of four years by the constituents of the district in which the board member resides. As required by generally accepted accounting principles, these financial statements present RTD and its component unit. The component unit discussed in note A.2 is included in the RTD’s reporting entity because of the significance of its operational or financial relationship with the District. In 1988, a Senate Bill was enacted (privatization legislation) requiring RTD to implement by March 31, 1989, a plan to competitively bid contracts for the provision of at least 20% of RTD’s bus service by private contractors. In 1999, the Bill was amended requiring RTD to increase this provision to at least 35% of fixed route bus service. In 2003, the Bill was amended to require that at least 50% of RTD’s vehicular service be operated by private transit companies.

2. Financial Reporting Entity – Blended Component Unit The Regional Transportation District Asset Acquisition Authority, Inc. (the Authority) was

formed in 1987 as a nonprofit corporation on behalf of RTD for the purpose of issuing certificates of participation in a public offering collateralized by an installment purchase agreement with RTD. RTD’s General Manager appoints the Board of Directors of the Authority. The Authority serves as a financing mechanism for various financing arrangements for RTD. The activity related to the underlying financial obligations has been included in RTD’s financial statements for the years ended December 31, 2011 and 2010. No separately audited financial statements are prepared for the Authority.

3. Basis of Accounting

The accounts of RTD are reported as a Proprietary Fund. Proprietary funds are accounted for on the flow of economic resources measurement focus and use the accrual basis of accounting. Revenue is recognized when earned and expenses are recorded at the time liabilities are incurred. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of RTD are charges to customers for services. Operating expenses include the cost of services, administrative expenses and

REGIONAL TRANSPORTATION DISTRICT Notes to Financial Statements December 31, 2011 and 2010 (Dollars in Thousands)

47

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

depreciation on capital assets. All revenues and expenses not meeting the definition are reported as non-operating revenues and expenses. It is RTD’s policy to apply all applicable Governmental Accounting Standards Board (GASB) pronouncements and Financial Accounting Standard Board (FASB) Accounting Standards Codification (ASC) issued on or before, but not after, November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements. When both restricted and unrestricted resources are available for use, it is RTD’s policy to use restricted resources first, then unrestricted resources as they are needed.

4. Cash Equivalents RTD considers all highly liquid investments, both restricted and unrestricted, with an

original maturity of three months or less when purchased to be cash equivalents. 5. Interest Bearing Investments Investments with a maturity date, when purchased, of less than one year are recorded at cost

or amortized cost. Investments with a maturity date of more than one year from the date of purchase are recorded at fair value.

6. Inventories Inventories consist primarily of materials and supplies used in the ordinary course of

operations. Materials and supplies are stated at cost using the FIFO (first-in, first-out) method.

7. Other Assets

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. Escrows are deposits held in escrow during the period of construction. At the time projects are completed, escrows are generally applied toward the cost of the project or may be forfeited by the District upon breach of contract.

8. Receivables

Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollected amounts through a charge to earnings and a credit to a valuation allowance based on its assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. Changes in the valuation allowance have not been material to the consolidated financial statements.


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9. Restricted Assets

Restricted assets are assets restricted by the covenants of long-term financial arrangements. 10. Capital Assets Property and equipment are stated at historical cost. Capital assets are defined by RTD as

assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. Maintenance and repairs are charged to current period operating expenses and improvements are capitalized. Upon retirement or other disposition of property and equipment, the cost and related accumulated depreciation are removed from the respective accounts and any gains or losses are included in non-operating revenue and expenses. A pro rata share of the proceeds from the sale of property and equipment, which were acquired with federal funds, is required to be invested in a similar asset.

Interest is capitalized on assets financed with debt from the date of the borrowing until

completion of the project. The amount of tax-exempt debt (externally restricted) interest to be capitalized is the difference between the interest expense on debt and interest earnings on debt proceeds. The amount of other debt interest to be capitalized is calculated by weighted average construction expenditures multiplied by the weighted average interest rate of outstanding debt.

Total interest cost of RTD consisted of the following as of December 31:

2011 2010

Interest expense $ 51,274 $ 48,735 Capitalized interest 46,741 36,467

Total interest cost $ 98,015 $ 85,202

11. Depreciation Depreciation of property and equipment is computed using the straight-line method over

the estimated useful lives of the assets, which are as follows:

Land improvements 5–30 years Buildings 30 years Revenue earning equipment 8–25 years Shop, maintenance and other equipment 3–10 years

Fully depreciated assets, which are still in use, are included in the asset balances in the

accompanying financial statements. The cost of fully depreciated assets was approximately $208,207 and $201,084 at December 31, 2011 and 2010, respectively.


49


12. Compensated Absences

Substantially all employees receive compensation for vacations, holidays, illness, and certain

other qualifying absences. The number of days compensated in the various categories of absence is based generally on length of service. Compensated absences, which have been earned but not paid, have been accrued in the accompanying financial statements.

13. Self-Insurance

Liabilities for property damage and personal injury are recognized as incurred on the basis of

the estimated cost to RTD. In addition, RTD offers a self-insured health benefit option as part of its employee benefits program in which costs are recognized as they are incurred.

14. Revenue Recognition Passenger Fares Passenger fares are recorded as revenue at the time services are performed and revenue

passes through the farebox. Sales of monthly passes are recorded initially as unearned revenue and recognized as income at the end of the month for which the pass is used. Sale of tokens and ten ride tickets are recorded as income at the time of sale.

Sales of University based passes, which are valid for a specific academic semester, are

recorded initially as unearned revenue. Sales are recognized as income at the end of each month, with the amount recognized in each month determined by prorating the total contract amount over the number of academic calendar days in each month of the contract. Sales of Eco Pass and Neighborhood Pass, which are valid through December 31 of a given year, are recorded initially as unearned revenue. Sales are recognized as income at the end of each month, with the total contract amount prorated evenly over the number of months of the contract.

Sales and Use Taxes Under the provisions of the Act, as amended, RTD levies a sales tax of 1.0% on net taxable

sales made within the District and a use tax of 1.0% on items purchased for use inside the District. As described in Note E, under the terms of the Sales Tax Revenue Bonds, Series 2002B, Series 2004A, Series 2005A, Series 2006A, Series 2007A, Series 2008A, Series 2010A and Series 2010B bond resolutions, sales and use tax revenue is pledged for payment of debt service. Sales and use taxes are collected by the State of Colorado, Department of Revenue and are remitted to a trustee who satisfies debt service from the collections, as required under RTD’s bond and commercial paper resolutions, and remits balance to RTD.

Sales and use taxes are recorded as revenue by RTD in the month collected by the merchant. Sales and Use Tax Bonds debt service will be paid from the collateralized sales and use revenues in the amount of approximately $2,611,745 through 2050. Principal and interest paid for the current year and pledged revenues received were $83,650 in 2011.


50

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Grants and Other Contributions The federal government, through the Federal Transit Administration (the FTA), provides

financial assistance and makes grants directly to RTD for operations and acquisition of property and equipment. The amount recorded as federal capital grant was $186,073 and $102,213 in 2011 and 2010, respectively. Other contribution revenue was $141,811 and $93,038 in 2011 and 2010, respectively.

15. Use of Estimates

The financial statements contained herein have been prepared in accordance with US Generally Accepted Accounting Principles (GAAP). GAAP are uniform minimum standards of and guidelines to financial accounting and reporting. GAAP establishes appropriate measurement and classification criteria for financial reporting. Adherence to GAAP provides a reasonable degree of comparability among the financial reports of state and local governmental units. The preparation of financial statements in accordance with GAAP involves the use of management’s estimates. These estimates are based upon management’s best judgments, after considering past and current events and assumptions about future events. Actual results may differ from estimates.

16. Reclassification of Prior Year Amounts Other income - contributions have been regrouped and prior year financial statements have

been reclassified to conform to current year presentation. NOTE B – DEPOSITS AND INVESTMENTS Deposits

RTD’s deposits are subject to the State of Colorado’s Public Deposit Protection Act (PDPA). Under this act, all uninsured public deposits at qualified institutions are fully collateralized with pledged collateral which is held in custody by any Federal Reserve Bank or branch thereof, or held in escrow by some other bank in a manner as the banking Commissioner shall prescribe by rule and regulation, or may be segregated from the other assets of the eligible public depository and held in its own trust department. Colorado’s PDP Act requires that pledged collateral so held is clearly identified as being security maintained or pledged for the aggregate amount of public deposits accepted and held on deposit by the eligible public depository. The depository has the right at any time to make substitutions of eligible collateral maintained or pledged and is at all times entitled to collect and retain all income derived from those investments without restrictions.

On October 3, 2008, as part of the Economic Stabilization Act, Congress temporarily increased FDIC insurance from $100 to $250 per depositor. As of December 31, 2011 and 2010, respectively, RTD had bank deposits of $979 and $0 collateralized with securities held by the pledging financial institutions’ trust department or agent but not in RTDs name.


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NOTE B – DEPOSITS AND INVESTMENTS (CONTINUED) Investments At December 31, 2011, the Regional Transportation District’s investments consisted of the following:

Investment Type

Fair Value Less Than 6 Months

6-12 Months

1-5 Years

U.S. Agency Securities $ 246,435 $ 90,829 $ 65,659 $ 89,947

U.S Treasury Securities 60,545 35,299 10,047 15,199

Municipal Bonds 6,819 6,819 Commercial Paper 148,463 148,463 Corporate bonds 56,210 5,022 8,249 42,939 Repurchase

agreements 6,112 6,112 - -

Total 524,584 285,725 83,955 154,904 Money market

funds-(not categorized)

151,923 151,923 - -

Total: $ 676,507 $ 437,648 $ 83,955 $ 154,904 At December 31, 2010, the Regional Transportation District’s investments consisted of the following:

Investment Type Fair Value

Less Than 6 Months

6-12 Months

1-5 Years

U.S. Agency Securities $ 237,566 $ 67,900 $ 55,745 $ 113,921

U.S Treasury Securities 10,252 - - 10,252

Corporate bonds 52,571 - 9,153 43,418 Repurchase

agreements 27,141 27,141 - -

Total 327,530 95,041 64,898 167,591 Money market

funds-(not categorized)

116,226 116,226 - -

Total: $ 443,756 $ 211,267 $ 64,898 $ 167,591


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NOTE B – DEPOSITS AND INVESTMENTS (CONTINUED) Investments (Continued) Interest Rate Risk. As a means of limiting its exposure to fair value losses arising from rising

interest rates, RTD’s investment policy limits maturities of individual investment securities to 5 years, unless otherwise authorized by RTD’s Board of Directors.

Credit Risk. Investment transactions are made in accordance with the Colorado Revised

Statutes (CRS) 24-75-601, et seq. The types of investments, which are authorized by RTD’s internal investment policy, include the

following: 1. Obligations of the United States government.

2. Obligations of the United States government agencies and United States government sponsored corporations.

3. Municipal notes or bonds that are an obligation of any state of the United States. 4. Corporate Bonds that are an obligation of corporations or financial institutions organized

and operating in the United States. 5. Commercial paper. 6. Time Deposits/Time Certificates of Deposits. 7. Bankers’ Acceptances. 8. Repurchase agreements. 9. Money market funds. 10. Local government Investment Pools. 11. Any other Investment permitted under CRS 24-75-601 et seq.

Credit ratings of RTD’s portfolio, as of December 31, 2011 and 2010, are exhibited in the table below. While all portfolio holdings adhere to RTD’s investment policy and applicable statute, not all investment holdings are rated by the nationally recognized statistical rating organizations. Investments rated AAA, AA and A are from the Fitch rating service. Investments rated A-1+/P-1 are from the Standard & Poor’s and Moody’s rating services, respectively. The securities falling within the non-rated categories below are either money market funds, which seek their returns through investments in high-quality short-term debt obligations, securities issued by U.S. government agencies, or repurchase agreements collateralized with securities issued by the U.S. government and government sponsored enterprises (U.S. Agencies).


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NOTE B – DEPOSITS AND INVESTMENTS (CONTINUED) At December 31, 2011, the Regional Transportation District’s credit ratings consisted of the following:

Investment Ratings Market Value Summary AAA (Fitch Ratings)

$263,787

AA (Fitch Ratings) 44,760 A-1+/P-1 148,463 Non-rated Money Market Funds

151,923 Money market funds investing in

high-quality short-term debt obligations.

Non-rated Agency Securities: Although these securities are Non-rated, they are obligations issued

by federal agencies and/or the US government sponsored enterprises.

61,462

Securities issued by FHLB (rated Aaa Moody’s), FMLMC (rated Aaa Moody’s and AAA Fitch) and FNMA (rated Aaa Moody’s and AAA Fitch).

Non-rated Repurchase Agreements

6,112

Repurchase agreement collateralized with securities issued by U.S. government agencies.

Total: $676,507 At December 31, 2010, the Regional Transportation District’s credit ratings consisted of the following:

Investment Ratings Market Value Summary AAA (Fitch Ratings)

$206,040

AA (Fitch Ratings) 33,054 A-1+/P-1 (S&P, Moody’s) 6,132 Non-rated Money Market Funds

116,226 Money market funds investing in

high-quality short-term debt obligations.

Non-rated Agency Securities: Although these securities are Non-rated, they are obligations issued

by federal agencies and/or the US government sponsored enterprises.

55,163

Securities issued by FHLB (rated Aaa Moody’s), FMLMC (rated Aaa Moody’s and AAA Fitch) and FNMA (rated Aaa Moody’s and AAA Fitch).

Non-rated Repurchase Agreements

27,141

Repurchase agreement collateralized with securities issued by U.S. government agencies.

Total: $443,756


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NOTE B – DEPOSITS AND INVESTMENTS (CONTINUED) Concentration of Credit Risk. It is the policy of RTD to diversify its investment portfolio. Assets held in the investment funds shall be diversified to eliminate the risk of loss resulting from over-concentration of assets in a specific maturity, a specific issue or a specific class of securities. The asset allocation in the portfolio should, however, be flexible, depending upon the outlook for the economy and the securities markets.

RTD’s investment policy outlines the following maximum exposure limits for unrestricted investments. As of December 31, 2011, RTD was in compliance with these limits. RTD had investments in U.S. Agency securities greater than 5% of its total portfolio as follows: Federal Home Loan Mortgage (11%), Federal National Mortgage Association (10%), Federal Home Loan Bank (10%) and Federal Farm Credit Bank (7%). As of December 31, 2010, RTD was in compliance with limitations set out in RTD’s previous investment policy limitations. RTD had investments in U.S. Agency securities greater than 5% of its total portfolio as follows: Federal Home Loan Mortgage (17%), Federal National Mortgage Association (11%), Federal Home Loan Bank (18%) and Federal Credit Bank (11%).

Investment Type

Maximum Portfolio %

Maximum Issue %

Maturity

Restrictions

Rating

Restrictions

U.S. Treasury Securities 100% 100% 5 years N/A

U.S Agencies 1 75% 25% 5 years AAA Municipal Bonds 20% 3% 3 years AA- Pre-Refunded Muni

Bonds 40% 5% 3 years AA-

Corporate bonds 20% 3% 3 years AA- Commercial Paper 40% 3% 270 days A-1/P1 Time Deposits/CD 10% 3% 1 year AA- Bankers Acceptances 20% 3% 1 year AA- Repurchase agreements 50% 10% 90 days AA-

Money market funds 100% 20% N/A

AAA or assets under management of

$1 billion or more

Local Government investment 100% 20% N/A AAA

1 In the event that one or more nationally recognized statistical rating agency rates such Agency obligations below the highest rating category, but no lower than one of the two highest rating categories, RTD’s funds may continue to be invested in Agencies if such investments satisfy the requirements of CRS 24.75.601.1 (m) which limits the maturity from the date of settlement to three years, provided that the book value limits of CRS 24.75.601.1 (m) (II) shall not apply. Rather, the diversification limit shall be set as follows: no more than 75% of the portfolio may be invested in Agencies, with any more than 25% being invested in any one Agency.


55

NOTE B – DEPOSITS AND INVESTMENTS (CONTINUED) The Portfolio will be limited to an aggregate exposure of 50% for the following investment types: Municipal Bonds, Corporate Bonds, Commercial Paper, Time Deposits/Time Certificates of Deposit and Bankers Acceptances. Maturity restrictions shall be calculated from settlement date to maturity date. Portfolio percent restrictions by security type and issuer are applicable only on the date of purchase of the investment. Proceeds from the issuance of RTD’s obligations are invested in accordance with legal documentation governing the transaction, notwithstanding any provisions of RTD’s investment policy to the contrary, and do not fall within the maximum exposure limits listed above.

At December 31, 2011 and 2010, RTD had $454,671 and $694,018 of cash and investments that were restricted under the provisions of bond agreements.

NOTE C - OTHER ASSETS

Other Assets consist of:(In Thousands)

2011 2012Prepaid expenses 2,686$ 2,590$ Prepaid repair parts 1,405 - Eagle P3 construction escrow 86,011 99,539 Other constuction escrow 4,148 - Assets held for sale 8,305 9,323 Debt issue costs (net of amortization of $7,892 and $4,147 at December 31, 2011 and 2010, respectively) 88,655 92,128

191,210 203,580 Less current portion (102,555) (111,452)

88,655$ 92,128$


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NOTE D – CAPITAL ASSETS Capital asset activity as of December 31, 2011 was as follows:(In Thousands)

Balances 2011 2011 Balances12/31/2010 Additions Deletions 12/31/2011

Capital assets not being depreciated:Land 173,884$ 14,164$ 63$ 187,985$ Construction in progress 1,351,198 616,953 115,984 1,852,167 Total capital assets not being depreciated 1,525,082 631,117 116,047 2,040,152

Capital assets being depreciated:Land improvements 1,296,854 68,294 19,323 1,345,825 Buildings 259,553 3,894 13,192 250,255 Revenue earning equipment 730,295 14,437 - 744,732 Shop, maintenance and other equipment 88,495 15,195 2,261 101,429 Total capital assets being depreciated 2,375,197 101,820 34,776 2,442,241

Less accumulated depreciation:Land improvements 388,750 46,124 11,167 423,707 Buildings 162,817 7,941 11,777 158,981 Revenue earning equipment 306,631 42,994 18 349,607 Shop, maintenance and other equipment 72,932 7,221 2,188 77,965 Total accumulated depreciation 931,130 104,280 25,150 1,010,260 Total capital assets being depreciated, net 1,444,067 (2,460) 9,626 1,431,981 Capital assets, net 2,969,149$ 628,657$ 125,673$ 3,472,133$ The depreciation expense was $104,280 and $104,176 for years 2011 and 2010, respectively.


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NOTE D – CAPITAL ASSETS (CONTINUED) Capital asset activity as of December 31, 2010 was as follows:(In Thousands)

Balances 2010 2010 Balances12/31/2009 Additions Deletions 12/31/2010

Capital assets not being depreciated:Land 172,537$ 2,087$ 740$ 173,884$ Construction in progress 765,198 712,553 126,553 1,351,198 Total capital assets not being depreciated 937,735 714,640 127,293 1,525,082

Capital assets being depreciated:Land improvements 1,281,751 15,178 75 1,296,854 Buildings 257,817 1,736 - 259,553 Revenue earning equipment 634,665 104,292 8,662 730,295 Shop, maintenance and other equipment 89,387 3,260 4,152 88,495 Total capital assets being depreciated 2,263,620 124,466 12,889 2,375,197

Less accumulated depreciation:Land improvements 342,549 46,201 - 388,750 Buildings 155,028 7,789 - 162,817 Revenue earning equipment 272,479 42,580 8,428 306,631 Shop, maintenance and other equipment 69,454 7,606 4,128 72,932 Total accumulated depreciation 839,510 104,176 12,556 931,130 Total capital assets being depreciated, net 1,424,110 20,290 333 1,444,067 Capital assets, net 2,361,845$ 734,930$ 127,626$ 2,969,149$


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NOTE E – LONG-TERM DEBT Long-term debt is comprised of the following as of December 31:

2011 2010 Sales Tax Revenue Bonds, Series 2002B, due serially on

November 1 of each year from 2004 to 2012, issued with a coupon of 4.2%, payable semiannually on May 1 and November 1 of each year; including premium of $355 and $780 for 2011 and 2010, respectively. $ 8,285 $ 16,255

Sales Tax Revenue Bonds, Series 2004A, due serially on November 1 of each year through 2013, issued with a 5.00% coupon, payable semiannually on May 1 and November 1 of each year; including premium of $461 and $713 for 2011 and 2010, respectively. 11,691 17,158

Sales Tax Revenue Bonds, Series 2005A, due serially on November 1 of each year through 2021, issued with 4.00% and 5.00% coupons, payable semiannually on May 1 and November 1 of each year; including net unearned loss from refunding of ($4,582) and ($5,048) for 2011 and 2010, and premium of $5,640 and $6,214 for 2011 and 2010 respectively. 100,133 100,446

Sales Tax FasTracks Revenue Bonds, Series 2006A, due serially on November 1 of each year through 2036, issued with coupons between 4.375% to 5.0%, payable semiannually on May 1 and November 1 of each year; including premium of $9,183 and $9,553 for 2011 and 2010, respectively. 244,918 245,288

Sales Tax FasTracks Revenue Refunding Bonds, Series 2007A, due serially on November 1 of each year through 2036, issued with coupons between from 4.00% to 4.50% payable semiannually on May 1 and November 1 of each year; including net unearned gain from refunding of $713 and $742 for 2011 and 2010, and discount of ($1,274) and ($1,326) for 2011 and 2010, respectively. 361,234 361,671

Sales Tax Revenue Refunding Bonds, Series 2007A, due serially on November 1 of each year through 2024, issued with a 5.25% coupon, payable semiannually on May 1 and November 1 of each year; including net unearned loss of ($1,725) and ($1,859) for 2011 and 2010, and premium of $7,172 and $7,731 for 2011 and 2010, respectively. 75,272 75,697

Sales Tax Revenue Refunding Bonds, Series 2008A, due serially on November 1 of each year through 2012, issued with coupons between 4.50% and 5.00%, payable semiannually on May 1 and November 1 of each year, including net unearned loss of ($135) and ($298) for 2011 and 2010, and premium of $202 and $445 for 2011 and 2010, respectively. 6,422

12,552


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NOTE E – LONG-TERM DEBT (CONTINUED) 2011 2010 Sales Tax Revenue Refunding Bonds, Series 2010A, due serially on

November 1 of each year through 2017, issued with coupons between 3.00% and 5.00%, payable semiannually on May 1 and November 1 of each year, including net unearned loss of ($2,709) and ($3,173) for 2011 and 2010, and premium of $4,845 and $5,675 for 2011 and 2010, respectively. $ 46,471

$ 50,127 Subordinate Sales Tax FasTracks Revenue Bonds, Series 2010,

Denver Union Station Project Authority (DUSPA) with principal and interest due on February 1 and August 1 of every year thru February 2040, with a coupon of 5.85%. 164,619 166,864

Sales Tax FasTracks Revenue Bonds, Series 2010A, due serially on November 1 of 2037 and 2038, issued with coupon of 5.0%, payable semiannually on May 1 and November 1 of each year, including premium of $2,396 and $2,485 for 2011 and 2010, respectively. 81,536 81,625

Sales Tax FasTracks Revenue Bonds Taxable (Direct Pay Build America Bonds), Series 2010B, due serially on November 1 of 2046 through 2050, issued with coupon of 5.844%, payable semiannually on May 1 and November 1 of each year. 300,000 300,000

Certificates of Participation Refunding Obligations, Series 2004A, under a lease agreement for acquisition of transit buses and vehicles, payments are due semiannually on June 1 and December 1 to 2014, issued with coupons between 4.50% and 5.00%, including net unearned loss from refunding of ($1,048) and ($1,408) for 2011 and 2010 and premium of $946 and $1,270 for 2011 and 2010, respectively.

26,813

35,292

Certificates of Participation Obligations, Series 2005A, under a lease agreement for acquisition of light rail vehicles, payments are due semiannually on June 1 and December 1 to 2025, issued with coupons between 4.50% and 5.00%, including premium of $2,979 and $3,201 for 2011 and 2010, respectively.

60,439

65,011

Certificates of Participation Taxable Refunding Obligations, Series 2007A, under a lease agreement for acquisition of transit buses and vehicles, payments are due semiannually on June 1 and December 1 to 2021, issued with a 5.535% coupon, including net unearned loss from refunding of ($495) and ($545) for 2011 and 2010, respectively. 12,950 13,890

Certificates of Participation Obligations, Amended and Restated Series 2002A, under a lease agreement for acquisition of transit vehicles and facilities, payments are due semiannually on June 1 and December 1 to 2022, issued with coupons between 4.00% and 5.00%, including premium of $5,800 and $6,331 for 2011 and 2010, respectively. 122,835 131,236


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NOTE E – LONG-TERM DEBT (CONTINUED) 2011 2010 Certificates of Participation Obligations, Series 2010A, under a

lease purchase agreement for acquisition of light rail vehicles, construct, install and improve certain equipment and other capital projects. Payments are due semiannually on June 1 and December 1 to 2031, issued with coupons between 3.00% and 5.50%, including net unearned loss from refunding of ($576) and ($832) and premium of $3,893 and $4,307 for 2011 and 2010, respectively.

$ 211,987

$ 216,375

Certificates of Participation Taxable (Direct Pay Build America Bonds), Obligations, Series 2010B, under a lease purchase agreement for acquisition of light rail vehicles, construct, install and improve certain equipment and other capital projects. Payments are due semiannually on June 1 and December 1 thru 2040, issued with a coupon of 7.672%.

100,000

100,000

1,935,605 1,989,487

Less current portion ( 54,786) (50,965)

$ 1,880,819 $ 1,938,522 The Sales Tax Revenue Bonds are payable from and secured by RTD’s sales and use tax revenue. RTD is required to maintain certain minimum deposits, as defined in the bond resolution, to meet debt service requirements. The bonds may be redeemed in inverse order of maturity, at a price equal to the principal amount plus accrued interest thereon to the date of redemption and a premium. Sales Tax Revenue Bonds debt service requirements to maturity are as follows:

Year ending December 31, Principal Interest Total 2012 $ 26,211 $ 70,752 $ 96,963 2013 20,839 69,453 90,292 2014 21,898 68,396 90,294 2015 23,013 67,284 90,297 2016 24,178 66,113 90,291 2017-2021 133,497 310,794 444,291 2022-2026 53,496 282,873 336,369 2027-2031 300,169 246,521 546,690 2032-2036 360,632 168,432 529,064 2037-2041 116,105 98,508 214,613 2042-2046 53,220 87,660 140,880 2047-2050 246,780 37,105 283,885 $ 1,380,038 $ 1,573,891 $ 2,953,929

Certificates of participation relate to debt issued by Regional Transportation District Asset

Acquisition Authority, Inc., a nonprofit corporation. The Authority issued Certificates of


61

NOTE E – LONG-TERM DEBT (CONTINUED)

Participation (Certificates) with the proceeds being used to acquire certain equipment and

facilities to be used by RTD. RTD leases the equipment acquired with the proceeds from the Certificates under two separate Master Lease Purchase Agreements. For financial reporting purposes, RTD accounts for the Certificates as its own debt. Annual debt service requirements on the Certificates to maturity are as follows:

Year ending December 31, Principal Interest Total 2012 $ 28,575 $ 28,451 $ 57,026 2013 25,735 27,197 52,932 2014 28,580 25,918 54,498 2015 20,510 24,739 45,249 2016 21,525 23,720 45,245 2017-2021 132,075 102,137 234,212 2022-2026 107,135 66,099 173,234 2027-2031 59,390 46,683 106,073

2032-2036 69,575 24,014 93,589 2037-2040 30,425 4,894 35,319

$ 523,525 $ 373,852 $ 897,377

Changes in Long-Term Liabilities Long-term liability activity for the year ended December 31, 2011, was as follows:

Balance

12/31/2010 2011

Additions 2011

Reductions Balance

12/31/2011 Due Within One Year

Bonds payable: Sales Tax Revenue Bonds $1,405,048 $ - $25,010 $1,380,038 $26,211

Certificates of Participation

549,480

-

25,955

523,525

28,575 Less deferred amounts: Issuance premiums and discounts

47,381

-

4,782

42,599 -

Deferred loss on refunding (12,422) - (1,865) (10,557) - Total Bonds Payable 1,989,487 - 53,882 1,935,605 54,786 Other liabilities* 137,287 5,695 105,612 37,370 - Deferred revenue 212 - 102 110 110

Total long-term liabilities $2,126,986 $5,695 $159,596 $1,973,085 $ 54,896 *Other liabilities consist of Net Pension Obligation liability reflecting the cumulative differences between pension cost and employer’s contributions to the plan.


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NOTE E – LONG-TERM DEBT (CONTINUED)

Long-term liability activity for the year ended December 31, 2010, was as follows:

Balance

12/31/2009 2010

Additions 2010

Reductions Balance

12/31/2010 Due Within One Year

Bonds payable: Sales Tax Revenue Bonds $881,845 $ 594,719 $71,516 $1,405,048 $25,010

Certificates of Participation

291,135

312,900

54,555

549,480

25,955 Commercial Paper

22,000

-

22,000

-

- Less deferred amounts: Issuance premiums and discounts

40,357

13,347

6,323

47,381 -

Deferred loss on refunding (9,645) (4,491) (1,714) (12,422) - Total Bonds Payable 1,225,692 916,475 152,680 1,989,487 50,965

Other liabilities* 25,418 111,869 - 137,287 -

Deferred revenue 306 - 94 212 102 Total long-term liabilities $1,251,416 $1,028,344 $152,774 $2,126,986 $ 51,067

*Other liabilities consist of Net Pension Obligation liability reflecting the cumulative differences between pension cost and employer’s contributions to the plan and the Eagle P3 Project concession agreement. On December 1, 2011, RTD closed on a Transportation Infrastructure Finance and Innovation Act (TIFIA) loan of up to $280 million. The proceeds from the TIFIA loan will be used to pay for “Eligible Project Costs” on RTD’s Eagle Project. The interest rate on the TIFIA loan is 3.14% with principal and interest payments anticipated to begin in 2025 and final maturity expected in 2045. The TIFIA loan will be used to complement the other sources of debt, resulting in a lower cost of funding than would have otherwise been available in the capital markets. The first TIFIA draw is anticipated to be approximately $125 million in 2012. The TIFIA loan is secured by a pledge of RTD’s 0.4% FasTracks sales and use tax. In January 2010, RTD issued its Sales Tax Revenue Refunding Bonds, Series 2010A, in the par amount of $47,625 for the purpose of refunding a portion of its Sales Tax Revenue Bonds, Series 2000A, 2002B and 2004A. The final maturity for the Refunding Bonds is November 1, 2017. This refunding was undertaken to reduce total debt service by $2,152 and resulted in a net present value savings of $1,831. In November 2010, RTD issued its Tax-Exempt Sales Tax Revenue Bonds (FasTracks Project) Series 2010A and Taxable Sales Tax Revenue Bonds (FasTracks Project) (Direct Pay Build America Bonds), Series 2010B in the combined par amount of $379,140 for the purpose of financing additional costs of transit improvements, facilities, vehicles and equipment for its FasTracks transit expansion program, funding a reserve fund, costs of issuance and termination payments required in connection with managing certain forward starting swaps previously entered into by RTD. The final maturity on the Bonds is November 1, 2038 and November 1, 2050 for Series 2010A and Series 2010B, respectively. Under Section 6431 of the Tax Code, an issuer of a Qualified Build America Bond (BAB) may apply to receive BAB Credit directly from the Secretary of the U.S. Treasury at


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NOTE E – LONG-TERM DEBT (CONTINUED) 35% of the corresponding interest payable on the related BABs. The 2010B Bonds are Qualified Build America Bonds. In December 2010, RTD issued its Tax-Exempt Certificates of Participation, Series 2010A and Taxable Certificates of Participation (Direct Pay Build America Bonds) Series 2010B in the combined par amount of $312,900 for the purpose of refunding certain RTD certificates and to acquire, construct, install and improve certain equipment, vehicles, buildings and other capital projects. The final maturity on the Certificates is June 1, 2040. Under Section 6431 of the Tax Code, an issuer of a Qualified Build America Bond (BAB) may apply to receive BAB Credit directly from the Secretary of the U.S. Treasury at 35% of the corresponding interest payable on the related BABs. The 2010B Certificates are Qualified Build America Bonds. The refunding portion of the 2010A certificate resulted in a net present value savings of $18. In July 2010 RTD entered into a DUSPA/RTD Funding Agreement (the DUSPA Agreement) with the Denver Union Station Project Authority (DUSPA) in order to support DUSPA’s financing of the Denver Union Station mixed-use and multi-modal project, including transit elements which are to be constructed on RTD-owned property and will be owned and operated by RTD. Such transit elements include a new light rail terminal, a new commuter rail station, a regional and commercial bus facility and new tracks. Under the DUSPA Agreement, RTD has agreed to issue a Subordinate Lien Sales Tax Revenue Bond, Series 2010 (the DUSPA Bond) to DUSPA. The DUSPA Bond was issued in the principal amount of $167,954, bears interest at an annual interest rate of 5.85% and is amortized over a 30-year term.

NOTE F – EMPLOYEE RETIREMENT AND UNEARNED COMPENSATION PLANS Plan Description RTD maintains two single-employer defined benefit pension plans for substantially all full-time employees. The Regional Transportation District Salaried Employees’ Pension Plan (the RTD Plan) covers all non-union, full-time salaried employees who have reached the age of 21. The Regional Transportation District and Amalgamated Transit Union Division 1001 Pension Plan (the Union Plan) was established pursuant to collective bargaining agreements between RTD and the Union. This plan covers substantially all full-time union-represented employees in accordance with the union agreement. The Board of Directors of each plan has the authority for establishing and amending benefits and funding policy. Each plan is administered by a pension board and issues audited financial statements, which include financial information for that plan. Those financial statements may be obtained from the plan: Regional Transportation District RTD ATU 1001 Pension Plan Salaried Employees Pension Trust 2821 S. Parker Road 7000 North Broadway, Building 106 Aurora, Colorado 80014-2602 Denver, Colorado 80221 The RTD Plan provides retirement benefits to RTD salaried employees who retire at or after age 55 with at least five years of service. These employees are entitled to a single lump sum distribution or an annual retirement benefit, payable monthly for life. The normal retirement benefit is equal to


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NOTE F – EMPLOYEE RETIREMENT AND UNEARNED COMPENSATION PLANS (CONTINUED) 2½% of average final compensation to which a participant is entitled on the day the participant retires, multiplied by the number of years of credited service. The RTD Board adopted amendment No. 8, effective January 1, 2008, in which salaried employee new hires shall not be eligible to participate in the RTD Plan. New salaried employees will be eligible to participate in the new RTD defined contribution plan (the RTD DC Plan). The Board of Directors for the RTD DC Plan has the authority for establishing and amending benefits and funding policy. RTD contributes 9% of the employee’s qualifying wage. Contributions totaled $1,157 and $792 in 2011 and 2010, respectively. RTD employees cannot contribute to the RTD DC Plan. Membership was 237 and 163 active employees in 2011 and 2010, respectively. In addition, RTD has one employee in 2011 and 2010 participating in both the RTD plan and the RTD DC Plan due to a compensation level in excess of the 2011-2010 compensation limits imposed under IRC Section 401(a) (17). The Union Plan provides retirement benefits to employees who retire at or after a certain age with at least a specified number of years of service. These employees are entitled to a percentage of their final average earnings based on age and credited service at retirement. The following schedule (derived from the most recent actuarial valuation reports) reflects membership for the plans as of January 1, 2011:

RTD Plan Union Plan

Active employees 456 1,676 Pensioners 186 1,198 Inactive vests 111 983

753 3,857 Funding Policy Contributions to the RTD Plan are actuarially determined. RTD employees are not required to contribute to the RTD Plan. Contributions to the Union Plan are made in accordance with the Union agreement. This agreement requires RTD to contribute 8% and the employee to contribute 3% of the employee’s qualifying wages. RTD has no liability to the Union Plan beyond its contributions. Funding Status Based on actuarial valuations performed as of January 1, 2011, the RTD Plan had unfunded actuarial accrued liabilities of $990 and the Union Plan had unfunded actuarial accrued liabilities of $101,954. The actuarial value of assets for both plans is determined by spreading gains and losses over a five-year period.


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NOTE F – EMPLOYEE RETIREMENT AND UNEARNED COMPENSATION PLANS (CONTINUED) Schedule of Funding Progress – RTD Plan

Actuarial Valuation

Date

Actuarial Value of Assets

Actuarial Accrued Liability

Funding Excess

(Deficiency) Funding

Ratio

Annual Covered Payroll

Unfunded Actuarial

Liability as % of Covered

Payroll 1/1/11 $ 104,283 $ 105,273 $ (990) 99.06% $ 32,906 (3.0%)

Schedule of Funding Progress – Union

Actuarial Valuation

Date



Funding Excess


Ratio


Unfunded Actuarial


Payroll 1/1/11 $ 223,457 $ 325,411 $ (101,954) 68.67% $ 80,286 (127.0%)

The schedule of funding progress presented as Required Supplementary Information following the notes to the financial statements provides multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actual accrued liability. Three-year Trend Information – RTD Plan

Annual pension

cost (APC)

Annual pension cost

(APC) Net Pension Obligation

RTD Pension Plan Year-end December 31, 2009 $ 4,932 64% $ 1,780 2010 5,228 57% 4,011 2011 2,246 128% 3,385 Annual Pension Cost and Net Pension Obligation RTD Pension Plan NPO Liability Disclosure 2011 2010 2009 Actuarially Determined Contribution (ARC) $ 2,268 $ 5,255 $4,943 Interest on NPO 202 245 105 Adjustment (224) (272) (116) Annual Pension Cost (APC) 2,246 5,228 4,932 Contribution Made 2,872 2,997 3,152

Increase/Decrease NPO (626) 2,231 1,780 NPO Beginning of year 4,011 1,780 - NPO Ending of year $ 3,385 $ 4,011 $1,780


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NOTE F – EMPLOYEE RETIREMENT AND UNEARNED COMPENSATION PLANS (CONTINUED)

Three-Year Trend Information – Union Plan

Annual pension

cost (APC)

Annual pension cost

(APC) Net Pension Obligation

ATU 1001 Pension Plan Year-end December 31, 2009 $ 13,371 45% $ 23,638 2010 10,045 60% 27,663 2011 12,504 50% 33,985 Annual Pension Cost and Net Pension Obligation ATU 1001 Pension Plan NPO Liability Disclosure 2011 2010 2009 Actuarially Determined Contribution (ARC) $ 12,084 $ 9,668 $ 13,451 Interest on NPO 2,210 1,813 1,305 Adjustment (1,790)) (1,436)) (1,385) Annual Pension Cost (APC) 12,504 10,045 13,371 Contribution Made 6,182 6,020 6,045 Increase/Decrease NPO 6,322 4,025 7,326 NPO Beginning of year 27,663 23,638 16,312 NPO Ending of year $ 33,985 $ 27,663 $ 23,638

Actuarial Methods and Assumptions RTD annual pension cost for the current year, based on actuarial valuation plans performed as of January 1, 2011, and related information for each plan, is as follows:

RTD Pension Plan ATU 1001 Pension Plan Contribution rates RTD 9% 8% Contribution rates Employees - 3% Annual pension cost $ 2,246 $ 12,504 Contributions made $ 2,872 $ 6,182 Actuarial valuation date January 1, 2011 January 1, 2011 Actuarial cost method Entry age normal Individual Entry Age Amortization method Level-dollar; closed Level percentage of payroll;

open Remaining amortization period 20 Years 30 years

Asset valuation method 5-Year Smoothed Market

Value (20% Corridor) 5-Year Smoothed Market Value

(20% Corridor) Actuarial assumptions: Inflation Rate/Payroll Growth 3.5% to 8.5% 3% Investment rate of return 7.5% 8% Projected salary increases Age based table 3-7% Cost-of-living adjustments - -


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NOTE F – EMPLOYEE RETIREMENT AND UNEARNED COMPENSATION PLANS (CONTINUED) Amalgamated Transit Union Division 1001 Health and Welfare Trust The Amalgamated Transit Union Division 1001 Health and Welfare Trust was formed pursuant to a Trust Agreement effective July 1, 1971, between Amalgamated Transit Union Division 1001 (ATU 1001) and an agent of a transit enterprise owned by the City and County of Denver, through July 3, 1974, and the Regional Transportation District (RTD) thereafter. In addition to the original Denver Metro Division, employees of other RTD divisions have been approved for participation in the Trust benefits. The Trust agreement shall continue in full force and effect in all its terms and provisions so long as there continues to be a collective bargaining agreement between the Union and the District. The Trust provides health benefits (hospital, medical, dental, vision, life and short-term disability) for represented employees of RTD and certain officers of ATU 1001 and health care benefits for retired employees. RTD’s contribution was $11,323 and $11,051 for the years ended December 31, 2011 and 2010, respectively. The Trust also provides insurance coverage for felonious assault for each employee and funds the Amalgamated Transit Union Division 1001 Legal Services Trust. The Trust self-insures part of its health benefits, life insurance coverage and short-term disability. The plan issues audited financial statements, which include financial information for the plan. The financial statements may be obtained from the plan.

RTD ATU 1001 Health and Welfare Trust 2821 S. Parker Road, Suite 1005 Aurora, Colorado 80014-2602

Unearned Compensation Plan RTD offers its employees an unearned compensation plan (the Plan), created in accordance with Internal Revenue Code Section 457, which is available to substantially all employees and permits them to defer a portion of their compensation to future years. Under the terms of the Plan, the unearned compensation is available to participants upon termination, retirement, death or in the event of an unforeseeable emergency or other financial hardship. Compensated Absences RTD considers all accrued compensated absences as due within one year. Compensated absences activity for the year ended December 31, 2011, was as follows:

12/31/2010

Balance 2011

Accruals 2011

Payments 12/31/2011

Balance Represented employees $ 1,750 $ 1,021 $ 782 $ 1,989 Salaried employees 7,464 3,759 3,601 7,622 Total compensated absences due $ 9,214 $ 4,780 $ 4,383 $ 9,611


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NOTE F – EMPLOYEE RETIREMENT AND UNEARNED COMPENSATION PLANS (CONTINUED) Compensated absences activity for the year ended December 31, 2010, was as follows:

12/31/2009

Balance 2010

Accruals 2010

Payments 12/31/2010

Balance Represented employees $ 1,734 $ 782 $ 766 $ 1,750 Salaried employees 7,148 3,601 3,285 7,464 Total compensated absences

due $ 8,882 $ 4,383 $ 4,051 $ 9,214 The accrued compensation liabilities of $18,279 and $17,194 as of December 31, 2011 and December 31, 2010, include $8,668 and $7,980 of accrued wages, salaries, and fringe benefits in addition to accrued compensated absences. NOTE G – OPERATING LEASES – LESSOR Air Rights Lease In 1982, RTD entered into an agreement with a real estate partnership to lease the air space above RTD’s Civic Center transfer facility located in downtown Denver for the purpose of constructing, leasing and operating a 21-story office building for a period of 65 years. Under the terms of the lease agreement, RTD began receiving minimum annual rental income of approximately $400 beginning in 1987. In addition, RTD is entitled to receive 38% of the annual net cash flow proceeds, as defined in the lease agreement, from the rental of space in the office building. This amount totaled approximately $400 in 2011 and 2010. At the end of the lease term, RTD acquires title to the office building. Future minimum rentals are approximately $400 annually until the lease expires in 2049. The air space is carried at a zero basis by RTD. NOTE H – UNEARNED REVENUE During 1987, RTD entered into an out-of-court settlement with an architect, a contractor and a supplier of materials for the design, construction and materials supplied on the Sixteenth Street Mall. The settlement provided for RTD to receive a cash payment each year for 25 years. The actual payments will come from an annuities contract (rated AAA by Moody’s Investment Services), which is maintained by a local insurance company. RTD’s revenue is an amount equal to the net present value of the future cash flows ($2,156) at the time of the settlement based on an interest rate of 8.6%. RTD received an initial payment of $350. The next four payments were for $300 per year. The remaining payments are for $120 per year. As of December 31, 2011 and 2010, $110 and $212, respectively, of the initial deferral of $2,156 remains, which is recognized as repairs to the Mall are incurred.


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NOTE I – COMMITMENTS AND CONTINGENCIES Commitments Operating Lease In 1976, RTD entered into an operating lease for a portion of the land on which the Civic Center transfer facility is located in downtown Denver. As collateral for the lease, RTD must maintain an account balance with a minimum market value of $1,500 in an escrow account, the interest on which accrues to RTD until the lease expires. This amount in escrow is included in restricted assets in the accompanying financial statements. Operating Leases Fixed rental commitments under the lease in years subsequent to December 31, 2011, are as follows:

Year ending December 31, 2012 $249 2013 252

2014 254 2015 257 2016 259 2017-2021 1,337 2022-2026 1,405 2027-2031 1,477 2032-2036 1,552 2037-2041 1,631 2042-2046 1,714 2047-2051 1,801 2052-2056 1,894 2057-2061 1,990 2062-2066 2,092 2067-2071 2,198 2072-2075 1,839 $ 22,201

Rental expense relating to this lease amounted to $247 and $245 for the years ended December 31, 2011 and 2010, respectively.

RTD has entered into a number of transactions in which certain of its light rail vehicles have been leased to and subleased back from certain U.S. and foreign companies and has entered into a transaction in which its maintenance facilities have been leased to and subleased back. As part of these transactions, RTD irrevocably set aside certain monies (which were received from each counter party as payment for its leasing of light rail vehicles and real property) with a third party trustee. The monies held by such trustees will be utilized to make the lease payments owed by the RTD under the transactions and are therefore considered fully funded and economically defeased.


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NOTE I – COMMITMENTS AND CONTINGENCIES (CONTINUED) Cross Border Leases In December 1996, RTD entered into an 18-year cross border lease agreement and other related agreements with DB Export-Leasing GmbH for the sale and leaseback of six light rail vehicles. RTD has made investment arrangements to meet all of its payment obligations throughout the term of the lease. In December 1994, RTD entered into an 18-year cross border lease agreement and other related agreements with DB Export-Leasing GmbH for the sale and leaseback of eleven light rail vehicles. RTD has made investment arrangements to meet all of its payment obligations throughout the term of the lease. U.S. Leveraged Lease In July and December 1997, RTD entered into two U.S. leveraged lease agreements with Pitney Bowes Credit Corporation for the lease and leaseback of 17 light rail vehicles and four transportation and maintenance facilities. RTD has made investment arrangements to meet all its payment obligations throughout the terms of the leases. Capital Projects As of December 31, 2011, RTD has contracts for the construction of various capital projects and the purchase of buses and light rail vehicles. The costs to complete these projects and the purchase of buses/light rail vehicles total $488,318 and $287,187 in 2011 and 2010, respectively. Federal Grant Match Requirements Under the provisions of current FTA grants, RTD is obligated to satisfy certain matching requirements of these grants. At December 31, 2011, RTD had a commitment to provide $85,326 in matching funds in order to receive $131,314 in future federal grant funds. Privatization Contracts In response to the privatization legislation (Note A), RTD has awarded contracts for specific groups of routes, not to exceed 58% as required by law for vehicular services. ADA Paratransit Service With the passage of the Americans with Disabilities Act of 1990 (ADA), RTD was mandated to provide paratransit service to the disabled individuals unable to use RTD’s fixed route buses, operating the same days and hours of service as the fixed route service. This service, called access-a-Ride, is a curb-to-curb (with door-to-door assistance upon special request) transportation system offered to disabled individuals who cannot functionally use RTD’s regular fixed route system. Passengers eligible for access-a-Ride service must originate their trip within 3/4 of a mile of an RTD non-commuter fixed route. Since September 1996, RTD has been in full compliance with the Americans with Disabilities Act of 1990 requirement to provide paratransit service to the disabled individuals unable to use fixed route buses.


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NOTE I – COMMITMENTS AND CONTINGENCIES (CONTINUED) Future Commitments under Construction Contracts In 2010, RTD entered into a public-private partnership to design, build, finance and operate several of the transit improvements contemplated under the FasTracks program, including the Commuter Rail Maintenance Facility, the East Corridor, the Gold Line Rail Corridor and the electrified segment of the Northwest Rail Corridor (together, the “Eagle P3 Project). The Eagle P3 Project is being delivered and operated under a concession agreement that RTD has entered into with a concessionaire that has been selected through a competitive proposal process. The selected concessionaire is known as Denver Transit Partners (DTP), a special purpose company owned by Fluor Enterprises, Uberior Investments and Laing Investments.

The Eagle P3 Project construction will be completed in two phases with Phase I completed in 2016 and Phase II completed in 2017. Under the terms of the Eagle P3 Project agreement, RTD will make scheduled construction payments to DTP each year from 2011 through 2017 for completed project elements totaling $1,064,592. RTD will assume ownership of the Eagle P3 Project elements as they are constructed. In addition, RTD will make scheduled secured principal and interest payments to DTP from 2017 through 2044 for the remaining Eagle P3 Project obligation totaling $1,438,234 resulting in a total project cost through 2044 of $2,502,826. The Eagle P3 Project agreement also includes a provision whereby, upon project completion and placement in service, DTP will operate and maintain the Eagle P3 Project during the period 2016 through 2044 for which RTD will make service payments. Future Commitments under Service Contracts The fixed commitments under the Privatization and ADA Paratransit Service contracts in the years subsequent to 2011 are as follows:

Commitments under ADA Paratransit Service contracts expire at the end of 2012. Due to ADA Paratransit Services being federally mandated, renewal of these contracts is projected to increase the contracted amounts above by approximately $39,500 in 2013, $40,600 in 2014, $41,900 in 2015 and $43,100 in 2016.

Year ending December 31,

2012 $127,774 2013 89,837 2014 82,279 2015 38,746 2016 24,789

Total $363,425


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NOTE I – COMMITMENTS AND CONTINGENCIES (CONTINUED) Diesel Fuel Contract RTD contracts with Suncor Energy (U.S.A.) Inc. for diesel fuel. The contract is structured as a base year with fifth year options to renew. RTD is on the fifth option for 2012. The fixed commitment under the Suncor contract in 2012 is $13,000. RTD estimates usage of 9.1 million gallons at unit cost of $2.55 per gallon: 5.1 million RTD usage and 4.0 million RTD private carriers usage. Contingencies Federal Grants RTD receives federal grants for capital projects and operating assistance, which are subject to audit by FTA. Although the outcome of any such audit cannot be predicted, it is management’s opinion these audits will not result in liabilities to such an extent that they would materially affect RTD’s financial position. Self-Insurance RTD is self-insured for general liability and Workers’ Compensation claims. Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. In addition, RTD offers a self-insured health benefit option as part of its employee benefits program in which costs are recognized as they are incurred. RTD does not carry excess liability insurance for personal injury and property damage. Under the provisions of the Colorado Government Immunity Act, the maximum liability, with certain exceptions as defined in the Act, to RTD for claims involving personal injury and property damage is $150 per individual and $600 per incident. For Workers’ Compensation, an excess coverage insurance policy covers individual claims in excess of $2,000. The amount of settlements has not exceeded insurance coverage in any of the past three years. RTD’s liability for unpaid claims includes an amount for claims that have been incurred but not reported (IBNR). RTD’s Risk Management determines incurred claims by investigating the accident and establishing a reserve. Reserves are established on the day of assignment, reviewed at 330 days and again at 90 days. Reserves are reviewed every 90 days thereafter and based on ultimate exposure. This amount is included in other accrued expenses in the statement of net assets. Changes in the balances of claims liabilities for both general liability and Worker’s Compensation


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NOTE I – COMMITMENTS AND CONTINGENCIES (CONTINUED) during the past year are as follows:

General Liability

Workers’ Compensation Total

Unpaid claims, January 1, 2010 $ 2,066 $ 1,782 $ 3,848 Incurred claims (including IBNR) 2,145 2,047 4,192 Claims payments (1,854) (2,096) (3,950)

Unpaid claims, December 31, 2010 $2,357 $1,733 $4,090 Incurred claims (including IBNR) 2,006 3,146 5,152 Claims payments (1,950) (2,233) (4,183)

Unpaid claims, December 31, 2011* $ 2,413 $ 2,646 $ 5,059 *All claim liabilities are considered current liabilities payable within one year. Contract Disputes and Legal Proceedings RTD is party to a number of pending or threatened lawsuits under which it may be required to pay certain amounts upon final disposition of these matters. RTD’s legal counsel estimates that the ultimate outcome of these matters is either sufficiently covered by RTD’s general liability and Workers’ Compensation reserves or would not materially affect the financial statements of RTD. As of December 31, 2011, RTD has no outstanding judgments payable within one year. NOTE J – NET POSITION

December 31, 2011 2010

Invested in capital assets, net of related debt $ 1,872,790 $ 1,597,631

Restricted net assets Restricted debt service and project related 101,656 60,419 Tabor emergency 16,392 15,486 FasTracks related 389,657 363,929

Total restricted net position 507,705

439,834

Unrestricted assets net assets1 134,671 166,299

Total net position $ 2,515,166 $ 2,203,764 1 Substantially all of the unrestricted net assets, although not legally restricted, have been appropriated or reserved by the RTD’s Board for future capital acquisition, operating reserve policy, and debt liquidation during the budget process.


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NOTE K – BUDGETARY DATA RTD’s annual budget is prepared on the same basis as that used for accounting except that the budget also includes proceeds of long-term debt and capital grants as revenue and expenditures includes capital outlays and bond principal payments, and excludes TABOR rebates under Amendment One, extraordinary loss and depreciation on, as well as gains and losses on disposition of, property and equipment. The budget sets forth all proposed outlays for operations, planning, administration, development, debt service, and capital outlays for the calendar year. Prior to October 15, the General Manager submits to the Board of Directors a proposed operating and capital budget for the fiscal year commencing the following January 1, which is made available for public inspection and comment. On or before December 31, the budget is adopted in conjunction with an appropriation resolution by the Board of Directors, who must also approve subsequent amendments thereto. In the absence of such adoption, RTD has authority to begin making expenditures limited to 90% of the prior year’s approved appropriation. RTD’s policy on budget transfers authorizes the General Manager to approve certain transfers within the budget. A reconciliation for the years ended December 31 of the annual budget, as amended, to actual revenue and expenses is as follows:

2011 2010

Revenue, actual $635,991 $609,160 Proceeds from debt / arbitrage relief - 748,521 Federal capital grants and local contributions 238,292 102,596 Revenue, actual (budgetary basis) 874,283 1,460,277 Revenue, budget 1,387,634 1,401,214

Expenses, actual 562,881 554,167 Capital outlays 616,953 712,552 Depreciation, amortization, other (104,280) (104,176) Long-term debt principal payment 53,882 74,101 Expenses, actual (budgetary basis) 1,129,436 1,236,644 Appropriations 1,914,394 1,866,235 Unused appropriations $784,958 $629,591

Unused appropriations lapse at year-end, except the Board of Directors has the authority, as stated in the adopted appropriation resolution, to carry over the unused portion of funds for capital projects not completed, for a period not to exceed three years. As of December 31, 2011, there were approximately $784,958 million of unused 2011 appropriations for capital outlays available for carryover to 2012.


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NOTE L – TAX, SPENDING AND DEBT LIMITATIONS In November 1992, Colorado voters passed an amendment (Amendment One) to the State Constitution (Article X, Section 20) that limits the revenue raising and spending abilities of state and local governments. The limits on property taxes, revenue, and “fiscal year spending” include allowable annual increases tied to inflation and local growth in construction valuation. Fiscal year spending as defined by the amendment excludes spending from certain revenue and financing sources such as federal funds, gifts, property sales, fund transfers, damage awards, and fund reserves (balances). The amendment requires voter approval for any increase in mill levy tax rates, new taxes, or creation of multi-year debt. Revenue earned in excess of the “spending limit” must be refunded to the taxpayers unless voters approve retention of these revenues. In addition, the amendment mandates that reserves equal to 3% of fiscal year spending be established for declared emergencies. On November 7, 1995, the voters of the District exempted the Regional Transportation District from the revenue and spending limitations concerning the Amendment through December 31, 2005. On November 2, 1999, the voters of the District further exempted RTD from the revenue and spending limitations outlined in the Amendment for the purpose of paying any debt incurred to finance the Southeast Corridor light rail project or to operate such project for as long as any debt remains outstanding, but in no event beyond December 31, 2026. On November 2, 2004, the voters of the District authorized an increase in RTD’s sales and use tax rate from 0.6% to 1.0%, effective January 1, 2005, to finance the FasTracks transit improvement program. This authorization also exempted RTD from any revenue and spending limitations on the additional tax and on any investment income generated by the increased tax revenue, and allowed RTD to incur debt to finance the capital improvements included in the FasTracks program. At the time that all FasTracks debt is repaid, RTD’s sales and use tax rate will be reduced to a rate sufficient to operate the rapid transit system financed through FasTracks. As of December 31, 2007, RTD has $3.477 billion in authorized debt, of which $600 million has been issued, subject to the Amendments’ limitations. This debt was authorized by the voters of the District in 2004 to pay for the FasTracks rapid transit improvement program, and is scheduled to be issued between 2006 and 2014. Based on estimated fiscal year spending for 2011, $16,392 of year-end net assets has been reserved for emergencies. The Amendment is complex and subject to judicial interpretation. RTD believes it is in compliance with the requirements of the Amendment based on the interpretations of the Amendment’s language available at year-end.


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NOTE M – SUBSEQUENT EVENTS By March 15 of the second year following the year in which the federal census is taken, RTD is required by Colorado Revised Statute 32-9-111 (1) (a) to apportion the composition of the Board of Directors into compact contiguous director districts so that the 15 directors will represent, to the extent practical, the people of the District on the basis of population. On January 24, 2012, the RTD Board of Directors approved a revised map of the director district boundaries in which each district is within five percent of the average individual District population of approximately 180,000. The above change affected the composition of the boundaries within the District without changing the outer boundaries and is not expected to have any financial impact.

During January 2012, RTD implemented fixed route service changes that were approved by the Board of Directors in October 2011. The service changes were approved by the Board of Directors as a result of recommendations made by a Fiscal Sustainability Task Force which was convened in late 2010 to examine measures to be taken to address the long-term fiscal sustainability of RTD’s operations. These changes are expected to reduce the amount of fixed route services by 7-8% or approximately $10,700 in 2012.

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REQUIRED SUPPLEMENTARY INFORMATION

78

Required Supplementary Information REGIONAL TRANSPORTATION DISTRICT Pension Plan Summary Schedule of Funding Progress – RTD Plan

Actuarial Valuation

Date



Funding Excess


Ratio


Unfunded Actuarial


Payroll 1/1/09 $ 95,398 $ 100,157 $ (4,759) 95.25% $ 36,499 (13.0%) 1/1/10 103,917 106,374 (2,457) 97.69% 34,606 (7.1%) 1/1/11 104,283 105,273 (990) 99.06% 32,906 (3.0%)

Schedule of Funding Progress – Union

Actuarial Valuation

Date



Funding Excess


Ratio


Unfunded Actuarial


Payroll 1/1/09 $ 213,273 $ 293,899 $ (80,626) 72.57% $ 76,978 (104.7%) 1/1/10 228,617 312,839 (84,222) 73.08% 77,254 (109.0%) 1/1/11 223,457 325,411 (101,954) 68.67% 80,286 (127.0%)

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SUPPLEMENTAL INFORMATION

80

SCHEDULE OF EXPENSE AND REVENUE

(In Thousands) Variance -Adopted Final positiveBudget Budget Actual (negative)

Operating revenuePassenger fares 103,236$ 103,236$ 108,497$ 5,261$ Other 5,374 5,374 4,882 (492)

Total operating revenue 108,610 108,610 113,379 4,769Operating expenses

Salaries, wages and fringe benefits 154,739 155,286 166,332 (11,046)Materials and supplies 50,989 54,981 52,015 2,966Services 87,063 89,609 48,357 41,252Utilities 10,510 11,180 11,627 (447)Insurance 6,950 6,943 6,089 854Purchased transportation 110,372 110,487 108,865 1,622Leases and rentals 2,482 2,482 1,964 518Miscellaneous 3,476 3,575 2,082 1,493

Total operating expenses 426,581 434,543 397,331 37,212

Operating loss (317,971) (325,933) (283,952) 41,981Nonoperating revenue (expenses)

Sales and use tax 385,923 419,136 415,180 (3,956)Grant operating assistance 91,563 84,789 89,592 4,803Investment income 15,363 10,765 6,484 (4,281)Other income 1,679 1,479 11,356 9,877Gain/loss on capital assets - - (6,101) (6,101)Interest expense (90,705) (41,747) (51,274) (9,527)Other expense/unrealized loss capital assets - - (3,895) (3,895)

Total nonoperating revenue (expenses) 403,823 474,422 461,342 (13,080)Proceeds from debt - - - - Capital outlay

Capital expenses 1,318,094 1,327,839 616,953 710,886Less capital grants (244,883) (261,849) (238,292) (167,892)

1,073,211 1,065,990 378,661 687,329Long-term debt principal payment (51,535) (50,965) (53,882) (2,917)

Excess (deficiency) of revenue and nonoperatingincome over (under) expenses, capitaloutlays and debt principal payments (1,038,894)$ (968,466)$ (255,153) 713,313$

Increases (decreases) to reconcilebudget basis to GAAP basis

Capital expenses 616,953 Long-term debt principal payment 53,882 Depreciation (104,280)

INCREASE IN NET POSITION 311,402$


BUDGET AND ACTUAL - BUDGETARY BASISYear ended December 31, 2011

81

REGIONAL TRANSPORTATION DISTRICTCONDENSED SUMMARY OF ASSETS, LIABILITIES, AND NET POSITION BY SEGMENT (Unaudited)Year Ended December 31,(In Thousands)

2011 2010 2011 2010 2011 2010ASSETS

Current Assets 166,920$ 179,514$ 571,454$ 416,334$ 738,374$ 595,848$ Current assets - restricted 111,342 116,029 343,329 577,989 454,671 694,018Capital assets (net of accumulated depreciation) 1,447,927 1,510,414 2,024,206 1,458,735 3,472,133 2,969,149Other noncurrent assets 24,157 13,995 178,000 235,582 202,157 249,577

Total assets 1,750,346 1,819,952 3,116,989 2,688,640 4,867,335 4,508,592

LIABILITIES Current Liabilities 155,183 131,593 278,797 97,316 433,980 228,909 Noncurrent Liabilities 492,599 536,663 1,425,590 1,539,256 1,918,189 2,075,919

Total liabilities 647,782 668,256 1,704,387 1,636,572 2,352,169 2,304,828

NET POSITION

Invested in capital assets, net of related debt 1,009,645 1,034,778 863,145 562,853 1,872,790 1,597,631Restricted 47,314 42,877 460,391 396,957 507,705 439,834Unrestricted 45,605 74,041 89,066 92,258 134,671 166,299

Total net position 1,102,564$ 1,151,696$ 1,412,602$ 1,052,068$ 2,515,166$ 2,203,764$

Base System FasTracks Combined

82

COMBINED

(In Thousands)

2011 2010 2011 2010 2011 2010OPERATING REVENUE

Passenger fares 108,497$ 97,942$ - $ - $ 108,497$ 97,942$ Advertising, rent, and other 4,882 4,414 - - 4,882 4,414

Total operating revenue 113,379 102,356 - - 113,379 102,356

OPERATING EXPENSESSalaries and wages 119,006 115,840 4,698 3,582 123,704 119,422Fringe benefits 41,308 39,978 1,320 1,098 42,628 41,076Materials and supplies 51,934 48,098 81 212 52,015 48,310Services 39,521 40,990 8,836 19,563 48,357 60,553Utilities 11,583 10,942 44 35 11,627 10,977Insurance 6,029 4,941 60 488 6,089 5,429Purchased transportation 108,865 104,514 - - 108,865 104,514Leases and rentals 1,431 1,686 533 829 1,964 2,515Miscellaneous (10,324) (8,101) 12,406 11,416 2,082 3,315Depreciation 94,373 96,971 9,907 7,205 104,280 104,176

Total operating expenses 463,726 455,859 37,885 44,428 501,611 500,287

OPERATING LOSS (350,347) (353,503) (37,885) (44,428) (388,232) (397,931)

NONOPERATING REVENUE (EXPENSES)Sales and use tax 249,108 238,529 166,072 159,020 415,180 397,549Grant operating assistance 71,471 85,485 18,121 7,170 89,592 92,655Investment income 869 1,350 5,615 6,715 6,484 8,065Other income 2,523 2,859 8,833 5,676 11,356 8,535Gain/(Loss) capital assets (9,816) (3,474) 3,715 - (6,101) (3,474)Interest expense (20,828) (22,264) (30,446) (26,471) (51,274) (48,735)Other expense (691) (950) (3,204) (721) (3,895) (1,671)

Net nonoperating revenue (expenses) 292,636 301,535 168,706 151,389 461,342 452,924

INCOME BEFORE CAPITAL GRANTSAND LOCAL CONTRIBUTIONS (57,711) (51,968) 130,821 106,961 73,110 54,993

Capital grants and local contributions (note A) 8,579 20,452 229,713 82,144 238,292 102,596

CHANGE IN NET POSITION (49,132) (31,516) 360,534 189,105 311,402 157,589

NET POSITION, beginning of year 1,151,696 1,183,212 1,052,068 862,963 2,203,764 2,046,175

NET POSITION, end of year 1,102,564$ 1,151,696$ 1,412,602$ 1,052,068$ 2,515,166$ 2,203,764$

Combined

STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY SEGMENT (Unaudited)


Year ended December 31,

Base System FasTracks

83

STATISTICAL SECTION

This part of the Regional Transportation District’s comprehensive annual financial report presents detailed information

as a context for understanding what the information in the financial statements, note disclosure, and required supplementary information says about the government’s overall financial health.

Contents Page Financial Trends 84-85

These tables contain trend information to help the reader understand how the government’s financial performance and well-being have changed over time.

Revenue Capacity 86-87

These tables contain information to help the reader assess the government’s most significant revenue source. Debt Capacity 88-89

These tables present information to help the reader asses the affordability of the government’s current levels of outstanding debt and the government’s ability to issue additional debt in the future.

Demographic and Operating Information 90-91

These tables contain service and infrastructure data to help the reader understand how the information in the financial report relates to service the government provides and the activities it performs. The demographic and economic indicators help the reader understand the environment within which the government’s financial activities take place.

84

Table 1

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002Invested in capital assets, net of related debt (Note J) 1,872,790$ 1,597,631$ 1,456,493$ 1,338,453$ 1,162,486$ 1,167,667$ 1,027,361$ 835,035$ 803,738$ 758,399$ Restricted (Note J)

Emergencies 16,392 15,486 15,158 16,821 16,829 15,078 14,048 8,860 8,359 8,657Reserves 491,313 424,348 442,489 393,223 412,822 232,702 120,653 - - -

Unrestricted (Note J) 134,671 166,299 132,035 143,913 186,280 140,626 204,176 296,945 269,944 200,839

Total net position 2,515,166$ 2,203,764$ 2,046,175$ 1,892,410$ 1,778,417$ 1,556,073$ 1,366,238$ 1,140,840$ 1,082,041$ 967,895$

1 Data is taken from the financial records of RTD and is presented on the accrual basis.

REGIONAL TRANSPORTATION DISTRICTNET POSITION BY COMPONENT1 (In Thousands)

85

REGIONAL TRANSPORTATION DISTRICT Table 2SUMMARY OF STATEMENT OF REVENUES, EXPENSESAND CHANGES IN NET POSITION(In Thousands)

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002Operating Revenues:

Passenger Fares 108,497$ 97,942$ 96,890$ 88,205$ 77,128$ 66,211$ 57,638$ 55,442$ 50,459$ 49,967$ Other 4,882 4,414 4,357 4,124 4,382 3,310 5,103 5,581 4,088 2,646 Total Operating Revenues 113,379 102,356 101,247 92,329 81,510 69,521 62,741 61,023 54,547 52,613

Operating Expenses:Salaries, wages, fringe benefits 166,332 160,498 161,747 155,799 150,560 136,733 130,371 127,334 130,435 129,251Materials and supplies 52,015 48,310 56,835 61,056 49,157 43,709 39,869 27,835 25,422 22,953Services 48,357 60,553 42,783 36,835 30,654 29,864 22,344 20,127 21,499 17,926Utilities 11,627 10,977 9,512 10,575 8,678 7,530 7,170 5,548 5,330 4,603Insurance 6,089 5,429 3,767 5,333 5,090 5,722 6,569 7,451 8,217 9,531Purchased transportation 108,865 104,514 103,975 102,743 97,819 93,003 86,330 76,759 66,970 64,974Leases and rentals 1,964 2,515 2,680 2,464 2,195 1,758 1,568 1,460 1,655 1,587Miscellaneous 2,082 3,315 6,866 2,619 2,390 3,144 2,347 2,815 2,247 2,338 Total Operating Expenses 397,331 396,111 388,165 377,424 346,543 321,463 296,568 269,329 261,775 253,163

Operating loss before depreciation (283,952) (293,755) (286,918) (285,095) (265,033) (251,942) (233,827) (208,306) (207,228) (200,550)Depreciation 104,280 104,176 106,025 102,252 103,302 67,526 58,924 58,833 58,567 59,750Operating Loss (388,232) (397,931) (392,943) (387,347) (368,335) (319,468) (292,751) (267,139) (265,795) (260,300)Nonoperating income (expense):

Sales and use tax revenues 415,180 397,549 371,405 412,824 418,407 399,557 386,427 221,276 210,447 213,668Grant operating assistance 89,592 92,655 68,146 50,814 47,040 42,805 41,322 39,649 37,803 35,096Interest income 6,484 8,065 29,379 52,456 57,471 29,936 15,624 9,439 10,095 18,815Other income 11,356 3,653 3,243 3,106 4,706 4,031 3,484 3,621 3,550 3,493Gain/Loss on Capital Assets (6,101) (3,474) 40 1 1,055 1,929 1,450 (50) (1,311) (780)Interest expense (51,274) (48,735) (34,179) (56,273) (52,272) (29,689) (21,163) (18,385) (19,786) (20,208)Other expense/Unrealized Loss Assets (3,895) (1,671) (23,037) (977) (861) (805) (790) (1,367) (794) (592) Total Nonoperating Income 461,342 448,042 414,997 461,951 475,546 447,764 426,354 254,183 240,004 249,492

Net income before capital grants and local contributions 73,110 50,111 22,054 74,604 107,211 128,296 133,603 (12,956) (25,791) (10,808)Capital grants and local contributions 238,292 107,478 131,711 39,389 115,133 61,537 97,384 71,755 139,936 50,570Increase in Net Position 311,402 157,589 153,765 113,993 222,344 189,833 230,987 58,799 114,145 39,762Net Position at Beginning of Year 2,203,764 1,892,410 1,892,410 1,778,417 1,556,073 1,366,240 1,140,841 1,082,042 967,897 928,135Prior Period Adjustment (5,588)Net Position at End of Year 2,515,166$ 2,203,764$ 2,046,175$ 1,892,410$ 1,778,417$ 1,556,073$ 1,366,240$ 1,140,841$ 1,082,042$ 967,897$

86

Table 3

Transit Planning, OtherOperating Administrative Interest Nonoperating Capital

Year Expenses2 and Development Depreciation Expense2 Expenses Outlays2 Total 2002 224,231$ 28,932$ 59,750$ 20,208$ 1,372$ 164,954$ 499,447$ 2003 235,011 26,765 58,567 19,786 2,104 277,944 620,1772004 242,176 27,153 58,833 18,385 1,418 217,201 565,1662005 264,840 31,728 58,924 21,163 790 273,843 651,2882006 284,360 37,104 67,526 29,689 805 208,361 627,8452007 302,626 43,916 103,302 52,272 861 156,785 659,7622008 324,931 52,492 102,252 56,273 977 282,758 819,6832009 326,324 61,841 106,025 34,179 23,037 410,354 961,7602010 318,751 77,360 104,176 48,735 5,145 712,552 1,266,7192011 333,301 64,030 104,280 51,274 9,996 616,953 1,179,834

1 Data is taken from the financial records of RTD and is presented on the accrual basis.2 RTD capitalizes certain interest costs, which are included in capital outlays.


Last Ten Years (Unaudited)

(In Thousands)

OPERATING AND OTHER EXPENSES AND CAPITAL OUTLAYS1

87

REGIONAL TRANSPORTATION DISTRICTREVENUE BY SOURCE1 Table 4

Grant Local Total RevenueOperating Sales/Use Operating Interest Total Capital Capital and Capital Grant

Year Revenues Tax2 Assistance Income Other Revenue Grants Contributions & Contributions2002 52,613$ 213,668$ 35,096$ 18,815$ 3,493$ 323,685$ 46,984$ 3,587$ 374,256$ 2003 54,547 210,447 37,803 10,095 3,550 316,442 135,917 4,019 456,378 2004 61,023 221,276 39,649 9,439 3,621 335,008 54,446 17,309 406,763 2005 62,741 386,427 41,322 15,624 3,484 509,598 86,523 10,861 606,982 2006 69,521 399,557 42,805 29,936 4,032 545,851 57,413 4,123 607,387 2007 81,510 418,407 47,041 57,471 4,706 609,135 107,577 7,556 724,268 2008 92,329 412,824 50,814 52,456 3,106 611,529 39,220 169 650,918 2009 101,247 371,405 68,146 29,379 3,283 573,460 129,211 2,500 705,171 2010 102,356 397,549 92,655 8,065 3,653 604,278 102,213 5,265 711,756 2011 113,379 415,180 89,592 6,484 11,356 635,991 186,073 52,219 874,283

1 Data is taken from the financial records of RTD and is presented on the accrual basis.2 RTDs Sales/Use Tax increased from 0.6% to 1.0% effective January 1, 2005.

(In Thousands)Last Ten Years (Unaudited)

88

REGIONAL TRANSPORTATION DISTRICTDEBT COVERAGE RATIOS1 Table 5(In Thousands)

LAST TEN YEARS (UNADUITED)

Debt Sales Tax Service Requirements2 Sales Tax CoverageInterest Principal Total Collections Ratio

2002 12,076$ 10,050$ 22,126$ 213,668$ 9.662003 15,650 9,205 24,855 210,447 8.472004 17,748 15,125 32,873 221,276 6.732005 18,683 12,415 31,098 386,427 12.432006 21,048 15,015 36,063 399,557 11.082007 48,445 38,590 87,035 418,407 4.812008 44,944 45,505 90,449 412,824 4.562009 43,210 44,430 87,640 371,405 4.242010 46,324 44,511 90,835 397,549 4.382011 70,646 25,010 95,656 415,180 4.34

Debt Certificate of Participation Service RequirementsInterest Principal Total

2002 9,545$ 10,265$ 19,810$ 2003 9,484 10,830 20,3142004 10,472 11,345 21,8172005 12,651 11,470 24,1212006 14,393 16,155 30,5482007 14,428 17,105 31,5332008 14,502 17,515 32,0172009 13,714 18,340 32,0542010 13,711 26,725 40,4362011 28,973 25,955 54,928

89

REGIONAL TRANSPORTATION DISTRICT Table 5DEBT COVERAGE RATIOS2 (Continued)

(In Thousands)

Total Debt Service Requirements Total CoverageInterest Principal Total Revenue Ratio

2002 21,621$ 20,315$ 41,936$ 323,685$ 7.722003 25,134 20,035 45,169 316,442 7.012004 28,220 26,470 54,690 335,008 6.132005 31,334 23,885 55,219 509,598 9.232006 35,441 31,170 66,611 545,851 8.192007 62,873 55,695 118,568 609,135 5.142008 59,446 63,020 122,466 611,528 4.992009 56,924 62,770 119,694 573,460 4.792010 60,035 71,236 131,271 635,991 4.842011 99,619 51,735 151,354 874,283 5.78

1 Source: The financial records of RTD and the Offical Statements of the respective debt issues.2 Sales Tax Bonds include the 2001A Commercial Paper.

90

REGIONAL TRANSPORTATION DISTRICT Table 6DEMOGRAPHIC AND OPERATING DATA

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002January 1 population within RTD service area 2,800,000 2,800,000 2,800,000 2,760,000 2,700,000 2,619,000 2,598,000 2,545,000 2,525,900 2,510,000Cities and towns served 40 40 40 40 40 39 40 40 40 40Square miles in service area 2,348 2,348 2,348 2,337 2,331 2,329 2,327 2,327 2,326 2,410Total miles 42,996,614 41,449,988 48,862,622 49,947,763 50,706,993 49,167,392 49,167,392 49,053,000 48,399,000 47,000,000Passenger stops 9,698 10,140 10,199 10,199 10,329 10,596 10,366 10,237 10,352 10,348

Number of routes1 138 148 150 165 170 166 174 177 175 181 Local 64 66 67 72 73 73 67 67 66 66 Express 16 20 20 24 25 24 37 38 37 41 Regional 17 16 16 18 18 16 20 20 20 20 Skyride 5 5 5 5 5 5 5 5 5 5 Circulator - - - - - - 1 1 1 3 Boulder City 12 14 15 15 15 15 15 16 16 16 Longmont City 4 7 7 7 8 8 8 8 8 8 Limited 11 11 11 13 15 15 15 16 16 15 Miscellaneous 9 9 9 11 11 10 6 6 6 7Ridership average weekday, without Mall Shuttle and Light Rail 205,504 209,172 212,758 224,918 207,734 198,629 194,077 180,467 168,712 178,012Ridership average weekday, including Mall Shuttle 254,197 255,068 259,873 273,737 255,987 246,992 254,928 243,395 229,776 237,067Ridership average weekday, including Mall Shuttle, Light Rail, ADA, and Van Pool 325,900 323,311 328,291 344,954 320,311 294,791 292,407 279,101 267,389 273,924Total annual boardings without Mall Shuttle, Light Rail and ADA 61,634,723 62,902,963 63,578,004 67,910,015 62,007,583 57,662,038 56,736,687 53,963,199 50,079,765 53,199,492Total annual boardings, including Mall Shuttle 76,577,627 76,825,609 77,928,088 82,727,534 76,620,488 74,637,863 75,100,270 72,221,606 67,652,418 70,354,789Total annual boardings, including Mall Shuttle and Light Rail 97,272,342 96,657,335 97,687,476 103,362,667 95,275,984 85,915,718 85,557,899 82,250,065 78,302,600 80,784,361Total annual boardings, including Mall Shuttle, Light Rail, ADA service, and Van Pool 98,384,882 97,724,928 98,746,429 104,071,339 96,326,580 86,842,675 86,371,859 82,978,959 78,911,922 81,322,400Daily miles operated (average weekday), including Mall Shuttle 117,261 124,248 149,750 152,848 155,153 154,078 158,464 158,188 155,795 156,561Daily miles operated (average weekday), including Mall Shuttle and Light Rail 126,849 134,294 159,824 163,987 166,571 165,666 163,398 163,057 160,634 161,488

Diesel fuel consumption, gallons2 5,400,000 5,200,000 5,400,000 6,000,000 6,000,000 6,100,000 6,100,000 6,000,000 6,400,000 7,100,000Total active buses 969 1,025 1,050 1,039 1,071 1,071 1,071 1,074 1,064 1,127Wheelchair lift equipped buses 969 1,025 1,050 1,039 1,071 1,071 1,071 1,074 1,064 1,127Number of employees Salaried 697 696 664 623 611 613 591 553 544 561 Represented (includes part-time) 1,785 1,744 1,802 1,903 1,923 1,907 1,919 1,893 1,885 2,000Fleet requirements (during peak hours) 797 806 830 862 862 851 880 863 855 856

Operating facilities2 6 6 6 6 6 6 6 6 6 6

* Source: Population is based on estimates provided by the Denver Regional Council of Governments. All other data comes from the financial records of RTD.1 Reflects fixed route service realignment as of November 2006 for the opening of the Southeast Light Rail Line service.2 Excludes purchased transportation services.

Last Ten Years (Unaudited)

91

REGIONAL TRANSPORTATION DISTRICTLARGEST PRIVATE EMPLOYERS-DENVER METRO AREA Table 7Current Year and Nine Years Ago

2011 2002Percentage of Percentage ofTotal District Total District

Employees Rank Employment Employees Rank Employment

King Soopers, Inc. 12,280 1 0.9% 13,800 2 1.1%

Wal-Mart 10,770 2 0.8%

HealthOne 9,640 3 0.7% 9,000 3 0.7%

Safeway Inc. 9,440 4 0.7% 6,200 9 0.5%

Century Link 7,380 5 0.5% 15,000 1 1.1%

Exempla Healthcare 7,320 6 0.5% 7,300 5 0.6%

Lockheed Martin Corp. 7,220 7 0.5% 5,500 10 0.4%

Centura Health 6,370 8 0.5% 6,400 7 0.5%

Kaiser Permanente 5,870 9 0.4%

Target Corporation 5,350 10 0.4% 7,100 8 0.5%

Coors Brewing Corporation 5,500 10 0.4%

IBM 6,500 6 0.5%

United Airlines 7,600 4 0.6%

81,640 5.9% 89,900 6.9%

Total Employment 1,389,343 1,306,195

Source: Development Research Partners, Februry 2011

92

CAFR 1998A OSTable Table Table Title

8 I SBP Operations Program9 II SBP Capital Program

10 IV Additional Operating Data11 V RTD Statement of Debt12 XI RTD Annual Ridership and Fare Revenue13 XII RTD Advertising and Ancillary Revenues14 XIII RTD Federal Grant Receipts15 XIV Five-Year Summary of Revenue/Expense

Statements16 XV Five-Year Summary of Budget/Actuals 17 XVI RTD 2010 and 2011 Budget

1998A OSTable Table Title Location in CAFR

VI RTD Revenues by Source Statistical Section – Table 4XVI Summary Balance Sheet Statement of

Net Position – pp. 40–41

Debt Disclosure Tables for 2011 CAFR

Debt Disclosure Tables Updated in Body of 2010 CAFR

93

Table 8

2012 2013 2014 2015 2016 2017 Total Cost

Interest payments1,2 25,809$ 28,280$ 30,770$ 32,849$ 32,917$ 30,136$ 180,761$ Bus operations – Current RTD 115,194 118,420 121,735 125,144 128,648 132,250 741,391 Bus operations – Private carrier startup1 1,000 - 1,057 - 1,117 - 3,174 Bus operations – Private carrier after contract1 89,032 92,553 94,088 97,808 99,430 103,362 576,273 Bus operations - call-n-Ride1 4,247 4,366 4,488 4,614 4,743 4,876 27,334 Private contract administration costs 182 187 192 198 203 209 1,171 FasTracks service allocation - Bus (7,589) (7,801) (8,020) (8,244) (8,475) (8,713) (48,842) Cost sharing agreements - Bus service1 1,993 2,049 2,106 2,165 2,226 2,288 12,827 Van pool program 1,080 1,110 1,142 1,173 1,206 1,240 6,951 Section 5011 local match 559 574 591 607 624 641 3,596 Light rail operations 34,706 35,646 36,242 37,256 38,300 39,372 221,522 ADA operating costs1 41,183 42,336 43,521 44,740 45,993 47,281 265,054 FasTracks service allocation - ADA (4,747) (4,880) (5,017) (5,157) (5,301) (5,450) (30,552) Facilities maintenance - Base 37,836 38,895 39,984 41,104 42,255 43,438 243,512 Facilities maintenance - Additional costs 1,156 3,173 18,025 6,993 5,974 4,152 39,473 Capital programs - Base 3,521 3,619 3,721 3,825 3,932 4,042 22,660 Capital programs - additional costs 2,192 2,278 1,745 1,008 1,234 1,249 9,706 Direct costs - Other departments 154 159 163 168 172 177 993 Indirect costs - Other departments 65,739 67,944 69,849 71,597 73,815 74,797 423,741 Denver Union Station costs 958 986 1,013 1,041 1,070 1,101 6,169

Grand total 414,205$ 429,894$ 457,395$ 458,889$ 470,083$ 476,448$ 2,706,914$

1Interest payments, private carrier operations costs, call-n-ride, ADA operations costs, and passthrough grants are presented in year of expenditure dollars.2 Interest payments on bonds and certificates of participation issued for purposes other than Southeast Line or FasTracks.

REGIONAL TRANSPORTATION DISTRICT2012-2017 STRATEGIC BUDGET PLAN - OPERATIONS (In Thousands)

94

Table 9

2012 2013 2014 2015 2016 2017 Total Cost

Long term debt1 29,736$ 27,373$ 33,498$ 32,172$ 37,047$ 36,900$ 196,726$ Southeast corridor debt service2 17,005 17,830 18,720 19,655 20,635 21,525 115,370 Fleet modernization and expansion

Transit buses 25,388 70,693 76,144 68,048 40,513 1,991 282,777 Light rail vehicles - - - - - - - ADA vehicles - 8,424 3,426 8,087 5,335 - 25,272 Van pool program - - - - - - - Major spares 250 700 400 400 400 - 2,150

Passenger infrastructureBus infrastructure 775 775 775 775 775 775 4,650 Transfer stations 130 - - - - - 130

Park-n-Rides 2,400 5,000 5,000 1,700 1,875 - 15,975 Capital support equipment

Vehicles and bus maintenance equipment 1,040 1,304 1,575 1,272 1,304 1,324 7,819 Treasury 175 - - - - - 175 Information systems, computer equipment for operations 7,378 7,392 488 2,200 - 1,360 18,818 Security equipment - - - - - - -

Bus maintenance facilitiesBoulder - - - - - - - District Shops 50 - 300 - - - 350 East Metro - - - - 175 - 175 Platte - - - - - - - Light rail maintenance facilities - Mariposa - 1,000 - - - - 1,000 Facilities District-wide - - - - - -

Discretionary capital 150 150 150 150 150 150 900

Grand total 84,477$ 140,641$ 140,476$ 134,459$ 108,209$ 64,025$ 672,287$

1Principal payments are set at the time the bonds are issued and do not change with inflation.2Southeast Corridor debt service costs include principal and interest payments on bonds and certificates of participation, and are presented in year of expenditure dollars.

2012-2017 STRATEGIC BUDGET PLAN - CAPITAL PROGRAM (In Thousands)

95

ADDITIONAL OPERATING DATA - 2010 Table 10

Total miles1 42,996,614Active bus stops 9,698Number of routes2 138

Local 64Express 16Regional 17SkyRide 5City of Boulder Local 12City of Longmont Local 4Limited 11Miscellaneous 9

Ridership average weekday, revenue service 277,207Ridership average weekday, all services 325,900Total annual boardings, revenue service 83,441,978Total annual boardings, all services 98,384,882Daily miles operated (average weekday),

including Mall Shuttle3 117,261Daily miles operated (average weekday),

including Mall Shuttle and Light Rail3 126,849Diesel fuel consumption, gallons4 5,400,000Total active buses 969Wheelchair lift equipped buses 969Number of employees4

Salaried 697Represented (includes part-time) 1,785

Fleet requirements (during peak hours) 797Operating facilities4 6

1 Reflects total miles (including Light Rail).2 Reflects fixed route service realignment as of November 2006 for the opening of the Southeast Light Rail Line service.3 Excludes special services. 4 Excludes purchased transportation services.

96

STATEMENT OF DEBT Table 11

Sales Tax Bonds Outstanding2

RTD Sales Tax Revenue Bonds, Series 2002B1 7,930$

RTD Sales Tax Revenue Bonds, Series 20041 11,230

RTD Sales Tax Revenue Bonds, Series 20051 99,075

RTD Sales Tax Revenue Bonds, Series 20061 - FasTracks 235,735

RTD Sales Tax Revenue Refunding Bonds, Series 20071 - FasTracks 361,795

RTD Sales Tax Revenue Refunding Bonds, Series 20071 69,825



RTD Subordinate Sales Tax Revenue (DUSPA) Fastracks, Series 2010 164,618

RTD Sales FasTracks Tax Revenue Bonds, Series 2010AB1 379,140

Total Sales Tax Revenue Debt 1,380,038$

Lease Purchase Agreements Outstanding2

Master Lease Purchase Agreement II Fixed Rate Certificates of Participation, Series 2004A 26,915$ Master Lease Purchase Agreement II Fixed Rate Certificates of Participation, Series 2005A 57,460Master Lease Purchase Agreement II Fixed Rate Taxable Certificates of Participation, Series 2007A 13,445

Amended and Restated Certificates of Participation, Series 2002A 117,035Master Lease Purchase Agreement II Fixed Rate Certificates of Participation, FasTracks Series 2010AB 308,670

Total Certificates of Participation Debt 523,525$

Total Debt 1,903,563$

RTD Seven County Populaiton 2010 3 2,784,228Per Capita Debt Requirement 684

2 RTD is current on its obligations under all such debt.3 Metro Denver Economic Profile 2011-2012


as of December 31, 2011

1 The Bond Resolution pursuant to which the RTD Sales Tax Revenue Bonds are issued provides that pledged for the payment of such Bonds are the Sales Tax Revenues and "any additional revenues legally available to RTD which the Board in its discretion may hereafter by Supplemental Resolution pledge to the payment of the Bonds".

97

Table 12(In Thousands)

PercentChange

Revenue Fare in FareYear Boardings1 Revenue Revenue

2002 64,167 49,967$ 6.8%2003 61,235 50,459 1.0%2004 64,720 55,442 9.9%2005 67,994 57,638 4.0%2006 69,867 66,211 14.9%2007 81,714 77,128 16.5%2008 89,254 88,205 14.4%2009 83,337 96,890 9.8%2010 83,732 97,942 1.1%2011 98,384 108,497 10.8%


Advertising AncillaryYear Revenue Revenues

2002 2,419$ 3,493$ 2003 2,886 3,550 2004 3,047 3,621 2005 3,196 3,484 2006 2,800 4,032 2007 3,194 4,706 2008 2,854 3,106 2009 2,866 3,243 2010 3,301 2,892 2011 3,992 2,528


Operations,Grant Other Local Planning,

Year Capital Contributions and Other

2002 46,983$ 3,587$ 35,096$ 2003 135,917 4,020 37,803 2004 54,446 17,309 39,649 2005 86,523 10,861 41,322 2006 57,413 4,124 42,805 2007 107,577 7,556 47,041 2008 39,220 169 50,814 2009 129,211 2,500 68,146 2010 102,213 5,265 92,655 2011 186,073 52,219 89,592

RTD ANNUAL RIDERSHIP AND FARE REVENUE - 2002-2011

RTD ADVERTISING AND ANCILLARY REVENUES - 2002-2011

RTD GRANT RECEIPTS - 2002-2011

1 Totals for 2002-2011 include access-a-Ride boardings. Totals for 2002-2011 include vanpool boardings.

98

Table 15

(In Thousands)

2011 2010 2009 2008 2007Operating Revenues:

Passenger Fares 108,497$ 97,942$ 96,890$ 88,205$ 77,128$ Other 4,882 4,414 4,357 4,124 4,382 Total Operating Revenues 113,379 102,356 101,247 92,329 81,510

Operating Expenses:Salaries, wages, fringe benefits 166,332 160,498 161,747 155,799 150,560Materials and supplies 52,015 48,310 56,835 61,056 49,157Services 48,357 60,553 42,783 36,835 30,654Utilities 11,627 10,977 9,512 10,575 8,678Insurance 6,089 5,429 3,767 5,333 5,090Purchased transportation 108,865 104,514 103,975 102,743 97,819Leases and rentals 1,964 2,515 2,680 2,464 2,195Miscellaneous 2,082 3,315 6,866 2,619 2,390 Total Operating Expenses 397,331 396,111 388,165 377,424 346,543

Operating loss before depreciation (283,952) (293,755) (286,918) (285,095) (265,033)Depreciation 104,280 104,176 106,025 102,252 103,302

Operating Loss (388,232) (397,931) (392,943) (387,347) (368,335)Nonoperating income (expense):

Sales and use tax revenues 415,180 397,549 371,405 412,824 418,407Grant operating assistance 89,592 92,655 68,146 50,814 47,040Interest income 6,484 8,065 29,379 52,456 57,471Other income 11,356 3,653 3,243 3,106 4,706Gain/Loss on Capital Assets (6,101) (3,474) 40 1 1,056Interest expense (51,274) (48,735) (34,179) (56,273) (52,273)Other expense/Unrealized Loss (3,895) (1,671) (23,037) (977) (861) Total Nonoperating Income 461,342 448,042 414,997 461,951 475,546

Net income before capital grants and local contributions 73,110 50,111 22,054 74,604 107,211Federal capital grants and local contributions 238,292 107,478 131,711 39,389 115,133

Increase in Net Position 311,402 157,589 153,765 113,993 222,344

Net Position at Beginning of Year 2,203,764 2,046,175 1,892,410 1,778,417 1,556,073Prior Period AdjustmentNet Position at End of Year 2,515,166$ 2,203,764$ 2,046,175$ 1,892,410$ 1,778,417$

Years ended December 31

REGIONAL TRANSPORTATION DISCTRICT

AND CHANGES IN NET POSITIONFIVE-YEAR SUMMARY OF STATEMENT OF REVENUES, EXPENSES

99

Budget Actual Budget Actual Budget Actual Budget Actual Budget ActualOperating revenues:

Passenger fares 103,236$ 108,497$ 93,449$ 97,942$ 93,449$ 96,890$ 85,786$ 88,205$ 68,633$ 77,128$ Other 5,374 4,882 4,117 4,414 4,102 4,357 4,041 4,124 3,791 4,382 Total operating revenues 108,610 113,379 97,566 102,356 97,551 101,247 89,827 92,329 72,424 81,510

Operating expenses:Salaries, wages, fringe benefits 155,286 166,332 149,840 160,498 149,969 161,747 151,991 155,799 145,579 150,560 Materials and supplies 54,981 52,015 50,333 48,310 59,870 56,835 65,665 61,056 52,511 49,157 Services 89,609 48,357 86,355 60,553 57,331 42,783 46,828 36,835 45,460 30,654 Utilities 11,180 11,627 9,920 10,977 9,805 9,512 10,160 10,575 10,024 8,678 Insurance 6,943 6,089 7,505 5,429 5,863 3,767 7,393 5,333 7,244 5,090 Purchased transportation 110,487 108,865 109,032 104,514 105,727 103,975 103,354 102,743 98,842 97,819 Leases and rentals 2,482 1,964 2,463 2,515 2,982 2,680 4,001 2,464 4,234 2,195 Miscellaneous 3,575 2,082 11,640 3,315 2,262 6,866 844 2,619 523 2,390 Total Operating Expenses 434,543 397,331 427,088 396,111 393,809 388,165 390,236 377,424 364,417 346,543

Operating loss (325,933) (283,952) (329,522) (293,755) (296,258) (286,918) (300,409) (285,095) (291,993) (265,033)

Nonoperating revenue (expense):Sales and use tax 419,136 415,180 386,390 397,549 373,193 371,405 427,690 412,824 425,796 418,407 Grant operating assistance 84,789 89,592 94,042 92,655 89,275 68,146 53,865 50,814 53,439 47,040 Interest income 10,765 6,484 16,039 8,065 23,078 29,379 37,706 52,456 26,457 57,471 Other income 1,479 11,356 1,644 3,653 2,590 3,243 3,272 3,106 3,650 4,706 Gain/Loss on capital assets - (6,101) - (3,474) - 40 - 1 - 1,056 Interest expense (41,747) (51,274) (73,057) (48,735) (42,561) (34,179) (65,467) (56,273) (68,379) (52,273) Other expense/Unlrealized loss - (3,895) - (1,671) - (23,037) - (977) - (861) Total nonoperating revenue 474,422 461,342 425,058 452,924 445,575 414,997 457,066 461,951 440,963 475,546

Proceeds from issuance of long-term debt - - 279,865 916,475 62,698 9,478 200,843 17,695 - 471,151

Capital outlayCapital expenses 1,327,839 616,953 1,227,124 712,552 987,199 410,354 646,087 282,758 480,536 156,785 Less capital grants (261,849) (238,292) (270,488) (107,478) (267,572) (131,711) (81,590) (39,389) (138,218) (115,133)

1,065,990 378,661 956,636 609,956 719,627 278,643 564,497 243,369 342,318 41,652

Long-term debt principal payment 50,965 53,882 71,660 74,101 63,861 65,109 63,040 63,020 55,695 55,695

Excess (deficit) of revenue and nonoperating income over (under) expenses, capital outlay and debt principal payments (968,466)$ (255,153) (652,895)$ 391,587 (571,473)$ (206,195) (270,037)$ (111,838) (249,043)$ 584,317

Increases (decreases) to reconcile budget basis to GAAP basis

Capital expenditures 616,953 712,552 410,354 282,758 156,785Long-term debt proceeds - (916,475) (9,478) (17,695) (471,151)Long-term debt principal 53,882 74,101 65,109 63,020 55,695Depreciation (104,280) (104,176) (106,025) (102,252) (103,302)

Net Income 311,402$ 157,589$ 153,765$ 113,993$ 222,344$

* RTD's annual budget is prepared on the same basis as that used for accounting except that the budget also includes proceeds of long-term debt and capital grants as revenues, and expenditures include capital outlays and bond principal

REGIONAL TRANSPORTATION DISTRICT Table 16FIVE-YEAR SCHEDULE OF EXPENSES AND REVENUES - BUDGET AND ACTUAL - BUDGETARY BASIS (In Thousands)*

2008 2007200920102011

100


Table 17

2011 August 2011 2012

Adopted Budget Amended Budget Adopted Budget

Beginning net position 2,203,764$ 2,203,764$ 2,285,219$

Revenues:

Operating 108,610 108,610 111,655

Sales & use taxes 385,923 419,136 430,799

Federal and local grants 336,446 346,638 319,499 Interest and other income 17,042 12,244 14,478 FasTracks - change in construction reserve 551,006 501,006 7,487 Financing proceeds - - 25,388 Contributed capital 352,868 179,520 110,179

Total Revenues 1,751,895 1,567,154 1,019,485

Expenditures:

Operating 426,581 439,543 508,890

Interest expense 90,705 41,747 52,999

Debt payments 51,535 50,965 56,563 Current capital 535,860 785,573 901,571

Capital carryforward 782,234 542,266 807,279

Total expenditures 1,886,915 1,860,094 2,327,302

Adjustments1 (103,485) (17,322) 706,782

Ending net position 1,965,259$ 1,893,502$ 1,684,184$

Net position summary:Invested in captital assets, net of related debt 955,206 1,245,155 1,152,575 Restricted debt service, project related and other2 412,797 183,201 172,220

Restricted TABOR fund 15,347 16,200 16,708 Restricted FasTracks3 559,182 402,919 284,084 Restricted Board appropriated and capital replacement fund4 - - 19,200

Unrestricted fund 22,727 46,027 39,397

Ending net position 1,965,259$ 1,893,502$ 1,684,184$

FISCAL YEAR 2011 AND 2012 BUDGET SUMMARY (in thousands)

1 Adjustments reflect cash activity from the Statement of Net Position.2 Funds restricted by bond covenants, other contracts and policy guidelines.3 Appropriated funds which are available to fund future year expenditures for the FasTracks program.4 Board appropriated funds per policy guidelines and funds designated for capital replacement.

C-1

Appendix C

AN ECONOMIC AND DEMOGRAPHIC OVERVIEWOF THE DENVER METROPOLITAN AREA


AN ECONOMIC & DEMOGRAPHIC OVERVIEW OF THE DENVER METROPOLITAN AREA

Page 1 Regional Transportation District October 2012

INTRODUCTION Through much of 2011, employment data suggested Colorado was still lagging the nation in recovery from the “Great Recession.” Various explanations seemed plausible: Colorado’s economy had relied more heavily on the construction industry than economies in other states, Colorado had entered the downturn later than other states, and Colorado lacked the manufacturing industry base that seemed to be driving solid recoveries in Texas, parts of the Northeast, and the upper Midwest.

A 2012 revision to employment data dramatically changed the perception of Colorado’s post-recession economy, however. Where it initially appeared the state was lagging the national recovery in both 2010 and 2011, the revised data show Colorado job growth actually outpaced growth reported nationwide in all but one month of 2011. The revised data also showed Colorado’s 2011 annual unemployment rate was slightly lower than previously thought and was considerably lower than the U.S. average. Growth advantages aside, Colorado’s economy is not independent of national trends: political conflict, slow growth in nationwide economic output, and unstable foreign economies have had a very real impact on business in the state. Even so, Colorado’s recovery is well underway and the state had the sixth highest job growth rate of the 50 states in 2011.

As Colorado’s economy thrives, so will the economy in the Denver metropolitan area. Like the Colorado employment data, data for the Denver metropolitan area underwent a significant annual revision that showed the recovery in 2011 was much stronger than original estimates indicated. This was particularly true of the region’s natural resources and construction and information sectors, which ended 2011 with much smaller employment deficits than analysts originally calculated. Four large industry sectors – professional and business services, education and health services, leisure and hospitality, and wholesale and retail trade – accounted for the vast majority of Denver metropolitan area jobs added between 2010 and 2011.

The Denver metropolitan area is comprised of seven counties – Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, and Jefferson – and continues to be an important driver in Colorado’s economy, accounting for 56 percent of the state’s population and 60 percent of its jobs. The Regional Transportation District (RTD) operates as a public transportation system whose 2,348-square-mile service area includes all or parts of eight counties, consisting of parts of the seven Denver metropolitan area counties plus a small part of Weld County. Specifically, RTD serves 40 municipalities within six counties and two city/county jurisdictions: the City and County of Denver, the City and County of Broomfield, the counties of Boulder and Jefferson, the western portions of Adams and Arapahoe Counties, the northeastern portion of Douglas County, and portions of Weld County annexed by Longmont and Erie. RTD operates 996 buses on 134 fixed routes and 172 light rail vehicles on 35 miles of track. As the area of Weld County served by RTD is relatively small, this report describes economic activity in the seven-county Denver metropolitan region using mostly annual statistics.

POPULATION

Colorado

Data from the most recent decennial census show Colorado was home to more than five million residents in 2010 and ranked as the 22nd-most populous state in the nation. The state’s population growth between 2010 and 2011 reached 1.4 percent, or a rate twice the national average.

Population growth depends on two components – natural increase and net migration. Natural increase is the difference between births and deaths, and it tends to change only gradually as the population ages. Net migration reflects the number of in-migrants to the state minus the number leaving, and it tends to be more volatile as



0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Annual Percentage Population Growth

Colorado

Denver Metropolitan Area

Source: Colorado Division of Local Government, Demography Section.

economic cycles, housing costs, and other less-predictable factors tend to influence population mobility. Natural increase accounted for 58 percent of Colorado’s total population change between 2001 and 2011, and net migration accounted for 42 percent.

As Colorado’s economy both expanded and contracted over the past decade, single-year net migration has represented as much as 63 percent and as little as 20 percent of the state’s total population change. As Colorado’s economy recovers and the state continues to attract households seeking good quality of life, demographers expect net migration as a share of total population will gradually increase over the next several years and then flatten. Historically, the largest groups of new Colorado residents have hailed from California, Texas, Arizona, and Florida.


The Denver metropolitan area is a magnet for new Colorado residents, although the two nationwide recessions that occurred over the past decade made net migration’s share of regional population growth somewhat smaller than it was during the 1990s and early 2000s. Net migration represented 31 percent of total Denver metropolitan area population growth between 2001 and 2011, and natural increase represented 69 percent of total growth.

Even with slower net migration during recession periods, the Denver metropolitan area’s average annual population growth over the past decade – 1.3 percent – was noticeably faster than the national average (0.9 percent). The region’s population grew 1.1 percent between 2010 and 2011 and the Denver metropolitan area is now home to more than 2.8 million residents.

As its total population continues to grow at a faster-than-average pace, the Denver metropolitan area’s young adult population is growing quickly as well. A study released by the Brookings Institution in late 2011, for example, showed the Denver-Aurora-Broomfield metropolitan statistical area ranked first among large metro areas for total population growth in

the 25- to 34-year age group between 2008 and 2010.1 The Denver metropolitan area’s median age (36.4) is lower than the nationwide median (37.3), and the total share of the region’s population age 65 and older (about 11 percent) is somewhat smaller than the comparable share nationwide (13 percent).

1 William H. Frey. “Young Adults Choose ‘Cool’ Cities During Recession.” The Brookings Institution. October 2011.

(10,000)

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Net Migration

Colorado





Denver Metropolitan Area Population by County

2001 2006 2011

Avg. Annual Population Growth (%)

2001-2006 2006-2011 Adams 359,437 407,587 451,914 2.5 2.1 Arapahoe 501,671 536,051 582,106 1.3 1.7 Boulder 283,510 286,133 297,814 0.2 0.8 Broomfield 41,387 51,152 57,556 4.3 2.4 Denver 563,300 562,862 612,219 0.0 1.7 Douglas 199,038 257,833 291,077 5.3 2.5 Jefferson 528,067 524,579 537,487 -0.1 0.5 Denver Metropolitan Area 2,476,410 2,626,179 2,830,174 1.2 1.5 Colorado 4,444,513 4,745,660 5,119,779 1.3 1.5


Of the seven Denver metropolitan area counties, Douglas County, the City and County of Broomfield, and Adams County have reported the fastest population growth over the past five years. Growth in five of the seven counties exceeded both the statewide and national average growth rates between 2006 and 2011.

EMPLOYMENT The U.S. Bureau of Labor Statistics releases employment data based on two different surveys. The household survey – also called the Current Population Survey (CPS) – reflects employment characteristics by place of residence and is the data source for statistics on labor force, employment and self-employment, and unemployment by county. This data is discussed in the Labor Force & Unemployment section of this report.

The so-called “establishment” survey is the data source for the Current Employment Statistics (CES) series, which includes detailed information on employment, hours, and earnings by industry. Although the survey does not count the self-employed, the CES data are some of the most closely watched and widely used gauges of employment trends.

Industry employment data in the CES series are grouped according to North American Industry Classification System (NAICS) codes. This coding structure includes 20 detailed industry groups that form 11 industry “supersectors.”

Colorado

CES data show Colorado average annual employment growth between 2001 and 2011 was a slight 0.1 percent and was hardly faster than the nation’s zero percent growth average over the same period. This does not necessarily suggest Colorado’s job trends resembled trends in other states during the past decade, which was marked by two nationwide recessions. Rather, Colorado experienced a deeper-than-average 2001 recession, expanded more quickly than many other states following the downturn, and repeated the “deeper decline, sharper rise” pattern during the 2007 recession.

This pattern of amplified employment trends suggests Colorado’s industry mix – one with large concentrations of high-tech, natural resource, and construction activity – gave the state unique advantages and exposures in a decade marked by booms and busts in those industries. Colorado also lacks the depth of employment in manufacturing and public-sector healthcare and education that appeared to benefit some states immediately after the recession ended. As a result, Colorado’s employment contracted slightly more (-1 percent) between 2009 and 2010 than the national average (-0.7 percent). Colorado was not long in lagging other states’ economies, however.



In fact, Colorado job growth between 2010 and 2011 (+1.5 percent) ranked as the sixth-highest in the country and was noticeably faster than growth reported nationwide (+1.1 percent). Partly because of this revived growth, Colorado had slightly more jobs in 2011 than in 2001 while the nation lost jobs, on net, over the decade.


The U.S. Bureau of Labor Statistics also compiles CES data for a number of Metropolitan Statistical Areas (MSAs), including the Denver-Aurora-Broomfield MSA (Denver MSA) and the Boulder MSA. The Denver MSA consists of ten counties: Adams, Arapahoe, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson, and Park Counties. Because CES data are not available for the counties individually, data in this section of the

report reflect the Denver MSA and Boulder MSA (Boulder County) combined.

This 11-county region has a nonfarm employment base of nearly 1.4 million workers. Because much of Colorado’s high-tech workforce is concentrated in the Denver metropolitan area, the area’s job losses in the tech-led 2001 recession were considerably more severe than losses reported statewide and nationwide. The region’s economy also took longer than other economies to recover from the 2001 downturn but by 2005 was again adding jobs at a pace that exceeded the national average.

The Denver metropolitan area entered the 2007 recession somewhat later than other areas, but

the area’s economy ultimately lost jobs at a rate comparable to the rate of job loss reported nationwide. By the second half of 2010, however, Denver metropolitan area employment rose above the year-ago level and continued to recover throughout 2011. While the region had slightly fewer jobs in 2011 than it had in 2001, 2011 employment data suggest the Denver metropolitan area was again poised for growth: the region’s total job growth

between 2010 and 2011 (+1.6 percent) was noticeably higher than the national average (+1.1 percent).

Four industry supersectors – professional and business services, education and health services, leisure and hospitality, and wholesale and retail trade – accounted for the vast majority of Denver metropolitan area jobs added between 2010 and 2011. Part of these industries’ large impact on overall job growth reflects their sheer size, as they are some of the region’s largest sectors in terms of total jobs. Employment in the region’s second-largest industry supersector, government, declined slightly (-0.3 percent) between 2010 and 2011 as local, state, and federal agencies

struggled to balance lower revenues and higher demands for public services.

-5.5%

-4.5%

-3.5%

-2.5%

-1.5%

-0.5%

0.5%

1.5%

2.5%

3.5%

4.5%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Nonfarm Employment Growth Rates

United States


Sources: U.S. Bureau of Labor Statistics, Colorado Department of Labor and Employment.

0.0% 5.0% 10.0% 15.0% 20.0%

Natural Resources & Construction

Manufacturing

Wholesale & Retail Trade

Transportation, Warehousing, Utilities

Information

Financial Activities

Professional & Business Services

Education & Health Services

Leisure & Hospitality

Other Services

Government

Distribution of Nonfarm Employment by Industry (2011)


United States




Employment in four of the Denver metropolitan area’s six remaining supersectors also declined between 2010 and 2011, although losses in percentage terms were generally small with the largest loss (-1.0 percent) in the information supersector. Notably, the natural resources and construction supersector – arguably the hardest hit during the 2007 recession – reported one of the smallest job declines (-0.3 percent) among all Denver metropolitan area supersectors that lost jobs in 2011.

LABOR FORCE & UNEMPLOYMENT Though higher than it was during the late 1990s, the nation’s unemployment rate in the early 2000s – between five and six percent in most years – was relatively stable even through the 2001 recession. The 2007 recession, however, drove the U.S. unemployment rate to highs not seen since the early 1980s. Unemployment declined between 2010 (9.6 percent) and 2011 (8.9 percent), but the 2011 rate was still the fifth highest reported in records dating back to 1947.

Colorado

Periods of rapid growth in natural resource- and tech-related employment are partly behind Colorado’s long history of lower-than-average unemployment. The state’s rate exceeded the national average following the 2001 recession but again fell below the U.S. rate from 2006 forward. Colorado unemployment remained below the U.S. average during and after the 2007 recession as well, but this particular advantage was perhaps not as meaningful as it was in the past: Colorado’s 2010 unemployment rate (8.9 percent) was the highest reported for the state in records dating back to 1976, and the 2011 rate (8.3 percent) ranked second highest.


The effects of the 2001 recession kept the region’s unemployment rate above the national average until 2006, but Denver metropolitan area unemployment remained below five percent through 2008. While it stayed below the national average throughout the most recent recession, the Denver metropolitan area unemployment rate – 8.8 percent in 2010 and 8.1 percent in 2011 – still reached some of the highest levels seen since the late 1980s.

Even so, the region is a magnet for a young and highly educated workforce. As mentioned previously, the Denver MSA outranked all other large MSAs for total in-migration of young

adults between 2008 and 2010. Furthermore, the seven-county region’s 2011 share of adults age 25 and older with a bachelor’s or higher-level degree (40.5 percent) ranked fourth highest among shares for the 25-largest metros. Colorado had the nation’s third-highest rate of bachelor’s degree attainment (36.7 percent) in 2011.

Combined, the data suggest employers in the Denver metropolitan area will have access to significant workforce resources as the region’s economy continues to recover.

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Annual Average Unemployment Rates

United States

Colorado





MAJOR EMPLOYERS

Colorado’s small businesses play a major role in the state’s job creation and economic growth. Data from the U.S. Census Bureau show that, as of 2010, more than 98 percent of Colorado businesses employed fewer than 100 workers. Self-employment is another important economic driver in Colorado: according to the U.S. Bureau of Economic Analysis, Colorado had the nation’s fourth-largest share of total jobs linked to sole proprietorship in 2010.

While small businesses and the self-employed are vitally important to the Denver metropolitan area economy, larger firms are also key providers of jobs and income. Census Bureau data show 116 firms with 1,000 or more employees were operating in Colorado in 2010 and more than half of these large businesses were located in the

Denver metropolitan area.

Nine companies headquartered in Colorado were included on the 2012 Fortune 500 list. Arrow Electronics (130th) was the highest-ranked Colorado company, followed by DISH Network (191st), Liberty Interactive (230th), Newmont Mining (257th), Liberty Global (261st), Ball Corporation (297th), DaVita Inc. (359th), CH2M Hill (440th), and Western Union (445th).

Private sector businesses account for a majority of employment in the Denver metropolitan area, but the public sector also represents a sizeable portion of the area’s job base. As the capital of Colorado, the City and County of Denver has a large concentration of government employees. Specifically, public sector employment in Denver consists of 14,000

federal government employees, 19,700 state government employees, and 33,300 employees in local government entities including Denver Public Schools (13,100 employees) and the City and County of Denver (10,900 employees).

INTERNATIONAL TRADE The Denver metropolitan area is located just west of the nation’s geographic center and at the exact midpoint between Tokyo and Frankfurt. As a result, it serves as an ideal hub for businesses focused on interstate and international commerce. Shipping businesses can access the Denver metropolitan area via all transportation modes except water, and the region’s location midway between Canada and Mexico – U.S. partners under the North American Free Trade Agreement (NAFTA) – is another asset for trade-focused companies. About 31 percent of the total dollar value of export shipments from Colorado went to Canada and Mexico in 2011; others of the state’s largest trading partners include China, Japan, the Netherlands, and Germany.

Metro Denver Largest Private Sector Employers Company Product/Service Employment King Soopers Inc. Grocery 12,540 Wal-Mart General Merchandise 10,550 HealthONE Corporation Healthcare 10,280 Exempla Healthcare Healthcare 7,260 Safeway Inc. Grocery 7,150 Lockheed Martin Corporation Aerospace & Defense Systems 7,030 Centura Health Healthcare 6,920 CenturyLink Telecommunications 6,850 Kaiser Permanente Healthcare 6,170 Target Corporation General Merchandise 5,350 Comcast Corporation Telecommunications 5,000 United Airlines Airline 4,600 DISH Network Satellite & TV Equipment 4,420 Children’s Hospital Colorado Healthcare 4,400 University of Colorado Hospital Healthcare, Research 4,400 Wells Fargo Bank Financial Services 4,400 University of Denver University 4,310 IBM Corporation Computer Systems & Services 4,200 United Parcel Service Parcel Delivery 3,430 Frontier Airlines Airline 3,360

Source: Development Research Partners, April 2012



The most recent recession took a significant toll on Colorado’s exports, which fell sharply (-23.9 percent) between 2008 and 2009. Over that period, the decline in exports of computers and electronic products – Colorado’s largest export commodity – was significantly sharper in Colorado (-41.3 percent) than it was nationwide (-15.6 percent). The state’s total exports increased between 2009 and 2010 (+14.6 percent) and between 2010 and 2011 (+9 percent), but the gains in both periods were smaller than increases reported nationwide. A decline in chemicals exports and falling natural gas prices appear to have played a role in the state’s slower-than-average export growth.

While Colorado’s export base still relies heavily on computers and electronics, its range of traded commodities has grown significantly more diverse: computers and electronics represented 56 percent of the state’s total export value in 2001 but only 28 percent in 2011. The state’s next three-largest commodities by export value – food products, machinery, and chemicals – represented more than one-third of total Colorado export value in 2011.

INFLATION The U.S. Bureau of Labor Statistics measures inflation – or deflation – as a change in the Consumer Price Index (CPI). The CPI is a compilation of price measures for items in eight broad categories, the most heavily weighted of which are housing, transportation, and food and beverages. Housing carries the most weight of these three categories.

The weight placed on housing costs is one reason why the U.S. average and Denver-Boulder-Greeley CPIs have varied over the past decade. Slow economic growth following the 2001 recession and a milder-than-average home price boom meant the Denver-Boulder-Greeley CPI rose at a slower-than-average pace between 2003 and 2005. Oil prices – which tend to drive CPI when they are most volatile – rose in 2005 and brought the local and national inflation rates closer together.

Fallout from the 2007 recession caused a rare decline in both the Denver-Boulder-Greeley and U.S. CPIs in 2009, but variation in housing trends – slightly stronger trends in Denver and

weaker trends elsewhere – again drove the CPIs apart in the following years. The Denver-Boulder-Greeley CPI rose 1.9 percent in 2010 and 3.7 percent in 2011, while the U.S. measure rose 1.6 percent and 3.2 percent, respectively.

Denver-Boulder-Greeley prices for housing, transportation, recreation, food, and apparel rose more quickly than national averages in 2011, and the region’s prices for education and communication, medical care, and all other goods and services rose more slowly.

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Annual Inflation RatesUnited States

Denver-Boulder-Greeley

Source: U.S. Bureau of Labor Statistics.



INCOME

Colorado

Because earnings from work are by far the largest component of personal income, growth trends in Colorado personal income over the past decade have reflected trends in the state’s major industries. Slower-than-average growth in Colorado personal income following the 2001 recession partly reflected deep job losses in the high-tech sector, and faster-than-average growth in 2005 and 2006 reflected a boom in energy and natural gas exploration. Personal income in both Colorado and the nation as a whole declined in 2009 as the most recent recession took a steep toll on jobs and household assets, but the income measures for both geographies grew at a modest pace in 2010. In 2011, Colorado’s faster-than-average job growth meant its annual personal income gain (+5.7 percent) exceeded the national average (+5.1 percent).

Growth in per capita personal income – or total personal income divided by population – is often slower-than-average in Colorado as the state’s population has long grown at a rate faster than the national average. Still, Colorado per capita personal income in 2011 ($44,088) was 106 percent of the U.S. average.


Personal income in the Denver metropolitan area has roughly followed the statewide trend over the past decade. Income growth slowed after the 2001 recession, accelerated between 2004 and 2006, and slowed – and eventually declined – with the most recent recession. The decline in Denver metropolitan area personal income between 2008 and 2009 (-5.4 percent) was steeper than the decline reported nationwide (-4.3 percent), but the region’s personal income grew at the national average rate of increase (+3.7 percent) in 2010.

Denver metropolitan area per capita personal income in 2010 ($47,295) was 118 percent of

the U.S. average. (Note that sub-state personal income data are not yet available past 2010.)

Comparatively high wage rates tend to keep per capita personal income in the Denver metropolitan area above the national average. Denver metropolitan area average annual pay in 2011 ($54,590) was up 2.5 percent over the 2010 annual average.

RETAIL TRADE Household spending represents a large portion of the nation’s total economic output, and retail sales are a valuable indicator of consumer health. Retail sales activity has fluctuated over the past decade: the home refinance boom helped sustain and accelerate retail sales during and after the 2001 recession, but the most recent recession brought spending growth to an abrupt halt. U.S. retail sales fell 1.2 percent in 2008 and seven percent in 2009 as many households grappled with job loss, heavy debt loads, and a weak housing market that all but prohibited refinance activity.

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Annual Growth in Per Capita Personal Income

United States

Colorado


Source: U.S. Bureau of Economic Analysis.



A modestly better economic outlook encouraged recession-weary households in 2010, and retail sales for the year – while still lower than they were before the recession began – rose 6.4 percent over spending in 2009. Retail spending continued to increase throughout 2011, and while some of the gain reflected rising prices for essentials including food and gasoline, consumers were also buying more cars, clothes, and furniture. Total 2011 retail sales were 7.7 percent higher than sales reported in 2010.

Colorado

Economic growth – partly fueled by an energy boom – and a solid housing market contributed to faster-than-average growth in Colorado retail trade sales in 2006 and 2007. Statewide sales rose 7.6 percent in 2006 and seven percent in 2007, while sales nationwide rose 5.4 percent and 3.3 percent, respectively. With the onset of recession, however, Colorado households sharply curtailed their spending. Statewide retail trade sales decreased an average of 6.1 percent per year between 2007 and 2009, while sales nationwide declined by an average of 4.1 percent.

The state’s retail trade sales recovered throughout 2010, and total sales in 2011 were up 7.6 percent over-the-year.


Like sales in Colorado, retail sales in the Denver metropolitan area grew rapidly in 2006 and 2007. A strong housing market allowed households more asset-based wealth, and solid job and income growth also supported retail sales. When the most recent recession dramatically lessened household wealth and drove unemployment higher, Denver metropolitan area retail trade sales fell 0.8 percent in 2008 and 11.3 percent in 2009.

While consumer confidence data suggest many households are still worried about jobs and income, consumers have noticeably increased their spending since the recession. Denver metropolitan area retail trade sales rose 5.2 percent in 2010 and 5.9 percent in 2011, and while higher prices for food and gasoline drove some of the gains, household spending on non-essentials also increased. Sales of motor vehicles and auto parts,

for example, rose 14.9 percent between 2010 and 2011, and sales of electronics, appliances, and furniture also rose. Sales for two of the largest contributors to total Denver metropolitan area retail trade sales – grocery stores

Denver Metropolitan Area Retail Trade Sales ($000s)

Industry 2010 2011Percentage

ChangeRetail Trade:

Motor Vehicle / Auto Parts $6,841 $7,860 14.9Furniture and Furnishings $1,240 $1,308 5.4Electronics and Appliances $1,258 $1,400 11.3Building Materials / Nurseries $2,512 $2,573 2.4Food/Beverage Stores $7,715 $8,130 5.4Health and Personal Care $1,352* $1,410* -------Service Stations $2,235 $2,606 16.6Clothing and Accessories $2,116 $2,262 6.9Sporting/Hobby/Books/ Music $1,376 $1,458 6.0General Merchandise/ Warehouse $5,953 $6,266 5.3Misc. Store Retailers $1,472 $1,772 20.4Non-Store Retailers $1,025* $713* -------

Total Retail Trade $35,907 $37,977 5.8Food / Drinking Services $4,987 $5,340 7.1TOTAL $40,894 $43,317 5.9Note: Data are not adjusted for inflation. Sales by industry may not add to totals due to rounding and data suppression. *total does not include data that have been suppressed. Source: Colorado Department of Revenue.

-13.5%

-9.0%

-4.5%

0.0%

4.5%

9.0%

13.5%

18.0%

22.5%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Annual Growth in Retail Trade Sales

Colorado


Source: Colorado Department of Revenue.



and general merchandise stores – rose 5.4 percent and 5.2 percent between 2010 and 2011, respectively.

Arapahoe County – which has the largest share of retail trade activity in the Denver metropolitan area – also posted the strongest over-the-year increase in retail activity in 2011 (10.9 percent). Over-the-year retail trade sales gains in the remaining counties ranged from 0.8 percent in Adams County to 8.5 percent in Douglas County and the City and County of Broomfield.

RESIDENTIAL REAL ESTATE Combined, all aspects of the housing market – from new home construction to money spent on mortgage and rental payments, furnishings, and home improvements – contribute significantly to the nation’s economy. Housing’s large role in the economy explains why the market collapse helped trigger such a deep recession in 2007.

While housing markets appear to be recovering, the makeup and function of markets has clearly changed. Census data show the U.S. homeownership rate fell from 69.1 percent in the first quarter of 2005 to a first quarter 2012 rate of 65.4 percent, the lowest rate reported since 1997. The shift in homeownership for individual states has been even more profound: Colorado’s homeownership rate fell from 72.1 percent in the first quarter of 2005 to 64.5 percent in the first quarter of 2012. In fact, Colorado ranked second only behind Arizona and Minnesota for largest percentage-point decline in homeownership over the seven-year period.

Despite a large decline in homeownership, Colorado’s housing markets appear to be recovering more quickly than markets elsewhere. Foreclosures and slow price appreciation are still risks to the market’s stability, but the balance between housing supply and demand has shifted in a way that should ultimately support healthier price and sales trends.

Residential Home Prices

While home prices in the Denver metropolitan area appreciated noticeably over the past decade, the region’s home price increase was much smaller than the gain reported elsewhere. The nationwide median home price rose a swift 7.1 percent per year between 2000 and 2006, while Denver metropolitan area prices appreciated at a little more than half of that rate (four percent annually). Because the region’s price appreciation occurred at a slower rate, the subsequent collapse in prices was much milder for the Denver metropolitan area than it was in many other parts of the country. The Denver metropolitan area median home price in 2011 ($231,400) was 7.3 percent lower than the median at the 2006 peak, while the nationwide median in 2011 ($166,200) was more than 25 percent below the 2006 price.

Arapahoe 23%

Denver 22%

Jefferson 18%

Adams 14%

Douglas 10%

Boulder 10%

Broomfield 3%

Distribution of 2011 Retail Trade Sales by County

Source: Colorado Department of Revenue.



Other home price measures also suggest the Denver metropolitan area housing market is in better health than many other metro markets. The Federal Housing Finance Agency’s Home Price Index for the fourth quarter of 2011 shows the Denver-Aurora-Broomfield MSA ranked 93rd among 276 metro areas for smallest over-the-year decline in home prices. A different data source, the S&P/Case-Shiller Home Price Index, suggests Denver’s home prices started to appreciate in January 2012. Denver was one of just three cities included in the 20-city index where home prices rose over-the-year in January 2012. While the two data sources give slightly different portrayals of home prices – variation that partly reflects

different methodologies – they are consistent in an over-arching theme: home prices in the Denver metropolitan area continue to be more stable than prices elsewhere.

Demographic data suggest Denver metropolitan area home prices might even be poised for appreciation in the coming years. Growth in housing units throughout the region significantly outpaced growth in households until 2006, when the sharp pullback in new home construction and a slower rate of household formation helped

rebalance housing supply and demand. The rate of household formation across the region now surpasses growth in new housing units – this scenario should ultimately support higher home prices and more housing unit construction over the longer term.

Foreclosures

While defaults on subprime and other “exotic” home loans may have triggered the foreclosure crisis, high unemployment and plunging home prices sustained the flow of foreclosures during the recession. By 2011, foreclosure assistance programs, a slowly improving economy, and the inevitable “dying-down” of the default wave were becoming apparent in lower foreclosure rates: the total count of new Denver

metropolitan area foreclosures filed in 2011 (16,744) was 28.4 percent lower than the number filed in 2010. Despite the significant decline, the 2011 filings total was still almost four-times the total reported ten years earlier in 2001. The foreclosure trend clearly needs more time to subside, and foreclosure processing delays related to litigation in 2010 could mean filing activity actually rises for a short time before declining more noticeably, as has occurred in the first half of 2012.

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Annual Growth in Denver Metropolitan Area Housing Units and Households

Housing Units

Households


$40.0

$90.0

$140.0

$190.0

$240.0

$290.0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Median Home Price ($000s)

United States


Source: National Association of Realtors.



Residential Home Sales

Denver metropolitan area existing home sales reached a peak (54,012) in 2004. Sales ratcheted down in the following years before dropping more noticeably in 2009 and 2010. With high unemployment, tight housing

credit, falling home prices, and the whiplash effect of homebuyers’ stimulus programs – an initial boost in demand followed by a sharp drop in home buying – sales in 2010 fell more than 28 percent below the 2004 peak.

By mid-2011, however, home sales totals were consistently rising above year-ago totals. The sales count for the year (39,387) was still substantially below pre-recession averages, but a gradual upswing in sales activity appeared increasingly entrenched. Furthermore, the unsold inventory of existing homes available at the end of 2011 (just under 11,000 homes) was the smallest unsold inventory reported for the region in more than a decade. Some local

brokers say tight inventory has boosted competition among buyers in some parts of the Denver metropolitan area, and that competition should ultimately encourage hesitant home sellers and boost home prices.

Residential Building Permits

Denver metropolitan area new home construction trends met both extremes over the past decade: the total count of residential permits pulled in 2001 (27,794) was one of the highest reported since the early 1980s, while the

total pulled at the bottom of the market crash in 2009 (3,436) was the lowest reported in at least three decades. Permit issuance notched upwards in 2010 and 2011 – when permit counts rose 50.5 percent and 23.1 percent over-the-year, respectively – but large gains over 2009’s extremely low permit count still made for some of the most sluggish homebuilding activity reported in years.

Still, demographic data and anecdotal reports suggest housing demand is growing. Colorado and the Denver metropolitan area continue to attract new residents, and stronger-than-average job growth over the past year has added to the areas’ appeal for relocating households.

Housing demand will also rise as families that lost a home or shared housing during the downturn seek new living arrangements.

While these shifts suggest housing demand will continue to strengthen as the economy improves, demand may rise for different property types – specifically, smaller homes and rental housing – than those commonly sought

0

5,000

10,000

15,000

20,000

25,000

30,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Denver Metropolitan Area Residential Building Permits

Multi-Family

Two-Family

Single Family

Source: Home Builders Association of Metro Denver.

0

10,000

20,000

30,000

40,000

50,000

60,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Denver Metropolitan Area Existing Home Sales

Source: Metrolist.



before the downturn. The 2011 Denver metropolitan area permit data show evidence of these shifts already occurring: an increase in multi-family construction accounted for more than 84 percent of the total increase in permit issuance between 2010 and 2011. The 2011 counts of detached home permits and permits for condominiums and townhomes each rose 4.5 percent from the 2010 counts, while the 2011 count of apartment permits more than doubled.

Like the building permit data, data on apartment vacancy and rental rates suggest many households – at least for now – are favoring rental properties. The Denver Metro Apartment Vacancy and Rent Survey shows the seven-county vacancy rate in the first quarter of 2012 (4.9 percent) was the lowest first quarter rate reported since 2001 (4.5 percent). First quarter vacancy rates throughout the seven-county region were lowest in Jefferson County (3.8 percent), the Boulder/Broomfield area (3.9 percent), and the City and County of Denver (4.2 percent).

Rising apartment demand and falling vacancy rates have driven average lease rates higher: the first quarter 2012 average for the Denver metropolitan area ($953) was up 4.5 percent over-the-year. The Boulder/Broomfield area and the City and County of Denver reported the largest first quarter rent increases – 6.7 percent and 6.3 percent over-the-year, respectively – of the region’s seven counties.

COMMERCIAL REAL ESTATE Prior to the 2001 recession, commercial developers were highly active in the Denver metropolitan area: in 2000 and 2001 alone, builders completed almost 20 million square feet of new office and industrial space. Once the nationwide recession took hold, the large inventory of new space weighed on the market and pushed lease rates steadily lower until 2004.

After a few years of recovery, the region’s commercial real estate markets faced another recession. While defaults, a near disappearance of commercial real estate credit, and a drop in property demand put Denver metropolitan area markets under heavy strain, this latest round of recession was arguably more manageable for many submarkets and property types. Without the overbuilding that came before the 2001 recession, vacancy rates in many areas did not rise to the levels reported earlier in the decade.

As 2011 ended, the Denver metropolitan area’s commercial real estate markets appeared to have settled in a pattern of slow – but steady – improvement, and the market remained highly attractive to national tenants and investors.

Office Activity

Data from CoStar Realty Information, Inc. show the direct office market vacancy rate in the Denver metropolitan area fell in 2011 to 12.7 percent, the lowest rate reported since mid-2008. Because vacancy still exceeded the rates reported just before the recession began – rates in the high 11 percent range – direct average lease rates continued to drift downward: the fourth quarter average rate ($19.78 per square foot) was 6.7 percent lower than the average reported just before the recession began ($21.20 per square

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Denver Metropolitan Area Office Market Direct Vacancy Rates

Source: CoStar Realty Information, Inc.



foot in the fourth quarter of 2007). The decline in average office market lease rates that occurred in 2010 and 2011, however, was much shallower than the sharp drops reported in 2008 and 2009.

As job growth continues and office market property demand revives, the region’s rental rates should stabilize and will eventually prompt new development. In the meantime, most of the office market construction has been build-to-suit. Some of the largest projects underway as 2011 ended included the Denver Police Crime Lab and a new headquarters for DaVita Inc., both of which were completed in July 2012. Notably, office market fundamentals in the northwest metro area had improved enough by late 2011 to support construction of a speculative building in Broomfield. As of mid-2012, two new corporate headquarters buildings were under construction: IMA Financial Group near Union Station in downtown Denver and TriZetto in the Meridian International Business Center in Douglas County. In addition, Trimble is building a new 125,000-square-foot building in the Westmoor area of Westminster.

Industrial and Flex Activity

The most recent recession drove direct vacancy rates in the Denver metropolitan area industrial market above seven percent in 2009, but rates have since fallen almost to the levels reported before the recession. CoStar data show the direct industrial vacancy rate in the fourth quarter of 2011 (6.4 percent) was just a few tenths of a percentage point higher than the rate reported in the fourth quarter of 2007 (6.1 percent). The region’s industrial market has perhaps benefitted the most from limited pre-recession construction, and reports from local brokers indicate large blocks of high-quality industrial space are in increasingly short supply. Average rents, however, have been somewhat slow to respond to the market’s favorable balance of supply and demand: the fourth quarter direct average lease rate ($4.56 per square foot) was 9.9 percent lower than the average reported before the recession began ($5.06 per square foot in the fourth quarter of 2007). Out of caution, some landlords are leaving lease rates unchanged but are scaling back the generous incentives they offered during the downturn.

Like lease rates in the industrial market, flex market rates have not yet responded to lower vacancy: the Denver metropolitan area direct flex market lease rate in the fourth quarter of 2011 ($8.85 per square foot) was 3.9 percent lower than the fourth quarter 2007 average. Direct flex market vacancy in the fourth quarter (13 percent) was almost a full percentage point below the year-ago level but was still above the pre-recession low of 11.5 percent. Bargain-priced office, industrial, and retail properties made stiff competition for flex properties during the recession and have likely contributed to a slower flex market recovery.

While builders completed very little new industrial or flex property in 2011, several projects – including work at the National Renewable Energy Laboratory campus in Jefferson County, the National Archives and Records Administration in Broomfield, and several manufacturers’ expansion projects in Adams County – are supporting more construction activity in 2012.

Retail Activity

Because the recession dealt a direct blow to consumers, it also took a large toll on retail real estate. The market’s subsequent recovery, then, is all the more impressive: CoStar data show the direct average vacancy rate for the region’s retail market in the fourth quarter of 2011 (7.3 percent) was less than one percentage point above the rates – between 6.5 and seven percent – that prevailed just before the recession began. As in the other property markets, average rents in the retail market have not yet responded to lower vacancy: the fourth quarter direct average lease rate ($14.58 per square foot) was 12.9 percent below the rate reported for the fourth quarter of 2007. Cautious retail landlords are likely still more concerned with retaining tenants than raising lease rates, although concessions available during the height of the recession are disappearing.



Retail construction projects underway in 2012 – including several grocery and general merchandise stores – were mostly small and targeted towards essentials-focused households. This sort of development is likely to continue in the near term: Walmart Inc., for example, expanded in the Denver metropolitan area with five of its smaller-format, “Neighborhood Market” stores. Outdoor gear retailer Cabela’s began construction on its first two Denver metropolitan area stores in 2012.

These new facilities will add to the large array of thriving retail establishments already operating in the Denver metropolitan area. Nine retail centers across the region offer close to or more than one million square feet of space, and two of those centers – Park Meadows in Lone Tree and Southlands in Aurora – offer at least 1.7 million square feet. Other major retail centers throughout the region include Cherry Creek Shopping Center in Denver, FlatIron Crossing in Broomfield, and Colorado Mills in Lakewood.

Medical Facilities

A rapidly growing – and aging – population demands more healthcare, and the healthcare sector continues to be one of the Denver metropolitan area’s most active in construction activity. St. Anthony Central Hospital opened its new Lakewood campus in mid-2011, and the hospital is spurring adjacent medical office development. Builders are completely redeveloping Exempla St. Joseph Hospital in downtown Denver, and several healthcare providers are responding to rapid growth in the southeast metro area with planned development. For example, phase one of Centura Health’s Castle Rock Adventist Health Campus opened in fall 2011, and Centura will open a 50-bed hospital in a second phase in 2013. HealthOne is planning a $107 million expansion for Sky Ridge Medical Center in Douglas County, and Kaiser Permanente is building its 275,000-square-foot Multi-Specialty Center nearby.

The Fitzsimons Life Science District in Aurora is another of the Denver metropolitan area’s most active healthcare developments. The district includes the Colorado Science + Technology Park, where builders are working on an $8 million business accelerator facility that will add to the six million square feet of bioscience research and incubator space already available. The district also includes the growing Anschutz Medical Campus, where a $230 million expansion for Children’s Hospital is underway and builders recently finished work on the Colorado Center for Health and Wellness at the University of Colorado. Nearby, builders are working on a 180-bed, full-service Department of Veterans Affairs hospital scheduled to open in 2015.

TRANSPORTATION With access by road, rail, and air, the Denver metropolitan area is one of the country’s most important transportation hubs. The region’s national and international connectivity both reflects and supports its dynamic economy.

Highways

Colorado’s transportation network includes almost 1,000 miles of Interstate highway, more than 300 miles of other freeways and expressways, and almost 87,100 miles of arterials, collectors, and local roads. In 2010, the entire network supported more than 46.9 billion vehicle-miles of travel.

The Denver metropolitan area is at the crossroads of three major Interstate highways. Motorists can access I-25 for north-south travel and both I-70 and I-76 for east-west routes. More than three-quarters of the Denver metropolitan area beltway – E-470, C-470, and the Northwest Parkway – has been completed to date. In 2008, Jefferson County, the City and County of Broomfield, and the city of Arvada formed the Jefferson Parkway Public Highway Authority to complete the remaining portion of the beltway.



Improvement and maintenance of a high quality transportation system contributes to the state’s long-term economic well-being. In 2009, Colorado legislators approved a bill – Funding Advancements for Surface Treatment and Economic Recovery (FASTER) – which added an average of $61 per year to the cost of each Colorado vehicle registration to fund bridge repairs and highway improvements. FASTER encompasses four programs that focus separately on bridge safety and repair, highway safety, highway funding, and transit and rail. FASTER revenues totaled $168.3 million in fiscal year 2011.

As the state’s largest economic hub, the Denver metropolitan area receives a significant portion of the Colorado Department of Transportation (CDOT) annual funding allocation. In fiscal year 2011, the highway regions that encompass the Denver metropolitan area received $233.8 million in CDOT funding that went towards construction (62 percent of funds), maintenance (29 percent), and traffic and safety work (eight percent).

Transportation funds received through FASTER, gasoline taxes, and other means will be increasingly important as funding activity under the American Recovery and Reinvestment Act (ARRA) continues to wind down. Federal data show that, as of the first quarter of 2012, total ARRA transportation awards to Colorado agencies approached $611 million.

Mass Transit

The Regional Transportation District (RTD), funded by a one percent sales tax, oversees the Denver metropolitan area’s mass transit system. RTD operates almost 1,000 buses on 134 fixed routes and 172 light rail vehicles on five light rail lines (C, D, E. F, and H). The District operates 74 Park-n-Rides, 36 light rail stations, and almost 9,700 bus stops. RTD also operates 36 hybrid-electric buses along the 16th Street Mall in downtown Denver and transports visitors from one end of the mile-long pedestrian mall to the other free of charge. System-wide ridership for 2011 resulted in more than 98 million boardings.

As the Denver metropolitan area continues to grow, RTD is working to expand its capacity and satisfy transit demand through FasTracks, a $7.4 billion plan for the buildout of a comprehensive, multi-modal metro transit system. When completed, FasTracks will add 122 miles of new light rail and commuter rail, 18 miles of bus rapid transit service, and more than 21,000 new parking spaces at rail and bus stations. FasTracks will also redirect bus service to better connect communities throughout the Denver metropolitan area and will add 57 new transit stations.

Perhaps the most prominent of these stations, Union Station, will combine state-of-the-art facilities for buses, light rail, regional rail, and commuter rail with office, residential, and retail development on nearly 20 acres of space in the heart of downtown Denver. Builders are currently working to redevelop the historic Union Station and have made progress on a regional bus facility, a light rail plaza, and support systems for a commuter rail line to Denver International Airport. The completed Union Station project will also include several public plazas and a privately operated boutique hotel.

Rail lines that will connect with Union Station are also underway. The West Corridor – which will run between Union Station and the Jefferson County Government Center – was the first FasTracks corridor to begin full construction and is currently on-track for completion in 2013. In 2010, builders broke ground on Eagle P3, a multi-pronged project that includes the East Corridor commuter rail line between Union Station and the airport, the Gold Line light rail between Union Station and Wheat Ridge, and a portion of the Northwest Rail Corridor. The Eagle P3 corridors will be funded, built, and managed by a first-of-its-kind public-private partnership, and construction should be complete in 2016.



Other FasTracks projects currently underway include an extension of the I-225 Corridor light rail line, which will eventually connect to commuter rail on the East Corridor. RTD staff is also planning work on four other corridors or extensions to existing corridors.

Air

Denver International Airport (DIA) provides an invaluable link between the Denver metropolitan area and the global community. Located on a 53-square mile parcel northeast of downtown Denver, DIA has six runways – one of which is the longest commercial runway in North America – plus three concourses, 95 gates, and 62 regional aircraft positions. Fifteen commercial carriers offer almost 170 nonstop flights from DIA to destinations worldwide. Partly because three of those carriers – United Airlines, Southwest Airlines, and Frontier Airlines – have Denver hubs, the airport has developed a reputation for some of the nation’s most competitive fares. DIA ranked third among the 20 major U.S. airports with the lowest airfares in the first quarter of 2012, and it reported the largest decline in average fairs between the first quarters of 2001 and 2012.

DIA is the only major U.S. airport constructed in the past 25 years. As a relatively new facility, DIA was designed around sustainability and has become one of the nation’s models for green operations. The airport’s ISO 14001 certified environmental management system provides a comprehensive framework for reducing waste, protecting natural resources, and conserving energy, and airport officials aim to make DIA a zero-waste, carbon-neutral facility by 2020. Progress towards that goal is already evident: with three large solar arrays, DIA is the largest distributed generation photovoltaic energy producer in the state.

The airport’s location and relative youth also make it one of the few facilities nationwide that still have room enough for growth, and expansion capacity has become an asset as the airport serves progressively larger numbers of passengers. In 2011, DIA and airline staff managed almost 1,740 flight operations and more than 144,790 passengers every 24 hours. Total airport passenger traffic rose 1.7 percent between 2010 and 2011 and reached a record 52.8 million, while passenger traffic nationwide rose 1.3 percent. DIA ranks as the nation’s fifth-busiest airport by passenger traffic and is the tenth busiest airport worldwide.

Like cargo totals nationwide, the total amount of cargo shipped through DIA declined slightly between 2010 and 2011. Still, air freight activity remains a dynamic part of the airport’s daily operations. Nine cargo airlines and 14 major and national carriers currently provide DIA cargo service, and the carriers handled roughly 547 million pounds of shipments – including 512 million pounds of freight and express and 35 pounds of air mail – in 2011.

With a dynamic freight business and record passenger growth, DIA is poised to expand. Builders have started work on the $500 million South Terminal redevelopment project, which includes train and baggage system upgrades, a new public plaza, a station for the commuter rail line that will connect DIA with Union Station, and a 500-room Westin Hotel. The train station should be ready for preliminary testing in 2014, and the hotel will open in 2015.

The airport’s growth is also galvanizing development activity on surrounding property. Officials with DIA and the City and County of Denver recently unveiled plans for Airport City Denver, a large, mixed-use development that could occupy surplus airport land. The plan includes six individual districts: the first district, Airport City Center, would include a cluster of hotels, stores, and office buildings and would locate near DIA. Another district, Airport City Gateway, would include parking structures, an automobile and RV mall, and several transit-oriented developments. Airport City Tech would house companies focused on renewable energy, aerospace, and bioscience, while Airport City Agro would support food and biofuels manufacturing. Airport City Logistics would offer warehousing and distribution space, and Airport City Aero would focus on military and aviation uses.



Three reliever airports complement DIA’s expanding role in the Denver metropolitan area economy. Centennial Airport serves the southeast metro area; Front Range Airport is located six miles southeast of DIA and serves the northeast Denver metropolitan area; and Rocky Mountain Metropolitan Airport serves Jefferson, Broomfield, and Boulder Counties in the northwest area. Three general aviation airports – Boulder Municipal Airport, Erie Municipal Airport, and Vance Brand Municipal Airport in Longmont – also serve the Denver metropolitan area.

Rail

Rail lines are a critical component of the nation’s transportation system and are vital to the Denver metropolitan area’s economic health and global competitiveness. Colorado is home to 14 freight railroads operating on more than 2,680 miles of track, and the Denver metropolitan area serves as a major hub for the Burlington Northern Santa Fe and Union Pacific railroads. According to the Association of American Railroads, coal accounted for 70 percent of rail shipments originating in Colorado and almost 60 percent of shipments ending in the state in 2010.

Passenger rail adds to the variety of travel options available in the Denver metropolitan area. Amtrak’s California Zephyr route offers area residents transportation through the Rocky Mountains west of Denver and connects Chicago to San Francisco. Almost 206,430 travelers passed through Colorado Amtrak stations in fiscal year 2011, and more than half (56 percent) of those travelers either boarded or alighted from trains in the Denver metropolitan area.

TOURISM Denver’s many recreational opportunities, cultural attractions, and entertainment and convention venues make the region a favorite of business and leisure travelers. According to the most recent study by Longwoods International, Denver tourism activity increased to a record 13.2 million overnight visitors spending $3.3 billion in 2011, representing a four percent increase in visitors and a 10 percent increase in spending over 2010. Business travelers were responsible for a large portion of the increase, registering a 17 percent increase in visits and a 15 percent increase in spending. Top Denver attractions for visitors included the 16th Street Mall and the Cherry Creek Shopping District, as well as the LoDo Historic District and numerous other cultural facilities.

In addition to excellent cultural attractions and amenities, the Denver metropolitan area is also home to a variety of professional sports teams and some of the newest sports venues in the nation. Denver sports fans enjoy seven professional sports franchises – the NFL Denver Broncos, the NBA Denver Nuggets, the MLB Colorado Rockies, the NHL Colorado Avalanche, the MLS Colorado Rapids, the NLL Colorado Mammoth, and the MLL Denver Outlaws. Each of these teams plays in a venue constructed within the past 20 years. Coors Field – a 76-acre ballpark – hosted two sold-out games of the 2007 World Series, and the 76,125-seat Sports Authority Field at Mile High hosts Denver Broncos football and Denver Outlaws games as well as large public events. Located nine miles northeast of downtown Denver, Dick’s Sporting Goods Park opened in spring 2007 and hosts the Colorado Rapids soccer team. With an 18,000-seat stadium and a fully-lit, 24-field complex, the park is considered to be one of the largest of its kind in the world. Finally, the Pepsi Center hosts three professional sports teams and numerous special events throughout the year.

In addition to professional athletics, Denver metropolitan area residents and visitors also enjoy year-round outdoor recreation. The City and County of Denver maintains more than 200 city and mountain parks, and eight state parks are located in or immediately outside of the seven-county Denver metropolitan area. The region is also the gateway to the Rocky Mountains, which attract hikers, bikers, rafters, and climbers during the summer and winter sports enthusiasts during colder months. In fact, Colorado is one of the nation’s most-favored destinations



for skiing: 11 of the 20 top resorts in Ski magazine’s “2011-2012 Resort Rankings” are located in the Colorado Rocky Mountains.2

Twelve Colorado ski resorts – including several in the top resorts ranking – are located within two hours of the Denver metropolitan area. Data from Colorado Ski Country USA and Vail Resorts, Inc. indicate that the count of skier visits at Colorado resorts during the 2011/2012 season fell to about 11 million, a 10.3 percent decline. Colorado skier visits – or the count of persons skiing or snowboarding for any part of one day – declined in response to extreme weather impacting Colorado resorts. Although abundant snowfall occurred in the fall, prompting some resorts to open early, the record low levels of snowfall during the remainder of the season halted the momentum.

Already magnets for recreational visitors, Colorado and the Denver metropolitan area are increasingly recognized as ideal locations for business travel. A Metropoll survey released in early 2012, for example, showed meeting planners nationwide rank Denver as the nation’s fifth-best city for hosting a convention.3 Increased convention activity confirms the region’s growing popularity among meeting planners and attendees: the Colorado Convention Center reported a 5.8 percent increase in convention delegates between 2010 and 2011 and an

equivalent increase in delegate spending. As one of the largest public meeting facilities in the west, the Colorado Convention Center is poised to accommodate more and larger gatherings. In fact, 11 conventions between May and October 2012 attracted at least 5,000 delegates each.

Growth in convention activity – and visitor activity more generally – has supported more hotel development throughout the Denver metropolitan area. Development has been particularly brisk in downtown Denver, where multiple new or remodeled hotels – including the Four Seasons Hotel Denver, the Embassy Suites Denver-Downtown Convention Center, and the

Ritz-Carlton, Denver – have opened within the past several years. The Metropolitan State University of Denver’s Hotel and Hospitality Learning Center opened in fall 2012 and offers a fully functioning flagged hotel – the 150-room SpringHill Suites® Denver Downtown – and an extensive learning laboratory for growing hospitality student enrollment. Plans for at least three other downtown hotels are also moving forward.

2 SKImag.com. “2011-2012 Resort Rankings.” www.skinet.com 3 Denver Business Journal. “Denver Ranked 5th-Best City for Conventions.” January 30, 2012.

40%

45%

50%

55%

60%

65%

70%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Denver Metropolitan Area Average Hotel Occupancy Rates

Source: Colorado Hotel & Lodging Association, Rocky Mountain Loding Report.

8.0

8.5

9.0

9.5

10.0

10.5

11.0

11.5

12.0

12.5

13.0Colorado Skier Visits (millions)

Source: Colorado Ski Country USA.



New hotel openings – particularly the launch of luxury establishments – are one reason why average room rates for the Denver metropolitan area have recently increased. Some of the gain, however, also reflects a strengthening economy and increased business and consumer willingness to travel. Data from the Rocky Mountain Lodging Report show the region’s average nightly room rate for 2011 ($109.94) was two percent higher than the 2010 average, and the average occupancy rate for 2011 (66.8 percent) was noticeably higher than the comparable 2010 rate (64.4 percent).

SUMMARY Employment data for the Denver metropolitan area underwent a significant annual revision that showed the recovery in 2011 was much stronger than original estimates indicated. The region’s total population and its young adult population have also grown at a faster-than-average pace. Given accelerating job growth and a growing population of highly educated, working-age residents, the Denver metropolitan area appears poised for solid growth.

While the region’s foreclosure crisis is not yet resolved, the Denver metropolitan area housing market has recently strengthened. Low unsold inventory, better-than-average price trends, and a favorable balance between housing unit development and new household formation should ultimately support a healthier market. As housing demand continues to revive, Denver metropolitan area home construction will accelerate but may result in more apartment units and smaller-format homes than the region has had in the past.

The region’s commercial real estate markets are recovering at a slow but steady pace, and several businesses are building new headquarters. Evolving plans for Airport City Denver will leverage the region’s attractiveness for national tenants and property investors and one of its strongest transportation assets, Denver International Airport. Rising airport passenger traffic reflects the region’s continued appeal for business and leisure travelers, as does increased convention activity.

Prepared By:

10184 West Belleview Avenue, Suite 100 Littleton, Colorado 80127 Phone: 303-991-0073

DATA APPENDIX


2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

POPULATION (July 1)United States (thousands) 284,969 287,625 290,108 292,805 295,517 298,380 301,231 304,094 306,772 309,330 311,592

Colorado 4,444,513 4,504,709 4,555,084 4,608,811 4,662,534 4,745,660 4,821,784 4,901,938 4,976,853 5,050,870 5,119,779

Denver Metropolitan Area 2,476,410 2,504,883 2,528,665 2,558,106 2,582,177 2,626,197 2,670,038 2,716,819 2,762,164 2,798,766 2,830,174

POPULATION GROWTH RATEUnited States 1.0% 0.9% 0.9% 0.9% 0.9% 1.0% 1.0% 1.0% 0.9% 0.8% 0.7%

Colorado 2.4% 1.4% 1.1% 1.2% 1.4% 1.8% 1.6% 1.7% 1.5% 1.5% 1.4%

Denver Metropolitan Area 2.3% 1.1% 0.9% 1.2% 1.3% 1.7% 1.7% 1.8% 1.7% 1.3% 1.1%

NET MIGRATIONColorado 67,121 21,251 10,313 14,300 13,779 42,896 35,000 40,469 36,267 38,106 33,488

Denver Metropolitan Area 30,829 3,818 (1,917) 4,263 (1,367) 18,864 18,704 22,326 21,639 14,762 8,448

NONAGRICULTURAL EMPLOYMENTUnited States (millions) 131.8 130.3 130.0 131.4 133.7 136.1 137.6 136.8 130.8 129.9 131.4

Colorado (thousands) 2,226.9 2,184.2 2,152.8 2,179.6 2,226.0 2,279.1 2,331.3 2,350.3 2,245.6 2,222.3 2,255.3

Denver Metropolitan Area 1,375.2 1,332.8 1,314.0 1,324.7 1,349.9 1,377.2 1,406.8 1,420.4 1,359.1 1,352.5 1,374.0

(thousands)

NONAGRICULTURAL EMPLOYMENT GROWTH RATEUnited States 0.0% -1.1% -0.3% 1.1% 1.7% 1.8% 1.1% -0.6% -4.4% -0.7% 1.1%

Colorado 0.6% -1.9% -1.4% 1.2% 2.1% 2.4% 2.3% 0.8% -4.5% -1.0% 1.5%

Denver Metropolitan Area 0.0% -3.1% -1.4% 0.8% 1.9% 2.0% 2.1% 1.0% -4.3% -0.5% 1.6%

DATA APPENDIX


2011 EMPLOYMENT DISTRIBUTION BY INDUSTRY

Natural Resources & ConstructionManufacturingWholesale & Retail TradeTransportation, Warehousing, UtilitiesInformationFinancial ActivitiesProfessional & Business ServicesEducation & Health Leisure & HospitalityOther ServicesGovernment

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

UNEMPLOYMENT RATEUnited States 4.7% 5.8% 6.0% 5.5% 5.1% 4.6% 4.6% 5.8% 9.3% 9.6% 8.9%

Colorado 3.8% 5.7% 6.1% 5.6% 5.1% 4.3% 3.8% 4.8% 8.1% 8.9% 8.3%

Denver Metropolitan Area 3.8% 5.9% 6.4% 5.8% 5.2% 4.3% 3.8% 4.8% 8.2% 8.8% 8.1%

CONSUMER PRICE INDEX (CPI-U, 1982-84=100)United States 177.1 179.9 184.0 188.9 195.3 201.6 207.3 215.3 214.5 218.1 224.9

Denver-Boulder-Greeley 181.3 184.8 186.8 187.0 190.9 197.7 202.0 209.9 208.5 212.4 220.3

INFLATION RATEUnited States 2.8% 1.6% 2.3% 2.7% 3.4% 3.2% 2.8% 3.8% -0.4% 1.6% 3.2%

Denver-Boulder-Greeley 4.7% 1.9% 1.1% 0.1% 2.1% 3.6% 2.2% 3.9% -0.6% 1.9% 3.7%

2.0%

10.1%4.1%

16.8% 17.4%

12.0%

United States

4.8%8.9%

15.4%

3.7% 3.1%

3.2%6.4%

15.1%12.1%

15.2%

5.8%

13.2%15.1% 12.2%

10.8%3.9%

17.5%

5.4%5.6%

15.0%

3.4%

3.9%7.1%

4.1%

Colorado

6.2%5.7%

14.7%


DATA APPENDIX


2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

TOTAL PERSONAL INCOME (millions, except as noted)United States (billions) $8,879 $9,055 $9,369 $9,929 $10,477 $11,257 $11,901 $12,452 $11,917 $12,354 $12,982

Colorado $156,468 $157,752 $159,918 $168,587 $179,695 $194,390 $205,242 $216,030 $205,787 $213,494 $225,591

Denver Metropolitan Area $99,605 $99,903 $100,934 $106,176 $113,046 $123,018 $128,512 $134,768 $127,505 $132,226 N/A

TOTAL PERSONAL INCOME GROWTH RATEUnited States 3.8% 2.0% 3.5% 6.0% 5.5% 7.4% 5.7% 4.6% -4.3% 3.7% 5.1%

Colorado 6.4% 0.8% 1.4% 5.4% 6.6% 8.2% 5.6% 5.3% -4.7% 3.7% 5.7%

Denver Metropolitan Area 6.2% 0.3% 1.0% 5.2% 6.5% 8.8% 4.5% 4.9% -5.4% 3.7% N/A

PER CAPITA PERSONAL INCOMEUnited States $31,157 $31,481 $32,295 $33,909 $35,452 $37,725 $39,506 $40,947 $38,846 $39,937 $41,663

Colorado $35,355 $35,131 $35,312 $36,849 $38,795 $41,181 $42,724 $44,180 $41,388 $42,295 $44,088

Denver Metropolitan Area $40,352 $40,049 $40,187 $41,925 $44,148 $47,208 $48,436 $49,884 $46,379 $47,295 N/A

PER CAPITA PERSONAL INCOME GROWTH RATEUnited States 2.8% 1.0% 2.6% 5.0% 4.5% 6.4% 4.7% 3.6% -5.1% 2.8% 4.3%

Colorado 4.0% -0.6% 0.5% 4.4% 5.3% 6.1% 3.7% 3.4% -6.3% 2.2% 4.2%

Denver Metropolitan Area 3.9% -0.8% 0.3% 4.3% 5.3% 6.9% 2.6% 3.0% -7.0% 2.0% N/A

RETAIL TRADE SALESUnited States (billions) $3,386 $3,467 $3,618 $3,841 $4,091 $4,310 $4,454 $4,401 $4,093 $4,353 $4,689

Colorado (millions) $59,014 $58,850 $58,689 $62,288 $65,492 $70,437 $75,375 $74,911 $66,454 $70,233 $75,551

Denver Metropolitan Area $35,657 $35,355 $35,548 $37,197 $38,589 $41,491 $44,177 $43,829 $38,882 $40,894 $43,317

(millions)

DATA APPENDIX


2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

RETAIL TRADE SALES GROWTH RATEUnited States 2.9% 2.4% 4.3% 6.2% 6.5% 5.4% 3.3% -1.2% -7.0% 6.4% 7.7%

Colorado 1.8% -0.3% -0.3% 6.1% 5.1% 7.6% 7.0% -0.6% -11.3% 5.7% 7.6%

Denver Metropolitan Area 1.4% -0.8% 0.5% 4.6% 3.7% 7.5% 6.5% -0.8% -11.3% 5.2% 5.9%

MEDIAN HOME PRICEUnited States (thousands) $156.6 $167.6 $180.2 $195.2 $219.0 $221.9 $217.9 $196.6 $172.1 $173.1 $166.2

Denver Metropolitan Area $218.3 $228.1 $238.2 $239.1 $247.1 $249.5 $245.4 $219.3 $219.9 $232.4 $231.4

(thousands)

EXISTING HOME SALESDenver Metropolitan Area 47,832 47,919 47,966 54,012 53,106 50,244 49,789 47,837 42,070 38,818 39,387

NEW RESIDENTIAL UNITSDENVER METROPOLITAN AREASingle Family 14,262 13,793 12,656 14,260 15,778 10,952 7,082 3,686 2,397 3,372 3,525

Two-Family 4,442 4,425 3,755 4,843 4,642 5,311 4,632 1,330 601 798 834

Multi-Family 9,090 4,085 1,858 2,681 459 1,727 3,015 4,413 438 1,002 2,008

Total Units 27,794 22,303 18,269 21,784 20,879 17,990 14,729 9,429 3,436 5,172 6,367

OFFICE VACANCY RATEDenver Metropolitan Area 10.1% 13.5% 14.2% 14.5% 13.2% 12.8% 11.8% 12.9% 13.8% 13.2% 12.7%

HOTEL OCCUPANCY RATEDenver Metropolitan Area 62.5% 60.3% 59.5% 61.9% 64.1% 66.4% 67.0% 65.0% 59.0% 64.4% 66.8%

SKIER VISITS 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12

Colorado (millions) 11.1 11.6 11.3 11.8 12.5 12.6 12.5 11.9 11.9 12.3 11.0

N/A: Not Available

Sources: U.S. Department of Commerce, Bureau of the Census; Colorado Division of Local Government, Demography Section; U.S. Department of Labor, Bureau of Labor Statistics; Colorado Department of Labor and Employment, Labor Market Information; U.S. Department of Commerce, Bureau of Economic Analysis; Colorado Department of Revenue; National Association of REALTORS; Metrolist, Inc.; Home Builders Association of Metro Denver; CoStar Realty Information, Inc.; Rocky Mountain Lodging Report; and Colorado Ski Country USA.

D-1

Appendix D

FORM OF BOND COUNSEL OPINION

May 16, 2013

Regional Transportation District1600 Blake StreetDenver, Colorado 80202

$204,820,000Regional Transportation District (Colorado)

Sales Tax Revenue Refunding Bonds(FasTracks Project)

Series 2013A

Ladies and Gentlemen:

We have acted as bond counsel to the Regional Transportation District (the "District"), inthe State of Colorado, in connection with its issuance of the above-captioned bonds (the "2013A Bonds")issued and secured pursuant to an authorizing resolution adopted by the Board of Directors of the Districton February 19, 2013 (the "Bond Resolution"), and an Indenture of Trust, dated as of May 16, 2013 (the"Indenture"), between the District and The Bank of New York Mellon Trust Company, as trustee (the"Trustee"). In such capacity, we have examined the District's certified proceedings and such otherdocuments and such law of the State of Colorado and of the United States of America as we have deemednecessary to render this opinion letter. Capitalized terms not otherwise defined herein shall have themeanings ascribed to them by the Indenture.

Regarding questions of fact material to our opinions, we have relied upon the District'scertified proceedings and other representations and certifications of public officials and others furnishedto us without undertaking to verify the same by independent investigation.

Based upon such examination, it is our opinion as bond counsel that:

1. The 2013A Bonds have been duly and validly authorized and issued inaccordance with law, including the Act, and in accordance with the Bond Resolution and the Indentureand are entitled to the benefits of the Bond Resolution, the Indenture and the Act.

2. The 2013A Bonds are valid and binding, special, limited obligations of theDistrict payable solely from the Pledged Revenues and from funds and accounts pledged therefor underthe Indenture.

3. The District has the right and power under the Act to enter into the Indenture, theIndenture has been duly and lawfully authorized by the District, duly executed and delivered byauthorized officials of the District, and assuming due authorization, execution and delivery thereof by theTrustee, constitutes a valid and binding obligation of the District, enforceable in accordance with itsterms, and no other authorization for the Indenture is required.

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4. The Sales Tax is a valid tax under Colorado law. The Indenture creates a validpledge of the Pledged Revenues which include the moneys, securities and funds held or set aside underthe Indenture for the benefit of the 2013A Bonds, subject to the terms and conditions set forth in theIndenture. The Indenture creates a valid lien on the Sales Tax Revenues on a parity with the lien thereonof the Outstanding 2007A Bonds, 2010A Bonds, and 2010B Bonds and a valid lien on that portion of theSales Tax Revenues derived from the 0.6% Sales Tax subordinate to the lien thereon of the OutstandingSenior Debt. Except as described in this paragraph, we express no opinion regarding the priority of thepledge of the Pledged Revenues or the lien on the Sales Tax Revenues securing the 2013A Bonds createdpursuant to the Indenture.

5. Interest on the 2013A Bonds is excluded from gross income under federalincome tax laws pursuant to Section 103 of the Internal Revenue Code of 1986, as amended to the datehereof (the "Tax Code"), interest on the 2013A Bonds is excluded from alternative minimum taxableincome as defined in Section 55(b)(2) of the Code, except that such interest is required to be included incalculating the adjusted current earnings adjustment applicable to corporations for purposes of computingthe alternative minimum taxable income of corporations, and interest on the 2013A Bonds is excludedfrom Colorado taxable income or Colorado alternative minimum taxable income under Colorado incometax laws in effect as of the date hereof. The opinions expressed in this paragraph assume continuouscompliance with the covenants and representations contained in the District's certified proceedings and incertain other documents or certain other certifications furnished to us.

The opinions expressed in this opinion letter are subject to the following:

The obligations of the District pursuant to the 2013A Bonds, the Bond Resolution and theIndenture are subject to the application of equitable principles, to the reasonable exercise in the future bythe State of Colorado and its governmental bodies of the police power inherent in the sovereignty of theState of Colorado, and to the exercise by the United States of America of the powers delegated to it by theFederal Constitution, including without limitation, bankruptcy powers.

In expressing the opinions above, we are relying, in part, on a report of an independentcertified public accountant verifying (i) the mathematical computations of the adequacy of the maturingprincipal amounts of and interest on the investments and moneys included in the 2013A Escrow Accountto pay when due, at stated maturity or upon prior redemption, all principal of, any prior redemptionpremiums, and interest on the Refunded Bonds and (ii) the mathematical calculations of the yield of the2013A Bonds and the yield of certain investments made with the proceeds of the 2013A Bonds and othermoneys deposited in the 2013A Escrow Account.

In this opinion letter issued in our capacity as bond counsel, we are opining only uponthose matters set forth herein, and we are not passing upon the accuracy, adequacy or completeness of theOfficial Statement or any other statements made in connection with any offer or sale of the 2013A Bondsor upon any federal or state tax consequences arising from the receipt or accrual of interest on or theownership or disposition of the 2013A Bonds, except those specifically addressed herein.

This opinion letter is issued as of the date hereof, and we assume no obligation to reviseor supplement this opinion letter to reflect any facts or circumstances that may hereafter come to ourattention or any changes in law that may hereafter occur.

Respectfully submitted,

E-1

Appendix E

SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE

The following description is intended as a summary only and is qualified in its entirety byreference to the Indenture of Trust, dated as of May 16, 2013 (the "Indenture"), between the District andThe Bank of New York Mellon Trust Company, N.A., as trustee. Certain provisions of the Indenture aresummarized under the captions "INTRODUCTION," "THE BONDS" and "SECURITY FOR THEBONDS" in the body of this Official Statement and are not summarized in this APPENDIX E.

Certain Definitions

The following are definitions of certain terms contained in the Indenture and used herein:

"2006A Bonds" means the Regional Transportation District's Sales Tax Revenue Bonds(FasTracks Project), Series 2006A issued pursuant to the provisions of the 2006A Indenture.

"2006A Indenture" means the Indenture of Trust, dated as of October 1, 2006, as amended,between the District and the Trustee.

"2007A Bonds" means the Regional Transportation District's Sales Tax Revenue RefundingBonds (FasTracks Project), Series 2007A issued pursuant to the provisions of the 2007A Indenture.

"2007A Indenture" means the Indenture of Trust, dated as of May 1, 2007, as amended, betweenthe District and the Trustee.

"2010 Bonds" means, collectively, the 2010A Bonds and the 2010B Bonds.

"2010 Indenture" means the Indenture of Trust, dated as of November 23, 2010, between theDistrict and the Trustee.

"2010A Bonds" means the Regional Transportation District's Tax-Exempt Sales Tax RevenueBonds (FasTracks Project), Series 2010A issued pursuant to the provisions of the 2010 Indenture.

"2010B Bonds" means the Regional Transportation District's Taxable Sales Tax Revenue Bonds(FasTracks Project) (Direct Pay Build America Bonds), Series 2010B issued pursuant to the provisions ofthe 2010 Indenture.

"2012A Bonds" means the Regional Transportation District's Taxable Sales Tax Revenue Bonds(FasTracks Project), Series 2012A issued pursuant to the provisions of the 2012A Indenture.

"2012A Indenture" means the Indenture of Trust, dated as of December 20, 2012, between theDistrict and the Trustee.

"2013A Escrow Agreement" means the escrow account established pursuant to the EscrowAgreement.

"Act" means the Regional Transportation District Act, currently Sections 32-9-101 to 32-9-164,inclusive, Colorado Revised Statutes, as from time to time amended and supplemented.

E-2

"Additional Parity Bonds" means any Securities issued after the issuance of the Bonds andpayable from all or a portion of the Pledged Revenues and having a lien on the Pledged Revenues whichis equal to or on a parity with the Bonds, but does not include any Credit Facility Obligations or FinancialProducts Agreements relating to any such Securities.

"Authorized Denominations" means denominations of $5,000 or any integral multiple thereof.

"Average Annual Debt Service Requirements" means the aggregate of all Debt ServiceRequirements (excluding any redemption premiums) due on the Securities for which the computation isbeing made for all Bond Years beginning with the Bond Year in which Debt Service Requirements ofsuch Securities or any portion thereof are first payable after the computation date and ending with theBond Year in which the last of the Debt Service Requirements are payable, divided by the whole numberof such years.

"Beneficial Owner" means the beneficial owner of Bonds registered in the name of theDepository or its nominee.

"Board" means the Board of Directors of the District.

"Bond Fund" means the "Regional Transportation District Sales Tax Revenue Bonds (FasTracksProject), Series 2013A Bond Service Fund" established pursuant to the Indenture.

"Bond Resolution" means the resolution adopted by the Board authorizing the issuance of theBonds and the execution and delivery of the Indenture.

"Bond Year" means the twelve (12) months commencing on the second day of November of anycalendar year and ending on the first day of November of the next succeeding calendar year.

"Bonds" means the Regional Transportation District's Sales Tax Revenue Refunding Bonds(FasTracks Project), Series 2013A in the original aggregate principal amount of $204,820,000.

"Chief Financial Officer" means the Chief Financial Officer of the District.

"Code" means the Internal Revenue Code of 1986, as amended to the date of delivery of theBonds, and applicable regulations and rulings presently or hereafter promulgated or proposed thereunderor under any predecessor thereto.

"Combined Maximum Annual Debt Service Requirements" means the Maximum Annual DebtService Requirements of all designated Securities for which such computation is being made, treated as asingle issue.

"Costs of Issuance Fund" means the fund of that name created pursuant to the Indenture.

"Credit Facility" means any letter or line of credit, policy of bond insurance, surety bond orguarantee or similar instrument issued by a financial, insurance or other institution and which specificallyprovides security and/or liquidity in respect of Securities payable from all or a portion of the PledgedRevenues.

"Debt Service Requirements" means, for any period, the amount required to pay the principal ofand interest on any designated outstanding Securities during such period; provided that the determinationof the Debt Service Requirements of any Securities, including without limitation the Bonds, the Senior

E-3

Debt, any Parity Bonds and any proposed Additional Parity Bonds, will assume the redemption andpayment of such Securities on any applicable mandatory redemption dates. In any computation relatingto the issuance of Additional Parity Bonds, there will be excluded from the computation of Debt ServiceRequirements any proceeds on deposit in a bond fund for such Securities constituting capitalized interest.

"District" or "RTD" means the Regional Transportation District, a public body politic andcorporate and a political subdivision of the State, formed under and governed by the Act and any publicbody politic and corporate succeeding to the rights of the District.

"District Sales Tax Area" means the geographic area comprising the District as described in theAct as amended to the date of execution and delivery of the Indenture plus any other area within whichthe District is hereafter authorized by law to levy the Sales Tax.

"DTC" means The Depository Trust Company, New York, New York, and its successors andassigns.

"Escrow Agreement" means the Escrow Agreement, dated as of May 16, 2013, between theDistrict and the Trustee, as escrow agent.

"Escrow Fund" means any fund established with the Trustee or other depository in whole or inpart with the proceeds of any refunding bonds or other moneys to provide for the timely payment of anyDebt Service Requirements on the Bonds.

"FasTracks" means the transit expansion plan adopted by the Board on April 22, 2004.

"Federal Securities" means bills, certificates, notes, bonds or similar securities which are directobligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, theUnited States (or ownership interests in any of the foregoing) and which are not callable prior to theirscheduled maturities by the issuer thereof.

"Financial Products Agreement" means an interest rate swap, cap, collar, floor, other hedgingagreement, arrangement or security, however denominated, entered into by the District with a Providerwith respect to the Bonds or specific Securities or as otherwise permitted by State law and providing thatany payments by the District thereunder are payable from a lien on all or a portion of the PledgedRevenues and for the purpose of (i) reducing or otherwise managing the District's risk of interest ratechanges or (ii) effectively converting the District's interest rate exposure, in whole or in part, from a fixedrate exposure to a variable rate exposure, or from a variable rate exposure to a fixed rate exposure.

"Financial Products Payments" means payments periodically required to be paid to a Provider bythe District pursuant to a Financial Products Agreement but specifically excluding Financial ProductsTermination Payments.

"Financial Products Receipts" means amounts periodically required to be paid to the District by aProvider pursuant to a Financial Products Agreement but specifically excluding any Financial ProductsTermination Payment.

"Financial Products Termination Payment" means any termination, settlement or similarpayments required to be paid upon an early termination of the Financial Products Agreement as a result ofany event of default or termination event thereunder.

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"Fiscal Year" means the twelve months commencing on January 1 of any calendar year andending on December 31 of such calendar year, or any other 12-month period which the District designatesas its fiscal year.

"Fitch" means Fitch Inc., a corporation organized and existing under the laws of the State ofDelaware, and, if such corporation is dissolved or liquidated or no longer performs the functions of asecurities rating agency, "Fitch" will be deemed to refer to any other nationally recognized securitiesrating agency designated by the District by notice to the Trustee, which rating agency then maintains arating with respect to the Bonds.

"Funds" means, collectively, the 0.4% Sales Tax Increase Fund, the 0.6% Sales Tax Fund, theBond Fund and the Costs of Issuance Fund.

"Indenture" means the Indenture of Trust, dated as of May 16, 2013, between the District and theTrustee, as it may be amended from time to time.

"Maximum Annual Debt Service Requirements" means the maximum aggregate amount of DebtService Requirements (excluding redemption premiums) due on the Securities for which suchcomputation is being made in any Bond Year beginning with the Bond Year in which Debt ServiceRequirements of such Securities are first payable after the computation date and ending with the BondYear in which the last of the Debt Service Requirements are payable.

"Moody's" means Moody's Investors Service, a corporation organized and existing under the lawsof the State of New York, its successors and assigns and, if such corporation is dissolved or liquidated orno longer performs the functions of a securities rating agency, "Moody's" will be deemed to refer to anyother nationally recognized securities rating agency designated by the District by notice to the Trustee,which rating agency then maintains a rating with respect to the Bonds.

"Owner" or "Registered Owner" means the Person shown on the registration records maintainedby the Registrar as the registered owner of any Bond.

"Parity Bonds" means the 2007A Bonds, 2010 Bonds, 2012A Bonds, RTD TIFIA Bond and anyother Securities payable from all or a portion of the Pledged Revenues and having a lien on the PledgedRevenues which is equal to or on a parity with the Bonds, but does not include any Credit FacilityObligations or Financial Products Agreements relating to any such Securities.

"Parity Bond Indentures" means the 2007A Indenture, the 2010 Indenture, the 2012A Indenture,the TIFIA Loan Agreement and any indentures or other agreements executed and delivered by the Districtin connection with the issuance of Additional Parity Bonds.

"Parity Bond Resolutions" means the resolutions authorizing the issuance of the 2007A Bonds,the 2010 Bonds, the 2012A Bonds, the RTD TIFIA Bond and any resolutions hereafter adopted by theDistrict authorizing the issuance of Additional Parity Bonds.

"Parity Credit Facility Obligations" means any Credit Facility Obligations payable from all or aportion of the Pledged Revenues on a parity with the Bonds.

"Parity Financial Products Agreement" means any Financial Products Agreement pursuant towhich Financial Products Payments are payable from a lien on all or a portion of the Pledged Revenueson a parity with the Bonds.

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"Participants" means participating underwriters, securities brokers or dealers, banks, trustcompanies, closing corporations, or other Persons for which the Depository holds Bonds.

"Paying Agent" means The Bank of New York Mellon Trust Company, N.A., and its successorsand assigns, or such other entity appointed under the Indenture as agent for the District for the payment ofthe Bonds.

"Permitted Investments" means any obligations legal for investment of funds of the District underapplicable State law (including, but not limited to, the Act).

"Person" means a corporation, firm, other body corporate (including without limitation theUnited States, the State, or any other body corporate and politic other than the District), limited liabilitycompany, partnership, association or individual, and also includes an executor, administrator, trustee,receiver or other representative appointed according to law.

"Pledged Income" means the Pledged Income, as defined in the Senior Bond Resolution, whichincludes the revenues received from the 0.6% Sales Tax which is pledged to the payment of the SeniorBonds pursuant to the Senior Bond Resolution.

"Pledged Revenues" means:

(a) The Sales Tax Revenues; and

(b) Any additional revenues legally available to the District which the Board in itsdiscretion, without further consideration from any Bondholder, may hereafter pledge to thepayment of the Bonds; and

(c) Proceeds of the Bonds or other legally available moneys credited to or paid intoand held in the 0.4% Sales Tax Increase Fund, the 0.6% Sales Tax Fund, the Bond Fund and theCosts of Issuance Fund; and

(d) Interest or investment income on the 0.4% Sales Tax Increase Fund, the 0.6%Sales Tax Fund, the Bond Fund and the Costs of Issuance Fund, all to the extent that the moneysare at any time required to be credited to or paid into and held in such funds.

"Principal Corporate Trust Office" means (i) with respect to The Bank of New York MellonTrust Company, N.A., as Trustee, Registrar and Paying Agent hereunder, Los Angeles, California, orsuch other place as designated in writing to the Owners of the Outstanding Bonds, (ii) for purposes of thesurrender of the Bonds for transfer or exchange, such other place as designated in writing to the Ownersof the Outstanding Bonds, and (iii) with respect to any successor trustee, registrar or paying agent, theprincipal office of its corporate trust department or such other place as designated in writing to theOwners of the Outstanding Bonds.

"Provider" means any financial institution or insurance company which is a party to a FinancialProducts Agreement with the District.

"Rating Category" means one of the generic rating categories of Moody's, if the Bonds are ratedby Moody's, or of Standard & Poor's, if the Bonds are rated by Standard & Poor's, or of Fitch, if theBonds are rated by Fitch, without regard to any refinement or gradation of such rating category by anumerical modifier or otherwise.

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"Rebate Fund" means the fund by that name established pursuant to the Indenture.

"Refunded Bond Requirement" means the principal of, premium, if any, and interest on theRefunded Bonds as the same become due prior to and at the maturity or prior redemption thereof.

"Refunded Bonds" means all the outstanding 2006A Bonds.

"Refunding Project" means the application of the net proceeds of the Bonds for the purpose ofrefunding, paying and discharging the Refunded Bond Requirements.

"Registrar" means The Bank of New York Mellon Trust Company, N.A., and its successors andassigns, or any other entity appointed under the Indenture as agent for the District for the registration,transfer and exchange of Bonds.

"RTD TIFIA Bond" means the bond delivered by the District to the TIFIA Lender pursuant to theterms and provisions of the TIFIA Loan Agreement.

"Sales Tax" means, collectively, the 0.6% Sales Tax and the 0.4% Sales Tax Increase.

"0.6% Sales Tax" means the sales tax levied uniformly throughout the District Sales Tax Area ata rate of 0.6% upon every transaction or other incident with respect to which a sales tax is levied by theState pursuant to the provisions of Article 26 of Title 39, Colorado Revised Statutes, and pursuant to theAct.

"0.6% Sales Tax Fund" means the "Regional Transportation District 0.6% Sales Tax Fund"established pursuant to the Indenture.

"0.4% Sales Tax Increase" means the sales tax increase approved at the 2004 Election whichcommenced on January 1, 2005, that is levied uniformly throughout the District Sales Tax Area at the rateof four-tenths of one percent upon every transaction or other incident with respect to which a sales tax islevied by the State pursuant to the provisions of Article 26 of Title 39, Colorado Revised Statutes, andpursuant to the Act.

"0.4% Sales Tax Increase Fund" means the "Regional Transportation District 0.4% Sales TaxIncrease Fund" established pursuant to the Indenture.

"Sales Tax Revenues" means the proceeds received by the District, or by the Trustee as assigneeof the District, from the levy and collection of the Sales Tax and from the levy and collection of anyadditional sales tax the proceeds of which have been added to Pledged Revenues by resolution of theDistrict.

"Securities" means bonds, notes, certificates, warrants, leases, contracts or other financialobligations or securities issued or executed by the District and payable in whole or in part from a lien onthe Pledged Revenues.

"Senior Bond Resolution" means, collectively, Resolution No. 9, Series 1977 of the District, assupplemented by the following resolutions of the District: Resolution No. 13, Series 1985, ResolutionNo. 2, Series 1988, Resolution No. 6, Series 1990, Resolution No. 5, Series of 1992, Resolution No. 9,Series of 1993, Resolution No. 14, Series of 1997, Resolution No. 20, Series of 2000, Resolution No. 13,Series of 2001, Resolution No. 24, Series of 2001, Resolution No. 26, Series of 2002, Resolution No. 6,Series of 2003, Resolution No. 04, Series of 2004, Resolution No. 01, Series of 2005, Resolution No. 003,

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Series of 2007, Resolution No. 04, Series of 2008, Resolution No. 28, Series of 2009 and ResolutionNo. 002, Series of 2013, and any resolutions hereafter adopted by the District authorizing the issuance ofSecurities to refund, in whole or in part, any Outstanding Senior Debt in accordance with the provisionsof this Indenture or authorizing Senior Financial Products Agreements or Senior Credit FacilityAgreements relating to the Senior Debt.

"Senior Bonds" means the following outstanding bonds of the District: the Sales Tax RevenueRefunding Bonds, Series 2007A, the Sales Tax Revenue Refunding Bonds, Series 2010A the Sales TaxRevenue Bonds, Series 2004A and the Sales Tax Revenue Refunding Bonds, Series 2013A.

"Senior Credit Facility Obligations" means any Credit Facility Obligations incurred by theDistrict in connection with a Credit Facility in respect of Senior Debt which is payable from a lien on the0.6% Sales Tax that is senior or superior to the lien thereon of the Bonds.

"Senior Debt" means the Senior Bonds and any Securities hereafter issued to refund, in whole orin part, any outstanding Senior Debt in accordance with the provisions of the Indenture, that have a lienon the 0.6% Sales Tax that is senior or superior to the lien thereon of the Bonds, but does not include anyCredit Facility Obligations or Financial Products Agreements relating to any such Senior Debt.

"Senior Debt Trustee" means The Bank of New York Mellon Trust Company, N.A., a bankingassociation organized and existing under the laws of the United States of America (successor in interest toBNY Western Trust Company), and its successors and assigns, as trustee under the Senior BondResolution, or any other entity appointed thereunder in accordance therewith and in accordance with theIndenture. Any entity that serves as Senior Debt Trustee must also serve as Trustee under the Indentureand as trustee under any Parity Bond Resolutions and any Parity Bond Indentures.

"Senior Financial Products Agreement" means any Financial Products Agreement entered into bythe District with respect to Senior Debt pursuant to which Financial Products Payments and/or theFinancial Products Termination Payments required thereunder are payable from a lien on the 0.6% SalesTax that is superior or senior to the lien thereon of the Bonds.

"Standard & Poor's" means Standard & Poor's Rating Services, a Standard & Poor's FinancialServices LLC business, and, if such business is dissolved or liquidated or no longer performs thefunctions of a securities rating agency, "Standard & Poor's" will be deemed to refer to any othernationally recognized securities rating agency designated by the District by notice to the Trustee, whichrating agency then maintains a rating with respect to the Bonds.

"Subordinate Credit Facility Obligations" means any Credit Facility Obligations payable inwhole or in part from the Pledged Revenues and having a lien on the Pledged Revenues which issubordinate to the lien thereon of the Bonds.

"Subordinate DUSPA Bond" means the District's Subordinate Sales Tax Revenue Bond, Series2010.

"Subordinate Financial Products Agreement" means any Financial Products Agreement pursuantto which Financial Products Payments are payable from a lien on the Pledged Revenues that issubordinate to the lien thereon of the Bonds. No Financial Products Termination Payment required underany Subordinate Financial Products Agreement may have a lien on the Pledged Revenues that is senior toor on a parity with the lien thereon of the Bonds.

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"Subordinate Lien Obligations" means the TABOR Portion and the Subordinate DUSPA Bondand any additional Securities payable in whole or in part from the Pledged Revenues and having a lien onthe Pledged Revenues which is subordinate to the lien thereon of the Bonds but does not include anyCredit Facility Obligations or Financial Products Agreements relating to any such Subordinate LienObligations.

"TABOR Portion" means the portion of the monthly service payments of the District under aConcession and Lease Agreement with Denver Transit Partners LLC to which the District has pledged theSales Tax Revenues.

"Tax Compliance Certificate" means the Federal Tax Exemption Certificate executed by theDistrict in connection with the execution, issuance and delivery of the Bonds.

"Term Bonds" means any Bonds that are payable on or before their specified maturity dates fromsinking fund payments established for the purpose and calculated to retire such Bonds on or before theirspecified maturity dates.

"TIFIA Lender" means the United States Department of Transportation, an agency of the UnitedStates of America, acting by and through the Federal Highway Administrator.

"TIFIA Loan Agreement" means the TIFIA Loan Agreement, dated as of December 1, 2011,between the District and the TIFIA Lender.

"Trustee" means The Bank of New York Mellon Trust Company, N.A., a banking associationorganized and existing under the laws of the United States of America, and its successors and assigns, orany other entity appointed as trustee under the Indenture. Any entity that serves as Trustee under theIndenture must also serve as trustee under the Senior Bond Resolution, any Parity Bond Resolutions andany Parity Bond Indentures.

"Underwriters" means, collectively, Morgan Stanley & Co. LLC, Merrill Lynch, Pierce, Fenner& Smith Incorporated, George K. Baum & Company and Loop Capital Markets, as the underwriters ofthe Bonds.

Pledge Effected by the Indenture

The Pledged Revenues are pledged to the punctual payment of the Debt Service Requirements ofthe Bonds in accordance with the provisions set forth in the Indenture. The Bonds are payable out of andconstitute an irrevocable first lien (but not necessarily an exclusive first lien) on the revenues receivedfrom the 0.4% Sales Tax Increase, and on the proceeds of the Bonds or other legally available moneysdeposited into and held in the 0.4% Sales Tax Increase Fund, the Bond Fund and the Costs of IssuanceFund pursuant to the provisions and requirements of the Indenture. The Bonds are also payable out ofand constitute an irrevocable lien on the Pledged Income and moneys deposited in the 0.6% Sales TaxFund which is in all respects subordinate to the pledge and lien thereon of the Senior Debt at any timeoutstanding.

Except as hereinafter provided, the Bonds, any Parity Bonds, any Additional Parity Bonds, anyParity Credit Facility Obligations and any Financial Products Payments pursuant to any Parity FinancialProducts Agreements are equitably and ratably secured by a lien on the Pledged Revenues equal inpriority to one another in the application of the Pledged Revenues regardless of the time or times of theissuance of the Bonds, any Parity Bonds, any Additional Parity Bonds or Parity Credit FacilityObligations or of the entering into of the Parity Financial Products Agreements. Notwithstanding the

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foregoing, however, the portion of the Pledged Revenues that consists of moneys in the Bond Fund andthe Costs of Issuance Fund secures only the Bonds, any Parity Credit Facility Obligations relating to theBonds, and any Financial Products Payments pursuant to Parity Financial Products Agreements relatingto the Bonds. Additional Parity Bonds may have a lien on the Sales Tax Revenues on a parity with thelien of the Bonds even if no reserve fund is established for the Additional Parity Bonds or a reserve fundis established but with a different requirement as to the amount of moneys (or the value of a reserve fundinsurance policy with respect to the Additional Parity Bonds) required to be on deposit within the reservefund or the manner or period of time in which the reserve fund is funded.

Moneys on deposit in the Rebate Fund and the 2013A Escrow Account are not pledged to thepayment of the Bonds and do not constitute Pledged Revenues under the Indenture.

Assignment of Sales Tax Revenues to Trustee

In connection with the issuance of the Senior Debt, the District has heretofore assigned its rightsto receive payment of the 0.6% Sales Tax to the Senior Debt Trustee for the benefit of the owners of theSenior Debt. In the Indenture the District has further assigned its rights to receive payment of the 0.6%Sales Tax to the Trustee for the benefit of the owners of the Bonds and any other Securities hereafterissued payable from the 0.6% Sales Tax. In the Indenture, the District has also assigned its rights toreceive payment of the 0.4% Sales Tax Increase to the Trustee for the benefit of the Owners of the Bondsand any other Securities hereafter issued payable from the 0.4% Sales Tax Increase. The District hasdirected the Executive Director of the Colorado Department of Revenue to pay the Sales and Use TaxRevenues collected by the Director directly to the Senior Debt Trustee and the Trustee in accordance withthe provisions of the Indenture.

Trustee and Senior Debt Trustee

The Bank of New York Mellon Trust Company, N.A., a national banking association, is Trusteeunder the Indenture and also serves as Senior Debt Trustee under the Senior Bond Resolution. TheIndenture requires that any entity that serves as Trustee under the Indenture must also serve as trusteeunder the Senior Bond Resolution, any Parity Bond Resolutions and any Parity Bond Indentures.

Additional Parity Bonds

The District may issue Additional Parity Bonds that are payable from and that have a lien on allor a portion of the Pledged Revenues that is on a parity with the lien thereon of the Bonds, if inaccordance with the provisions of the Act and the Constitution and laws of the State, upon compliancewith the following terms and conditions:

(a) The Trustee shall have received a certificate signed by the District Representativestating:

(1) The total amount of Sales Tax Revenues from the District Sales TaxArea and revenues received by the District or the Trustee from any Additional Tax fromthe District Sales Tax Area during twelve (12) consecutive calendar months of theeighteen (18) calendar months next preceding the authentication and delivery of theproposed Additional Parity Bonds. The term "Additional Tax" means any sales tax, otherthan the Sales Tax, which shall have been (1) levied or imposed by the State, or by theDistrict pursuant to State legislative authorization, and in effect at the time ofauthentication and delivery of the proposed Additional Parity Bonds, (2) received by theDistrict or the Trustee for at least twelve (12) consecutive months immediately preceding

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the authentication and delivery of the Additional Parity Bonds and (3) included as part ofPledged Revenues prior to such certification.

(2) The estimated receipts, if any, for the twelve-month period of clause(a)(1), which would have been received by the District or the Trustee during said twelve-month period from any Additional Tax collected in the District Sales Tax Area had suchAdditional Tax been in effect throughout said period, but not including any receipts fromsuch Additional Tax included within the amount set forth in clause (a)(1).

(3) The interest received on moneys or securities in the 0.4% Sales TaxIncrease Fund and the 0.6% Sales Tax Fund during said twelve-month period.

(4) The sum of the amounts in clauses (a)(1), (a)(2) and (a)(3).

(5) The Combined Maximum Annual Debt Service Requirements for allSenior Debt, the Bonds, any Parity Bonds and the proposed Additional Parity Bondswhich will be Outstanding immediately after the authentication and delivery of suchproposed Additional Parity Bonds.

(6) The percentage derived by dividing the amount in clause (a)(4) by theamount in clause (a)(5).

(b) The percentage shown in clause (a)(6) of such certificate is not less than 200%.

(c) The Trustee shall have received a certificate from the District Representativestating that no Events of Default have occurred and are continuing under the Senior BondResolution, the Indenture, any Parity Bond Resolutions or any Parity Bond Indentures as of thedate of issuance of the proposed Additional Parity Bonds.

(d) Such Additional Parity Bonds shall be duly authorized by a resolution of theDistrict. All Additional Parity Bonds may be payable as to principal and interest on any date ordates as set forth in the Parity Bond Resolution or Parity Bond Indenture relating to suchAdditional Parity Bonds.

For purposes of making the required computations, the Indenture contains provisions regardingthe determination of the interest rate on variable rate securities, the calculations to be made if a FinancialProducts Agreement has been entered into by the District with respect to any Securities that are to beincluded in the calculation, and the method of calculating Debt Service Requirements on commercialpaper notes.

The District may enter into Parity Credit Facility Obligations and Parity Financial ProductsAgreements relating to the Bonds, any Parity Bonds and any Additional Parity Bonds as is determined bythe Board to be in the best interest of the District and in accordance with the provisions of the Act and theConstitution and laws of the State. However, no Financial Products Termination Payment required underany such Parity Financial Products Agreements may be secured by a lien on the Pledged Revenues that issenior to or on a parity with the lien thereon of the Bonds.

Refunding Bonds

In the case of Additional Parity Bonds issued for the purpose of refunding less than all of theBonds and other Parity Bonds then outstanding, compliance with the provisions set forth in (a) and (b)

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under "Additional Parity Bonds" is not required (unless by the provisions of any resolution or indentureauthorizing the issuance of other outstanding Parity Bonds) so long as the debt service payable on allBonds and other Parity Bonds outstanding after the issuance of such Additional Parity Bonds in eachBond Year does not exceed the debt service payable on all Bonds and other Parity Bonds outstandingprior to the issuance of such Additional Parity Bonds in each Bond Year.

Superior and Subordinate Obligations

The District may not issue Securities payable from and having a lien on all or a portion of thePledged Revenues that is superior or senior to the lien thereon of the Bonds, except for Securities issuedto refund, in whole or in part, outstanding Senior Debt, provided that after the issuance of such refundingbonds, the debt service payable in each Bond Year on all Senior Debt outstanding after the issuance ofsuch refunding bonds does not exceed the debt service payable in each Bond Year on all Senior Debtoutstanding prior to the issuance of such refunding bonds. Notwithstanding the foregoing, the Districtmay enter into Senior Financial Products Agreements and Senior Credit Facility Agreements relating tothe Senior Debt.

The District may issue or enter into Subordinate Lien Obligations and enter into SubordinateFinancial Products Agreements and Subordinate Credit Facility Obligations provided that no events ofdefault have occurred and are continuing under the Senior Bond Resolution, the Indenture, any ParityBond Resolutions, any Parity Bond Indentures and any Parity Financial Products Agreements.

Application of Pledged Revenues

The Trustee is required to apply the Pledged Revenues in accordance with the provisions of theIndenture, as described in "SECURITY FOR THE BONDS – Flow of Funds" in the body of this OfficialStatement.

Bond Fund

The Trustee is required to use any moneys deposited into the Bond Fund to pay the principal of,prior redemption premium, if any, and interest on the Bonds as the same become due (except as providedin the Indenture with respect to payments to be made into the Rebate Fund, payments from the Bond Fundupon discharge of the lien of the Indenture, the application of moneys in the Bond Fund upon theoccurrence of an Event of Default, and the application of moneys in the Bond Fund upon refunding all ora portion of the Bonds). The Bond Fund will be held in the custody of the Trustee, but in the name of theDistrict and the District has authorized and directed the Trustee to withdraw sufficient funds from theBond Fund to pay the Debt Service Requirements of the Bonds as the same become due and payable.Moneys on deposit in the Bond Fund shall not secure the payment of any Parity Bonds.

Costs of Issuance Fund

Net proceeds of the Bonds in the amount of $411,235.02 will be deposited in the Costs ofIssuance Fund and used to pay costs of issuance of the Bonds, as approved by the District. Upon thepayment of all costs of issuance, any moneys remaining the Costs of Issuance Fund are required to betransferred to the Bond Fund.

Notwithstanding any other provisions of the Indenture, to the extent that other monies are notavailable therefor, amounts on deposit in the Costs of Issuance Fund shall be applied to the payment ofprincipal of and interest on the Bonds when due.

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Rebate Fund

The Indenture requires that there is credited to the Rebate Fund moneys in the amounts and at thetimes specified in the Tax Compliance Certificate relating to the Bonds so as to enable the District tocomply with the covenants of the Indenture. Amounts credited to the Rebate Fund are not subject to thelien and pledge of the Indenture. The District is required to cause amounts credited to the Rebate Fund tobe forwarded to the United States Treasury at the times and in the amounts set forth in the TaxCompliance Certificate. The Trustee is not required to take any actions under the Tax ComplianceCertificate in the absence of written instructions from the District, and the Trustee shall conclusively bedeemed to have complied with the provisions of the Tax Compliance Certificate if it complies with suchwritten instructions of the District.

The Trustee is required to transfer moneys into the Rebate Fund from Pledged Revenues aftermaking in full the monthly transfers required to be made to the Bond Fund and reserve funds for alloutstanding Parity Bonds. The Trustee may, at the written direction of the District, transfer to the RebateFund any investment income or other gain attributable to any Fund under the Indenture if necessary tosatisfy the amounts required to be on deposit therein. Upon receipt by the Trustee of a written opinion ofBond Counsel to the effect that the amount credited to the Rebate Fund is in excess of the amountrequired to be contained therein, the Trustee is required to transfer the excess to the Bond Fund.

Investment of Certain Funds

The Trustee is required to invest any moneys held in the Funds and the Rebate Fund, on writtendirection from the District, in Permitted Investments. Obligations purchased as an investment of moneysin any Fund or the Rebate Fund shall be deemed at all times to be a part of such Fund or the Rebate Fund,as the case may be. Any loss resulting from any such investment shall be charged to such Fund or theRebate Fund, as the case may be. Any interest or other gain realized as a result of any investment orreinvestment of moneys in any Fund and the Rebate Fund shall be credited to such Fund or the RebateFund, as the case may be. In computing the amount in any Fund or the Rebate Fund, PermittedInvestments shall be valued at fair market value. In determining fair market value of PermittedInvestments, the Trustee may use and rely upon any generally recognized pricing information service(including brokers and dealers in securities) available to it.

Covenant Regarding Payment of Bonds

The District covenants in the Indenture that it will promptly cause to be paid the Debt ServiceRequirements of each Bond at the place, on the dates and in the manner provided in the Indenture and inthe Bonds according to the true intent and meaning thereof. The Debt Service Requirements of the Bondsare payable solely from the Pledged Revenues, and not from any other funds of the District.

Incontestable Recitals in Bonds

Pursuant to Section 32-9-135 of the Act, each Bond will recite that it is issued under the authorityof the Act. This recital will conclusively impart full compliance with all the provisions of the Act and allthe Bonds issued containing this recital will be incontestable for any cause whatsoever after their deliveryfor value. Each Bond will also recite that it is issued under the authority of the Supplemental Act, whichrecital will be conclusive evidence of the validity and the regularity of the issuance of the Bonds aftertheir delivery for value.

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Authority to Issue Bonds and Pledge the Pledged Revenues

The District has certified in the Indenture that it is duly authorized under the Constitution andlaws of the State, including particularly and without limitation the Act, to issue the Bonds and to executethe Indenture and to pledge and assign the receipts and amounts pledged in the Indenture in the mannerand to the extent set forth therein.

Collection of Sales Tax; Protection of Security

The District covenants and agrees in the Indenture that, so long as any of the Securities payable inwhole or in part from the Sales Tax Revenues remain outstanding, the District shall, in accordance withthe provisions of the Act, impose, administer and enforce, or shall cause to be imposed, administered orenforced, the Sales Tax, shall collect or cause to be collected the Sales Tax Revenues and shall not takeany action or omit to take any action to reduce, impair, repeal or otherwise adversely impact theimposition, administration, enforceability and collectability of the Sales Tax and Sales Tax Revenues.The District covenants that it will cause the Sales Tax Revenues to be collected promptly and to beaccounted for in the funds provided in the Indenture, subject to the provisions of the Act and theConstitution and laws of the State.

The District covenants and agrees in the Indenture to preserve and protect the security of theBonds and other Securities.

Instruments of Further Assurance

The District covenants in the Indenture that it will do, execute, acknowledge and deliver, or causeto be done, executed, acknowledged and delivered, such indentures supplemental thereto, and such furtheracts, instruments and transfers as the Trustee may reasonably require for the better assuring, transferring,conveying, pledging, assigning and confirming unto the Trustee all and singular the District's interest inthe property described in the Indenture and the Pledged Revenues, receipts and other amounts pledgedthereby to the payment of the Debt Service Requirements of the Bonds. The District covenants andagrees in the Indenture that it has not and will not, except as otherwise expressly provided in theIndenture, sell, convey, mortgage, encumber or otherwise dispose of any part of its interest in the PledgedRevenues other than as security for the payment of the Bonds and any other Securities.

District Sales Tax Area

For purposes of the Indenture, the District Sales Tax Area is defined to mean the geographic areacomprising the District as described in the Act as amended to the date of execution and delivery of theIndenture plus any other area within which the District is hereafter authorized by law to levy the SalesTax. The Indenture provides that the District, its officers, agents and employees, shall not take any actionin such manner or to such extent as might materially impair or diminish the security for the payment ofthe Bonds or other outstanding Securities, including without limitation, excluding any areas from theDistrict Sales Tax Area.

Tax Covenants

In the Indenture, the District covenants for the benefit of the Owners of the Bonds that it will nottake any action or omit to take any action with respect to the Bonds, the proceeds thereof, any other fundsof the District or the project refinanced by the proceeds of the Bonds if such action or omission (i) wouldcause the interest on the Bonds to lose its exclusion from gross income for federal income tax purposesunder Section 103 of the Code, (ii) would cause interest on the Bonds to lose its exclusion from

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alternative minimum taxable income as defined in Section 55(b)(2) of the Code except to the extent suchinterest is required to be included in the adjusted current earnings adjustment applicable to corporationsunder Section 56 of the Code in calculating corporate alternative minimum taxable income, or (iii) wouldcause interest on the Bonds to lose its exclusion from Colorado taxable income or Colorado alternativeminimum taxable income under present Colorado law. In furtherance of this covenant, the District agreesto comply with the procedures set forth in the Tax Compliance Certificate. The foregoing covenant shallremain in full force and effect notwithstanding the payment in full or defeasance of the Bonds until thedate on which all obligations of the District in fulfilling the above covenant under the Code and Coloradolaw have been met.

Indenture to Constitute Contract

In consideration of the purchase and acceptance of any or all of the Bonds by those who will ownthe Bonds from time to time, the provisions of the Indenture shall be a part of the contract between theDistrict and the Owners of the Bonds from time to time, to the effect and with the purpose set forth in theIndenture.

Accounts and Reports

The District covenants in the Indenture that it will at all times keep, or cause to be kept, properand current books and accounts (separate from all other records and accounts) in which complete andaccurate entries will be made of all transactions relating to the Refunding Project, the Pledged Revenues,the Funds and the Rebate Fund. Unless required earlier by State law, the Indenture requires the District toprepare within 180 days after the close of each Fiscal Year, commencing with the Fiscal Year endingDecember 31, 2013, a complete financial statement or statements of the District for such year, togetherwith a report of a certified public accountant or firm of certified public accountants selected by theDistrict. The District is required to furnish a copy of such statement or statements to the Trustee, and tothe Underwriters and any Owner upon written request therefor. The Trustee shall have no duty to review,verify or analyze such financial statements and shall hold such financial statements solely as a repositoryfor the benefit of the Owners. The Trustee shall not be deemed to have notice of any informationcontained therein or event of default which may be disclosed therein in any manner.

Maintenance of Existence

The District covenants in the Indenture to take no action to terminate its existence as a publicbody corporate and politic so long as any Bonds or other Securities remain outstanding.

Continuing Disclosure Covenant

The District covenants in the Indenture to comply with the Continuing Disclosure Agreement,provided that failure to do so will not constitute an Event of Default under the Indenture. See"CONTINUING DISCLOSURE AGREEMENT" in the body of this Official Statement.

Events of Default

The events that constitute an Event of Default under the Indenture are discussed in "SECURITYFOR THE BONDS – Events of Default" in the body of this Official Statement.

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Remedies on Default

If any Event of Default has occurred and is continuing, the Trustee in its discretion may, andupon the written request of the Owners of not less than 25% in aggregate principal amount of all Bondsthen outstanding and receipt of indemnity to its satisfaction is required to, in its own name:

(a) By mandamus, or other suit, action or proceeding at law or in equity, enforce allrights of the Owners of the Bonds, including the right to require the District to carry out theprovisions of the Indenture for the benefit of the Owners of the Bonds and to perform its dutiesunder the Act;

(b) Bring suit upon the Bonds;

(c) By action or suit in equity require the District to account as if it were the trusteeof an express trust for the Owners of the Bonds; or

(d) By action or suit in equity enjoin any acts or things which may be unlawful or inviolation of the rights of the Owners of the Bonds.

The Trustee is required to institute, have, and maintain all such proceedings at law or in equity forthe equal benefit of all Owners of the Bonds and any other Parity Bonds and any Parity Credit FacilityObligation relating thereto and the Providers of any Parity Financial Products Agreements, subject to anysuperior rights of the owners of the Senior Debt then outstanding.

The Indenture does not permit the Trustee, the Owners of the Bonds or any other Person todeclare the Debt Service Requirements of the Bonds to be due and payable prior to their scheduledpayment dates upon the occurrence of an Event of Default or for any other reason.

The Owners of a majority in aggregate principal amount of the Bonds outstanding will have theright, after furnishing indemnity satisfactory to the Trustee, to direct the method and place of conductingall remedial proceedings by the Trustee under the Indenture, provided that the direction must not be inconflict with any rule of law or with the Indenture or unduly prejudice the rights of minority Owners.

No Owner of a Bond will have any right to pursue any remedy under the Indenture unless:

(a) the Trustee has been given written notice of an Event of Default;

(b) the Owners of at least 25% in aggregate principal amount of all Bonds thenoutstanding have requested the Trustee, in writing, to exercise the powers it is granted in theIndenture or to pursue such remedy in its or their name or names;

(c) the Trustee has been offered indemnity satisfactory to it against costs, expensesand liabilities; and

(d) the Trustee has failed to comply with the request within a reasonable time.

Notwithstanding the foregoing, the obligation of the District shall be absolute and unconditionalto pay pursuant to the Indenture, but solely from the Pledged Revenues, the Debt Service Requirements ofthe Bonds to the respective Owners thereof on their respective due dates, and nothing in the Indentureaffects or impairs the right of action, which is absolute and unconditional, of such Owners to enforce suchpayment.

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No remedy conferred in the Indenture is intended to be exclusive of any other remedy orremedies, and each remedy is in addition to every other remedy given in the Indenture or now or hereafterexisting at law or in equity or by statute.

No delays or omissions in respect of exercising any right or power accruing upon any Event ofDefault will impair the right or power or be a waiver of the default, and every remedy given by theIndenture may be exercised from time to time and as often as may be deemed expedient.

The Trustee may, at its discretion, waive any Event of Default under the Indenture and itsconsequences and is required do so upon the written request of the Owners of (i) not less than a majorityin aggregate principal amount of all outstanding Bonds in respect of which an Event of Default in thepayment of any Debt Service Requirements of the Bonds exists, or (ii) not less than a majority inaggregate principal amount of all outstanding Bonds in the case of any other Event of Default; provided,however, that the Trustee may not waive any Event of Default in the payment of the Debt ServiceRequirements of any outstanding Bonds unless prior to the waiver or rescission, all arrears of principaland interest, and all fees and expenses of the Trustee in connection with the Event of Default or otherwisein connection with the performance of the Trustee's duties under the Indenture, have been paid orprovided for. In case of any such waiver or rescission, the District, the Trustee and the Owners of theBonds will be restored to their former positions and rights under the Indenture, respectively, but no suchwaiver or rescission will extend to any subsequent or other Event of Default or impair any rightconsequent thereon.

Any moneys received by the Trustee upon the occurrence of an Event of Default is required to bedeposited in the Bond Fund, and into bond funds or similar funds established for other Parity Bonds thenoutstanding, pro rata based upon the aggregate principal amount of the Bonds and Parity Bonds thenoutstanding. The Trustee is required to apply amounts so deposited in the Bond Fund in the followingorder:

(a) To the payment of the reasonable fees and costs of the Trustee, the Paying Agentand the Registrar;

(b) Unless the principal of all the Bonds has become due, the Trustee is required toapply the money as follows: First, to the payment of all installments of interest then due on theBonds, in the order of the maturity of the installments of the interest and, if the amount availableis insufficient to pay in full any particular installment, then to the payment ratably, according tothe amounts due on the installment, to the Persons entitled to the payments without anydiscrimination or privilege. Second, to the payment of unpaid principal of and premium, if any,on any of the Bonds that have become due (other than Bonds matured or called for redemptionfor the payment of which moneys are held pursuant to the provisions of the Indenture), in theorder of their due dates with interest on the unpaid principal and premium, if any, on the Bondsfrom the respective dates upon which they became due, to the extent permitted by law, at the rateof interest borne by the respective Bond and, if the amount available is insufficient to pay in fullBonds due on any particular date, together with such interest, then to the payment ratably,according to the amount of principal due on such date, to the Persons entitled to the paymentswithout any discrimination or privilege.

(c) If the principal of all the Bonds has become due, the Trustee is required to applyall the moneys to the payment of the principal and interest then due and unpaid upon the Bondswithout preference or priority of principal over interest or of interest over principal, or of anyinstallment of interest over any other installment of interest, or of any Bond over any other Bond,ratably, according to the amounts due, respectively, for principal and interest to the Personsentitled thereto without any discrimination or privilege, with interest on overdue installments of

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interest and principal from the respective dates upon which they became due, to the extentpermitted by law, at the rate of interest borne by the respective Bond.

The Trustee must apply any moneys so deposited in the Bond Fund equally and ratably to thepayment of the Bonds, to any Financial Products Payments due and owing pursuant to any ParityFinancial Products Agreement entered into by the District in connection with the Bonds, and to thepayment of any amounts due and owing under any Parity Credit Facility Obligation relating to the Bonds.

Whenever such moneys are to be applied, such moneys are required to be applied at such times,and from time to time, as the Trustee determines, having due regard to the amount of such moneysavailable for application and the likelihood of additional moneys becoming available for such applicationin the future. Whenever the Trustee applies such funds, it is required to fix the date (which is to be aninterest payment date unless the Trustee deems another date more suitable) upon which the application isto be made and upon that date interest on the amounts of principal to be paid on that date will cease toaccrue. The Trustee is required to give any notice as it may deem appropriate of its receipt of any suchmoneys and of the fixing of any such date, and will not be required to make payment to the Owner of anyBond until the Bond is presented to the Trustee for appropriate endorsement or for cancellation if fullypaid.

Notwithstanding any other provisions contained in the Indenture to the contrary, upon theoccurrence of an Event of Default, the rights and remedies of the Owners of the Bonds shall be subject tothe superior rights and priority of the owners of any Senior Debt then outstanding with respect to theSales Tax Revenues attributable to the 0.6% Sales Tax, if such Event of Default also constitutes an eventof default under the Senior Bond Resolution.

Qualifications of Trustee; Removal of Trustee

The Trustee and any successor to the Trustee must also serve as trustee under the Senior BondResolution, any Parity Bond Resolutions and any Parity Bond Indentures. Any successor Trustee isrequired to be a trust company or bank organized and in good standing under the laws of the United Statesor one of the states, duly authorized to exercise trust powers and subject to examination by federal or stateauthority and is required to have a reported capital and surplus of not less than $75,000,000.

So long as any Senior Debt remains outstanding, the Trustee and the Senior Debt Trustee must bethe same entity. The Trustee may be removed at any time by the District for any reason upon thirty daysprior written notice to the Trustee, but only upon the simultaneous removal of the Senior Debt Trustee inaccordance with the provisions of the Senior Bond Resolution. The Trustee may also be removed at anytime by an instrument or concurrent instruments in writing delivered to the Trustee and to the District andsigned by the Owners (or their attorneys in fact) of at least a majority in aggregate principal amount ofoutstanding Bonds, provided, however, that so long as any Senior Debt remains outstanding, suchremoval shall not be effective unless the owners of at least a majority in aggregate principal amount of theoutstanding Senior Debt consent to the simultaneous removal of the Senior Debt Trustee under the SeniorBond Resolution. If the owners of the Senior Debt remove the Senior Debt Trustee under the SeniorBond Resolution, the Trustee shall be deemed to have been removed under the Indenture. Upon anyremoval of the Trustee under the Indenture, the Trustee shall be deemed to be removed as trustee underthe Senior Bond Resolution, any Parity Bond Resolutions and any Parity Bond Indentures. No removalof the Trustee will be effective until the appointment of a successor Trustee under the Indenture.

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Amendment; Supplemental Indentures

The District and the Trustee may, without the consent of, or notice to, any of the Owners of theBonds, enter into a Supplemental Indenture for any one or more of the following purposes:

(a) to cure any ambiguity or formal defect or omission in the Indenture;

(b) to grant to or confer upon the Trustee for the benefit of the Owners of the Bonds anyadditional rights, remedies, powers or authorities that may lawfully be granted to or conferred upon theOwners of the Bonds or the Trustee;

(c) to subject to the Indenture additional revenues, properties or collateral;

(d) to modify, amend or supplement the Indenture in such manner as to permit thequalification of the Indenture under the Trust Indenture Act of 1939, as amended, or any similar federalstatute or to permit the qualification of the Bonds for sale under the securities laws of any of the states ofthe United States;

(e) in order to preserve or protect the excludability from gross income for federal income taxpurposes of interest on the Bonds; or

(f) to make any other amendment to the terms and provisions of the Indenture if suchamendment is necessary or desirable and is not materially adverse to the interests of the Owners of theBonds.

The Owners of not less than a majority in aggregate principal amount of the outstanding Bondswill have the right, from time to time, to consent to and approve the execution by the District and theTrustee of other Supplemental Indentures as the District deems necessary and desirable for the purpose ofmodifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisionsset forth in the Indenture, provided, however, that without the consent of the Owners of all the BondsOutstanding affected thereby, nothing in the Indenture permits or is to be construed as permitting:

(a) an extension of the maturity of the principal of, or the interest on, any Bond, or areduction in the principal amount of or the rate of interest on, any Bond, or a privilege or priority of anyBond or Bonds over any other Bond or Bonds, or the deprivation of the Owner of any Bond of the liencreated on the Pledged Revenues by the Indenture without the consent of the Owner of each Bondadversely affected thereby; or

(b) a reduction in the aggregate principal amount of the Bonds required for consent toadditional Supplemental Indentures, or the creation of any lien on the whole or any part of the PledgedRevenues, which is prior or superior to the lien of the Bonds, other than as created by the Indenture,without the consent of the Owners of all Bonds outstanding.

If at any time the District requests the Trustee to enter into any Supplemental Indenture requiringthe consent of the Owners of any Bonds, the Trustee is required, upon being satisfactorily indemnifiedwith respect to expenses, to give notice of the proposed execution of the Supplemental Indenture to theOwner of each Bond by first class mail. The notice is required to briefly set forth the nature of theproposed Supplemental Indenture and is required to state that copies of the notice are on file at thePrincipal Corporate Trust Office of the Trustee for inspection by all Owners of the Bonds. If, within 60days, or such longer period as is prescribed by the District following such notice, the Owners of therequisite aggregate principal amount of the Bonds outstanding at the time of the execution of any such

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Supplemental Indenture have consented to and approved the execution thereof as provided in theIndenture, no Owner of any Bond will have any right to object to any of the terms and provisionscontained in such Supplemental Indenture, or the operation thereof, or in any manner to question thepropriety of the execution thereof, or to enjoin or restrain the Trustee or the District from executing thesame or from taking any action pursuant to the provisions thereof.

Defeasance

Any Bond will, prior to the maturity or Redemption Date thereof, be deemed to have been paidunder the Indenture if: (i) in case such Bond is to be redeemed on any date prior to its maturity, theDistrict gives to the Trustee irrevocable instructions to give notice of redemption of such Bond on saidRedemption Date, such notice to be given in accordance with the provisions of the Indenture; and (ii) theDistrict has deposited in an Escrow Fund cash or Federal Securities or both in an amount sufficient(including the known minimum yield from Federal Securities in which such amount may be wholly orpartially invested) to pay when due the Debt Service Requirements due and to become due on such Bondon and prior to the Redemption Date or maturity date thereof, as the case may be, as evidenced by a reportof an independent firm of nationally recognized certified public accountants verifying the sufficiency ofthe Escrow Fund to pay the applicable Bonds in full on the Redemption Date or maturity date thereof, asthe case may be. The Federal Securities may not contain provisions permitting the redemption thereof atthe option of the obligor and shall become due or be callable at the option of the holder at or prior to therespective times on which the proceeds thereof shall be needed to pay such Debt Service Requirements.Neither such Federal Securities (or principal or interest payments received with respect thereto) normoneys placed in such Escrow Fund may be withdrawn or used for any purpose other than the payment ofthe Debt Service Requirements of such Bond and such Federal Securities or moneys are required to beheld in trust solely for the payment of such Debt Service Requirements of such Bond; provided, any cashreceived from the principal or interest payments on such Federal Securities if not then needed for suchpurpose shall, to the extent practicable, be reinvested in Federal Securities maturing at times and inamounts sufficient to pay when due the Debt Service Requirements to become due on such Bond on orprior to such Redemption Date or maturity date thereof, as the case may be. Any such Bond will nolonger be secured by or entitled to the benefits of the Indenture, except for the purpose of any paymentfrom such moneys or Federal Securities placed in such Escrow Fund.


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