The proposed restructuring costs the City $21.37 million on a present value basis which equates to $187.9 million more in debt service over 30 years (or approximately 11 cents in present value for every dollar paid). Most debt restructurings of this nature require additional debt service payments in order to provide lower annual payments and a more level debt service structure. This is like a bank offering to take all of your debt (consisting of credit card payments, mortgage, home equity loan, auto and other bank loans) which now costs you $5,000 per month and consolidating these loans into a repayment plan that only costs you $4,000 per month.

The chief benefit to the City is $16.5 million in FY2004 and $136 million of positive cashflow to City through FY 2013.

Please refer to section 6, pages 8 and 9 of the source document.

Not doing this restructuring will leave you and your children with unaffordable debt over the next 10 fiscal years. This proposed restructuring allows your children to experience affordable debt and the ability to borrow to improve the standard of living and the prosperity that as residents of Jersey City they deserve.

Please refer to the 8th page of Section 2 of the source document. Please note that the numbers shown in percentage format are the debt service ratios and are derived by dividing the debt service number by the miscellaneous revenue number for each year.

Of the $280 million in principal that this restructuring addresses, $78,960,000 of the Fiscal Year Adjustment Bonds are being restructured with a final maturity stretched out for an additional 15 years (from FY 2011 to FY 2026). The remainder of the bonds are being restructured to their present final maturity date. (The proposed restructured bonds is actually being extended 9.534 years, from 6.53 year avg. life to 16.077 year average life)

Please refer to the 1st page of Section 6 and Section 6, page 14 of the source document

The opposite is true. Without this restructuring there cannot and will not be any capacity to bond for new capital needs without multiple double digit increases in the City property tax levy. Please refer to the decrease in debt service to miscellaneous revenue ratio illustrated on the 8th page of Section 2 of the source document. Please note that the numbers shown in percentage format are the debt service ratios and are derived by dividing the debt service number by the miscellaneous revenue number for each year.

Clearly this shows that the debt/revenue ratio for the next 30 years will decrease below historical levels not seen for the past 15 years.

Of the $306,070,210 million in restructured principal, $144,990,000 would be structured on a taxable basis. The taxable portion of the restructuring is necessary to provide debt relief due to the lack of flexibility on that portion of the City’s outstanding debt. This lack of flexibility is a result of tax law, since the outstanding bonds are non-callable and therefore cannot be refinanced on a tax-exempt basis.

Please note that non-callable debt can never be financed for interest rate savings for the life of the bonds. Taxable bonds can be refinanced after 8 years for savings, dependant upon interest rates.

Logically, if under tax law you cannot restructure bonds on a tax-exempt basis, you must then restructure on a taxable basis. The taxable bonds would carry a higher rate than current tax-exempt debt, but in many cases current taxable rates are lower than historical tax-exempt rates. On an overall basis, the average coupon on the new bonds is the same as the average coupon on the old bonds. The average coupon of the new restructuring bonds is approximately 5%, compared to an average coupon of 4.98% on the old restructured bonds. The average coupon on the new tax-exempt bonds is approximately 4.5%, and approximately 5.2% on the new taxable bonds.

Please refer to Section 6, pages 8 and 14 of the source book.

You cannot have a bond insurer review or approve a plan until the City Council ratifies the Ordinance which is pending before you for approval. However, we have had ongoing discussions with the bond insurers and the rating agencies in which the bond insurers have assured us that if warranted, there is an appetite and capacity to insure these bonds.

THIS IS NOT A DEFICIT FINANCING, and therefore will not incur any new debt. Under the proposed restructuring, it is expected that the rating agencies and investor community will view this as a favorable stabilization of Jersey City’s long-term fiscal policy. Jersey City under it’s current debt obligations maintains a debt per capita ratio of $1,512 per capita and after this restructuring will maintain a debt ratio of $1,512 per capita.

Please refer to the 8th page of Section 2 of the source book. Please note that the numbers shown in percentage format are the debt service ratios and are derived by dividing the debt service number by the miscellaneous revenue number for each year.

48%, however the projected cash-flow savings for FY2004 is $6.5 million of the $16.5 million that can be saved. Without the cash-flow savings from the School Bonds, this would translate to a 12% increase in City property taxes levied in the Spring. In addition, this would mean a decrease of approximately $41 million in budget relief or an increase of $41 million needed through City tax levy increases over the next 10 years.

Please refer to the 7th page of Section 2 of the source book and the 3rd page of Section 1 of the presentation book dated December 1, 2003 and titled “ Restructuring Analyses of Jersey City’s Outstanding Debt (Without Restructuring the City’s School Bonds)”

Please refer to our response to question 5. The taxable portion of the restructuring is necessary to provide debt relief due to the lack of flexibility on that portion of the City’s outstanding debt. This is due to tax law, since the outstanding bonds are non-callable and therefore cannot be refinanced on a tax-exempt basis. It is important to note that an integral part of the proposed restructuring plan is to incorporate future flexibility through standard 8 to 10 year call features.

The answer to this question is supplied by the finance team’s bond counsel, which cannot be selected or engaged until the Bond Ordinance is approved by City Council. Under law, the proposed restructuring will not extend the average life of the bonds beyond the permissible average life of assets originally financed.

These bonds were issued by the City of Jersey City on behalf of the Jersey City Municipal Utilities Authority (“MUA”) and not issued by the MUA. Therefore the debt service on the water bonds is part of the City’s general obligation debt service and must be paid for out of City tax revenues.

Logically, if under tax law you cannot restructure bonds on a tax-exempt basis, the taxable bonds would carry a higher rate than current tax-exempt debt, but in many cases current taxable rates are lower than historical tax-exempt rates. On an overall basis, the average coupon on the new bonds is the same as the average coupon on the old bonds. The average coupon of the new restructuring bonds is approximately 5%, compared to an average coupon of 4.98% on the old restructured bonds. The average coupon on the new tax-exempt bonds is approximately 4.5%, and approximately 5.2% on the new taxable bonds.

Please refer to Section 6, pages 8 and 14 of the source book and also please refer to our response to question 6 on page 2 of this response.

Some relief can be accomplished with a smaller bond issue, however it would not provide the necessary budget relief needed by Jersey City to avoid an obligatory increase in the City’s property tax levy. The proposed restructuring provides the optimal amount of budget relief necessary to provide the City and its citizens with affordable debt and the ability to borrow to improve the standard of living and the prosperity that residents of Jersey City deserve.

The $3.7 million in costs of issuance includes over $1.5 million in bond insurance, which is economically beneficial to the proposed bond restructuring. The overall costs of issuance for the proposed restructuring is in line with standard costs for any general obligation tax-exempt transaction of this size.

Banc of America Securities (“BAS”) is not a west coast bank. Banc of America Securities is a national securities firm headquartered at 9 West 57th Street, NY, NY in New York City, with over 4,500 employees in the Tri-State area. In New Jersey, BAS currently has over 50,000 square feet of office space and over 1,000 employees call New Jersey home. This is without any completion of the proposed merger with Fleet Bank. BAS has assets of over $660 billion (as of 12/31/2002).

In choosing an investment bank to underwrite a deal of this size, you must look at the financial strength and capacity of the financial institution. In the selection of BAS as an investment bank we took into consideration their ability to underwrite the liability of this financing.

Of the $280 million in principal that this restructuring addresses, $78,960,000 of the Fiscal Year Adjustment Bonds are being restructured with extending the final maturity by 15 years (from FY 2011 to FY 2026). The remainder of the bonds are being restructured to their present final maturity date. (The proposed restructured bonds is actually being extended 9.534 years, from 6.53 year avg. life to 16.077 year average life)

Please refer to the 1st page of Section 6 and Section 6, page 14 of the source document

According to the current debt service schedules, the FYABs can only be paid off in the next 10 years with annual double-digit tax increases. Not doing this restructuring will leave you and other Jersey City property owners with unaffordable debt service over the next 10 fiscal years and rising tax rates. This proposed restructuring allows you and other property owners to afford the current debt obligations and preserves the ability to borrow to improve the standard of living and to increase the prosperity to Jersey City residents.

The proposed restructuring costs the City $21.37 million on a present value basis, which equates to $187.9 million more in debt service over 30 years (or approximately 11 cents in present value for every dollar paid). Most debt restructurings of this nature require additional debt service payments in order to provide lower annual payments and a more level debt service structure. As we have stated previously, this is like a bank offering to take all of your debt (consisting of credit card payments, mortgage, home equity loan, auto and other bank loans) which now costs you $5,000 per month and consolidating these loans into a repayment plan that only costs you $4,000 per month.

The chief benefit to the City is $16.5 million in FY2004 and $136 million of positive cash-flow to City through FY 2013.

Please refer to section 6, pages 8 and 9 of the source document.

The answer to this question is supplied by the finance team’s bond counsel, which cannot be selected or engaged until the Bond Ordinance is approved by City Council. Under law, the proposed restructuring can not extend the average life of the bonds beyond the permissible average life of assets originally financed.

It is the policy of the Cunningham administration to ensure the match of new liabilities to the life of the acquired assets. This is illustrated through our increasing use of leasing to acquire computers, vehicles, and other relatively short life assets. The proposed restructuring does follow this policy and would adhere to tax law.

This statement is unclear and does not apply to the restructuring.

This is not an election year. The restructuring plan represents a 30-year fiscal policy plan in which current property owners and future property owners will benefit from.

Please refer to the 8th page of section 2 of the source book. Please note that the numbers shown in percentage format are the debt service ratios and are derived by dividing the debt service number by the miscellaneous revenue number for each year.

With all due respect, the 2004 and 2005 graph submitted to us is incorrect. The current debt service in FY 2005 is $56.6 million and the proposed post restructuring debt service in FY 2005 is $42.16 million. This represents a 26% decrease in debt service under the restructuring.

With all due respect, the refinancing addresses the 25MM deficit of the City, which includes all contractual obligations and is exclusive of discretionary spending. Since the structural deficit includes other issues such as labor contracts, health benefits and litigation expense, the largest component of the deficit is debt service. This proposal reduces the largest structural expense that the City faces by $16.5 million for FY 2004 without increasing debt, reducing services or laying off police or fire personnel.

This is not an election year. The restructuring plan represents a 30-year fiscal policy plan in which current property owners and future property owners will benefit from.

Please refer to the 8th page of section 2 of the source book. Please note that the numbers shown in percentage format are the debt service ratios and are derived by dividing the debt service number by the miscellaneous revenue number for each year.

It is normal to have some debt service fluctuation in various years. However, the debt service in the period 1996 through 2003 is significantly higher on an annual basis than any debt service projected over the next 30 years. By example, the debt service in FY1996 was $56 million, FY2000 was $53.6 million, FY 2003 was in excess of $57 million, but was reduced to $47 million through refunding of debt service. However, the highest debt service projected after the restructuring is $49.5 million, which only occurs in FY 2017.

Please refer to the 8th page of section 2 of the source book. Please note that the numbers shown in percentage format are the debt service ratios and are derived by dividing the debt service number by the miscellaneous revenue number for each year.

The chief benefit to the City is $16.5 million in FY2004 and $136 million of positive cash-flow through FY 2013. The debt service will decrease by 27% in fiscal years 2004 through fiscal year 2013. The reason that the debt service increases by 25% in 2014 is due to the significant savings of 27% savings over the previous 10-year period. As a matter of fact, the proposed $44 million in debt service in FY 2014 is lower than the current debt service in any of the years from FY 2005 through FY 2011.

Without this restructuring there cannot and will not be any capacity to bond for new capital needs without multiple double digit increases in the City property tax levy. Please refer to the decrease in debt service to miscellaneous revenue ratio illustrated on the 8th page of Section 2 of the source document. Please note that the numbers shown in percentage format are the debt service ratios and are derived by dividing the debt service number by the miscellaneous revenue number for each year. Clearly this shows that the debt/revenue ratio for the next 30 years will decrease below historical levels not seen for the past 15 years.

Please see our response to question 12, page 6 and questions 1 and 4 on page 1. Please refer to the 8th page of section 2 of the source book. Please note that the numbers shown in percentage format are the debt service ratios and are derived by dividing the debt service number by the miscellaneous revenue number for each year.

This plan has future payments, which are all lower than the current debt service projected between FY 2005 and FY 2011. Please refer to the 8th page of section 2 of the source book. Please note that the numbers shown in percentage format are the debt service ratios and are derived by dividing the debt service number by the miscellaneous revenue number for each year.