HomeMy WebLinkAboutMINUTES - 02112003 - C82 Quint&Thimtnig LLP 12/18/02
(Walnut Creek SD CUB) 01/08/03
CONTRA COSTACOUNTY
RESOLUTION OF THE BOARD OF SUPERVISORS OF CONTRA COSTA COUNTY,
CALIFORNIA,PROVIDING FOR AUI`HOR17ATION OF ISSUANCE AND SALE OF
WALNUT CREEK SCHOOL DISTRICT GENERAL OBLIGATION BONDS,ELECTION
OF 2002,SERIES A,IN THE AGGREGATE PRINCIPAL AMOUNT OF$7AW,000
Resolution No.21103/99
RESOLVED, by the Board of Supervisors (the "Board") of Contra Costa County,
California (the "County"),as follows:
WHEREAS, a duly called special municipal election was held in the Walnut Creek
School District, Contra Costa County, California (the "District"), on November 5, 2002, and
thereafter canvassed pursuant to law; and
WHEREAS,at such election there was submitted to and approved by the requisite 55%
vote of the qualified electors of the District a question as to the issuance and sale of general
obligation bonds of the District for various purposes set forth in the ballot submitted to the
voters,in the maximum amount of $20,000,000 (the "Bonds") payable from the levy of an ad
valorem tax against the taxable property in the District; and
WHEREAS,the Board has received a resolution of the Board of Trustees of the District
requesting the issuance of the first series of Bonds in the aggregate principal amount of seven
million dollars ($7,000,000) (the "Series A Bonds") for the purpose of raising funds needed to
improve school facilities,including updating safety and security systems,building a new library
at Walnut Creek Intermediate,improving building exteriors and grounds for safety,updating the
technology infrastructure, renovating fields, for other projects listed in District's Project List
(the "Project") and for other authorized costs; and
WHEREAS, in its resolution, the District found and informed this Board that all acts,
conditions and things required by law to be done or performed have been done and performed
in strict conformity with the laws authorizing the issuance of general obligation bonds of the
District,and the indebtedness of the District, including this proposed issue of Series A Bonds,
is within all limits prescribed by law;
NOW, THEREFORE, BE IT RESOLVED by the Board of Supervisors of Contra Costa
County,State of California, as follows.-
Section
ollows:Section 1. P== of Series A Bonds. That for the purpose of raising money for real
property acquisition or improvements,namely: (a) for the purpose of raising funds needed for
the Project, and (b) to pay all necessary legal, financial, engineering and contingent costs in
connection therewith,the Board hereby authorizes the issuance of the Series A Bonds.
Section 2. Official Notice of Sale. The Official Notice of Sale for the Series A Bonds is
hereby approved,such notice to be substantially in accordance with the Official Notice of Sale
attached hereto as Exhibit A and by this reference incorporated herein (the "Official Notice of
Sale"). Said Official Notice of Sale and the Bid Form, attached hereto as Exhibit B and by this
reference incorporated herein,are hereby approved.
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have been based on actual attendance and no longer include excused absences. Revenue limit calculations
are made by each school district,reviewed by the County Office of Education and submitted to the State
Department of Education. The State Department of Education reviews the calculations for accuracy,
determines the amount of State apportionment owed to each school district and notifies the State Controller
to distribute the apportionments. The first calculation is performed for the First Principal Apportionment
in February, the second calculation for the Second Principal Apportionment in June, and the final
calculation for the end of the fiscal year Annual Principal Apportionment, in essence a correction that is
made in October of the next fiscal year.
See "DISTRICT INFORMATION"herein for the District's specific annual revenue limit per
A.D.A.
Basic Aid Districts
In the event that a school district's property tax revenue exceeds its calculated revenue limit
entitlement, that school district retains all of its property tax revenue and State apportionments to that
district are limited to the minimum"basic aid" amount of$120 per A.D.A. set forth in the Constitution.
Such districts are commonly known as "Basic Aid Districts." See "DISTRICT INFORMATION—•-
Average Daily Attendance and Revenue Limit"herein for the District's Basic Aid status.
State Budget
The State budget approval process begins with the release of the Governor's proposed budget for
the next fiscal year by January 10'to the State legislature. State fiscal years begin July l'`. In May,the
Governor submits a revision of the proposed budget that reflects updated estimates of revenues and
expenditures. After a series of public hearings and the other steps in the legislative process,the budget must
be approved by two-thirds vote in each house of the State legislature and submitted to the Governor. The
Governor may reduce or eliminate any appropriation through the line-item veto. Although the budget is
required by the Constitution to be approved no later than June 15',it often has not been approved until later.
While the Constitution in large part dictates the formulae for determining the allocation of State
revenues to the K-12 education portion of the State budget pursuant to Proposition 98 and other provisions
(see"CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING DISTRICT REVENUE
AND APPROPRIATIONS"herein),the Governor and State legislature still have significant leeway in
deciding whether and by how much to exceed or reduce such allocation in the actual funding of K-12 school
districts,and to decide what funds will be general purpose or restricted purpose,in the State budget process.
The 2002103 Budget Act, creating the State's budget for 2002/03, was signed into law on
September 5,2002. The 2002103 Budget Act identifies a$23.6 billion gap between State expenditures and
revenues that is addressed through a combination of program and personnel reductions,loans,fund shifts,
accelerations of revenue recognition, transfers and tax increases. Many of these steps are one time
adjustments that benefit 2002/03 by delaying the effect of parts of this gap until future years.
The 2002103 Budget Act reports general fund revenue and transfers-in of $71.428 billion for
2000/01 and projects $73.898 billion for 2001/02 and $79.158 billion for 2002/03. General fund
expenditures are reported as $78.052 for 2000/01, and projected to be $76.863 billion for 2001/02 and
$76.772 billion for 2002/03. Fiscal year end general fund balance is shown at$3.037 billion for 2000/01,
and is projected to be$72 million for 2001/02 and$2.508 billion for 2002/03.
Proposition 98 K-12 education funding allocations under the 200210.3 Budget Act,including local
property tax revenue, are projected at$38.3 billion for 2001/02 and$41.6 billion for 2002/03. Of'these
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amounts,$29.9 billion in 2001/02 and$30.8 billion in 2002/03 is projected to be funded by the State;the
difference is projected to be funded from local property tax revenue received by each school district. For
2001/02, Proposition 98 funding included a 3.87% cost of living adjustment (the "COLA") for school
district and county office of education revenue limit apportionments and categorical programs,and funding
ofa 1.51%increase in statewide enrollment. For 2002/03,the 2002-03 Budget Act includes a 2.00%COLA
(only 1.66%is mandated under Proposition 98 formula)for school district and county office of education
revenue limit apportionments and categorical programs, and funding of a 1.37% increase in statewide
enrollment. Proposition 98 K-12 funding per pupil is reported as$6,681 for 2000/01,and projected to be
$6,610 for 2001/02 and$7,067 for 2002/03,which,after adjusting for various deferrals,becomes$6,681,
$6,894 and$6,996 net,respectively.
On January 10,2003,the Governor proposed mid-year cuts to the 2002/03 Budget,and presented
a Proposed Budget for 2003/04. Significant reductions to education funding have been proposed for both
years. Implications for the District are still under review. For more information,refer to the State's website
at"www.dof.ca.gov",which is not a part of this Official Statement.
State Funding of School Construction
The State makes funding for school facility construction and modernization available to K-12
districts throughout the State through the Office of Public School Construction("OPSC") and the State
Allocation Board("SAB"), financed with the proceeds of State general obligation bonds authorized and
issued for this purpose. The older funding source is from bonds issued under a$6.7 billion authorization
for K-12 school facilities passed by over 62% of the State-wide vote in November 1998 under
Proposition 1A. The bonds available under this authorization have been issued,and the proceeds largely
have been distributed or committed. The newest funding source is from bonds authorized in the amount of
$13.05 billion,$11.40 billion of which is for K-12 school facilities and$1.65 billion of which is for higher
education facilities,passed by 58.9%of the State-wide vote on November 5,2002 under Proposition 47.
The SAB anticipates that bonds will be issued under the Proposition 47 authorization and funding made
available to K-12 school districts with approved projects early in 2003. The SAB will allocate Proposition
47 bond funds for 50% of approved new construction costs, 60%of approved modernization costs(80%
for modernization project applications made prior to February 1,2002),or 100%of approved costs of any
type if the district is approved for hardship funding. The school district is responsible for the costs not
funded by the State. School districts routinely apply for such funding whenever they have projects they
believe meet OPSC and SAB criteria for funding, often in order to be "in line" for future State bond
funding.
An additional bond measure for education capital projects has been approved by the State
legislature for submission to State voters in March 2004 in an authorization amount of$12.3 billion,$10.0
billion of which is for K-12 school facilities and$2.3 billion of which is for higher education facilities,and
requires approval by a majority of State voters to pass.
State Retirement Programs
School districts participate in the State of California Teachers Retirement System("STRS"). This
plan covers all full-time and most part-time certificated employees. In order to receive STRS benefits,an
employee must be at least 55 years old and have provided five years of service to California public schools.
School districts also participate in the PERS. This plan covers all classified personnel who are employed
at least four hours per day. In order to receive PERS benefits,an employee must be at least 50 years old
and have had five years of covered PERS service as a public employee.
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Contribution rates to these two retirement systems vary annually depending on changes in actuarial
assumptions and other factors,such as changes in benefits. The contribution rates are based on statewide
rates set by the STRS and PERS State retirement boards. STRS has a substantial State-wide unfunded
liability. Under current law, the liability is the responsibility of the State and not of individual school
districts. Since this liability has not been broken down by each school district,it is impossible to determine
each district's share. See"DISTRICT INFORMATION" herein for information regarding the District's
contributions to these retirement systems.
County Office of Education
In each county there is a county superintendent of schools (the "County Superintendent") and a
county board of education. The Office of the County Superintendent, frequently known as the "County
Office of Education"(the"County Office")provides the staff and organization that carries out the activities
of the County Superintendent and county board of education.
County Offices provide instructional and support services to school districts within their counties,
and various State mandated services county-wide, particularly in special education and juvenile court
education services. County Office business services departments act as a control point for a variety of
information,including pupil data collection,attendance accounting,teacher credential registration,payroll
accounting,retirement and tax information and school district budgets,and also report such information to
the State Department of Education.All school district budgets must be approved by their County Office and
each district must provide its County Office with scheduled interim reports throughout the fiscal year.
County Offices also act as enforcement entities which intervene in district fiscal matters should a district
fail to meet State budget and reporting criteria.
School District Budget Process
School districts are required by provisions of the State Education Code to maintain a balanced
budget each year,in which the sum of expenditures and the ending fund balance cannot exceed the sum of
revenues and the carry-over fund balance from the previous year. School districts' annual general fund
expenditures are characterized in large partby multi-year expenditure commitments such as union contracts.
Year-to-year fluctuations in State and local funding of school district general funds could result in revenue
decreases which, if large enough,may not easily be offset by an equal reduction in expenditures until at
least the following fiscal year. School districts are required by State law to maintain general fund reserves
which can be drawn upon in the event of a resulting excess of expenditures over revenues for a given fiscal
year. The State Department of Education imposes a uniform budgeting and accounting format for school
districts.
School districts must adopt a budget no later than June 30 of each year. The budget must be
submitted to the County Superintendent within five days of adoption or by July 1,whichever occurs first.
A district may be on either a dual or single budget cycle. The dual budget option requires a revised and
readopted budget by September 1 that is subject to State mandated standards and criteria. The revised
budget must reflect changes in projected income and expenses subsequent to July 1. The single budget is
only readopted if it is disapproved by the County Superintendent,or as needed.
For both dual and single budgets submitted on July 1,the County Superintendent will examine the
adopted budget for compliance with the standards and criteria adopted by the State Board of Education and
identify technical corrections necessary to bring the budget into compliance, and will determine if the
budget allows the district to meet its current obligations and is consistent with a financial plan that will
enable the district to meet its multi-year financial commitments. On or before August 15, the County
Superintendent will approve or disapprove the adopted budget for each school district. Pursuant to State
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law,the county superintendent has available various remedies by which to impose and enforce a budget that
complies with State criteria,depending on the circumstances,if a budget is disapproved.
Subsequent to approval,the County Superintendent throughout the fiscal year will monitor each
school district under his or her jurisdiction pursuant to its adopted budget to determine on an ongoing basis
if the district can meet its current or subsequent year financial obligations. If a County Superintendent
determines that a district cannot meet its current or subsequent year obligations,the County Superintendent
will notify the district's governing board of the determination and the County Superintendent may do either
or both of the following:(a)assign a fiscal advisor to enable the district to meet those obligations or(b)if
a study and recommendations are made and a district fails to take appropriate action to meet its financial
obligations,the County Superintendent will so notify the State Superintendent of Public Instruction, and
then may do any or all of the following for the remainder of the fiscal year: (i) request additional
information regarding the district's budget and operations; (ii)develop and impose, after also consulting
with the district's board,revisions to the budget that will enable the district to meet its financial obligations;
and(iii)stay or rescind any action inconsistent with such revisions. However,the County Superintendent
may not abrogate any provision of any collective bargaining agreement that was entered into prior to the
date upon which the County Superintendent assumed authority.
At minimum, school districts file with their County Superintendent and the State Department of
Education a First Interim Financial Report by December 15' covering financial operations from July 1
through October 31',and a Second Interim Financial Report by March 15'covering financial operations
from November 1 through January 31'. Section 42131 of the Education Code requires that each interim
report be certified by the school board as either (a) "positive," certifying that the district, "based upon
current projections,will meet its financial obligations for the current fiscal year and subsequent two fiscal
years," (b) "qualified," certifying that the district, "based upon current projections, may not meet its
financial obligations for the current fiscal year or two subsequent fiscal years,"or(c)"negative,"certifying
that the district, "based upon current projections, will be unable to meet its financial obligations for the
remainder of the fiscal year or the subsequent fiscal year."A certification by a school board may be revised
by the County Superintendent. If either the First or Second Interim Report is not "positive,"the County
Superintendent may require the district to provide a Third Interim Financial Report covering financial
operations from February Pt through April 30'by June 1'. If not required, a Third Interim Financial
Report is not prepared. Each interim report shows fiscal year to date financial operations and the current
budget,with any budget amendments made in light of operations and conditions to that point. After the
close of the fiscal year on June 30`x,an unaudited financial report for the fiscal year is prepared and filed
without certification with the County Superintendent and the State Department of Education.
Accounting Practices
The accounting policies of California school districts conform to generally accepted accounting
principles, as modified in accordance with policies and procedures of the California School Accounting
Manual. This manual,pursuant to Section 41010 of the Education Code,is to be followed by all California
school districts. Revenues are recognized in the period in which they become both measurable and available
to finance expenditures of the current fiscal period. Expenditures are recognized in the period in which the
liability is incurred. See also "Note V in "APPENDIX A"herein for further discussion of applicable
accounting policies.
County Investment Pool
In accordance with Education Code Section 41001,each California public school district maintains
substantially all of its operating funds in the county treasury of the county in which it is located,and each
county treasurer serves as ex officio treasurer for those school districts located within the county. Each
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county treasurer has the authority to implement and oversee the investment of school district funds held in
the county treasury. Generally,the county treasurer pools county funds with school district funds and funds
from certain other public agencies and invests the cash. These pooled funds are carried at cost. Interest
earnings are accounted for on either a cash or accrual basis and apportioned to pool participants on a regular
basis.
Each county treasurer is required to invest funds, including those pooled funds described above,
in accordance with Government Code Sections 53601 et seq. and 53635 et seq. In addition,each county
treasurer is required to establish an investment policy which may impose further limitations beyond those
required by the Government Code. A copy of the County investment policy and periodic reports on the
County investment pool are available from the County Treasurer-Tax Collector,Contra Costa County,625
Court Street, Room 100, Martinez, CA 94553, telephone (925) 646-4125; for more information see
"APPENDIX D — EXCERPTS FROM THE CONTRA COSTA COUNTY INVESTMENT
PORTFOLIO REPORT".
DISTRICT INFORMATION
The description in this section concerning District general operating and financial information is
provided as supplementary information only. It should not be inferred from the inclusion cif this information
that any of the matters discussed in this section affect in any way the obligation of the County on beha hof
the District to levy ad valorem taxes on taxable property within the District in an amount sufficient to pay
all amounts due on the Bonds.
General Information
The District includes most of the City of Walnut Creek,and the surrounding unincorporated area
of Contra Costa County and provides educational services to the residents of the City of Walnut Creek(the
"City"). The District operates five elementary(K-5)schools and one middle(6-8)school. The estimated
population of the District is 46,810.
The 2002/03 pupil-teacher ratios are expected to be as follows:
WALNUT CREEK ELEMENTARY SCHOOL DISTRICT
Pupil-Teacher Ratios
Grade patio
K through 3 20:1
4 through 8 22:1
Source: The District.
The District is governed by a Board of Trustees consisting of five members. Members are elected
to four-year terms in staggered years. The day-to-day operations are managed by a board-appointed
Superintendent of Schools. Michael DeSa has served in this capacity since 1994.
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Average Daily Attendance and Revenue Limit
The following table summarizes the historical and current year estimated average daily attendance
(A.D.A.)for the District.
WALNUT CREEK ELEMENTARY SCHOOL DISTRICT
Average Daily Attendance Second Period Report
Academic Year Average Daily Attendance
1998/99 3,180
1999/00 3,198
2000/01 3,192
2001/02 3,200
2002/03('> 3,248
Estimated.
Source: The District.
The District is not a Basic Aid District. The District's statutory base revenue limit per A.D.A.under
the State revenue limit formula was $ for 2001/02, and is projected to be
$ per A.D.A. for 2002/03. See "GENERAL SCHOOL DISTRICT FINANCIAL
INFORMATION---State Funding of School Districts"herein.
Labor Relations
Currently the District employs _ full-time equivalent (FTE) certificated employees, _ FTE
classified employees and_management employees. There are—formal bargaining units operating in
the District which are described in the table below.
WALNUT CREEK ELEMENTARY SCHOOL DISTRICT
Labor Organizations
Labor Organization plumber of E=loyees Contract Expiration()
Walnut Creek Education Association(certificated) June 30,
California Schools Employees Association(classified) June 30,
(a)(MAY NEED FOOTNOTE IF CONTRACT"IS STILL UNDER NEGOTIATION]
Source: The District.
See"—Comparative Financial Statements"below for historical comparison of salary expense
for the District.
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Retirement Programs
The District's contribution to SIRS for fiscal year 2001/02 was$886,966 and in fiscal year 2002/03
is estimated to be$ . The District's contribution to PERS for fiscal year 2001/02 was$0 and for
fiscal year 2002/03 is projected to be $ . See "GENERAL SCHOOL DISTRICT FINANCIAL
INFORMATION—State Retirement Programs"herein.
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Comparative Financial Statements
The table below summarizes the District's historical and current General Fund revenue,
expenditures, and fund balances from fiscal year 1998/99 through 2002/03. Year-end fund balance is
comprised of reserved and unreserved funds, including a reserve for economic uncertainty. (See
"APPENDIX All and the"Combined Balance Sheet"therein for further detail on the composition of the
June 30,2001 ending balance.)
The District's First Period Interim Report for fiscal year 2002/03 was certified as"positive."
WALNUT CREEK ELEMENTARY SCHOOL DISTRICT
General Fund Revenue,Expenditures and Fund Balances
1998199 through 2002/03
Budget
19981990) 1999/00W 2000/01(a) 2001/02(°) 2002/03()
REVENUE:
Revenue Limit Sources:
State Apportionment $ 2,152,804 $ 2,322,520 $ 2,517,475 $ 2,176,215
Local Sources 9,650,260 10,057,497 11,777,035 12,509,666
Federal 289,926 363,813 613,602 549,522
Other State 3,457,987 3,875,202 4,452,996 3,925,675
Other Local 1,134,414 905,317 1,622,952 1,132,831
TOTAL REVENUE 16,685,391 17,524,349 0 20,984,060 20,293,909
EXPENDITURES:
Salaries:
Certificated 8,528,184 9,073,846 11,321,728 10,907,956
Classified 2,198,434 2,501,107 3,307,453 3,143,680
Employee Benefits 2,397,699 2,518,726 3,320,035 3,342,130
Books and Supplies 569,542 779,652 1,050,398 1,012,743
Contract Services and Other Operating Expenses 1,636,801 1,516,216 1,803,460 1,957,407
Capital Outlay 546,109 469,484 264,800 110,000
Other 348,398 357,308 115,834 111,182
TOTAL EXPENDITURES 16,225,167 17,216,339 0 21,183,708 20,585,098
OTHER FINANCING SOURCES(USES)
Operating Transfers In 0 287,960 85,475 124,800
Operating Transfers Out (796,466} (295,912) (410,817) (348,178)
TOTAL OTHER FINANCING SOURCES (796,466) (7,952) 0 (325,342) (223,378)
EXCESS REVENUE OVER
(UNDER)EXPENDITURES (336,242) 300,058 0 (524,990) (514,567)
FUND BALANCE,JULY 1 $2,945,683 2,609,441 2,909,499 $011,589 3,486,599
FUND BALANCE,JUNE 30 2609 441 2 909 499 011 589 $3,486,599 $ 2.972,032
ca) Audited Financial Statements.
ro) District Budget as of December 2,2003.
Source: The District.
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Audit
Excerpts from the 2001/02 audited financial statements are included in APPENDIX A,herein.
The District is required to accept its annual audit at a public meeting no later than January 31st of the
following year. The District considers its audited financial statements to be documents of public record.
The District has not requested its auditors to review this Official Statement,nor have they done so.
Parcel Tax
On March 2001,66.9%of District voters authorized a qualified special tax. The District collects
$41 per parcel annually to be used for various educational program enhancements throughout the District.
The authorization expires in 2009. The District expects to collect parcel tax revenues of$ in
2002/03. See"CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING DISTRICT
REVENUE AND APPROPRIATIONS --Articles XIIIC and XIHD" and "—Future Initiatives"
herein.
District Debt
General Obligation Bonds.The Prior Bonds outstanding as of February 1,2003,are set forth in the
table below. See "THE BONDS —Authority for Issuance" and "THE BONDS—Debt Service"
herein.
WALNUT CREEK ELEMENTARY SCHOOL DISTRICT
Outstanding General Obligation Bonds
As of February 1,2003
Amount of Outstanding
Delivery Date Series Original Issue February 1.2003
8/16/95 Election of 1995,Series A $ 4,500,000 $ 3,130,0000}
2/12/97 Election of 1995,Series B 6,500,000 5,890,000(1)
8/19/98 Election of 1995,Series C 5,000,000 4,755,000
3/9/00 Election of 1995,Series D 5.000.000 4,890.000
$21,000,000 S18,665,000
Concurrent with the sale of the Bonds,these Prior Bonds are being refunded with 2003 Refunding General Obligation Bonds.
All debt service payments on the Prior Bonds, including refunding bonds currently being issues,
are payable from an ad valorem tax levied and collected by the County on assessed property in the District.
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Capital Leases. The District leases real property valued at $712,106 under an agreement that
provides for title to pass upon expiration of the lease period. Future minimum lease payments are as
follows:
WALNUT CREEK ELEMENTARY SCHOOL DISTRICT
Lease Payments
Year Ending June 30 Lease Payments
2003 $ 60,049
2004 120,099
20035 120,099
2006 120,099
Total Payments 420,346
Less amounts representing interest (36,075)
Present value of net minimum lease payments 384 71
The District will receive no sublease rental revenues nor pay any contingent rentals for this real
property.
Availability of Documents
Additional public documents will be made available upon request through the Business Office of
the District. Such public documents include periodic financial reports such as interim reports, approved
budget and audited financial statements. See "INTRODUCTION— Other Information" herein for
contact information.
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DISTRICT TAX. BASE INFORMATION
This section presents certain information concerning the property tax base in the District. For
general information on how ad valorem property tax is assessed, levied and collected, see "AD
VALOREM PROPERTY TAXATION"herein.
Assessed Valuation
The following table represents the five-year history of assessed valuation in the District. For more
information regarding how property is assessed in the State of California, see "AD VALOREM
PROPERTY TAXATION—Assessed Valuation"herein.
WALNUT CREEK ELEMENTARY SCHOOL DISTRICT
Assessed Valuation
Fiscal Year Local Secured ut li Unsecured Total
1998/99 $4,305,472,009 $280,650 $275,435,390 $4,581,188,049
1999/00 5,151,797,960 307,645 266,944,328 5,419,049,933
2000/01 5,555,619,599 307,645 284,191,687 5,840,118,931
2001/02 5,994,236,653 149,395 290,434,118 6,284,820,166
2002/03 6,433,572,941 149,395 289,735,085 6,723,457,421
Source: California Municipal Statistics,Inc.
The ad valorem property tax to pay debt service on the Bonds and the Prior Bonds is levied on total
assessed value of all taxable property within the District before deducting any redevelopment agency tax
increment. The District's general fund property tax revenue is a percentage of the County-wide 1%general
purpose tax rate levied on total assessed value of all taxable property within the District after deducting
redevelopment agency tax increment.
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Secured Tax Charges and(Delinquencies
The following table reflects the historical secured tax levy and year-end delinquencies for the
District.
WALNUT CREEK ELEMENTARY SCHOOL DISTRICT
Secured Tax Charges and Delinquencies
Fiscal Year Secured Tax CAmount Delinquent June 30 Percent Delinquent June 30
1997/98 $55,975,452.16 $512,589.12 0.92%
1998/99 60,217,254.62 499,111.94 0.83
1999/00 62,560,779.81 757,309.18 1.21
2000/01 67,800,554.91 432,044.60 0.64
2001/02 73,722,768.38 578,889.60 0.79
All taxes collected by the County within the District.
Source. California Municipal Statistics,Inc.
Under the Teeter Flan,the County funds the District its full tax levy allocation rather than funding
only actual collections(levy less delinquencies). In exchange,the County receives the interest and penalties
that accrue on delinquent payments,when the late taxes are collected. The County does include the secured
and unsecured ad valorem tax levy for the District's general obligation bonds under the Teeter Plan. See
"AD VALOREM PROPERTY TAXATION-Teeter Plan"herein.
Tax Rates
The following is a summary of tax rates for a representative tax rate area,TRA 09000,within the
District. TRA 09000 has a total 2002/03 assessed valuation of$3,885,519,097, approximately 57.8%of
the District's total assessed valuation. See "AD VALOREM PROPERTY TAXATION" for further
information on establishing tax rates.
WALNUT CREEK ELEMENTARY SCHOOL DISTRICT
Tax Rates -TRA09000
1998/99 1999/00 2000/01 2001/02 2002/03
County-wide Rate() 1.0000% 1.0000% 1.0000% 1.0000% 1.0000%
Service Area R-8 0.0066 0.0055 0.0054 0.0050 0.0046
Bay Area Rapid Transit 0.0167 - -
East Bay Regional Park District 0.0092 0.0088 0.0650 0.0072 0.0065
Acalanes High School District General
Obligation Bonds 0.0371 0.0278 0.0370 0.0340 0.0324
Walnut Creek Elementary School District
General Obligation Bonds 0.0221 0.0198 0.0231 0.2100 0.0199
Contra Costa Community College - 0.0040
TOTAL 1.0917 1.0619 1.0720 1.0672 1.0674
{`> Maximum rate for purposes other than paying debt service in accordance with Article XIHA of the State Constitution.
Source: California Municipal Statistics,Inc.
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Largest Taxpayers
The twenty largest taxpayers in the District, as shown on the 2002/03 secured tax roll, and the
amounts of their assessed valuations for all taxing jurisdictions within the District, are shown below.
WALNUT CREED ELEMENTARY SCHOOL DISTRICT
Largest Taxpayers
2002/03
Name Primary Land Use Assessed Valuation Percent of Total(')
First Walnut Creek Mutual Cooperatives-Rossmoor $ 187,905,967.00 2.92%
Second Walnut Creek Mutual Cooperatives-Rossmoor 144,760,085.00 2.25
Macerich Northwest Associates Shopping Center 88,980,087.00 1.38
California Plaza at Walnut Creek Inc. Office Building 74,388,599.00 1.16
Property California SCJLW One Corp. Office Building 65,006,539.00 1.01
Metropolitan Life Insurance Office Building 64,024,091.00 1.00
Fidelity Non-Profit Management Fund Office Building 57,972,382.00 0.90
Northwestern Mutual Life Insurance Co. Office Building 53,318,247.00 0.83
Spieker-Treat Towers LLC Office Building 48,234,000.00 0.75
Cornerstone Suburban Office Office Building 45,909,936.00 0.71
Bayconn LLC Apartments 44,833,706.00 0.70
Growers Square Inc. Office Building 43,991,495.00 0.68
Walnut Creek Properties Inc. Office Building 43,613,303.00 0.68
Security Capital Pacific Trust Apartments 43,592,676.00 0.68
1500 Bothelho LLC Shopping Center 38,849,400.00 0.60
MIP Walnut Creek LLC Hotel 37,791,120.00 0.59
Broadway Pointe Investors Shopping Center 30,959,747.00 0.48
Sierra Pacific Properties Office Building 30,948,094.00 0.48
Civic Executive Center Office Building 28,989,237.00 0.45
Manor Healthcare Corporation Convalescent Hospital 26.276.152.00 0.41
TOTAL $1,200,344,863.00 1-8.66-%
(m) Total Local Secured Assessed Valuation for 2002/03 $6,433,572,941
Source: California Municipal Statistics,Inc.
Statement of Direct and Overlapping Deist
Set forth below is a direct and overlapping debt report(the"Debt Report")prepared by California
Municipal Statistics, Inc. and dated as of March 1, 2003. The Debt Report is included for general
information purposes only. The District has not reviewed the Debt Report for completeness or accuracy
and makes no representation in connection therewith.
The Debt Report generally includes long-term obligations sold in the public credit markets by public
agencies whose boundaries overlap the boundaries of the District in whole or in part. Such long term
obligations generally are not payable from revenues of the District (except as indicated) nor are they
necessarily obligations secured by land within the District. In many cases long term obligations issued by
a public agency are payable only from the general fund or other revenues of such public agency. The first
column of the Debt Report lists local agencies with territory overlapping,at least in part,that of the District.
The second column shows the portion of each overlapping entity's debt assignable to property within the
boundaries of the District,and the third column shows the amount of that portion of the overlapping entity's
existing debt. The total amount of debt for each overlapping entity is not given.
31
The Debt Report also shows,at the tap,the grass assessed valuation,less any redevelopment agency
tax increment and the resulting net assessed valuation after deducting redevelopment agency tax increment.
WALNUT CREEK ELEMENTARY SCHOOL DISTRICT
Statement of Direct and Overlapping Dent
2002-03 Assessed Valuation: $6,723,457,421
Redevelopment Incremental Valuation: (425,525,848)
Adjusted Assessed Valuation: 6,297,931,573
Percent
DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: Applicable Debt 3/1/03
Contra Costa Community College District 7.115% $ 3,557,500
Acalanes Union High School District 41.232 31,985,621
Walnut Creek School District 100 18,665,000(')
East Bay Municipal Utility District 5.647 270,209
East Bay Regional Park District 3.181 5,104,869
Contra Costa County Service Area No.R-8 59.235 592,350
Contra Costa County Community Facilities District No.1991-1 7.23 313,059
Contra Costa County Reassessment District No.93-5 50 456,853
TOTAL GROSS DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT 60,945,461
Less: East Bay Municipal Utility District (270.209)
TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT 60,675,252
OVERLAPPING GENERAL FUND OBLIGATION DEBT:
Contra Costa County General Fund Obligations 7.109% 23,367,994
Contra Costa County Board of Education Certificates of Participation 7.109 20,006,503
Contra Costa County Mosquito Abatement District Certificates of Participation 7.109 170,616
Contra Costa Community College District Certificates of Participation 7.109 57,938
City of Walnut Creek General Fund Obligations 7.115 99,254
Pleasant Hill Recreation and Park District Certificates of Participation 54.342 1,149,333
TOTAL OVERLAPPING GENERAL FUND OBLIGATION DEBT 0.066 1.934
$44,853,572
GROSS COMBINED TOTAL DEBT $105,799,0331")
NET COMBINED TOTAL DEBT $105,528,824
Excludes general obligation bonds to be sold.
ro)Excludes tax and revenue anticipation notes,revenue,mortgage revenue and tax allocation bonds and non-bonded capital lease obligations.
Ratios to 2002-03 Assessed Valuation:
Direct Debt($18,665,000) .................................................0.28%
Total Gross Direct and Overlapping Tax and Assessment Debt ......................0.91%
Total Net Direct and Overlapping Tax and Assessment Debt .......................0.90%
Ratios to 2002-03 Assessed Valuation:
Gross Combined Debt .................................................... 1.68%
Net Combined Total Debt ................................................. 1.68%
STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/02: $0
Source: California Municipal Statistics,Inc.
32
ECONOMIC PROFILE
"ile the economics of the City and County and surrounding region influence the economics within
the District, only property within the District is subject to an unlimited ad valorem tax levy to pay debt
service on the Bonds.
Introduction
The District is located in the city of Walnut Creek in Contra Costa County.
Situated northeast of San Francisco,Contra Costa County is bounded by San Francisco Bay to the
west,the San Pablo Bay and the Sacramento River delta to the north,and by Alameda County on the south.
Ranges ofhills effectively divide Contra Costa County into three distinct regions. The western portion,with
its access to water,contains much of Contra Costa County's heavy industry. The central section is rapidly
developing from a suburban area into a major commercial and financial headquarters center. The eastern
part is also undergoing substantial change, from a rural, agricultural area, to a suburban region. Contra
Costa County has extensive and varied transportation facilities--ports accessible to ocean-going vessels,
railroads, freeways, and rapid transit lines connecting the area with Alameda County and San Francisco.
Population
The following table summarizes population figures for the City and for the County.
CITY OF WALNUT CREEK AND CONTRA COSTA COUNTY
Population
Year City of walnut Creek Contra Costa County
1980 53,643 656,380
1990 60,569 803,732
2000 64,296 948,816
2001 65,600 965,100
2002 65,900 981,600
Source: The 1980,1990 and 2000 totals are U.S.Census figures. The figures for the years 2001 and 2002 are based upon adjusted
January 1 estimates provided by the State.
33
Employment
The following table summarizes historical employment and unemployment in Contra Costa County.
CONTRA COSTA COUNTY
Civilian Labor Force,Employment and Unemployment
Annual Averages
1997 1998 1999 2000 2001
Civilian labor Forces')
Employment 453,200 462,600 475,300 490,400 493,100
Unemployment 1900 17,300 14,800 13,700 16,700
Total 472.800 479,900 490.100 504,100 509,800
Unemployment Rate(b 4.1% 3.6% 3.0% 2.7% 3.3%
Based on place of residence;March 2001 Benchmark.
ro> The unemployment rate is calculated using unrounded data.
Source: California Employment Development Department,Labor Market Information Division
The following table summarizes the historical numbers of workers by industry in Contra Costa
County.
CONTRA COSTA COUNTY
Estimated Number of Wage and Salary Workers by Industry(")
1997 1998 1999 2000 2901
Agricultural 1,100 900 1,300 2,200 2,400
Mining&Construction 22,100 23,300 26,300 28,000 29,800
Manufacturing 26,000 25,600 24,400 25,400 25,500
Transportation&Public Utilities 20,400 20,100 19,900 20,500 20,800
Wholesale Trade 11,300 11,000 12,100 12,300 12,200
Retail Trade 57,400 59,200 60,600 62,000 62,200
Finance,Insurance&Real Estate 27,900 28,100 28,500 28,400 30,100
Services 98,900 103,800 106,300 109,800 109,900
Government 45,600 45,500 47.200 48,200 49,600
Total All Industries 310,800 3171600 326.600 336,600 342,300
Does not include proprietors,self-employed,unpaid volunteers or family workers,domestic workers in households,and persons involved in
labor/management trade disputes. Employment reported by place of work. Items may not add to totals due to independent rounding. March
2001 benchmark.
Source: California Employment Development Department,Labor Market Information Division.
34
Major Employers
The following table summarizes the major employers in the City
CITY OF WALNUT CREEK
Major Employers
Number of
Employer Product/Service Errmlovees
Safeway Inc. Operates grocery stores&plants 1,100
Contra Costa Newspapers Inc. Publishes five daily newspapers 784
Bank of the West Bank 600
US Bank of California Consumer business&corporate banking;CRE&international banking services center 550
Verizon Wireless Inc. Mobile communication telephone services(rnarketing location) 500
Golden Rain Foundation of WC Residential property management services 350
Varian Inc. Manufactures analytical instruments for chromatography 330
Fresenius Medical Care NA Manufactures equipment&disposable products for the treatment of kidney failure by
hemodialysis&peritoneal dialysis 300
Teradyne Inc. Manufactures electronic automatic testers 260
Westaff Inc. Owns,operates&franchises temporary staffing services 211
Volt Services Group Job placement in technical,engineering 210
Montgomery Watson Americas Full environmental engineering,construction,technology&management company 200
Sklar Damich Inc. Employment staffing services 200
California Translation Intl Translation and interpreting service 200
Valley Waste Management Garbage collection&recycling(dispatch office) 175
Manorcare Health Services Skilled nursing facility 175
Source: 2002 Harris InfoSource.
35
The following table summarizes the major employers in Contra Costa County:
CONTRA COSTA COUNTY
Major Employers
Number of
1✓rrrploYer
Product/Service Emniovees"I
Kaiser Foundation Hospitals Medical&surgical hospital 5,285
ChevronTexaco Corp. Petroleum&chemical research;administrative offices 4,750
John Muir/Mt.Diablo Health Systems Regional trauma center for Contra Costa County 2,466
Contra Costa County Hospital Facilities Medical&surgical hospital services 1,500
Safeway hie. Operates grocery stones&plants 1,305
USS-Pasco Industries Produces cold-rolled,galvanized&tin plate sheet steel;steel,galvanized 1,200
Bio-Rad Laboratories Manufactures medical,scientific&industrial instruments 1,150
Ocular Sciences Inc. Manufacture contact lenses 1,031
Tenet Healthcare Corp. Medical hospital&outpatient hospital services 1,000
Doctors Medical Centers Community hospital 1,000
Martinez Refining Co. Manufactures gasoline,jet fuel,lubricants&petroleum products 400
Lesher Communications Inc. Newspaper publishing;letterpress&offset printing 800
Contra Costa Newspapers hie. Publishes five daily newspapers 787
Verizon Wireless Distributes&services cellular phones 762
ADP Claims Solutions Group Designs software for automotive body shops&insurance claims offices 750
QRS Corp. Applications service providers&software developers 700
Ladbrokes Casino San Pablo Gambling casino with show room 670
Ultramar Inc. Petroleum refining 670
Irwin Home Equity Corp. Bank;home equity loans 670
Pacific Bell Wired communication services 600
Bank of the West Bank 600
US Bank of California Consumer business&corporate banking;CRE&international banking services center 550
Sutter Delta Medical Hospital 535
California&Hawaiian Sugar Co. Refines household&industrial cane sugar 520
Dow Chemical Co. Manufactures disinfectants for personal care products 500
BEI Systron Donner Inertial Manufacturers inertial sensors&subsystems,solid-state rate sensors,rate gyroscopes
&inertail measurement units 500
Tosco Refining Co. Petroleum refining 500
Source: 2002 Harris InfoSource.
36
Construction Activity
The following table summarizes historical residential building permit valuation for the City and the
County.
CITY OF WALNUT CREEK AND CONTRA COSTA COUNTY
Residential Building Permit Valuation
(Dollars in Thousands)
City of Walnut Creek Contra Costa County
Year(') Units(e) Valuation(`) Units(s) Valuation(`)
1997 70 $13,056 3,464 $ 608,342
1998 293 53,377 4,142 738,939
1999 65 16,266 4,413 852,256
2000 116 30,310 5,479 965,154
2001 34 10,824 41920 921,370
As of January 1.
Does not include alterations and additions.
Includes all residential building activity.
Source: "California Building Permit Activity,"Economic Sciences Corporation.
Commercial Activity
The following table summarizes historical taxable transactions in the City and the County.
CITY OF WALNUT CREEK AND CONTRA COSTA COUNTY
Taxable Transactions
(Dollars in Thousands)
City of Walnut Creek Contra Costa County
Year Outlets Taxable Transactions Outlets Taxable Transactions
1996 2,591 $1,163,835 24,326 $ 8,575,704
1997 2,590 1,497,769 23,643 9,277,418
1998 2,530 1,747,401 23,093 10,093,690
1999 2,593 1,485,968 22,733 11,114,476
2000 2,481 1,671,753 22,674 12,330,560
2001 2,488 1,649,962 n.a. 12,256,721
Source: State Board of Equalization.
37
Median Household Income
Effective Buying Income(EBI)is defined as money income less personal income tax and non-tax
payments, such as fines, fees or penalties. The following table summarizes historical median household
EBI, for the City,County, State of California and United States of America.
CITY OF WALNUT CREEK,CONTRA COSTA COUNTY,
STATE OF CALIFORNIA AND UNITED STATES OF AMERICA
Median Household Effective Buying Income
Yea?') City of Walnut Creek Contra Costa County State of California United States of America
1998 $49,277 $48,476 $36,483 $34,618
1999 50,672 49,645 37,091 35,377
2000 52,056 53,234 39,492 37,233
2001 58,977 60,189 44,464 39,129
2002 55,285 56,507 43,532 38,365
t`> As of January 1.
Source: "Survey of Buying Power",Sales and Marketing Management Magazine.
LEGAL MATTERS
Tax Matters
In the opinion of Quint & Thimmig LLP, San Francisco, California, Bond Counsel, subject,
however to the qualifications set forth below,under existing law,the interest on the Bonds is excluded from
gross income for federal income tax purposes and such interest is not an item of tax preference for purposes
of the federal alternative minimum tax imposed on individuals and corporations,provided,however,that,
for the purpose of computing the alternative minimum tax imposed on corporations(as defined for federal
income tax purposes), such interest is taken into account in determining certain income and earnings.
The opinions set forth in the preceding paragraph are subject to the condition that the District
comply with all requirements of the Internal Revenue Code of 1986 (the "Code") that must be satisfied
subsequent to the issuance of the Bonds in order that such interest be,or continue to be,excluded from gross
income for federal income tax purposes. The District has covenanted to comply with each such
requirement. Failure to comply with certain of such requirements may cause the inclusion of such interest
in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds.
In the further opinion of Bond Counsel,interest on the Bonds is exempt from California personal
income taxes.
Owners of the Bonds should also be aware that the ownership or disposition of,or the accrual or
receipt of interest on,the Bonds may have federal or state tax consequences other than as described above.
Bond Counsel expresses no opinion regarding any federal or state tax consequences arising with respect to
the Bonds other than as expressly described above.
38
No Litigation
No litigation is pending concerning the validity of the Bonds,and a certificate or certificates to that
effect will be furnished to the initial purchaser of the Bonds at the time of the original delivery of the Bonds.
The District is not aware of any litigation pending or threatened questioning the political existence of the
District or contesting the District's ability to receive ad valorem taxes or to collect other revenues or
contesting the District's ability to issue and retire the Bonds.
Legality for Investment in California
Under provisions of the California Financial Code,the Bonds are legal investments for commercial
banks in California to the extent that the Bonds, in the informed opinion of the bank,are prudent for the
investment of funds of depositors,and under provisions of the California Government Code, are eligible
security for deposits of public moneys in California.
Legal Opinion
The validity of the Bonds and certain other legal matters are subject to the approving opinion of
Quint & Thimmig LLP, Bond Counsel. Bond Counsel undertakes no responsibility for the accuracy,
completeness,or fairness of this Official Statement.
MISCELLANEOUS
Rating(s)
Moody's Investors Service and Standard&Poor's have assigned their municipal bond ratings of
It 95 and ", respectively, to the Bonds with the understanding that, upon delivery of the Bonds, a
policy insuring the payment when due of the principal of and interest on the Bonds will be issued by
. Such ratings reflect only the views of such organizations and any desired
explanation of the significance of such ratings should be obtained from the rating agencies at the following
addresses: Moody's Investors Service,99 Church Street,New York,NY,10007;Standard&Poor's Ratings
Services,55 Water Street, 38th Floor,New York,NY 10041.
Generally, a rating agency bases its rating on the information and materials furnished to it(some
of which may not be included in this Official Statement)and on investigations,studies and assumptions of
its own. There is no assurance such rating will continue for any given period of time or that such rating will
not be revised downward or withdrawn entirely by the rating agency, if in the judgement of such rating
agency,circumstances so warrant. Any such downward revision or withdrawal of such rating may have an
adverse effect on the market price of the Bonds.
Underwriting
Pursuant to the terms of a public bid held on , as Underwriter (the
"Underwriter"),has agreed to purchase the Bonds from the District at the purchase price of$
plus accrued interest. The Underwriter has represented to the District that the Bonds were reoffered to the
public at the prices or yields set forth on the cover page of this Official Statement,at an aggregate reoffering
price of$ The Underwriter will be obligated to take and pay for all of the Bonds,if
any Bond is purchased.
39
Closing Papers
The District will furnish to the Underwriter, without charge, concurrently with payment for and
delivery of the Bonds,the following closing papers,each dated the date of such delivery:
(a) The opinion of Quint&Thimmig LLP,San Francisco,California,Bond Counsel,
substantially in the form attached as APPENDIX B hereto;
(b) The tax certificate of the District containing certifications and covenants relied
upon by Bond Counsel in rendering its opinion that the interest on the Bonds is
exempt from federal income taxation;
(c) The certificate on behalf of the District certifying that there is no litigation pending
affecting the validity of the Bonds;
(d) The Certificate of an appropriate District official,acting on behalf of the District
solely in his or her official and not in his or her personal capacity,certifying that
at the time of the sale of the Bonds and at all times subsequent thereto up to and
including the time of delivery of the Bonds to the initial purchasers thereof,to the
best knowledge and belief of said Official,this Official Statement(excluding the
description of the DTC and its book-entry system, information relating to a
municipal bond insurance policy, if any, and the provider thereof, information
provided by the Underwriter relating to the underwriting and the reoffering of the
Bonds, and information relating to the investment of District funds,provided by
the County Treasurer-Tax Collector), did not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein,in light of the circumstances under which they were made,not misleading;
(e) The signature certificate of the officials of the County certifying that said officials
have signed the Bonds, whether by facsimile or manual signature, and that they
were duly authorized to do so; and
(f) The receipt of the Treasurer-Tax Collector of the County for the purchase price of
the Bonds,including interest accrued to the date of delivery thereof.
(g) The Continuing Disclosure Certificate of the District in substantially the form
shown in APPENDIX C attached hereto.
Continuing Disclosure
The District has covenanted for the benefit of the holders and beneficial owners of the Bonds to
provide to any person upon written request certain financial information and operating data relating to the
District by not later than nine months following the end of the District's fiscal year(the"Annual Report"),
commencing with the Annual Report for the 2002/03 Fiscal Year, which is due no later than March 31,
2004, and to provide notices of the occurrence of certain enumerated events, if material. Currently, the
District's Fiscal Year ends on June 30 of each year. The Annual Report will be filed by the District with
each Nationally Recognized Municipal Securities Information Repository("NRMSIR")and with the state
information repository, if any. The notices of material events will be filed by the District with each
NRMSIR or with the Municipal Securities Rulemaking Board, and with the state information repository,
if any. The specific nature of the information to be contained in the Annual Report or the notices of
material events is set forth below under the caption"APPENDIX C—Form of Continuing Disclosure
40
Certificate." These covenants have been made to assist the Underwriter in complying with S.E.C.
Rule 15c2-12(b)(5). The District has never failed to comply in all material respects with any previous
undertakings with regard to said Rule to provide annual reports or notices of material events.
Financial Advisor
The District has entered into an agreement with Kelling,Northcross &Nobriga(the "Financial
Advisor"),A Division of Zions First National Bank,whereunder the Financial Advisor provides financial
recommendations and guidance to the District with respect to preparation and sale of the Bonds. The
Financial Advisor has read and participated in the drafting of certain portions of this Official Statement and
has supervised the completion and editing thereof. The Financial Advisor has not audited,authenticated
or otherwise verified the information set forth in the Official Statement, or any other related information
available to the District,with respect to accuracy and completeness of disclosure of such information,and
the Financial Advisor mares no guaranty, warranty or other representation respecting accuracy and
completeness of the Official Statement or any other matter related to the Official Statement.
Additional Information
The purpose of this Official Statement is to supply information to prospective buyers of the Bonds.
Quotations from and summaries and explanations of the Bonds, the Resolution providing for issuance of
the Bonds, and the documents, statutes and constitutional provisions referenced herein,do not purport to
be complete, and reference is made to said documents, statutes, and constitutional provisions for full and
complete statements of their provisions. This Official Statement has been reviewed and approved by the
District.
WALNUT CREEK ELEMENTARY SCHOOL DISTRICT
By:
Superintendent
41
APPENDIX A
EXCERPTS FROM 2001/02 AUDITED FINANCIAL STATEMENTS
A- 1
APPENDIX B
PROPOSED FORM OF LEGAL OPINION
B- 1
AI'P'ENDIX C
FORM OF CONTINUING DISCLOSURE CERTIFICATE
C- 2
APPENDIX D
EXCERPTS FROM THE
CONTRA COSTA COUNTY INVESTMENT PORTFOLIO REPORT
D- 1
In accordance with Education Code Section 41001, and Government Code 53600, et seq., school
districts in the State maintain substantially all operating funds in the treasuries of the counties in which the
school districts are located. Each county is required to invest such funds in accordance with Government
Code 53601, et seq. In addition, counties have established their own investment policies which are
generally intended to outline further limitations beyond those required by the Government Code.
The following information has been provided by the Treasurer of the County for inclusion in the
Official Statement. The District tabes no responsibility for the accuracy or completeness thereof. Further
information may be obtained by contacting the County Treasurer.
The Treasurer accepts funds only from agencies located within the County for investment in the
Pool. As of June 30, 2002, the total investment pool equaled $1,525,358,622 and the fair value was
$1,531,273,817.
The following table summarizes the composition of the Pool as of June 30,2002.
CONTRA COSTA COUNTY INVESTMENT POOL
PORTFOLIO COMPOSITION
Percent of Total
Type of Investment Cost Value Fair Value (Cost Value)
U.S.Treasuries(STRIPS,Bills,Notes) $ 10,047,505.45 $ 11,355,140.65 0.66%
U.S.Agencies 215,970,497.48 217,562,922.49 14.15
Money Market Instruments 532,976,858.37 533,686,031.95 34.95
Local Agency Investment Fund 545,667,292.52 547,184,326.17 35.77
Other 151,725,141.17 152,514,069.20 9.95
Cash 68,971.326.61 68,971,326.61 4.52
TOTAL $1.525,358,621.60 $1.531,273,817.07 100.00%
As of June 30, 2002,the weighted average maturity of the Contra Costa County Investment Pool
was 64 days. The following table summarizes the maturity structure of the Pool.
CONTRA COSTA COUNTY INVESTMENT POOL
PORTFOLIO MATURITY STRUCTURE
_2402}
Percent of Total
Term of Maturity Cost Value (Cost Value)
Maturities Less than I year 1,426,345,586 93.52%
Maturities 1 to 2 years 67,098,966 4.40
Maturities 2 to 3 years 20,502,742 1.34
Maturities 3 to 4 years 3,578,686 0.23
Maturities 4 to 5 years 6,922,323 0.45
Maturities Greater than 5 yearsW 910,137 0.06
TOTAL $1525,358,622 100.00%
ca> Represents bond proceeds of school districts
D-2
The County reports that it is current practice for the Treasurer to mark the portfolio to market on
a monthly basis. Such evaluations are performed by the County. The County expects the Fool will have
sufficient liquid funds to meet disbursement requirements of Pool participants for the next six months.
D-3
Section 3. Publication-of Notice of Inteniszn to Sell Bonds. The Clerk of the Board is
hereby authorized and directed to cause to be published, once a week for two (2) successive
weeks,the Notice of Intention to Sell Bonds in substantially the form attached hereto as Exhibit
C,in a newspaper published and of general circulation in the County. The Clerk of the Board is
hereby authorized and directed to cause to be published,once at least fifteen (15) days prior to
the date to receive bids,the Notice of Intention to Sell Bonds in substantially the form attached
hereto as Exhibit D,in the Bond Buyer.
Section 4.Terms and Conditions of Sale.The Board hereby offers the Series A Bonds for
public sale on February 26, 2003, or as soon thereafter as practicable. Consent is hereby given
for lions First National Bank, the parent company of Kelling, Northcross & Nobriga, the
District's financial advisor,to submit a bid for purchase of the Series A Bonds and to acquire or
participate in the purchase of the Series A Bonds.The terms and conditions of the offering and
the sale of the Series A Bonds shall be as specified in said Official Notice of Sale.
Section 5. Fumishine of Official Notice of Sale.The Secretary of the Board of Trustees of
the District and the financial advisor to the District, Kelling, Northeross & Nobriga (the
"Financial Advisor"), are hereby authorized to cause to be furnished to prospective bidders a
reasonable number of copies of said Official Notice of Sale(including the Bid Form).
Section 6. General Authorizati n. The Treasurer-Tax Collector of the County or his
designee(the "Treasurer-Tax Collector")is hereby authorized and directed to open the bids at
the time and place specified in said Official Notice of Sale, to cause said bids to be examined
for compliance with said Official Notice of Sale,to cause computations to be made as to which
bidder has bid the lowest total true interest cost as provided in said Official Notice of Sale, and
to award the sale of the Series A Bonds to the best bidder within twenty-six (26) hours
following the time set for receipt of bids. Notwithstanding the foregoing sentence, however, in
the event that no acceptable bids are received for the sale of the Series A Bonds, then the
Treasurer-Tax Collector is authorized to proceed with the negotiated sale of the Series A Bonds
upon such terms and conditions as the Treasurer-Tax Collector shall deem advisable.
Section 7. Series A Bond Terms. The Series A Bonds shall be issued as fully registere&
Bonds,without coupons, in the denominations of $5,000 each or any integral multiple thereof,
and shall be dated as of March 1, 2003.
The Series A Bonds shall bear interest from the date of the Series A Bonds to maturity of
each of the Series A Bonds at a rate or rates not in excess of twelve percent (12%) per annum.
Interest shall be payable on March 1 and September 1 of each year (the "Interest Payment
Dates"),commencing March 1,2004,until the principal amount has been paid or provided for.
Each Series A Bond shall bear interest from the Interest Payment Date next preceding the date
of authentication thereof,unless (a) it is authenticated as of a business day following the 15th
day of the month immediately preceding any Interest Payment Date and on or before such
Interest Payment Date,in which event it shall bear interest from such Interest Payment Date, or
(b)it is authenticated on or before February 15, 2004, in which event it shall bear interest from
March 1, 2003.
The Series A Bonds shall mature(or,alternatively,be subject to mandatory sinking fund
redemption as hereinafter provided)on September 1 of the years and in the amounts as shown
below
-2-
Maturity Principal Maturity Principal
� ptember 1) Amours (Sttember 1 Amount
2004 2016
2005 2017
2006 2018
2007 2019
2008 2020
2009 2021
2010 2022
2011 2023
2012 2024
2013 2025
2014 2026
2015 2027
Section 8.Redemption of Series A Bonds.
(a) Optional Redemption. The Series A Bonds maturing on or before September 1, 2013,
shall not be subject to redemption prior to their respective stated maturities. The Series A
Bonds maturing on or after September 1,2014,shall be subject to redemption prior to maturity,
at the option of the District, from any available source of funds, on any date on or after
September 1, 2013, at a redemption price equal to the principal amount thereof together with
accrued interest thereon to the date fixed for redemption,without premium.
(b) Mandatory Sinking Fund Redemption. In the event and to the extent specified in the
bid of the winning bidder for the Series A Bonds, any maturity of Series A Bonds shall be
designated as "Term Bonds" and shall be subject to mandatory sinking fund redemption on
September 1 in each of the years set forth in such bid and in the respective principal amounts as
set forth in Section 7, at a redemption price equal to one hundred percent (1001%) of the
principal amount thereof to be redeemed (without premium), together with interest accrued
thereon to the date fixed for redemption. If some but not all of such Term Bonds have been
redeemed pursuant to the preceding subsection (a) of this Section 8, the aggregate principal
amount of such Term Bonds to be redeemed in each year pursuant to this subsection(b) shall be
reduced on a pro rata basis in integral multiples of $5,000, as shall be designated pursuant to
written notice filed by the District with the County and the Paying Agent (as defined in Section
10 hereof).
(c) Selection of Bonds for Redemption.If less than all of the Series A Bonds shall be called
for redemption,the particular Series A Bonds or portions thereof to be redeemed shall be called
in such order as shall be directed by the District and,in lieu of such direction,in inverse order of
their maturity. Within a maturity, the Paying Agent shall select the Series A Bonds for
redemption by lot; provided, however, that the portion of any Series A Bond to be redeemed
shall be in the principal amount of five thousand dollars ($5,000) or some integral multiple
thereof and that,in selecting Series A Bonds for redemption, the Paying Agent shall treat each
Series A Bond as representing that number of Series A Bonds which is obtained by dividing the
principal amount of such Series A Bond by five thousand dollars($5,000).
(d) Notice of Redemption. The Paying Agent shall give notice of the redemption of the
Series A Bonds at the expense of the District. Such notice shall specify: (a) that the Series A
Bonds or a designated portion thereof are to be redeemed,(b) the numbers and CUSIP numbers
of the Series A Bonds to be redeemed,(c)the date of notice and the date of redemption, (d) the
place or places where the redemption will be made, and (e) descriptive information regarding
the Series A Bonds including the dated date,interest rate and stated maturity date. Such notice
shall further state that on the specified date there shall become due and payable upon each
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Series A Bond to be redeemed,the portion of the principal amount of such Series A Bond to be
redeemed, together with interest accrued to said date, and redemption premium, if any, and
that from and after such date interest with respect thereto shall cease to accrue and be payable.
Notice of redemption shall be by registered or otherwise secured mail or delivery service,
postage prepaid, to the registered owner of the Series A Bonds, or if the registered owner is a
syndicate, to the managing member of such syndicate, to a municipal registered securities
depository and to a national information service that disseminates securities redemption
notices, and by first class mail, postage prepaid, to the District and County and the respective
owners of any registered Series A Bonds designated for redemption at their addresses
appearing on the Bond registration books, in every case at least thirty (80) days, but not more
than sixty (60) days,prior to the redemption date; provided that neither failure to receive such
notice nor any defect in any notice so mailed shall affect the sufficiency of the proceedings for
the redemption of such Series A Bonds.
(e) Partial Redemption of Bonds. Upon the surrender of any Series A Bond redeemed in
part only, the Paying Agent shall execute and deliver to the registered owner thereof a new
Bond or Bonds of like tenor and maturity and of authorized denominations equal in aggregate
principal amount to the unredeemed portion of the Series A Bonds surrendered. Such partial
redemption shall be valid upon payment of the amount required to be paid to suchregistered
owner and the County, the Paying Agent and the District shall be released and discharged
thereupon from all liability to the extent of such payment.
(f) Effect of Redemption. Notice having been given as aforesaid, and the moneys for the
redemption (including the interest to the applicable date of redemption) having been set aside
with the County for such purpose, the Series A Bonds to be redeemed shall become due and
payable on such date of redemption.
If on such redemption date, money for the redemption of all the Series A Bonds to be
redeemed as provided in this Section 8,together with interest to such redemption date, shall be
held by the Treasurer-Tax Collector so as to be available therefor on such redemption date, and
if notice of redemption thereof shall have been given as aforesaid, then from and after such
redemption date, interest with respect to the Series A Bonds to be redeemed shall cease to
accrue and become payable. All money held by or on behalf of the Treasurer-Tax Collector for
the redemption of Series A Bonds shall be held in trust for the account of the registered owners
of the Series A Bonds so to be redeemed.
All Series A Bonds paid at maturity or redeemed prior to maturity pursuant to the
provisions of this Section 8 shall be canceled upon surrender thereof and be delivered to or
upon the order of the County and the District.All or any portion of a Series A Bond purchased
by the County or the District shall be canceled by the Paying Agent.
Series A Bonds (or portions thereof), which have been duly called for redemption prior
to maturity under the provisions of this Resolution, or with respect to which irrevocable
instructions to call for redemption prior to maturity at the earliest redemption date have been
given to the Paying Agent,in form satisfactory to it, and sufficient moneys shall be held by the
Treasurer-Tax Collector irrevocably in trust for the payment of the redemption price of such
Bonds or portions thereof,all as provided in this Resolution, then such Series A Bonds shall no
longer be deemed outstanding and shall be surrendered to the Paying Agent for cancellation.
Section 9. Execution of Bonds. The Series A Bonds shall be signed by the manual or
facsimile signatures of the Chair of the Board, the Clerk of the Board and the Treasurer-Tax
Collector, and the seal of the County shall be reproduced thereon. No Series A Bond shall be
valid or obligatory for any purpose or shall be entitled to any security or benefit under this
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Resolution unless and until the certificate of authentication printed on the Series A Bond is
signed by the Paying Agent as authenticating agent,that the Series A Bond as authenticated has
been duly issued,signed and delivered under this Resolution and is entitled to the security and
benefit of this Resolution.
Section 10. Appointment of Paving Agent. The Board hereby appoints BNY Western
Trust Company, San Francisco, California, to act as the authenticating agent, bond registrar,
transfer agent and paying agent (collectively, the "Paying Agent") for the Series A Bonds. All
fees and expenses incurred for services of the Paying Agent shall be the sole responsibility of the
District.
(a) The Paying Agent may at any time resign and be discharged of the duties and
obligations created by this Resolution by giving at least 60 days' written notice to the District
and the Treasurer-Tax Collector. The Paying Agent may be removed at any time by an
instrument filed with such Paying Agent and the Treasurer-Tax Collector and signed by the
District. A successor Paying Agent shall be appointed by the District with the written consent
of the Treasurer-Tax Collector,which consent shall not be unreasonably withheld, and shall be
a bank or trust company organized under the laws of the state or any state of the United
States, a national banking association or any other financial institution, having capital stock
and surplus aggregating at least $50,000,000, and willing and able to accept the office on
reasonable and customary terms and authorized by law to perform all the duties imposed upon
it by this Resolution. Such Paying Agent shall signify the acceptance of its duties and
obligations hereunder by executing and delivering to the District and the Treasurer-Tax
Collector, a written acceptance thereof. Resignation or removal of the Paying Agent shall be
effective upon appointment and acceptance of a successor Paying Agent.
(b) In the event of the resignation or removal of the Paying Agent, such Paying Agent
shall pay over,assign and deliver any moneys held by it as Paying Agent to its successor, or, if
there is no successor,to the Treasurer-Tax Collector.In the event that for any reason there shall
be a vacancy in the office of the Paying Agent, the Treasurer-Tax Collector shall act as the
Paying Agent. The County shall promptly cause to be published at District expense in an
Authorized Newspaper the name and principal corporate trust office address of the Paying
Agent appointed to replace any resigned or removed Paying Agent.
Section 11.Pa'meet of Principal and Interest.The principal of and interest on.the Series
A Bonds shall be payable in lawful money of the United States of America without deduction
for the services of the Paying Agent.Principal shall be payable when due upon presentation and
surrender of the Series A Bonds at the principal corporate trust office of the Paying Agent.
Interest on a Series A Bond shall be paid on each Interest Payment Date by check or draft
mailed by first class mail to the person in whose name the Series A Bond was registered, and to
that person's address appearing on the Bond Register(as defined in Section 12 below) at the
close of business on the 15th day of the calendar month next preceding such Interest Payment
Date (a "Record Date").
Section 12.Bond Recistration and Transfer.If the book entry system is no longer in effect
as provided in Section 14,the District shall cause the Paying Agent to maintain and keep at its
principal corporate trust office all books and records necessary for the registration, exchange
and transfer of the Series A Bonds as provided in this Section(the"Bond Register").While such
book entry system is in effect, such books need not be kept, as the Series A Bonds will be
represented by one Bond for each maturity registered in the name of Cede&Co., as nominee for
DTC.
Subject to the provisions of Section 11 above,the person in whose name a Series A Bond
is registered on the Bond Register shall be regarded as the absolute owner of that Series A Bond
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for all purposes of this Resolution.Payment of or on account of the principal of and interest on
any Series A Bond shall be made only to or upon the order of that person, neither the District,
the County nor the Paying Agent shall be affected by any notice to the contrary, but the
registration may be changed as provided in this Section. All such payments shall be valid and
effectual to satisfy and discharge the District's liability upon the Series A Bonds, including
interest,to the extent of the amount or amounts so paid.
Any Series A Bond may be exchanged for Series A Bonds of a like maturity in any
authorized denomination, upon presentation and surrender at the office of the Paying Agent
designated for such purpose, together with a request for exchange signed by the registered
owner or by a person legally empowered to do so in a form satisfactory to the Paying Agent.
Any Bond may, in accordance with its terms, but only if the District determines to no longer
maintain the book entry only status of the Series A Bonds or if DTC determines to discontinue
providing such services and no successor securities depository is named or DTC requests the
District to deliver Bond certificates to particular DTC Participants, be transferred, upon the
books required to be kept pursuant to the provisions of this Section 12, by the person in whose
name it is registered,in person or by his duly authorized attorney,upon surrender of such Bond
for cancellation at the office of the Paying Agent, accompanied by delivery of a written
instrument of transfer in a form approved by the Paying Agent,duly executed.
Neither the District, the County nor the Paying Agent will be required: (a) to issue or
transfer any Series A Bonds during a period beginning with the opening of business on the 15th
calendar day next preceding either any Interest Payment Date or any date of selection of Series
A Bonds to be redeemed and ending with the close of business on the Interest Payment Date or
day on which the applicable notice of redemption is given,or(b)to transfer any Series A Bonds
which have been selected or called for redemption in whole or in part.
Section 13. Form of Bond.The Series A Bonds shall be in substantially the form set forth
in Exhibit E attached hereto and incorporated herein, allowing those officials executing the
Series A Bonds to make the insertions and deletions necessary to conform the Series A Bonds to
this Resolution and the winning bid for the Series A Bonds.
Section 14. Book-Entry System. Except as provided below, the owner of all of the Series
A Bonds shall be The Depository Trust Company, New York, New York ("DTC"), and the
Series A Bonds shall be registered in the name of Cede&Co.,as nominee for DTC. The Series A
Bonds shall be initially executed and delivered in the form of a single fully registered Series A
Bond for each maturity date of the Series A Bonds in the full aggregate principal amount of the
Series A Bonds maturing on such date.The County,the Paying Agent and the District may treat
DTC (or its nominee) as the sole and exclusive owner of the Series A Bonds registered in its
name for all purposes of this Resolution, and neither the County, the Paying Agent nor the
District shall be affected by any notice to the contrary. The County, the Paying Agent and the
District shall not have any responsibility or obligation to any participant of DTC (a
"Participant"),any person claiming a beneficial ownership interest in the Series A Bonds under
or through DTC or a Participant,or any other person which is not shown on the register of the
District as being an owner,with respect to the accuracy of any records maintained by DTC or
any Participant or the payment by DTC or any Participant by DTC or any Participant of any
amount in respect of the principal or interest with respect to the Series A Bonds. The County
and the District shall cause to be paid all principal and interest with respect to the Series A
Bonds only to DTC, and all such payments shall be valid and effective to fully satisfy and
discharge the District's obligations with respect to the principal and interest with respect to the
Series A Bonds to the extent of the sum or sums so paid. Except under the conditions noted
below,no person other than DTC shall receive a Series A Bond. Upon delivery by DTC to the
District of written notice to the effect that DTC has determined to substitute a new nominee in
place of Cede&Co.,the term "Cede & Co." in this Resolution shall refer to such new nominee
of DTC.
If the District determines that it is in the best interest of the beneficial owners that they
be able to obtain Series A Bonds and delivers a written certificate to DTC and the County to
that effect, DTC shall notify the Participants of the availability through DTC of Series A Bonds.
In such event, the County shall issue, transfer and exchange Series A Bonds as requested by
DTC and any other owners in appropriate amounts. DTC may determine to discontinue
providing its services with respect to the Series A Bonds at any time by giving notice to the
District and the County and discharging its responsibilities with respect thereto under
applicable law. Linder such circumstances (if there is no successor securities depository), the
County shall be obligated to deliver Series A Bonds as described in this Resolution. Whenever
DTC requests the District and the County to do so, the District and the County will cooperate
with DTC in taking appropriate action after reasonable notice to(a)make available one or more
separate Series A Bonds evidencing the Series A Bonds to any DTC Participant having Series A
Bonds credited to its DTC account or (b) arrange for another securities depository to maintain
custody of certificates evidencing the Series A Bonds.
Notwithstanding any other provision of this Resolution to the contrary, so long as any
Series A Bond is registered in the name of Cede &Co., as nominee of DTC, all payments with
respect to the principal and interest with respect to such Series A Bond and all notices with
respect to such Series A Bond shall be made and given,respectively, to DTC as provided as in
the representation letter delivered on the date of issuance of the Series A Bonds.
Section 15. Establishment of Funds and Accounts, Delivery of Series A Bonds.
Disposition of Proceeds of the Series A Bonds.
(a)Establishment of Funds and Accounts.
(i) Building Fund. A fund, to be known as the "Walnut Creek School District,
General Obligation Bonds, Election of 2002 Building Fund" (the "Building Fund"), has
heretofore been created and established within the County Treasury. Moneys deposited
therein shall be used solely for the purpose for which the Series A Bonds are being
issued. The interest earned on the moneys deposited to the Building Fund shall be
retained in the Building Fund and used for the purposes thereof.
(ii)Interest and Sinking Fund.A fund,to be known as the "Walnut Creek School
District, General Obligation Bonds, Election of 2002, Series A, Interest and Sinking
Fund" (the "Interest and Sinking Fund"), is hereby created and established within the
County Treasury,which fund shall be accounted for separate and distinct from all other
District and County funds.Moneys deposited therein shall be used only for payment of
principal and interest on the Series A Bonds.Any excess proceeds of the Series A Bonds
not needed for the authorized purposes set forth herein for which the Series A Bonds are
being issued shall be transferred to the Interest and Sinking Fund and applied to the
payment of principal and interest on the Series A Bonds at the direction of the District.
If, after payment in full of the Series A Bonds, there remain excess proceeds, any such
excess amounts shall be transferred to the general fund of the District. Notwithstanding
the foregoing provisions of this Section 15, any excess proceeds of the Series A Bonds
not needed for the authorized purposes set forth herein for which the Series A Bonds are
being issued shall be applied solely in a manner which is consistent with the
requirements of applicable state and federal tax law, including but not limited to the
requirements of federal tax law(if any) relating to the yield at which such proceeds are
permitted to be invested.
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(iii) Costs of Issuance Fund. There is hereby created the "'Walnut Creek School
District,General Obligation Bonds, Election of 2002, Series A, Costs of Issuance Fund"
(the"Costs of Issuance Fund"),which shall be held and maintained by the Paying Agent
as a separate fund, distinct from all other funds of the District. Amounts on deposit in
the Costs of Issuance Fund shall be disbursed for the purpose of paying all items of
expense directly or indirectly reimbursable to the District relating to the issuance,
execution and delivery of the Series A Bonds including, but not limited to, filing and
recording costs, settlement costs, printing costs, reproduction and binding costs, legal
fees and charges, fees and expenses of the Paying Agent, financial and other
professional consultant fees, costs of obtaining credit ratings, fees for execution,
transportation and safekeeping of the Series A Bonds and charges and fees in
connection with the foregoing ("Costs of Issuance"). Payment of the Costs of Issuance
shall be made only upon the receipt by the Paying Agent of a written request of the
District. Moneys on deposit in the Costs of Issuance Fund shall be invested in money
market mutual funds which are rated by Standard&Poor`s Ratings Services in one of its
two highest rating categories,including funds for which the Paying Agent,its affiliates or
subsidiaries provide investment, advisory or other management or administrative
services.Interest and earnings derived from the investment of amounts on deposit in the
Costs of Issuance Fund shall be retained therein until the Costs of Issuance Fund is
closed.On September 1,2003,all amounts remaining on deposit in the Costs of Issuance
Fund shall be withdrawn therefrom by the Paying Agent and transferred to the
Treasurer-Tax Collector of the County,for deposit in the Building Fund and the Costs of
Issuance Fund shall be closed.
(b)Delivery of Series A Bonds.The proper officials of the District shall cause the Series A
Bonds to be prepared and, following their sale, shall have the Series A Bonds signed and
delivered, together with a true transcript of proceedings with reference to the issuance of the
Series A Bonds, to the original purchaser upon payment of the purchase price in funds which
are immediately available to the Paying Agent
(c) Disposition of Proceeds of the Series A Bonds. On the date of delivery of the Series A
Bonds (the "Closing Date"), the proceeds of sale of the Series A Bonds shall be paid by the
original purchaser to the Paying Agent. The Paying Agent shall deposit or transfer all of such
amounts as follows.
(i)The Paying Agent shall transfer to the Treasurer-Tax Collector of the County,
for deposit in the Interest and Sinking Fund, an amount equal to the accrued interest on
the Series A Bonds paid by the original purchaser;
(ii)The Paying Agent shall deposit in the Costs of Issuance Fund the proceeds of
the Series A Bonds,required to pay the Costs of Issuance(as shall be designated by the
District on or prior to the Closing Date);and
(iii)The Paying Agent shall transfer the remaining proceeds of the Series A Bonds
to the Treasurer-Tax Collector of the County for deposit in the Building Fund.
(d) Unclaimed Moneys.Any money held in any fund or account created pursuant to this
Resolution, or by the Paying Agent in trust, for the payment of the principal of, redemption
premium,if any,or interest on the Series A Bonds remaining unclaimed for two years after the
principal of all of the Series A Bonds has become due and payable (whether by maturity or
upon prior redemption),shall be transferred to the Interest and Sinking Fund for the payment of
any outstanding bonds of the District payable from said fund; or, if no such bonds of the
District are at such time outstanding,said moneys shall be transferred to the general fund of the
District as provided and permitted by law.
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{e} Authorized Investments. The proceeds of the Series A Bonds may be invested in any
investments permitted by law to be made with moneys belonging to, or in the custody of, the
District,including,but not limited to,the Local Agency Investment Fund in the California State
Treasury and investment agreements, including guaranteed investment contracts, with a
financial entity whose long-term debt is rated by Moody's Investors Service and Standard &
Poor's Datings Services in one of their two highest rating categories, and whose short-term debt
is rated no lower than the corresponding level of rating category for such debt, and so long as
any such guaranteed investment contract is approved in writing by any municipal bond insurer
insuring the Series A Bonds. Any such investment agreement shall provide that the financial
entity shall deposit collateral with a third party in accordance with criteria established by
Moody's Investors Service and Standard&Poor's Datings Services in the event that the rating of
short-or long-term debt of the financial entity is downgraded below then-current requirements
of Moody's Investors Service and Standard & Poor's Ratings Services for such investment
agreements.
Section 16. Source of Pa, ment. There shall be levied by the County on all the taxable
property in the District, in addition to all other taxes, a continuing direct and ad valorem tax
annually during the period the Series A Bonds are outstanding in an amount sufficient to pay
the principal of and interest on the Series A Bonds when due,which moneys when collected will
be placed in the Interest and Sinking Fund of the District, which fund is irrevocably pledged for
the payment of the principal of and interest on the Series A Bonds when and as the same fall
due.The moneys in the Interest and Sinking Fund, to the extent necessary to pay the principal
of and interest on the Series A Bonds as the same become due and payable, shall be transferred
by the County to the Paying Agent,as paying agent for the Series A Bonds, as necessary to pay
the principal of and interest on the Series A Bonds.
Section 17. Necessary Acts and Conditions. This Board determines that all acts and
conditions necessary to be performed by the Board precedent to and in the issuing of the Series
A Bonds in order to make them legal, valid and binding general obligations of the District have
been performed and have been met, or will at the time of delivery of the Series A Bonds have
been performed and have been met, in regular and due form as required by law; that the full
faith,credit and revenues of the District are pledged for the timely payment of the principal of
and interest on the Series A Bonds; and that no statutory or constitutional limitation of
indebtedness or taxation will have been exceeded in the issuance of the Series A Bonds.
Section 18. Approval of Actions. Officers of the Board and County officials and staff
are hereby authorized and directed, jointly and severally, to do any and all things and to
execute and deliver any and all documents which they may deem necessary or advisable in
order to proceed with the issuance of the Series A Bonds and otherwise carry out, give effect to
and comply with the terms and intent of this Resolution. Such actions heretofore taken by such
officers,officials and staff are hereby ratified, confirmed and approved.
Section 19.Limited Liability.Notwithstanding anything to the contrary contained herein,
in the Series A Bonds or in any other document mentioned herein, neither the County nor the
Board shall have any liability hereunder or by reason hereof or in connection with the
transactions contemplated hereby and the Series A Bonds shall be payable solely from the
moneys of the District available therefor as set forth in Section lb hereof.
Section 20. Certified Copy to Auditor-Controller. The Clerk of the Board is hereby
directed to provide a certified copy of this Resolution to the Auditor-Controller of Contra
Costa County.
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Section 21. Effective Date. This Resolution shall take effect immediately upon its
passage.
I hereby certify that the foregoing resolution was duly adopted at a meeting of the Board
of Supervisors of Contra Costa County held on the 11th day of February,2005,by the following
vote:
AYES: Supervisors Gioia, Uilkema, Glover and DeSaulnier
NOES: None
ABSENT: Gerber
Chair,Board of Supervisors
I HEREBY CERTIFY THAT THIS IS A TRUE AND
CORRECT COPY OF AN ACTION TAKEN AND
ENTERED ON THE MINUTES OF THE BOARD OF
SUPERVISORS ON THE DATE SHOWN.
ATTESTE1.3
JOHN SWEETEN, CLERK OF THE BOARD
AND COUNTY ADMINISTRATOR
BY i�rltt�`�- ,-•.. ,DEPUTY
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EXHIBIT A
FORM OF NOTICE OF SALE
Exhibit A
Page 1
Quint&Thimmig LLP 12/18/02
01/08/03
OFFICIAL NOTICE OF SALE
$7,000,000
WALNUT CREEK SCHOOL DISTRICT
(Contra Costa County, California)
GENERAL OBLIGATION BONDS
ELECTION OF 2002, SERIES A
NOTICE IS HEREBY GIVEN that sealed or telecopied bid proposals for the purchase of
$7,000,000 aggregate principal amount of Walnut Creek School District (Contra Costa County,
California)General Obligation Bonds,Election of 2002,Series A (the "Bonds"),will be received by
the Treasurer-Tax Collector of Contra Costa County (the "Treasurer-Tax Collector") at the place
and up to the time below specified:
TIME:Wednesday,February 26,2003,at 9:00 A.M. (Pacific Time).
PLACE: Office of Kell ng, Northcross & Nobriga, 1333 Broadway, Suite 1000, Oakland,
California.
SUBMISSION OF BIDS: Bids may be Bids may be submitted (for receipt not later than the
time set forth above)electronically only through the I-Deal LLC BiDCOMP/PARTTY@ system. See
"FORM OF BID" herein. All bids must be accompanied by a good faith deposit as more fully
described below under the caption"GOOD FAITH DEPOSIT".
ISSUE; BOOK ENTRY. $7,000,009-consisting of fully registered Bonds, without coupons.
The Bonds will be dated as of March 1, 2003, and will be issued in minimum denominations of
$5,000. The Bonds will be issued in a book entry only system with no physical distribution of the
Bonds made to the public. The Depository Trust Company, New York, New York ("DTC"), will
act as depository for the Bonds which will be immobilized in its custody. The Bonds will be
registered in the name of Cede & Co., as nominee for DTC, on behalf of the participants in the
DTC system and the subsequent beneficial owners of the Bonds.
MATURITIES: The Bonds will mature, or be subject to mandatory sinking fund
redemption, on September 1 in each of the years and in the amounts, as set forth in the following
table.Each bidder is required to specify in its bid whether,for any particular year, the Bonds will mature or,
alternately,be subject to mandatory sinking fund redemption in such year:
23005.03
Maturity Principal Maturity Principal
(ftt 1) AmQimt {September it AmQunt
2004 2016
2005 2017
2006 2018
2007 2019
2008 2020
2009 2021
2010 2022
2011 2023
2012 2024
2013 2025
2014 2026
2015 2027
ADJUSTMENT OF PRINCIPAL AMOUNTS:The District reserves the right to increase or
decrease the principal amount of any maturity of the Bonds as the District deems advisable in
order to accomplish its financing objectives.No such adjustment will have the effect of altering the
basis upon which the best bid is determined.
INTEREST: The Bonds shall bear interest, calculated on a 30/360 day basis, at a rate or
rates to be fixed upon the sale thereof but not to exceed 12%per annum,payable semiannually on
each March 1 and September 1,commencing March 1,2004.
PAYMENT: Principal of the Bonds will be payable upon surrender at BNY Western Trust
Company, San Francisco, California (the "Paying Agent"). Interest on the Bonds will be payable
by check or draft mailed by first class mail to the owner at the address listed on the registration
books maintained by the Paying Agent for such purpose.
REGISTRATION: The Bonds will be issued as fully registered Bonds as to both principal
and interest.The Bonds will be issued in the book-entry system of The Depository Trust Company
of New York("'DTC"),and the ownership of the Bonds will be registered to the nominee of DTC.
OPTIONAL REDEMPTION:The Bonds maturing on or before September 1,2013,are not
subject to redemption prior to their respective stated maturities. The Bonds maturing on or after
September 1, 2014, are subject to redemption prior to maturity, at the option of the District,from
any available source of funds, on any date on and after September 1, 2013, at a redemption price
equal to the principal amount thereof together with accrued interest thereon to the date fixed for
redemption,without premium.
If less than all of the Bonds shall be called for redemption,the particular Bonds or portions
thereof to be redeemed shall be called in such order as shall be directed by the District and,in lieu
of such direction, in inverse order of their maturity. Within a maturity, the Paying Agent shall
select the Bonds for redemption by lot; provided, however, that the portion of any Bond to be
redeemed shall be in the principal amount of five thousand dollars ($5,000) or some integral
multiple thereof and that, in selecting Bonds for redemption, the Paying Agent shall treat each
Bond as representing that number of Bonds which is obtained by dividing the principal amount of
such Bond by five thousand dollars($5,000).
SINKING FUND REDEMPTION: Any bidder may, at its option,specify that one or more
maturities of the Bonds will consist of term Bonds which are subject to mandatory sinking fund
redemption in consecutive years immediately preceding the maturity thereof,as designated in the
bid of such bidder. In the event that the bid of the successful bidder specifies that any maturity of
Bonds will be term Bonds,such term Bonds will be subject to mandatory sinking fund redemption
-2-
on September 1 in each year so designated in the bid, in the respective amounts for such years as
set forth above under the heading "MATUR.rM," at a redemption price equal to the principal
amount thereof to be redeemed together with accrued interest thereon to the redemption date,
without premium.
PURPOSE: The Bonds are being issued for the purpose of raising money for real property
acquisition or improvements, namely: (a) for the purpose of raising funds needed to improve
school facilities,including updating safety and security systems,building a new library at Walnut
Creek Intermediate,improving building exteriors and grounds for safety,updating the technology
infrastructure,renovating fields,for other projects listed in District's Project List, and (b)to pay all
necessary legal, financial, engineering and contingent costs in connection therewith. The requisite
55% approval of the electors of the District cast at a special election held on November 5, 2002,
upon the question of issuing bonds in the aggregate amount of $20,000,000, was received. The
Bonds represent the first issue of such authorization
SECURITY: The Bonds are general obligations of the Walnut Creek School District. The
Board of Supervisors of Contra Costa County has the power and is obligated to levy ad valorem
taxes for the payment of the Bonds and the interest thereon without limitation as to rate or
amount upon all property within the District subject to taxation (except for certain classes of
personal property.)
MUNICIPAL BOND INSURANCE; BIDDER'S OPTION: The District has applied to
certain bond insurance companies for a commitment to issue a policy insuring the payment when
due of principal of and interest on the Bonds. In the event such a commitment is obtained prior to
the sale date, such information will be made available to bidders by such bond insurance
companies. In the event the District obtains a commitment for municipal bond insurance, each
bidder shall have the option to elect whether such insurance will be issued. In the event that the
winning bidder elects to obtain any policy of municipal bond insurance, the premium for such
insurance and the costs of any related ratings will be paid by the bidder, and neither the County
nor the District will have any responsibility for payment of such premium and costs.
TERMS OF SALE
INTEREST RATE:No rate of interest may be bid which exceeds 12%per annum.Each rate
bid must be a multiple of one-twentieth of one percent (1/20%) or one-eighth of one percent
(1/8%). No Bond shall bear more than one interest rate, and all Bonds of the same maturity shall
bear the same rate. Each Bond must bear interest at the rate specified in the bid from its date to its
fixed maturity date. The rate on any maturity or group of maturities shall not be more than 3%
higher than the interest rate on any other maturity or group of maturities.
FORM OF BID: Bids may be submitted electronically only through the I-Deal LLC
BiDCOMP/PARTTYC system. To the extent any instructions or directions set forth in
BiDCOMP/PARTTYQ conflict with this Notice of Sale, the terms of this Notice of Sale shall
control. For further information about BiDCOMP/PARr1`Y0, bidders may contact the financial
advisor to the District or BIDCOMP/PARITY0 at(212)404-8102.
THE DISTRICT RETAINS ABSOLUTE DISCRETION TO DETERMINE WHETHER ANY BID IS
TIMELY,LEGIBLE AND COMPLETE.NEI'T'HER THE DISTRICT,KELLING,NORTHCROSS&NOBRIGA,
FINANCIAL ADVISOR TO THE DISTRICT (THE -FINANCIAL ADVISOR") NOR QUINT & TSG
LLP ("BOND COUNSEL") TAKES ANY RESPONSIBILITY FOR INFORMING ANY BIDDER PRIOR TO
THE T 0 FOR RECEIVING BIDS THAT ITS BID IS INCOMPLETE,ILLEGIBLE OR NOT RECEIVED.
-3-
THE DISTRICT WILL ACCEPT BIDS IN ELECTRONIC FORM SOLELY THROUGH
BiDCOMP/PARITYO ON THE OFFICIAL BID FORM CREATED FOR SUCH PURPOSE. EACH
BIDDER SUBMITTING AN ELECTRONIC BID UNDERSTANDS AND AGREES BY DOING SO
THAT IT IS SOLELY RESPONSIBLE FOR ALL ARRANGEMENTS WITH BiDCOMP/PARITYC),
THAT THE DISTRICT NEITHER ENDORSES NOR EXPLICITLY ENCOURAGES THE USE OF
BiDCOMP/PARTTYCD AND THAT BiDCOMP/PARITYQ IS NOT ACTING AS AN AGENT OF
THE DISTRICT. INSTRUCTIONS AND FORMS FOR SUBMITTING ELECTRONIC BIDS MUST
BE OBTAINED FROM BiDCOMP/PARITYO AND THE DISTRICT ASSUMES NO
RESPONSIBILITY FOR ENSURING OR VERIFYING BIDDER COMPLIANCE WITH THE
PROCEDURES OF BiDCOMP/PARRITYV. THE DISTRICT SHALL ASSUME THAT ANY BID
RECEIVED THROUGH BiDCOMP/PARITY@ HAS BEEN MADE BY A DULY AUTHORIZED
AGENT OF THE BIDDER.
THE DISTRICT WILL MAKE ITS BEST EFFORTS TO ACCOMMODATE ELECTRONIC
BIDS, HOWEVER THE DISTRICT, THE FINANCIAL ADVISOR AND BOND COUNSEL
ASSUME NO RESPONSIBILITY FOR ANY ERROR CONTAINED IN ANY BID SUBMITTED
ELECTRONICALLY, OR FOR FAILURE OF ANY BID TO BE TRANSMITTED, RECEIVED OR
OPENED AT THE OFFICIAL TIME FOR RECEIPT OF BIDS. THE OFFICIAL TIME FOR RECEIPT
OF BIDS WILL BE DETERMINED BY THE DISTRICT AT THE PLACE OF BID OPENING AND
THE DISTRICT SHALL NOT BE REQUIRED TO ACCEPT THE TIME KEPT BY
BiDCOMP/PARITYQ AS THE OFFICIAL TIME.
AWARD: All bids must be for not less than all of the Bonds hereby offered for sale. Each
bid shall state that the bidder offers par and accrued interest to the date of delivery,the premium,
if any, and the rate or rates not to exceed those specified herein, at which the bidder offers to buy
said Bonds. The purchase price of the Bonds must be paid in funds which are immediately
available to the County. Each bidder shall state in his bid the total true interest cost in dollars,
which shall be considered informative only and not a part of the bid.
BEST BIDDER: The Bonds will be awarded to the responsible bidder or bidders offering
to purchase the Bonds at the lowest true interest cost to the District. The true interest cost of each
bid will be determined on the basis of the present value of the aggregate future semiannual
payments resulting from the interest rates specified by the bidder. The present value will be
calculated to the dated date of the Bonds (March 1, 2003) and will be based on the proposed bid
amount (par value plus any premium), excluding the accrued interest from the dated date to the
date of delivery of the Bonds. For the purpose of making such determination, it shall be assumed
that any Bond designated as term bonds by the bidder shall be deemed to be payable on the dates
and in the amounts as shown under the section entitled "MATURITIES" herein. Each bidder is
requested, but not required, to state in his bid the percentage true interest cost to the District,
which shall be considered as informative only and shall not be binding on either the bidder or the
District. The determination of the best bid by the District's financial advisor shall be binding and
conclusive on all bidders. The purchaser must pay accrued interest from the date of the Bonds to
the date of delivery computed on a thirty(30)day month,360-day year basis.
RIGHT OF CANCELLATION OF SALE BY DISTRICT:The District reserves the right,in
its sole discretion, at any time to cancel the public sale of the Bonds. In such event, the District
shall cause notice of cancellation of this invitation for bids and the public sale of the Bonds to be
communicated through the Bond Buyer Wire as promptly as practicable. However, no failure to
publish such notice or any defect or omission therein shall affect the cancellation of the public sale
of the Bonds.
RIGHT TO MODIFY OR AMEND: The District reserves the right,in its sole discretion,to
modify or amend this official Notice of Sale including,but not limited to, the right to adjust and
-4-
change the principal amount and principal amortization schedule of the Bonds being offered,
however, such modifications or amendments shall be made not later than 9:30 A.M., California
time, on the business day prior to the bid opening and communicated through the Bond Buyer
Wire.
RIGHT OF POSTP'ONEMEN'T BY DISTRICT: The District reserves the right, in its sole
discretion, to postpone, from time to time, the date established for the receipt of bids. Any such
postponement will be communicated through the Bend Buyer Wire not later than 9:30 A.M.,
California time, on the business day prior to any announced date for receipt of bids. If any date is
postponed, any alternative sale date will be announced via through the Bond Buyer Wire at least 24
hours prior to such alternative sale date. On any such alternative sale date,any bidder may submit
a sealed bid for the purchase of the Bonds in conformity in all respects with the provisions of this
Official Notice of Sale, except for the date of sale and except for the changes announced by
through the Bond Buyer Wire at the time the sale date and time are announced.
RIGHT OF REJECTION:The District reserves the right,in its sole discretion, to reject any
and all bids and to waive any irregularity or informality in any bid except that no bids will be
accepted later than 9:00 A.M.on the date set for receipt of bids.
PROMPT AWARD: Pursuant to authority granted by the Board of Supervisors, the
Treasurer-Tax Collector will take action awarding the Bonds or rejecting all bids not later than
twenty-six (26)hours after the expiration of the time herein prescribed for the receipt of proposals;
provided, that the award may be made after the expiration of the specified time if the bidder shall
not have given to said Board notice in writing of the withdrawal of such proposal.
PLACE OF DELIVERY, CANCELLATION FOR LATE DELIVERY: It is expected that
said Bonds will be delivered to DTC for the account of the successful bidder within twenty (20)
days from the date of sale thereof. The successful bidder shall have the right, at his option, to
cancel its obligation to purchase the Bonds if the Bonds are not tendered for delivery within sixty
(60)days from the date of the sale thereof,and in such event the successful bidder shall be entitled
to the return of the deposit accompanying his bid.
GOOD FAITH DEPOSIT: A Good Faith Deposit ("Deposit") in the form of a certified or
cashier's check or a Financial Surety Bond in the amount of $70,000 payable to the order of the
Contra Costa County Treasurer-Tax Collector,is required for each bid to be considered. If a check
is used, it must accompany the bid. If a Financial Surety Bond is used, it must be from an
insurance company licensed to issue such a bond in the State of California, and such bond must be
submitted to the District's Financial Advisor prior to the opening of the bids. The Financial Surety
Bond must identify each bidder whose Deposit is guaranteed by such Financial Surety Bond. If the
Bonds are awarded to a bidder utilizing a Financial Surety Bond,then such bidder must submit its
Deposit to the County in the form of a cashier's check(or wire transfer such amount as instructed
by the County or such financial advisor) not later than 12:30 P.M. California time on the next
business day following the award. If such Deposit is not received by that time, the Financial
Surety Bond may be drawn by the County to satisfy the Deposit requirement. The amount of the
Deposit will be applied as a credit towards the payment of the purchase price by the successful
bidder. If after the award of the Bonds, the successful bidder fails to complete its purchase on the
terms stated in its proposal, the full amount of the good faith deposit will be retained by the
County.
CHANGE IN TAX EXEMPT STATUS: At any time before the Bonds are tendered for
delivery, the successful bidder may disaffirm and withdraw his proposal if the interest received
by private holders from Bonds of the same type and character shall be declared to be taxable
income under present federal income tax laws, either by a ruling of the Internal Revenue Service
-5-
or by a decision of any federal court, or shall be declared taxable, or be requited to be taken into
account in computing federal income taxes (except alternative minimum taxes and environmental
taxes payable by corporations) by any federal income tax law enacted subsequent to the date of
this notice.
CLOSING PAPERS; BOND PRINTING: Each proposal will be understood to be
conditioned upon the District furnishing to the purchaser, without charge, concurrently with
payment for and delivery of the Bonds, the following closing papers, each dated the date of
delivery:
(a) The opinion of Quint & Thimmig LLP, San Francisco, California, Bond Counsel,
approving the validity of the Bonds and stating that, under existing law, interest on the Bonds is
excluded from gross income for federal income tax purposes and is not an item of preference for
purposes of the federal alternative minimum tax imposed on individuals and corporations;
however, noting that with respect to corporations, such interest is taken into account in
determining certain income and earnings for the purpose of computing the alternative minimum
tax imposed on such corporations, and that such interest is also exempt from personal income
taxes of the State of California under present state income tax laws. Other federal tax
consequences to holders of the Bonds, if any, are not addressed in the opinion. A copy of the
opinion of Bond Counsel, certified by facsimile signature of an official of the County, will be
printed on the back of each Bond. No charge will be made to the purchaser for such printing or
certification.
(b) A certificate of the District certifying that on the basis of the facts, estimates and
circumstances in existence on the date of issue, it is not expected that the proceeds of the Bonds
will be used in a manner that would cause the Bonds to be arbitrage bonds;
(c) A certificate of the County, signed by officers and representatives of the County,
certifying that the officers and representatives have signed the Bonds whether by facsimile or
manual signature,and that they were respectively duly authorized to execute the same;
(d) The receipt of the Treasurer-Tax Collector evidencing the receipt of the purchase price
of the Bonds,including interest accrued to the date of delivery thereof;
(e) A certificate of the District, certifying that there is no known litigation threatened or
pending affecting the validity of the Bonds;and
(f) A certificate of the District, signed by an officer of the District, acting in his official
capacity,to the effect that at the time of the sale of the Bonds, and at all times subsequent thereto
up to and including the time of the delivery of the Bonds, the Official Statement relating to the
Bonds did not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under which they were
made,not misleading.
CUSIP NUMBERS:It is anticipated that CUSIP numbers will be printed on the Bonds,but
neither the failure to print such numbers on any Bond nor error with respect thereto shall
constitute cause for a failure or refusal by the purchaser thereof to accept delivery of and pay for
the Bonds in accordance with the terms of the purchase contract. All expenses of printing CUSIP
numbers on the Bonds and the CUSIP Service Bureau charge for the assignment of said numbers
shall be paid by the successful bidder.
CERTIFICATION OF REOFFERING PRICE:The successful bidder shall be required,as a
condition to the issuance of the Bonds,to deliver to the District a certificate,in form and substance
-6-
satisfactory to Bond Counsel,stating (i) that, as of the date of award,the Bonds were expected to
be reoffered in a bona fide public offering, (ii) the initial offering price at which a substantial
amount(at least 10%)of each maturity of the Bonds were sold to the public, and (iii)that no Bonds
of a single maturity were offered at one price to the general public and at a discount from that
price to institutional or other investors.
CALIFORNIA DEBT AND INVESTMENT ADVISORY COMMISSION: The successful
bidder will be required, pursuant to State law, to pay any fees to the California Debt and
Investment Advisory Commission when due.
DTC FEES: All fees due DTC with respect to these Bonds shall be paid by the successful
bidder or bidders.
OFFICIAL STATEMENT: The District has caused to be prepared a Preliminary Official
Statement describing the Bonds in a form deemed final by the District within the meaning of Rule
15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended, except for certain information which is permitted under said Rule 15c2-12 to be omitted
from the Preliminary Official Statement. A copy of the Preliminary Official Statement will be
furnished upon request to Kelling, Northcross & Nobriga, 1333 Broadway, Suite 1000, Oakland,
CA 94612,telephone (510) 839-8200. The District will furnish to the successful bidder within seven
business days following the date of award, at no charge,not in excess of one hundred (100) copies
of the Official Statement for use in connection with any resale of the Bonds.
DISCLOSURE CERTIFICATE: The District will deliver to the purchaser of the Bonds a
certificate of an official of the District, dated the date of Bond delivery, stating that as of the date
thereof, to the best of the knowledge and belief of said official, the Official Statement does not
contain an untrue statement of a material fact or omit to state any material fact necessary in order
to make the statements made therein, in the light of the circumstances under which they were
made, not misleading, and further certifying that the signatory knows of no material adverse
change in the condition of the District which would make it unreasonable for the purchaser of the
Bands to rely upon the Official Statement in connection with the resale of the Bonds.
CONTINUING DISCLOSURE: In order to assist bidders in complying with S.E.C.1 Rule
15e2-12(b)(5), the District will undertake, pursuant to the resolution authorizing issuance of the
Bonds and a Continuing Disclosure Agreement, to provide annual reports and notices of certain
events. A description of this undertaking is set forth in the preliminary Official Statement and will
also be set forth in the final Official Statement.
Dated:February 10,2003
-7-
EXFHBIT B
FORM OF NOTICE OF INTENTION TO SELL BONDS
(Contra Costa Tunes)
Exhibit C
Page 1
Quint&Thimmig LLP 12/18/02
01/08/03
NO'T'ICE OF INTENTION TO SELL BONDS
$7,000,000
WALNUT CREEK SCHOOL DIST'RICT
(Centra Costa County, California)
GENERAL OBLIGATION BONDS
ELECTION OF 2002, SERIES A
NOTICE IS HEREBY GIVEN, pursuant to section 15146 of the California Education
Code, that the Board of Supervisors of Contra Costa County, California, invites bids for the
purchase of $7,000,000 aggregate principal amount of Walnut Creek School District (Contra
Costa County, California) General Obligation Bonds, Election of 2002, Series A (the "Bonds").
Bids will be received on
WEDNESDAY, FEBRUARY 26, 2003
at 9:00 A.M., at the office of Felling, Northcross & Nobriga, 1333 Broadway, Suite 1000,
Oakland, California, and the sale will be awarded by the Treasurer-Tax Collector of Contra
Costa County within 26 hours after the expiration of the time prescribed for the receipt of bids.
The sale of the Bonds will be conducted upon the terms and conditions set forth in the Official
Notice of Sale for the Bonds. Such Official Notice of Sale and the Preliminary Official Statement
describing the Bonds will be distributed to prospective bidders by the financial advisor to the
District, Felling, Northcross & Nobriga, 1333 Broadway, Suite 1000, Oakland, CA 94612,
telephone (510) 839-8200. Bids will be entertained only from bidders to whom such Official
Notice of Sale and Preliminary Official Statement have been distributed.
Dated:February 10,2003
['TO BE PUBLISHED IN THE CONTRA COSTA TIMES ON FEBRUARY 10,2003,AND
FEBRUARY 17,2003,TO BE ARRANGED BY QUINT AND THINMG LLP]
23005.03
EXHIBIT C
FORM OF NOTICE OF INTENT ION TO SELL BONDS
(Bond Buyer`)
Exhibit D
Page 2
Quint&Thimmig LLP 12/18/02
01/08/03
NOTICE OF INTENTION TO SELL BONDS
$7,000,000
WALNUT CREEK SCHOOL DISTRICT
(Contra Costa County, California)
GENERAL OBLIGATION BONDS
ELECTION OF 2002, SERIES A
NOTICE IS HEREBY GIVEN, pursuant to section 53692 of the California Government
Code, that the Board of Supervisors of Contra Costa County, California, invites bids for the
purchase of$7,000,000 aggregate principal amount of Walnut Creek School District (Contra Costa
County, California) General Obligation Bonds, Election of 2002, Series A (the "Bonds"). Bids will
be received on
WEDNESDAY, FEBRUARY 26, 2003
at 9:00 A.M., at the office of Kelling, Northcross & Nobriga, 1333 Broadway, Suite 1000, Oakland,
California, and the sale will be awarded by the Treasurer-Tax Collector of Contra Costa County
within 26 hours after the expiration of the time prescribed for the receipt of bids. The sale of the
Bonds will be conducted upon the terms and conditions set forth in the Official Notice of Sale for
the Bonds. Such Official Notice of Sale and the Preliminary Official Statement describing the
Bonds will be distributed to prospective bidders by the financial advisor to the District, Kelling,
Northcross & Nobriga, 1333 Broadway, Suite 1000, Oakland, CA 94612, telephone (510) 839-8200.
Bids will be entertained only from bidders to whom such Official Notice of Sale and Preliminary
Official Statement have been distributed.
Dated:February 10,2003
[TO BE PUBLISHED IN THE BOND BUYER ON FEBRUARY 10,2003,TO
BE ARRANGED BY QUINT AND TI-IMMG LLP]
23005.03
E HI[BTI'D
FORINT OF SERIES A BONDS
WALNUT CREEK SCHOOL DISTRICT
(Contra Costa County,California)
GENERAL OBLIGATION BONDS
ELECTION OF 2002,SERIES A
; »» T »DAED
_..»».».». C»L.W»S»-
September 1: March 1,
. ...»,. , ». »....
REGISTERED
..
OWNER: CEDE & CO.
PRINCIPAL AMOUNT: DOLLARS
The Walnut Creek School District (the "District") in Contra Costa County, California
(the "County"), for value received, promises to pay to the Registered Omer named above, or
registered assigns, the Principal Amount on the Maturity Date, each as stated above, and
interest thereon, calculated on a 30/360 day basis, until the Principal Amount is paid or
provided for at the Interest Rate stated above, such interest to be paid on March 1 and
September 1 of each year (the "Interest Payment Dates"), commencing March 1, 2004. This
Bond will bear interest from the Interest Payment Date next preceding the date of
authentication hereof,unless(a)it is authenticated as of a business day following the 15th day
of the month immediately preceding any Interest Payment Date and on or before such Interest
Payment Date,in which event it shall bear interest from such Interest Payment Date, or (b) it is
authenticated on or before February 15,2004,in which event it shall bear interest from March 1,
2003. Principal, interest and redemption premium (if any) are payable in lawful money of the
United States of America, without deduction for the paying agent services, to the person in
whose name this Bond is registered (the "Registered Owner") on the Register maintained by
BNY Western Trust Company, San Francisco, California (the "Paying Agent"). Principal and
any redemption premium is payable upon presentation and surrender of this Bond at the
principal corporate trust office of the Paying Agent.Interest is payable by check or draft mailed
by the Paying Agent on each Interest Payment Date to .the registered owner of this Bond by
first-class mail at the address appearing on the Register at the close of business on the 15th day
of the calendar month next preceding that Interest Payment Date(the"Record Date").
This Bond is one of a series of $7,000,000 of Bonds issued for the purpose of raising
money for real property acquisition or improvements, namely: (a) for the purpose of raising
funds needed to improve school facilities, including updating safety and security systems,
building a new library at Walnut Creek Intermediate, improving building exteriors and grounds
for safety, updating the technology infrastructure, renovating fields, for other projects listed in
District's Project List, and (b) to pay all necessary Iegal, financial, angkwering and contingent
costs in connection therewith. The requisite 55% vote of the electors of the District upon the
question of issuing Bonds in the amount of $20,000,000, cast at a special election held on
November 5, 2002, was received. The Board hereby authorizes the issuance of the Series A
Bonds pursuant to the resolution of the Board of Trustees of the District adopted on January
27, 2003 (the "District Resolution"), and the resolution of the County Board of Supervisors
Exhibit D
Page 1
adopted on February 11,2003 (the "Bond Resolution"). This Bond and the issue of which this
Bond is a part are payable as to both principal and interest from the proceeds of the levy of ad
valorem taxes on all property subject to such taxes in the District, which taxes are unlimited as
to rate or amount.
The Bonds of this issue are issuable only as fully registered Bonds in the denominations
of$5,000 or any integral multiple thereof.This Bond is exchangeable and transferable for Bonds
of other authorized denominations at the principal corporate trust office of the Paying Agent,
by the Registered Owner or by a person legally empowered to do so, upon presentation and
surrender hereof to the Paying Agent, together with a request for exchange or an assignment
signed by the Registered Owner or by a person legally empowered to do so, in a form
satisfactory to the Paying Agent,all subject to the terms,limitations and conditions provided in
the Bond Resolution. Any tax or governmental charges shall be paid by the transferor. The
District, the County and the Paying Agent may deem and treat the Registered Owner as the
absolute owner of this Bond for the purpose of receiving payment of or on account of principal
or interest and for all other purposes,and neither the District, the County nor the Paying Agent
shall be affected by any notice to the contrary.
The Bonds maturing on or before September 1,2013,are not subject to redemption prior
to their respective stated maturities. The Bonds maturing on or after September 1, 2014, are
subject to redemption prior to maturity,at the option of the District, from any available source
of funds, on any date on and after September 1, 2013, at a redemption price equal to the
principal amount thereof together with accrued interest thereon to the date fixed for
redemption,without premium.
[If applicable:]The Bonds maturing on September 1, 20__ (the "Term Bonds") are also
subject to mandatory sinking fund redemption on September 1 in the years,and in the amounts,
as set forth in the following table,at a redemption price equal to one hundred percent (100%) of
the principal amount thereof to be redeemed (without premium), together with interest accrued
thereon to the date fixed for redemption; provided, however, that if some but not all of the
Term Bonds have been redeemed pursuant to the preceding paragraph, the aggregate principal
amount of Term Bonds to-be redeemed under this paragraph shall be reduced on a pro rata
basis in integral multiples of $5,000, as shall be designated pursuant to written notice filed by
the District with the County and the Paying Agent.
Redemption Date Principal
Sey�tember 1AM
If less than all of the Bonds of any one maturity shall be called for redemption, the
particular Bonds or portions of Bonds of such maturity to be redeemed shall be selected by lot
by the District in such mariner as the District in its discretion may determine, provided,
however, that the portion of any Bond to be redeemed shall be in the principal amount of
$5,000 or some multiple thereof and that, in selecting Bonds for redemption, the Paying Agent
shall treat each Bond as representing that number of Bonds which is obtained by dividing the
principal amount of such Bond by $5,000. If less than all of the Bonds shall be called for
redemption, the particular Bonds or portions thereof to be redeemed shall be called in the
inverse order of their maturities,unless otherwise directed by the District.
The Paying Agent shall give notice of the redemption of the Bonds at the expense of the
District.Such notice shall specify: (a) that the Bonds or a designated portion thereof are to be
Exhibit D
Page 2
redeemed, (b) the numbers and CUS1P nuYribers of the Bonds to be redeemed, (c) the date of
notice and the date of redemption, (d) the place or places where the redemption will be made,
and(e)descriptive information regarding the Bonds including the dated date, interest rate and
stated maturity date. Such notice shall further state that on the specified date these shall
become due and payable upon each Bond to be redeemed, the portion of the principal amount
of such Bond to be redeemed, together with interest accrued to said date, the redemption
premium,if any,and that from and after such date interest with respect thereto shall cease to
r accrue and be payable.
Notice of redemption shall be by registered or otherwise secured mail or delivery service,
postage prepaid, to the registered owner of the Bonds, or if the original purchaser is a
syndicate, to the managing nvmAw of such syndicate, to a municipal registered securities
depository and to a national information service that disseminates securities redemption
notices and,by first class mail,postage prepaid, to the District, the County and the respective
Owners of any Bonds designated for redemption at their addresses appearing on the Bond
registration books, in every case at least 30 days, but not more than 60 days, prior to the
redemption date; provided that neither failure to receive such notice nor any defect in any
notice so mailed shall affect the sufficiency of the proceedings for the redemption of such
Bonds.
Neither the District, the County nor the Paying Agent will be required: (a) to issue or
transfer any Bond during a period beginning with the opening of business on the 15th calendar
day next preceding either any Interest Payment Date or any date of selection of any Bond to be
redeemed and ending with the close of business on the Interest Payment Date or a day on which
the applicable notice of redemption is given,or(b)to transfer any Bond which has been selected
or called for redemption in whole or in part
Reference is made to the Bond Resolution for a more complete description of the
provisions,among others,with respect to the nature and extent of the security for the Bonds of
this series, the rights, duties and obligations of the District, the County, the Paying Agent and
the Registered Owners, and the terms and conditions upon which the Bonds are issued and
secured. The owner of this Bond assents;by acceptance hereof, to all of the provisions of the
Bond Resolution.
It is certified and recited that all acts and conditions required by the Constitution and
laws of the State of California to exist,to be performed or to have been met precedent to and in
the issuing of the Bonds in order to make them legal,valid and binding general obligations of the
District, have been performed and have been met in regular and due form as required by law;
that payment in full for the Bonds has been received; that no statutory or constitutional
limitation on indebtedness or taxation has been exceeded in issuing the Bonds; and that due
provision has been made for levying and collecting ad valorem property taxes on all of the
taxable property within the District in an amount sufficient to pay principal and interest when
due,and for levying and collecting such taxes the full faith and credit of the District are hereby
pledged.
This Bond shall be not be valid or obligatory for any purpose and shall not be entitled to
any security or benefit under the Bond Resolution (described on the reverse hereof) until the
Certificate of Authentication below has been manually signed by the Paying Agent.
Unless this certificate is presented by an authorized representative of The Depository
Trust Company to the issuer or its agent for registration of transfer, exchange or payment, and
any certificate issued is registered in the name of Cede &Co. or such other name as requested
by an authorized representative of The Depository Trust Company and any payment is made
to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
Exhibit D
Page 3
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof,
Cede&Co.,has an interest herein.
IN WITNESS WHEREOF, the Walnut Creek School District, Contra Costa County,
California, has caused this Bond to be executed on behalf of the District and in their official
capacities by the manual or facsimile signatures of the Chair of the Board of Supervisors of
Contra Costa County, the Clerk of said Board of Supervisors and the Treasurer-Tax Collector
of Contra Costa County,and has caused the seal of the County to be affixed hereon, all as of
the date stated above.
[SEAL]
CONTRA COSTA COUNTY
By
Chair of the Board of Supervisors
By
Clerk of the Board of Supervisors
By
Treasurer-Tax Collector
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the Bond-Resolution referred to herein.
Date of Authentication:
BNY WESTERN TRUST COMPANY, as
Paying Agent
By
Authorized Signatory
Exhibit D
Page 4
FORM OF ASSIGNMENT
For value received,the undersigned do(es)hereby sell,assign and transfer unto
(Name,Address and Tax Identification or Social Security Number of Assignee)
the within Bond and do(es)hereby irrevocably constitute and appoint
attorney,to transfer the same on the registration books of the Paying Agent,with full power of
substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE:Signature(s)must be guaranteed by an eligible NOTICE: The signature(s) on this AsOgninent mist
guarantor. correspond with the name(s)as written on the face of
the within Bond in everyparticular, without
alteration or enlargement or any change whatsoever.
Exhibit D
Page 5
Quint&'1 hinimig LLP 12/18/02
01/03/03
WALNUT CREEK SCHOOL DISTRICT
RESOLUTION NO.02-03-13
RESOLUTION OF THE BOARD OF TRUSTEES OF THE WALNUT CREEK
SCHOOL DISTRICT REQUESTING THE BOARD OF SUPERVISORS OF
CONTRA COSTA COUNTY TO ISSUE AND SELL THE DISTRICT'S
GENERAL OBLIGATION BONDS,ELECTION OF 2002,SERIES A,IN THE
AGGREGATE PRINCIPAL AMOUNT OF$7,000,000
RESOLVED by the Board of Trustees (the "Board") of the Walnut Creek School District
(the "District"), Contra Costa County (the "County"), State of California;
WHEREAS, an election was duly and regularly held in the Walnut Creek School District
(the "District") on November 5, 2002, for the purpose of submitting to the qualified electors of
the District the question whether general obligation bonds should be issued in the aggregate
principal amount of$20,000,000 (the "Bonds"), at which more than 55% of the votes cast were
in favor of the issuance of the Bonds;
WHEREAS, the District wishes at this time to institute proceedings for the issuance and
sale of the first series of the Bonds in the aggregate principal amount of$7,000,000 for the
purpose of raising funds needed to improve school facilities, including updating safety and
security systems, building a new library at Walnut Creek Intermediate, improving building
exteriors and grounds for safety, updating the technology infrastructure, renovating fields, for
other projects listed in District's Project List (the "Project") and for other authorized costs; and
WHEREAS, section 15140 of the California Education Code (the "Education Code")
requires that general obligation bonds of the District shall be offered for sale by the board of
supervisors of the county,the county superintendent of which has jurisdiction over the District,
as soon as possible following receipt of a resolution adopted by the Board;
NOW, THEREFORE, IT IS RESOLVED, DETERMINED AND ORDERED by the Board
of Trustees of the Walnut Creek School District,as follows:
Section 1. Request. The Board hereby requests the Board of Supervisors of Contra Costa
County to issue the first series of the Bonds, to be designated the "Walnut Creek School District
(Contra Costa County, California) General Obligation Bonds, Election of 2002, Series A" (the
"Series A Bonds") in the aggregate principal amount of seven million dollars ($7,000,000) for
the purpose of raising money for the Project.
Section 2. Interest. The Series A Bonds shall bear interest at the rate of not to exceed
twelve percent (12%) per annum,which interest shall be payable on March 1 and September 1
in each year beginning March 1, 2004.
Section 3. Maturity. The Series A Bonds shall mature on September 1 in each year during
the term of the Series A Bonds, commencing September 1, 2004, in amounts specifically set forth
in the winning bid for the purchase of the Series A Bonds. The term of the Series A Bonds shall
not exceed twenty-five (25) years.
23005.03
Section 4. Sale. The Board hereby requests that the Board of Supervisors of the County
offer the Series A Bonds for public sale on February 26, 2003, or as soon thereafter as
practicable. Consent is hereby given for Zions First National Bank, the parent company of
Kelling, Northcross & Nobriga, the District's financial advisor, to submit a bid for purchase of
the Series A Bonds and to acquire or participate in the purchase of the Series A Bonds.
Section 5. Investment of Series A Bond Proceeds. The proceeds of the Series A Bonds
shall be invested in any investments permitted by law to be made with moneys belonging to, or
In the custody of, the District, including, but not limited to, the Local Agency Investment Fund
in the California State Treasury and investment agreements, including guaranteed investment
contracts, with a financial entity whose long-term debt is rated by Moody's Investors Service
and Standard & Poor's Ratings Services in one of their two highest rating categories, and whose
short-term debt is rated no lower than the corresponding level of rating category for such debt,
and so long as any such guaranteed investment contract is approved in writing by any
municipal bond insurer insuring the Series A Bonds. Any such investment agreement shall
provide that the financial entity shall deposit collateral with a third party in accordance with
criteria established by Moody's Investors Service and Standard &Poor's Ratings Services in the
event that the rating of short- or long-term debt of the financial entity is downgraded below
then-current requirements of Moody's Investors Service and Standard &Poor's Ratings Services
for such investment agreements.
Section 6. Tax Covenants.
(a) Private Activity Bond Limitation. The District shall assure that the proceeds of the
Series A Bonds are not so used as to cause the Series A Bonds to satisfy the private business
tests of section 141(b) of the Code (as hereinafter defined) or the private loan financing test of
section 141(c) of the Code.
(b) Federal Guarantee Prohibition.The District shall not take any action or permit or suffer
any action to be taken if the result of the same would be to cause any of the Series A Bonds to
be "federally guaranteed" within the meaning of section 149(b) of the Code.
(c) Rebate Requirement. The District shall take any and all actions necessary to assure
compliance with section 148(f) of the Code, relating to the rebate of excess investment earnings,
if any, to the federal government, to the extent that such section is applicable to the Series A
Bonds.
(d) No Arbitrage. The District shall not take, or permit or suffer to be taken any action
with respect to the proceeds of the Series A Bonds which, if such action had been reasonably
expected to have been taken, or had been deliberately and intentionally taken, on the date of
issuance of the Series A Bonds would have caused the Series A Bonds to be "arbitrage bonds"
within the meaning of section 148 of the Code.
(e) Maintenance of Tax-Exemption. The District shall take all actions necessary to assure
the exclusion of interest on the Series A Bonds from the gross income of the registered owners of
the Series A Bonds to the same extent as such interest is permitted to be excluded from gross
Income under the Code as in effect on the date of issuance of the Series A Bonds.
For purposes of this Section 6, the term "Code" means the Internal Revenue Code of
1986 as in effect on the date of issuance of the Series A Bonds or (except as otherwise
referenced herein) as it may be amended to apply to obligations issued on the date of issuance
of the Series A Bonds, together with applicable temporary and final regulations promulgated,
and applicable official public guidance published, under the Code.
-2-
Section 7. Continuing Disclosure. The District hereby covenants and agrees that it will
comply with and carry out all of the provisions of the Continuing Disclosure Certificate.
Notwithstanding any other provision of this Resolution or the Issuance Resolution, failure of the
District to comply with the Continuing Disclosure Certificate shall not be considered an event of
default;however,any holder or beneficial owner of the Series A Bonds may take such actions as
may be necessary and appropriate to compel performance, including seeking mandate of
specific performance by court order.
For purposes of this Section 7, the term "Continuing Disclosure Certificate" shall mean
that certain Continuing Disclosure Certificate executed by the Issuer and dated the date of
issuance and delivery of the Series A Bonds, as originally executed and as it may be amended
from time to time in accordance with the terms thereof. For purposes of this Section 7,the term
"Participating Underwriter" shall have the meaning ascribed thereto in the Continuing
Disclosure Certificate.
Section 8. Official Statement.The Board hereby approves, and hereby deems nearly final
within the meaning of Rule 15c2-12 of the Securities Exchange Act of 1934, the preliminary
Official Statement describing the Series A Bonds in substantially the form submitted by Kelling
Northcross & Nobriga, as financial advisor to the District,and on file with the Secretary of the
Board. The Superintendent or his designee is hereby authorized to execute an appropriate
certificate stating the Board's determination that the Preliminary Official Statement has been
deemed nearly final within the meaning of such Rule. Distribution of the preliminary Official
Statement in connection with the sale of the Series A Bonds is hereby approved. The
Superintendent or his designee is hereby authorized and directed to approve any changes in or
additions to a final form of said Official Statement and the execution thereof by the
Superintendent or his designee shall be conclusive evidence of his approval of any such changes
and additions. The Board hereby authorizes the distribution of the final Official Statement by
the purchaser of the Series A Bonds.The final Official Statement shall be executed in the name
and on behalf of the District by the Superintendent or his designee.
Section 9. Appointment of Pa ring Agent. The Board hereby appoints BNY Western Trust
Company, San Francisco, California, to act as the authenticating agent, Bond registrar, transfer
agent and paying agent (collectively, the "Paying Agent") for the Series A Bonds. All fees and
expenses incurred for services of the Paying Agent shall be the sole responsibility of the District.
(a) The Paying Agent may at any time resign and be discharged of the duties and
obligations created by this Resolution by giving at least 60 days' written notice to the District
and to the County Treasurer-Tax Collector.The Paying Agent may be removed at any time by
an instrument filed with such Paying Agent and signed by the District and the County
Treasurer-Tax Collector. A successor Paying Agent shall be appointed by the District with the
written consent of the County Treasurer-Tax Collector,which consent shall not be unreasonably
withheld, and shall be a bank or trust company organized under the laws of the state or any
state of the United States, a national banking association or any other financial institution,
having capital stock and surplus aggregating at least $50,000,000, and willing and able to
accept the office on reasonable and customary terms and authorized by law to perform all the
duties imposed upon it by this Resolution.Such Paying Agent shall signify the acceptance of its
duties and obligations hereunder by executing and delivering to the District and the County
Treasurer-Tax Collect or, a written acceptance thereof. Resignation or removal of the Paying
Agent shall be effective upon appointment and acceptance of a successor Paying Agent.
(b) In the event of the resignation or removal of the Paying Agent, such Paying Agent
shall pay over, assign and deliver any moneys held by it as Paying Agent to its successor. The
County shall promptly cause to be published at District expense the name and principal
-3-
corporate .trust office address of the Paying Agent appointed to replace any resigned or
removed Paying Agent.
Section 10.Redemption of Series A Bands.
(a) Optional Redemption. The Series A Bonds maturing on or before September 1, 2013,
shall not be subject to redemption prior to their respective stated maturities. The Series A
Bonds maturing on or after September 1, 2014, shall be subject to redemption prior to maturity,
at the option of the District, from any available source of funds, on any date on or after
September 1, 2013, at a redemption price equal to the principal amount thereof together with
accrued interest thereon to the date fixed for redemption,without premium.
(b) Mandatory Sinking Fund Redemption. In the event and to the extent specified in the
bid of the winning bidder for the Series A Bonds, any maturity of Series A Bonds shall be
designated as "Term Bonds" and shall be subject to mandatory sinking fund redemption on
September 1 in each of the years set forth in such bid, at a redemption price equal to one
hundred percent (100%) of the principal amount thereof to be redeemed (without premium),
together with interest accrued thereon to the date fixed for redemption. If some but not all of
such Term Bonds have been redeemed pursuant to the preceding subsection (a) of this Section
10, the aggregate principal amount of such Term Bonds to be redeemed in each year pursuant to
this subsection (b) shall be reduced on a pro rata basis in integral multiples of$5,000, as shall
be designated pursuant to written notice filed by the District with the County and the Paying
Agent.
Section 11. Official Actions. The President of the Board of Trustees, the Superintendent,
the Director of Fiscal Services, and any designee of such persons are each authorized and
directed, for and in the name and on behalf of the District, to do any and all things and take
any and all actions, including execution and delivery of any and all assignments, certificates,
requisitions, agreements, notices, consents, instruments of conveyance, warrants and other
documents, which they, or any of them, may deem necessary or advisable in order to
consummate the lawful sale and issuance of the Series A Bonds.
Section 12.Indemnifica ion.The District shall indemnify and hold harmless,to the extent
permitted by law, the County and its officers and employees (the "Indemnified Parties"),
against any and all losses, claims, damages or liabilities, joint or several, to which such
Indemnified Parties may become subject, because of action or inaction related to the Series A
Bonds. The District shall also reimburse the Indemnified Parties for any legal or other expenses
incurred in connection with investigating or defending any such claims or actions.
Section 13. Submission of Request. The Secretary of the Board of Trustees is hereby
directed to file a certified copy of this Resolution with the Clerk of the Board of Supervisors of
the County,the County Superintendent of Schools and the County Treasurer-Tax Collector.
Section 14. Effect.This Resolution shall take effect immediately.
-4-
PASSED AND ADOPTED this 27th day of January, 2003, by the following vote:
AYES: Pena,Clarke, Pennington,Walden
NOES: None
ABSENT: Newell
Dan B. Walden,
President of the Board of Trustees
Walnut Creek School District
Contra Costa County, California
ATTEST:
Michael De Sa,
Secretary of the Board of Trustees
Walnut Creek School District
Contra Costa County, California
L Michael De Sa, Secretary of the Board of Trustees of the Walnut Creek School District,
Contra Costa County, California, do hereby certify that the foregoing is a full, true and correct
copy of the Resolution passed and adopted by said Board of Trustees at a meeting on the 27th
day of January, 2003, and that the minutes of said Board of Trustees shows that four (4)
members of said Board voted for and zero (0) members of said Board voted against the
adoption of said Resolution and the said Resolution is now spread upon the minutes of said
Board.
Michael De Sa,
Secretary of the Board of Trustees
Walnut Creek School District
Contra Costa County, California
Quint&Thimrnig LLP 12/18/02
01/08/03
CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and
delivered by the WALNUT CREEK SCHOOL DISTRICT (the "District") in connection with the
issuance by the Board of Supervisors of Contra Costa County (the "Board") in the name of the
District of$7,000,000 Walnut Creek School District (Contra Costa County, California) General
Obligation Bonds, Election of 2002, Series A (the "Series A Bonds"). The Series A Bonds are
being issued pursuant to a resolution adopted by the Board of Trustees of the District on
January 27,2003, and a resolution adopted by the Board on February 11, 2003 (collectively, the
"Resolution").The District covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being
executed and delivered by the District for the benefit of the holders and beneficial owners of the
Series A Bonds and in order to assist the Participating Underwriters in complying with S.E.C.
Rule 15c2-12(b)(5).
Section 2. Definitions. In addition to the definitions set forth in the Resolution, which
apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in
this Section 2,the following capitalized terms shall have the following meanings:
"Annual Report" shall mean any Annual Report provided by the District pursuant to,
and as described in,Sections 3 and 4 of this Disclosure Certificate.
"Dissemination Agent" shall mean the District, or any successor Dissemination Agent
designated in writing by the District and which has filed with the District a written acceptance
of such designation.
"Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure
Certificate.
"National Repository" shall mean any Nationally Recognized Municipal Securities
Information Repository for purposes of the Rule.
"Participating Underwriter" shall mean any of the original underwriters of the Series A
Bonds required to comply with the Rule in connection with offering of the Series A Bonds.
"'Repository"shall mean each National Repository and each State Repository.
".Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange
Commission under the Securities Exchange Act of 1934,as the same may be amended from time
to time.
"State Repository"shall mean any public or private repository or entity designated by the
State of California as a state repository for the purpose of the Rule and recognized as such by
the Securities and Exchange Commission. As of the date of this Disclosure Certificate, there is
no State Repository.
23005.03
Section 3. Provision of Annual Reports.
(a) The District shall, or upon written direction shall cause the Dissemination Agent to,
not later than nine months after the end of the District's fiscal year(which date would be March
31),commencing with the report for the 2001-2002 fiscal year, provide to each Repository and
the Participating Underwriter an Annual Report which is consistent with the requirements of
Section 4 of this Disclosure Certificate. Not later than fifteen (15) Business Days prior to said
date,the District shall provide the Annual Report to the Dissemination Agent (if other than the
District).The Annual Report may be submitted as a single document or as separate documents
comprising a package,and may include by reference other information as provided in Section 4
of this Disclosure Certificate;provided that the audited financial statements of the District may
be submitted separately from the balance of the Annual Report,and later than the date required
above for the filing of the Annual Report if not available by that date.If the District's fiscal year
changes, it shall give notice of such change to the Municipal Securities Rulemaking Board and
each State Repository. The District shall provide a written certification with each Annual
Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes
the Annual Report required to be furnished by the District hereunder.
(b) If the District is unable to provide to the Repositories an Annual Report by the date
required in subsection(a),the District shall send a notice to the Municipal Securities Rulemaking
Board and each State Repository in substantially the form attached as Exhibit A.
(c)The Dissemination Agent shall:
(i) determine each year prior to the date for providing the Annual Report the
name and address of each National Repository and each State Repository,if any; and
(ii) if the Dissemination Agent is other than the District, file a report with the
District certifying that the Annual Report has been provided pursuant to this Disclosure
Certificate, stating the date it was provided and listing all the Repositories to which it
was provided.
Section 4. Content of Annual Reports. The District's Annual Report shall contain or
incorporate by reference the following:
(a) Audited Financial Statements prepared in accordance with generally accepted
accounting principles as promulgated to apply to governmental entities from time to time by the
Governmental Accounting Standards Board. If the District's audited financial statements are
not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the
Annual Report shall contain unaudited financial statements in a format similar to the financial
statements contained in the final Official Statement, and the audited financial statements shall
be filed in the same manner as the Annual Report when they become available.
(b)Unless otherwise provided in the audited financial statements filed on or prior to the
annual filing deadline for Annual Reports provided for in Section 3 above, financial information
and operating data with respect to the District for preceding fiscal year, substantially similar to
that provided in the corresponding tables and charts in the official statement for the Series A
Bonds:
-2-
(i) The District's approved budget for the then current fiscal year;
(ii) Assessed value of taxable property in the District as shown on the recent equalized
assessment role;and
(iii) Property tax levies, collections and delinquencies for the District, for the most recent
completed fiscal year.
Any or all of the items listed above may be included by specific reference to other
documents, including official statements of debt issues of the District or related public
entities, which have been submitted to each of the Repositories or the Securities and
Exchange Commission. If the document included by reference is a final official
statement, it must be available from the Municipal Securities Rulemaking Board. The
District shall clearly identify each such other document so included by reference.
(c) In addition to any of the information expressly required to be provided under this
Disclosure Certificate, the District shall provide such further material information, if any, as
may be necessary to make the specifically required statements, in the light of the circumstances
under which they are made,not misleading.
Section 5.Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the District shall give, or cause to be
given,notice of the occurrence of any of the following events with respect to the Series A Bonds,
if material:
(i) Principal and interest payment delinquencies.
(ii) Non-payment related defaults.
(iii) Unscheduled draws on debt service reserves reflecting financial difficulties.
(iv) Unscheduled draws on credit enhancements reflecting financial difficulties.
(v) Substitution of credit or liquidity providers,or their failure to perform.
(vi) Adverse tax opinions or events affecting the tax-exempt status of the security.
(vii) Modifications to rights of security holders.
(viii) Contingent or unscheduled bond calls.
(ix) Defeasances.
(x) Release,substitution,or sale of property securing repayment of the securities.
(xi) Rating changes.
(b) Whenever the District obtains knowledge of the occurrence of a Listed Event, the
District shall as soon as possible determine if such event would be material under applicable
Federal securities law. The Dissemination Agent shall have no role nor any responsibility for
such determination.
(c)If the District determines that knowledge of the occurrence of a Listed Event would
be material under applicable Federal securities law, the District shall promptly file a notice of
such occurrence with the Municipal Securities Rulemaking Board and each Repository with a
copy to the Participating Underwriter. Notwithstanding the foregoing, notice of Listed Events
described in subsections (a)(viii) and (ix) need not be given under this subsection any earlier
than the notice (if any) of the underlying event is given to holders of affected Series A Bond
owners pursuant to the Resolution.
-3-
Section 6. 'Vermination of ReRorting Obligation. The District's obligations under this
Disclosure Certificate shall terminate upon the legal defeasance, prior prepayment or payment
in full of all of the Series A Bonds.
Section 7. Dissemination Aggnt.The District may,from time to time, appoint or engage a
Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate,
and may discharge any such Dissemination Agent, with or without appointing a successor
Dissemination Agent.The initial Dissemination Agent shall be the District. Any Dissemination
Agent may resign by providing thirty days'written notice to the District.
Section 8. Amendment. Waiver. Notwithstanding any other provision of this Disclosure
Certificate, the District may amend this Disclosure Certificate, and any provision of this
Disclosure Certificate may be waived,provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Sections 3(a) or 4, it may
only be made in connection with a change in circumstances that arises from a change in legal
requirements,change in law, or change in the identity, nature, or status of an obligated person
with respect to the Series A Bonds,or type of business conducted;
(b) the undertakings herein, as proposed to be amended or waived, would, in the
opinion of nationally recognized bond counsel,have complied with the requirements of the Rule
at the time of the primary offering of the Series A Bonds, after taking into account any
amendments or interpretations of the Rule,as well as any change in circumstances,and
(c)the proposed amendment or waiver either (i) is approved by holders of the Series A
Bonds in the manner provided in the Resolution for amendments to the Resolution with the
consent of holders, or (ii) does not, in the opinion of nationally recognized bond counsel,
materially impair the interests of the holders or beneficial owners of the Series A Bonds.
If the annual financial information or operating data to be provided in the Annual
Report is amended pursuant to the provisions hereof,the first annual financial information filed
pursuant hereto containing the amended operating data on financial information shall explain,
in narrative form, the reasons for the amendment and the impact of the change in the type of
operating data or financial information being provided.
If an amendment is made to the undertaking specifying the accounting principles to be
followed in preparing financial statements, the annual financial information for the year in
which the change is made shall present a comparison between the financial statements or
information prepared on the basis of the new accounting principles and those prepared on the
basis of the former accounting principles.The comparison shall include a qualitative discussion
of the differences in the accounting principles and the impact of the change in the accounting
principles on the presentation of the financial information, in order to provide information to
investors to enable them to evaluate the ability of the District to meet its obligations. To the
extent reasonably feasible, the comparison shall be quantitative. A notice of the change in the
accounting principles shall be sent to the Municipal Securities Rulemaking Board and each
Repository.
Section 9.Additional Information.Nothing in this Disclosure Certificate shall be deemed
to prevent the District from disseminating any other information, using the means of
dissemination set forth in this Disclosure Certificate or any other means of communication, or
including any other information in any Annual Report or notice of occurrence of a Listed Event,
in addition to that which is required by this Disclosure Certificate. If the District chooses to
include any information in any Annual Report or notice of occurrence of a Listed Event in
addition to that which is specifically required by this Disclosure Certificate, the District shall
-4-
have no obligation under this Disclosure Certificate to update such information or include it in
any future Annual Report or notice of occurrence of a Listed Event.
Section 9. Default.In the event of a failure of the District to comply with any provision
of this Disclosure Certificate any holder or beneficial owner of the Series A Bonds may take
such actions as may be necessary and appropriate, including seeking mandate or specific
performance by court order, to cause the District to comply with its obligations under this
Disclosure Certificate.A default under this Disclosure Certificate shall not be deemed an Event
of Default under the Resolution, and the sole remedy under this Disclosure Certificate in the
event of any failure of the District to comply with this Disclosure Certificate shall be an action
to compel performance.
Section 10. Duties,Immunities and Liabilities_of Dissemination A ent.The Dissemination
Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and
the District agrees to indemnify and hold the Dissemination Agent, its officers, directors,
employees and agents, harmless against any loss, expense and liabilities which they may incur
arising out of or in the exercise or performance of its powers and duties hereunder, including the
costs and expenses (including attorneys fees) of defending against any claim of liability, but
excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The
Dissemination Agent shall be paid compensation by the District for its services provided
hereunder in accordance with its schedule of fees as amended from time to time and all
expenses, legal fees and advances made or incurred by the Dissemination Agent in the
performance of its duties hereunder. The Dissemination Agent shall have no duty or obligation
to review any information provided to it by the District and shall not be deemed to be acting in
any fiduciary capacity for the District, the Bond holders or any other party. The obligations of
the District under this Section 10 shall survive resignation or removal of the Dissemination
Agent and payment of the Series A Bonds.
Section 11. Beneficiaries.This Disclosure Certificate shall inure solely to the benefit of the
District, the Dissemination Agent, the Participating Underwriters and holders and beneficial
owners from time to time of the Series A Bonds,and shall create no rights in any other person or
entity.
Date: March 12, 2003
WALNUT CREEK.SCHOOL DISTRICT
By
Authorized Officer
-5�
EX IIBTT A
NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD AND EACH STATE
REPOSITORY OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: Walnut Creek School District
Name of Issue: $7,000,000 Walnut Creek School District (Contra Costa County,
California)General Obligation Bonds,Election of 2002,Series A
Date of Issuance. March 12, 2003
NOTICE IS HEREBY GIVEN that the Walnut Creek School District (the "District") has
not provided an Annual Report with respect to the above-named Series A Bonds as required by
Section 6 of the resolution adopted by the Board of Trustees of the District on January 27, 2003.
The District anticipates that the Annual Report will be filed by
Dated:
WALNUT CREEK SCHOOL DISTRICT
By
Title
Exhibit A
PRELIMINARY OFFICIAL STATEMENT DATED , 2003
G , (Draft as of January 28,2003 G:\WALNUT.ESD\03Ref&SerA\Series_A1pos01_SeriesA.wpd)
NEW ISSUE— BOOB-ENTRY ONLY RATING:
r ra
Moody's:_
s Standard&Poor's:_
(See"MISCELLANEOUS—Rating"herein).
In the opinion of Quint&ThimmigLLP,San Francisco, California,Bond Counsel,subject,however to certain qualifications
described herein,under existing law,the interest on the Bonds is excluded from gross income for federal income tax purposes and such
interest is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations,
�q .8 although for the purpose ofcomputing the alternative minimum tax imposed on certain corporations,such interest is taken into account
8 in determining certain income and earnings. In the further opinion of Bond Counsel,such interest is exempt from California personal
�. income taxes. See"LEGAL MATTERS—Tex Netters"herein.
C3 2
y $7,000,000*
41
G WALNUT CREED.ELEMENTARY SCHOOL DISTRICT
m (Contra Costa County, California)
CM7 i~
General Obligation Bonds
Election of 2002, Series A
Y (Not Bank Qualified)
t/
M � �
Dated:March 1,2003 Due: September 1,as shown below
The Bonds are issued on behalf of the Walnut Creek Elementary School District(the"District"),and the Board of Supervisors
of Contra Costa County is empowered and is obligated to annually levy ad valorem taxes,without limitation as to rate or amount,upon
." all property subject to taxation within the District(except certain personal property which is taxable at limited rates),for the payment
w of interest on, and principal of, the Bonds, all as more fully described herein under "THE BONDS" and "AD VALOREM
" PROPERTY TAXATION." Interest on the Bonds is payable semiannually on each March 1 and September 1,commencing March 1,
2004. The Bonds,when delivered,will be registered initially in the name of Cede&Co.,as nominee of The Depository Trust Company
• ("DTC"),New York,New York. DTC will act as securities depository for the Bonds as described herein under"THE BONDS—
5 Book-Entry System." The Bonds due on or before September],2013,are not subject to optional redemption;the Bonds due on and
P after September 1, 2014 are subject to optional redemption as described herein.
U
9 9 'r- The following firm,serving as financial advisor to the District, has structured this financing.
X FELLING, NORTHCROSS & NOBR.IGA
A Division of Zlons First National Bank
MATURITY SCHEDULE
ID
Maturity Principal Interest Price Maturity Principal Interest Price
(September 1) Amount* Rate or Yield (September,i) Amount* hate or Yield
2004 2016
E ` 2005 2017
2006 2018
° 2007 2019
2008 2020
o 2009 2021
° 2010 2022
2011 2023
2012 2024
2013 2025
<� 2014 2026
2015 2027
�
(plus accrued interest from March 1(P >2003)
e- Pursuant to the terms of a public sale on February 26 2003, the Bonds were awarded to as
Underwriter, at a true interest cost of %. The Bonds will be offered when, as and if issued by the District and received
by the Underwriter, subject to the approval of legality by Quint& Thimmig LLP, San Francisco, California, Bond Counsel. It is
anticipated that the Bonds,in book-entryform,will be availablefor delivery through The Depositary Trust Company in New York,New
>> York, on or about March 12, 2003.
THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK. REFERENCE ONLY. IT IS NOT A
- SUMMARY OF THIS ISSUE. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION
° ro ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION.
Official Statement Date: ,2003
*Preliminary; subject to change.
No dealer, broker, salesperson or other person has been authorized by the Walnut Creek
Elementary School District(the"District")to give any information or to make any representations other
than those contained herein and, if given or made, such other information or representation must not
be relied upon as having been authorized by the District. This Official Statement does not constitute an
offer to sell or the solicitation of any offer to buy nor shall there be any sale of the Bonds by a person in
any jurisdiction in which it is unlawful for such person to make such an offer,solicitation or sale.
This Official Statement is not to be construed as a contract with the purchasers of the Bonds.
Statements contained in this Official Statement which involve estimates,forecasts or matters of opinion,
whether or not expressly so described herein,are intended solely as such and are not to be construed as
a representation of facts. The summaries and descriptions of documents, statutes and constitutional
provisions referred to herein do not purport to be comprehensive or definitive,and are qualified in their
entireties by reference to each such document,statute and constitutional provision.
The information setforth herein,other than thatprovided by the District,has been obtainedfrom
sources which the District believes to be reliable. The information and expressions of opinion herein are
subject to change without notice and neither delivery of this Official Statement nor any sale made
hereunder shall, under any circumstances,create any implication that there has been no change in the
affairs of the District since the date hereof. This Official Statement is submitted in connection with the
sale of the Bonds referred to herein and may not be reproduced or used,in whole or in part,for any other
purpose.
THE PRICES AND OTHER TERMS OF THE OFFERING AND SALE OF THE BONDS
MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER AFTER SUCH BONDS
ARE RELEASED FOR SALE AND SUCH BONDS MAY BE OFFERED AND SOLD AT PRICES
OTHER THAN THE INITIAL OFFERING PRICES,INCLUDING SALES TO DEALERS WHO
MAY SELL SUCH BONDS INTO INVESTMENT ACCOUNTS. IN CONNECTION WITH THE
OFFERING OF BONDS, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES FOR SUCH
BONDS AT A LEVEL ABOVE THAT WHICH MIGHT PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING,IF COMMENCED,MAY BE DISCONTINUED AT ANY TIME.
THE BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN
RELIANCE UPON THE EXEMPTION CONTAINED IN SECTION 3(a)(2)OF SUCH ACT.
CONTRA COSTA COUNTY
County Board of Supervisors
John Gioia
Chair, Supervisor,District I
Gayle Uilkema Donna Gerber
Supervisor, District 2 Supervisor, District 3
Mark DeSaulnier Federal Glover
Supervisor, District 4 Supervisor,Districi
WALNUT CREED.ELEMENTARY SCHOOL DISTRICT
Board of Trustees
Dan W.Walden
President
Katie Pefla Arthur M.Clark
Clerk Member
Sara C.Newell Barbara Pennington
Member Member
District Administration
Michael DeSa
Superintendent
Carol Ortega
Director of Fiscal Services
PROFESSIONAL SERVICES
Financial Advisor
Kelling,Northcross&Nobriga,
A Division of Zions First National Bank
Oakland, California
Bond Counsel
{quint&Thimmig LLP
San Francisco, California
Paying Agent
BNY Western Trust Company
San Francisco, California
TABLE OF CONTENTS
Page
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
TheDistrict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Sources of Payment for the Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Purpose of the Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Authority for Issuance of the Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Description of the Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
TaxMatters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Professionals Involved in the Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Offering and Delivery of the Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
THEBONDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Authority for Issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Purpose of Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a . . . . . . . . . . . . . . . . . . . 4
Estimated Sources and Uses of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Investment of Bond Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Security and Sources of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Description of the Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Book-Entry System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Discontinuation of Book-Entry System; Payment to Beneficial Owners . . . . . . . . . . . . . . . . . . 8
DebtService . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
All VALOREM PROPERTY TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
County Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Assessed Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
State-Assessed Utility Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Tax Levies, Collections and Delinquencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
TeeterPlan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
CONSTITUTIONAL AND STATUTORY PROVISIONS
AFFECTING DISTRICT REVENUE AND APPROPRIATIONS . . . . . . . . . . . . . . . . . . . . . 14
Article XIIIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Article XIIIB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Propositions 98 and 111 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Articles XMC and XIIID . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Future Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
GENERAL SCHOOL DISTRICT FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
State Funding of School Districts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Basic Aid Districts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
StateBudget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
State Funding of School Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
State Retirement Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
County Office of Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
School District Budget Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Accounting Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
County Investment Pool . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
DISTRICT INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Average Daily Attendance and Revenue Limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Retirement Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Comparative Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ParcelTax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
DistrictDebt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Availability of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
DISTRICT TAX BASE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Assessed Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Secured Tax Charges and Delinquencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
TaxRates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Largest Taxpayers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Statement of Direct and Overlapping Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ECONOMIC PROFILE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Population . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Major Employers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Construction Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Commercial Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Median Household Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
TaxMatters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
NoLitigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Legality for Investment in California . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
LegalOpinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Rating(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Closing Papers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Continuing Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
APPENDIX A-EXCERPTS FROM 2001/02 AUDITED FINANCIAL STATEMENTS . . . . . . . . A-1
APPENDIX.B -PROPOSED FORM OF LEGAL OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .B-1
APPENDIX C -FORM OF CONTINUING DISCLOSURE CERTIFICATE . . . . . . . . . . . . . . . . . . . C-1
APPENDIX D-EXCERPTS FROM THE CONTRA COSTA COUNTY
INVESTMENT PORTFOLIO REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1
OFFICIAL STATEMENT
$790009000*
WALNUT CREEK ELEMENTARY SCHOOL DISTRICT
(Contra Costa County, California)
General Obligation Bonds
Election of 2002, Series A
(Not Bank Qualified)
INTRODUCTION
.This introduction is not a summary of this official statement(the "Official Statement'). It is only
a brief description of and guide to, and is qualified by, more complete and detailed information contained
in the entire (7fflicial Statement, including the cover page and appendices hereto, and the documents
summarized or described herein. A full review should be made of the entire Oficial Statement. The
offering of the Bonds to potential investors is made only by means of the entire Official Statement.
This Official Statement,which includes the cover page and appendices hereto,is provided to furnish
information in connection with the sale of$7,000,000* principal amount of Walnut Creek Elementary
School District(Contra Costa County,California),General Obligation Bonds,Election of 2002,Series A,
(the"Bonds"),as described more fully herein.
The District
The Walnut Creek Elementary School District(the"District")provides educational services to the
residents of Walnut Creek(the"City"),in Contra Costa County(the "County"),in the State of California
(the"State"). More detailed information regarding the area served by the District and the student population
of the District may be found under"DISTRICT INFORMATION" herein.
Sources of Payment for the Bonds
The Bonds are obligations of the District issued by the Board of Supervisors of the County on
behalf of the District,and the Board of Supervisors of the County is empowered and is obligated to annually
levy ad valorem taxes,without limitation as to rate or amount,upon all property subject to taxation within
the District(except certain personal property which is taxable at limited rates), as necessary for payment
of interest on and principal of the Bonds. See "THE BONDS—Security and Sources of Payment",
"AD VALOREM PROPERTY TAXATION"and"DISTRICT TAX BASE INFORMATION"herein.
Purpose of the Bonds
The proceeds of Bonds are authorized to be used to improve school facilities,including updating
safety and security systems, building a new library at Walnut Creek Intermediate, improving building
exteriors and grounds for safety,updating the technology infrastructure,renovating fields,for other projects
listed in District's Project List (the "Project") and for other authorized costs. See "THE BONDS
Purpose of Issue."
*Preliminary;subject to change. 1
Authority for Issuance of the Bonds
The Bonds are issued pursuant to certain provisions of the State of California Education Code(the
"Education Code")and other applicable law,and pursuant to resolutions adopted by the Board of Trustees
of the District and the Board of Supervisors of the County. See "THE BONDS — Authority for
Issuance"herein.
Description of the Bonds
The Bonds will be issued as current interest bonds without coupons in denominations of$5,400
each,or any integral multiple thereof and will be registered initially in the name of Cede&Co.,as nominee
of The Depository Trust Company,New York,New York("DTC"). DTC will act as securities depository
for the Bonds. So long as DTC,or Cede&Co., as its nominee,is the registered owner of all the Bonds,
payments on the Bonds will be made directly to DTC, and disbursement of such payments to the DTC
Participants(defined herein)will be the responsibility of DTC,and disbursement of such payments to the
Beneficial Owners (defined herein) will be the responsibility of the DTC Participants, as more fully
described hereinafter. See"THE BONDS Description of the Bonds;Book-Entry System"and"—
Discontinuation of Book-Entry System; Payment to Beneficial Owners"herein.
The Bonds will bear interest semiannually each March 1 and September 1,commencing March 1,
2004 from a dated date of March 1,2003,calculated on the basis of 360-day year consisting of twelve 30-
day months. Principal of the Bonds will be paid, subject to any optional redemption,on the dates and in
the amounts set forth on the cover page hereof. See"THE BONDS"herein.
The Bonds maturing on and after September 1, 2014, may be redeemed prior to maturity at the
option of the District beginning on September 1,2013,as described under"THE BONDS—Redemption"
herein.
Tax Matters
In the opinion of Quint & Thimmig LLP, San Francisco, California, Bond Counsel, subject,
however to certain qualifications described herein,under existing law,the interest on the Bonds is excluded
from gross income for federal income tax purposes and such interest is not an item of tax preference for
purposes of the federal alternative minimum tax imposed on individuals and corporations,although for the
purpose of computing the alternative minimum tax imposed on certain corporations,such interest is taken
into account in determining certain income and earnings. In the further opinion of Bond Counsel, such
interest is exempt from California personal income taxes. See"LEGAL MATTERS--Tax Matters"
herein.
Professionals Involved in the Offering
With respect to the Bonds,Kelling,Northcross&Nobriga,A Division ofZions First National Bank,
Oakland,California,is the District's financial advisor(see"MISCELLANEOUS—Financial Advisor"
herein)and Quint&Thimmig LLP,San Francisco,California,is the District's bond counsel. BNY Western
Trust Company, San Francisco,California,will act on behalf of the County as paying agent,registrar and
transfer agent(the"Paying Agent")with respect to the Bonds. The Financial Advisor,Bond Counsel,and
Paying Agent will receive compensation from the District contingent upon the sale and delivery of the
Bonds.
2
Offering and Delivery of the Bonds
The Bonds will be offered when,as and if issued by the District and received by the Underwriter,
subject to approval as to their legality by Bond Counsel. It is anticipated that the Bonds,in book-entry form,
will be available for delivery through DTC in New York,New York on or about March 12,2003.
Other Information
This Official Statement speaks only as of its date,and the information contained herein is subject
to change. Copies of documents referred to herein and information concerning the Bonds are available from
the Business Office,Walnut Creek Elementary School District,960 Ygnacio Valley Road,Walnut Creek,
California 94596-3892 telephone.(925)944-6850. The District may impose a charge for copying,mailing
and handling. See also"MISCELLANEOUS—Continuing Disclosure"herein.
ENI) OF INTRODUCTION
3
THE BONDS
Authority for Issuance
The Bonds are issued under the previsions of Chapter 1 of Part 10 of Division 1 of Title 1 of the
Education Code of the State(the"Act")and other applicable law,and pursuant to resolutions adopted by
the Board of Trustees of the District on January 27, 2003 and by the Board of Supervisors of the County
on February 11,2003 (collectively the"Resolution").
The District received authorization to issue$20 million of bonds at an election held on November 5,
2002,by an affirmative vote of 64.9%of the votes cast(the"Authorization"). A 55%vote in favor was
required.The Bonds represent the first series issued under the Authorization. The District has issued all
of the bonds authorized under a prior election,held on June 6, 1995,as shown below. Concurrent with the
sale of the Bonds,the District is selling refunding bonds to refund Election of 1995,Series A and Series B.
WALNUT CREEK ELEMENTARY SCHOOL DISTRICT
Bonds Issued Under the Prior(1995)Authorization
Amount of Outstanding
Delivery Date Series Original Issue February 1.2003
8/16/95 Election of 1995,Series A $ 4,500,000 $ 3,130,000
2/12/97 Election of 1995,Series B 6,500,000 5,890,000
8/19/98 Election of 1995,Series C 5,000,000 4,755,000
3/9/00 Election of 1995,Series D 5,000,000 4.890.000
$21,000,000 $18,665,000
Purpose of Issue
Net proceeds of the Bonds are authorized to be used to improve school facilities,including updating
safety and security systems, building a new library at Walnut Creek Intermediate, improving building
exteriors and grounds for safety,updating the technology infrastructure,renovating fields,for other prof ects
listed in the District's Project fist(the"Project")and for other authorized costs.
4
Estimated Sources and Uses of Funds
The proceeds of the Bonds are expected to be applied as follows.
WALNUT CREEK ELEMENTARY SCHOOL DISTRICT
Estimated Sources and Uses of Funds
Sources of Funds
Principal Amount of Bonds $7,000,000*
Original Issue Premium
Accrued Interest
Total Sources
Uses of Funds
Project Costs $
Underwriter's Compensation(')
Costs of Issuance ro>
Deposit to Debt Service Fund
Total Uses
tg� Includes bond insurance premium of$
m> Includes estimated fees for financial advisor,bond counsel,rating agency,printing and distribution of the Official Statement,paying agent,
and miscellaneous costs of issuance.
Investment of Bond Proceeds
The proceeds from the sale of the Bonds,to the extent of the principal amount thereof,shall be paid
to the County to the credit of the building fund of the District(the`Building Fund")and shall be accounted
for separately from all other District and County funds,but may be commingled with the proceeds of sale
of other bonds of the District deposited in the Building Fund and authorized to be used for the same
purpose. The proceeds shall be used only for the purposes for which the Bonds are authorized. The accrued
interest and any premium received from the sale of the Bonds shall be deposited in the interest and sinking
fund of the District(the "Debt Service Fund")and used only for payments of principal of and interest on
the Bonds. Interest earned on the investment of monies held in the Debt Service Fund shall be retained in
the Debt Service Fund. Interest earned on the investment of monies held in the Building Fund shall be
retained in the Building Fund.
Monies in the Building Fund and the Debt Service Fund shall be invested in any one or more
investments generally permitted to school districts under the laws of the State, consistent with County
investment policy and the Resolution.The Resolution authorizes investment in the Local Agency Investment
Fund in the California State Treasury and investment agreements, including guaranteed investment
contracts,with a financial entity whose long-term debt is rated by Moody's Investors Service and Standard
&Poor's Ratings Services in one of their two highest rating categories,and whose short-term debt is rated
no lower than the corresponding level of rating category for such debt,and so long as any such guaranteed
investment contract is approved in writing by any municipal bond insurer insuring the Bonds. The Board
of Trustees has delegated to the County Treasurer,pursuant to Section 53607 of the Government Code,its
authority under Section 41015 of the Education Code and Section 53601 of the Government Code to invest
proceeds of the Bonds held in the Treasury of the County. See "GENERAL SCHOOL DISTRICT
FINANCIAL INFORMATION --- County Investment Pool' herein and "APPENDIX D —
EXCERPTS FROM THE CONTRA COSTA COUNTY INVESTMENT PORTFOLIO REPORT".
*Preliminary;subject to change. 5
Security and Sources of Payment
The Board of Supervisors of the County is empowered and is obligated to annually levy ad valorem
taxes,without limitation as to rate or amount,as necessary for payment of interest on and principal of the
Bonds,upon all property within the District(except certain personal property which is taxable at limited
rates). Such taxes,when collected,will be placed by the County in the Debt Service Fund.
The rate for the ad valorem tax will be set annually by the County based on the assessed value of
taxable property in the District and the debt service requirement on the outstanding Bonds in each year.
Variation in the annual debt service requirement and changes in assessed valuation within the District may
cause the annual tax rate for the Bonds to change from year to year. For further information regarding ad
valorem property taxation in general and within the District in particular, see "AD VALOREM
PROPERTY TAXATION"and"DISTRICT TAX BASE INFORMATION"herein.
Description of the Bonds
The Bonds in the aggregate principal amount of$7,000,004*will be dated March 1,2003 and will
bear interest payable semiannually each March 1 and September 1 (each an "Interest Payment Date"),
commencing March 1, 2004 at the interest rates shown on the cover hereof. The Bonds will mature on
September 1 in each of the years and in the principal amounts shown on the cover page hereof. Interest on
the Bonds will be computed on the basis of a 360-day year of twelve 30-day months. Each Bond
authenticated on or before February 15,2004, shall bear interest from the date of the Bonds. Each Bond
authenticated during the period between the close of business on the 15th day of the month preceding any
Interest Payment Date (the "Record Date") and that Interest Payment Date shall bear interest from that
Interest Payment Date. Any other Bond shall bear interest from.the Interest Payment Date immediately
preceding the date of its authentication.
The Bonds will be issued in the denomination of$5,000 principal amount each or any integral
multiple thereof. The Bonds when issued will be registered in the name of Cede&Co.,as registered owner
and nominee of DTC. So long as DTC,or Cede&Co., as its nominee,is the registered owner of all the
Bonds,principal and interest payments on the Bonds will be made directly to DTC, and disbursement of
such payments to the DTC Participants(defined below)will be the responsibility ofDTC,and disbursement
of such payments to the Beneficial Owners (defined below) will be the responsibility of the DTC
Participants,as more fully described below under"Book-Entry System." Only if the Bonds should cease
to be paid through a book-entry system would the Paying Agent make payments on the Bonds directly to
Beneficial Owners, as registered owners of the Bonds, as more fully described below under
"Discontinuation of Book-Entry System; Payment to Beneficial Owners."
Book-Entry System
The information in this section concerning DTC and DTC's book-entry system has been furnished
by DTC for use in disclosure documents, and the District takes no responsibility for the accuracy or
completeness thereof. The District cannot and does not give any assurances that DTC will distribute to
Direct Participants, or that Direct Participants or Indirect Participants will distribute to the Beneficial
Owners,payments ofprincipal of interest, andpremium, if any, on the Bonds paid or any redemption or
other notices or that they will do so on a timely basis or will serve and act in the manner described in this
Oficial Statement. Neither the District nor the County nor the Paying Agent are responsible or liable for
the failure of DTC or any Direct or Indirect Participant to make any payments or give any notice to a
Beneficial Owner or any error or delay relating thereto. Accordingly, no representations can be made
concerning these matters and neither the Direct norindirectParticipants nor the Beneficial Owners should
*Preliminary;subject to change. 6
rely on the following information with respect to such matters but should instead confirm the same with
TC or the DTC Participants, as the case may be.
DTC will act as securities depository for the Bonds. The Bonds will be issued as fully-registered
securities registered in the name of Cede&Co. (DTC's partnership nominee)or such other name as may
be requested by an authorized representative of DTC.One fully-registered Bond certificate will be issued
for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be
deposited with DTC.
DTC,the world's largest depository,is a limited-purpose trust company organized under the New
York Banking Law,a"banking organization"within the meaning of the New York Banking Law,a member
of the Federal Reserve System, a `clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a "clearing agency"registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934.DTC holds and provides asset servicing for over 2 million issues of U.S.
and non-U.S.equity issues,corporate and municipal debt issues,and money market instruments from over
85 countries that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the
post-trade settlement among Direct Participants of sales and other securities transactions in deposited
securities,through electronic computerized book-entry transfers and pledges between Direct 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 The Depository Trust&Clearing
Corporation("DTCC").DTCC,in turn,is owned by a number of Direct Participants of DTC and Members
of the National Securities Clearing Corporation, Government Securities Clearing Corporation, MBS
Clearing Corporation,and Emerging Markets Clearing Corporation,(NSCC,LSCC,MBSCC,and EMCC,
also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock
Exchange LLC,and the National Association of Securities Dealers,Inc.Access to the DTC system is also
available to others such as both U.S. and non-U.S. securities brokers and dealers,banks,trust companies,
and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant,
either directly or indirectly("Indirect Participants").DTC has Standard&Poor's highest rating:AAA.The
DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission.More
information about DTC can be found at www.dtcc.com.
Purchases of the Bonds under the DTC system must be made by or through Direct Participants,
which will receive a credit for the Bonds on DTC's records.The ownership interest of each actual purchaser
of each Bond(`Beneficial Owner")is in turn to be recorded on the Direct and Indirect Participants'records.
Beneficial Owners will not receive written confirnnation from DTC of their purchase.Beneficial Owners
are, however, expected to receive written confirmations providing details of the transaction, as well as
periodic statements of their holdings,from the Direct or Indirect Participant through which the Beneficial
Owner entered into the transaction.Transfers of ownership interests in the Bonds are to be accomplished
by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership interests in the Bonds,except
in the event that use of the book-entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are
registered in the name of DTC's partnership nominee,Cede&Co.,or such other name as may be requested
by an authorized representative of DTC.The deposit of Bonds with DTC and their registration in the name
of Cede&Co.or such other DTC nominee do not effect any change in beneficial ownership.DTC has no
knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the
Direct Participants to whose accounts such Bonds are credited,which may or may not be the Beneficial
Owners.The Direct and Indirect Participants will remain responsible for keeping account of their holdings
on behalf of their customers.
7
Conveyance of notices and other communications by DTC to Direct Participants, by Direct
Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial
Owners will be governed by arrangements among them,subject to any statutory or regulatory requirements
as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to
augment the transmission to them of notices of significant events with respect to the Bonds, such as
redemptions, tenders, defaults, and proposed amendments to the security documents. For example,
Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has
agreed to obtain and transmit notices to Beneficial Owners.In the alternative,Beneficial Owners may wish
to provide their names and addresses to the registrar and request that copies of notices be provided directly
to them.
Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being
redeemed,DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such
issue to be redeemed.
Neither DTC nor Cede&Co. (nor any other DTC nominee)will consent or vote with respect to
Bonds unless authorized by a Direct Participant in accordance with DTC's Procedures. Under its usual
procedures,DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date.The Omnibus
Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts
Bonds are credited on the record date(identified in a listing attached to the Omnibus Proxy).
Redemption proceeds,distributions,and dividend payments on the Bonds will be made to Cede&
Co.,or such other nominee as may be requested by an authorized representative of DTC.DTC's practice
is to credit Direct Participants'accounts upon DTC's receipt of funds and corresponding detail information
from Issuer or Agent,on payable date in accordance with their respective holdings shown on DTC's records.
Payments by Participants to Beneficial Owners will be governed by standing instructions and customary
practices, as is the case with securities held for the accounts of customers in bearer form or registered in
"street name," and will be the responsibility of such Participant and not of DTC (nor its nominee), the
Paying Agent,or the County,subject to any statutory or regulatory requirements as may be in effect from
time to time.Payment ofredemption proceeds,distributions,and dividend payments to Cede&Co.(or such
other nominee as may be requested by an authorized representative of DTC) is the responsibility of the
County or the Paying Agent,disbursement of such payments to Direct Participants will be the responsibility
of DTC,and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct
and Indirect Participants.
DTC may discontinue providing its services as depository with respect to the Bonds at any time by
giving reasonable notice to the County or the Paying Agent.Under such circumstances,in the event that a
successor depository is not obtained,Bond certificates are required to be printed and delivered.
The County may decide to discontinue use of the system of book-entry transfers through DTC(or
a successor securities depository). In that event,Bond certificates will be printed and delivered.
Discontinuation of Book-Entry System;Payment to Beneficial Owners
Payment,registration,transfer, exchange and replacement of the Bonds with respect to Beneficial
Owners under the DTC book-entry system are as described above. Only in the event that Bonds are printed
and delivered to the Beneficial Owners do these provisions then apply directly to Beneficial Owners.
Principal of the Bonds and any premium upon the redemption thereof prior to the maturity will be
payable upon presentation and surrender of the Bonds at the principal corporate trust office of the Paying
Agent as defined in the Resolution,or such other location as the Paying Agent may specify. Interest shall
be paid by check mailed by first class mail to the owner of any Bond at the address of such owner shown
8
on the registration books of the Paying Agent,or at such other address the owner of the Bond has filed with
the Paying Agent for such purpose on or before the Record Cate. Owners of not less than$1,000,000 in
principal amount of Bonds may,by written request received by the Paying Agent not later than the Record
Date prior to any Interest Payment Date, have interest payments made on the date due to an account
maintained in the United States of America in immediately available funds.
Any Bond may be exchanged for Bonds of any authorized denominations upon presentation and
surrender at the principal corporate trust office of the Paying Agent as defined in the Resolution,together
with a request for exchange signed by the registered owner or by a person legally empowered to do so in
a form satisfactory to the Paying Agent. Any Bond may be transferred on the Bond registration books upon
presentation and surrender of the Bond at the principal corporate trust office of the Paying Agent together
with an assignment executed by the registered owner or by a person legally empowered to do so in a form
satisfactory to the Paying Agent. Upon exchange or transfer,the Paying Agent shall complete,authenticate
and deliver a new Bond or Bonds of any authorized denomination or denominations requested by the
registered owner or by a person legally empowered to do so, equal in the aggregate to the unmatured
principal amount of the Bond surrendered and bearing interest at the same rate and maturing on the same
date.
The Paying Agent will not be required to exchange or transfer any Bond during the period from(a)
the close ofbusiness on the applicable Record Date to and including the succeeding Interest Payment Date,
or (b) the close of business on the date on which notice of redemption is given to and including the
redemption date.
9
Debt Service
Annual debt service obligations for the Bonds, assuming that no optional redemptions are made,
are as follows:
Annual Debt Service
The Bonds
Payment Date
(S tep eember 1) Outstanding Bonds(') Principal Interest Total Total Debt Service
2004 $ 1,497,431.26
2005 1,533,363.76
2006 1,560,861.26
2007 1,578,513.76
2008 1,583,558.76
2009 1,591,303.76
2010 1,592,388.76
2011 1,595,833.76
2012 1,586,538.76
2013 1,594,468.76
2014 1,594,096.26
2015 1,595,068.76
2016 1,587,531.26
2017 1,596,651.26
2018 1,591,450.00
2019 1,592,882.50
2020 1,304,717.50
2021 1,304,282.50
2022 795,525.00
2023 397,262.50
2024 401,850.00
2025
2026
2027
TOTAL $29,475,580.14
See"DISTRICT GENERAL AND FINANCIAL INFORMATION®District Debt"for a description of other outstanding bonds of the
District.
Redemption
Optional Redemption. The Bonds maturing on or before September 1, 2013, are not subject to
optional redemption. Bonds maturing on and after September 1,2014,are subject to redemption prior to
their respective stated maturity dates, at the option of the District, from any source of available funds, in
whole or in part, on any date on or after September 1, 2013, at the optional redemption prices set forth
below. If less than all of the Bonds are called for redemption, such Bonds shall be redeemed in inverse
order of maturities or as otherwise directed by the District, and if less than all of the Bonds of any given
maturity are called for redemption,the portions of such Bonds of a given maturity to be redeemed shall be
determined by lot.
10
Redemption_Date R.edemntion Price
September 1,2013 and thereafter 100%
[If there are any Term Bonds, as may be determined by the Underwriter upon sale of the Bonds,
the following ".Mandatory Finking Fund Redemption"paragraph and table will appear in respect to any
maturity of Term Bonds so established.]
.Mandatory Finking Fund Redemption. Term Bonds maturing on September 1, 20_, shall be
subject to redemption prior to their stated maturity,in part by lot,from mandatory sinking fund payments
in the following amounts and on the following dates,at the principal amount thereof on the date fixed for
redemption,without premium:
Rede=tion Date Principal Amount
September 1,20_
September 1,20
September 1,20_
The principal amount of each mandatory sinking fund payment of any maturity shall be reduced
proportionately by the amount of any Bonds of that maturity optionally redeemed prior to the mandatory
sinking fund payment date.
Notice of Redemption. Notice of redemption will be given by the Paying Agent at the expense of
the District. Such notice will specify:(a)that the Bonds or a designated portion thereof are to be redeemed,
(b)the numbers and CUSIP numbers of the Bonds to be redeemed, (c)the date of notice and the date of
redemption, (d) the place or places where the redemption will be made, and (e) descriptive information
regarding the Bonds including the dated date, interest rate and maturity date. Such notice of redemption
will also state that the Bonds,along with the interest accrued to such date and the redemption premium,if
any, will become due and payable on the specified date, and that from and after such date interest with
respect to the Bonds will cease to accrue.
Notice of redemption will be made by registered or otherwise secured mail,postage prepaid,to(a)
the registered owners of the Bonds being redeemed (or, if such owner is a syndicate, to the managing
member of such syndicate),(b)a municipal registered securities depository,and(c)a national information
service that disseminates securities redemption notices.Notice of redemption will be at least thirty days,
but not more than sixty days,prior to the redemption date. Neither failure to receive such notice nor any
defect in the content of such notice will affect the sufficiency of the proceeding for the redemption of the
Bonds.
AD VALOREM PROPERTY TAXATION
The information in this section describes how ad valorem property taxes in general are assessed
and levied. For specific information on the property tax base, tax levies and collections in the District,see
"DISTRICT TAX BASE INFORMATION"herein.
11
County Services
School districts within each county use the services of that county for the assessment and collection
of property taxes for district purposes. District property taxes,including the ad valorem property tax for
payment of the Bonds,are assessed and collected by the county at the same time and on the same rolls as
county, special district and city property taxes.
Assessed Valuation
All property is assessed using full cash value as defined by Article XIIIA of the Constitution. State
law exempts from taxation$7,000 of the full cash value of an owner-occupied dwelling,provided that the
owner files for such exemption. This exemption does not result in any loss of tax revenue to local agencies,
since the State reimburses local agencies for the value of taxes on exempted property. State law also
provides exemptions from ad valorem property taxation for certain classes of property based on ownership
or use, such as churches, colleges, non-profit hospitals and charitable institutions; the State does not
reimburse local agencies for any tax not levied due to these exemptions. State and federal government
property also is not taxed.
For assessment and collection purposes,property is classified as either"secured"or"unsecured„
and is listed accordingly on separate parts of the assessment roll. The "secured roll" is that part of the
assessment roll containing State-assessed property and other property having a tax lien which is sufficient,
in the opinion of the assessor, to secure payment of the taxes. Unsecured property comprises all other
taxable property. Unsecured property is assessed on the"unsecured roll." Every tax levied by a county that
becomes a lien on secured property has priority over all present and future private liens arising pursuant to
State law on the secured property,regardless of the time of the creation of the other liens. A tax levied on
unsecured property does not become a lien against the taxed unsecured property,but may become a lien on
other property owned by the taxpayer. Valuation of secured property and a statutory tax lien is established
as of January 1 prior to the tax year(the tax year is the July 1 -June 30 fiscal year of the State)of the related
tax levy, and the secured and unsecured tax rolls are certified on or before July 1 of the tax year by the
County Assessor. New property and improvements are assessed and added to"supplemental"rolls during
the year acquired or improvements are completed,and taxed at the secured or unsecured rate then in effect,
as the case may be, for the remaining portion of that year. The next year and thereafter such assets are
assessed on the regular tax rolls.
Future growth in assessed valuation allowed under Article XHIA is allocated on the basis of"situs"
among the jurisdictions that serve the tax rate area within which the growth occurs. Local agencies and
school districts will share the growth of"base" revenues from the tax rate area. Each year's growth
allocation becomes part of each agency's allocation in the following year.
See"DISTRICT TAX BASE IIVNFORMATION"herein for a history of assessed valuation and
a list of the largest secured tax payers for the current tax year within the District.
State-Assessed Utility Property
The Constitution provides that the State Board of Equalization(the "SBE")rather than counties
assess certain property owned or used by regulated utilities. Such property is grouped and assessed by the
SBE as"going concern"operating units,which may cross local tax jurisdiction boundaries,rather than as
individual parcels of real or personal property separately assessed. Such utility property is known as
"unitary property." The SBE assesses property at"fair market value,"determined by various methods and
formulae depending on the nature of the property, except that certain railroad property is assessed at a
specified percentage of the fair market value determined by the SBE,in conformity with federal law. The
12
SBE assesses values as of January 1 prior to the tax year of the related tax levy. Property tax on SBE-
assessed property is then levied and collected by each county in the same manner as county assessed
property,but at special county-wide tax rates, and distributed to each taxing agency within that county,
subject to certain adjustments,according to the approximate percentage allocated to each taxing agency in
the prior year.
Recent changes in the California electric utility industry structure and in the way in which
components of that industry are regulated and owned, including the sale of electric generation assets to
largely unregulated,non-utility companies,have caused some property that had been assessed by the SBE
to be assessed locally instead. If locally taxed property is acquired by a utility and taxed as unitary property,
local taxing agencies within a county will lose that assessed value. If the State or a local municipality buys
or otherwise acquires property owned by a private,tax paying utility,such property will be removed from
the tax rolls. Ad valorem tax rates for local agency bonds may have to be adjusted up or down in response
to such changes in assessed value.
Tax Levies,Collections and Delinquencies
Property tax rates are set by the first business day of September of the tax year of the related tax
levy. The secured property tax is payable in two equal installments due November 1 and February 1,and
payments become delinquent if not postmarked or paid by end of business day on December 10 and
April 10,respectively. Taxes on unsecured property(personal property and leasehold interests)are levied
at the preceding fiscal year's secured tax rate and have a due date set by each county effectively no earlier
than July 1 and no later than July 31 of each year. Taxes on unsecured property become delinquent if not
postmarked or paid by end of business day on August 31, or if added to the unsecured roll after July 31,
become delinquent at the end of the month succeeding the month of enrollment.
A 10%penalty attaches to any delinquent payment for secured roll taxes. In addition,property on
the secured roll for which taxes are delinquent becomes tax-defaulted. Such property may thereafter be
redeemed by payment of the delinquent taxes and the delinquency penalty,plus a redemption penalty of
1.5% per month to the time of redemption. If taxes are unpaid for a period of five years or more, the
property is subject to auction sale by the County Tax-Collector.
In the case of unsecured property taxes,a 10%penalty attaches to delinquent taxes on property on
the unsecured roll,and after the last day of the second month after the 10%penalty attaches,an additional
penalty of 1.5% per month begins to accrue, and a lien is recorded against the assessee. The taxing
authority may collect delinquent unsecured personal property taxes by: (a) a civil action against the
taxpayer;(b)filing a certificate of delinquency in the office of the County Clerk specifying certain facts in
order to obtain a judgment lien on specific property of the taxpayer; and(c) seizure and sale of personal
property,improvements or possessory interests belonging or assessed to the assessee.
Supplemental roll taxes are due on the date mailed. If the tax bill is mailed within the months of
July through October,the first installment shall become delinquent at 5 p.m.,or the end of the business day,
whichever is later,on December 10 of the same year and the second installment shall become delinquent
at 5 p.m.,or the end of the business day,whichever is later,on April 10 of the next year;if the bill is mailed
within the months of November through June,the first installment shall become delinquent at 5 p.m.,or the
end of the business day,whichever is later,on the last day of the month following the month in which the
bill is mailed and the second installment shall become delinquent at 5 p.m.,or the end of the business day,
whichever is later,on the last day of the fourth calendar month following the date the first installment is
delinquent. A 10%penalty attaches to any delinquent payment for supplemental roll taxes.
All tax due dates and delinquency dates become the next business day if they fall on a day that is
not a business day.
13
Teeter Plan
Under the Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale
Proceeds (the "Teeter Plan"), as provided for in Section 4701 et seq. of the State Revenue and Taxation
Code,each participating local agency levying property taxes,including school districts,receives from its
county the amount of uncollected taxes credited to its fund,in the same manner as if the amount credited
had been collected. In return,the county receives and retains delinquent payments,penalties and interest
as collected, that would have been due the local agency. The Teeter Plan, once adopted by a county,
remains in effect unless the county board of supervisors orders its discontinuance or unless,prior to the
commencement of any fiscal year,the board of supervisors receives a petition for its discontinuance from
two-thirds of the participating revenue districts in the county. A board of supervisors may, after holding
a public hearing on the matter, discontinue the procedures under the Teeter Plan with respect to any tax
levying agency in the county when delinquencies for taxes levied by that agency exceed 3%.
The Teeter Plan applies to the 1%general purpose property tax levy. Whether or not the Teeter
Plan also is applied to other tax levies for local agencies,such as the tax levy for general obligation bonds
of a local agency,varies by county.
See"DISTRICT TAX BASF INFORMATION—Secured Tax Charges and Delinquencies"
herein for applicability of the Teeter Plan and a history of property tax collections and delinquencies in the
District.
CONSTITUTIONAL AND STATUTORY PROVISIONS
AFFECTING DISTRICT REVENUE AND APPROPRIATIONS
The information in this section concerning certain provisions of Articles XIIIA,.SIM,MIX and
.XIIID of the State constitution,Propositions 98 and 111 and certain other law is provided as supplementary
information only, to outline the principal constitutional and statutory laws under which the operating
revenue and finances of K-12 school districts in the State are determined. For specific financial
information on the District, see "DISTRICT INFORMATION"herein.
Article XIIIA
Article XIIIA of the State constitution(the"Constitution")limits,subject to certain exceptions,the
amount of ad valorem taxes on real property to 1% of"full cash value" as determined by the county
assessor. Article XIItA defines"full cash value"to mean"the county assessor's valuation of real property
as shown on the 1975/76 tax bill under`full cash value'or,thereafter,the appraised value of real property
when purchased,newly constructed, or a change in ownership has occurred after the 1975 assessment,"
subject to exemptions in certain circumstances ofproperty transfer or reconstruction. The"full cash value"
is subject to annual adjustment to reflect increases, not to exceed 2% for any year, or decreases in the
consumer price index or comparable local data,or to reflect reductions in property value caused by damage,
destruction or other factors.
Article XHIA requires a vote of two-thirds of those voting in an election to impose ad valorem
taxes,and,except to pay debt service on certain voter approved indebtedness,prohibits the imposition of
any additional ad valorem,sales or transaction taxes on real property. Article XM does permit ad valorem
taxes to be levied in excess of the basic 1% tax limitation as required to pay debt service (a) on any
indebtedness approved by the voters prior to July 1,1978,(b)on any bonded indebtedness approved by two-
thirds of the votes cast by the voters for the acquisition or improvement of real property on or after July 1,
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1978, or(c)on any bonded indebtedness approved by fifty-five percent of the votes cast by the voters of
a school or community college district for the construction,reconstruction,rehabilitation or replacement
of,including furnishing and equipping of,or the acquisition or lease of real property for,school facilities,
provided that certain accountability and other requirements are satisfied.In addition,Article XIIIA requires
the approval of two-thirds of all members of the State Legislature to change any State taxes for the purpose
of increasing tax revenues,while prohibiting the imposition by the State Legislature of any new ad valorem,
sales or transaction taxes on real property.
Legislation has been enacted and amended a number of times since 1978 to implement Article
XIIIA. Under current law,local agencies are no longer permitted to levy directly any property tax except
to pay voter-approved indebtedness. The 1%property tax is automatically levied by each county in the
State and distributed according to a formula among taxing agencies within that county. The formula
apportions the tax roughly in proportion to the relative shares of taxes last levied prior to 1989.
That portion of annual property tax revenues generated by increases in assessed valuations within
each tax rate area within a county, subject to redevelopment agency claims, if any,on tax increment and
subject to changes in organization,if any,of affected jurisdictions,is allocated to each jurisdiction within
the tax rate area in the same proportion that the total property tax revenue from the tax rate area for the prior
year was allocated to such jurisdictions.
Article XIIIB
Article XIIIB of the Constitution, approved by voters in 1979 and subsequently amended by
Propositions 98 and 111 (together,the"Gann limit"),limits the annual appropriations of the State and of
any city, county, school district, authority or other political subdivision of the State, to the level of
appropriations of the particular governmental entity for the prior fiscal year,as adjusted for changes in the
cost of living and in population,for transfers in the financial responsibility for providing services and for
certain declared emergencies. As amended,Article XIIIB defines:
(a) "change in the cost of living"with respect to school districts to mean the percentage change
in California per-capita income from the preceding year,and
(b) "change in population"with respect to a school district to mean the percentage change in
the average daily attendance of the school district from the preceding fiscal year.
The appropriations of an entity of local government subject to Article XI[IB limitations include the
proceeds of taxes levied by or for that entity and the proceeds of certain State subventions to that entity.
"Proceeds of taxes"include,but are not limited to,all tax revenues and the proceeds to the entity from(a)
regulatory licenses, user charges and user fees (but only to the extent that these proceeds exceed the
reasonable costs in providing the regulation,product or service), and(b)the investment of tax revenues.
For school districts Article XIIIB constrains appropriations from State and local tax sources,but not federal
aid or non-tax income, such as revenues from cafeteria sales or adult education fees.
Appropriations subject to limitation do not include(a)refunds of taxes,(b)appropriations for debt
service,(c)appropriations required to comply with certain mandates of the courts or the federal government,
(d)appropriations of certain special districts,(e)appropriations for all qualified capital outlay projects as
defined by the legislature, (f) appropriations derived from certain fuel and vehicle taxes and (g)
appropriations derived from certain taxes on tobacco products.
Article XIIIB includes a requirement that all revenues received by an entity of government other
than the State in a fiscal year and in the fiscal year immediately following it in excess of the amount
permitted to be appropriated during that fiscal year and the fiscal year immediately following it shall be
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returned by a revision of tax rates or fee schedules within the next two fiscal years. If a school district
receives any proceeds of taxes in excess of its appropriations limit,it may increase its appropriations limit
to equal that amount by taking appropriations limit from the State.
Article XMB also includes a requirement that fifty percent of all revenues received by the State in
a fiscal year and in the fiscal year immediately following it in excess of the amount permitted to be
appropriated during that fiscal year and the fiscal year immediately following it shall be transferred and
allocated to the State School Fund pursuant to Section 8.5 of Article XVI of the Constitution. See
"Propositions 98 and 111"below.
Propositions 98 and 111
On November 8, 1988 the voters approved Proposition 98,an initiative constitutional amendment
and statute called"The Classroom Instructional Improvement and Accountability Act"("Proposition 98").
In addition to adding certain provisions to the Education Code,Proposition 98 also amended Article XM
and Section 8 of Article XVI of the Constitution and added Section 8.5 of Article XVI to the Constitution,
the effects of which are to establish a minimum level of State funding for school districts, to allocate to
school districts,within limits,State revenues in excess ofthe State's appropriations limit and to exempt such
excess funds from school district appropriations limits.
On June 5, 1990,the voters approved Proposition 111 (Senate Constitutional Amendment No. 1)
called the"Traffic Congestion Relief and Spending Limit Act of 1990"("Proposition 111")which further
modified Article XIIIB and Sections 8 and 8.5 of Article XVI of the Constitution with respect to
appropriations limitations and school funding priority and allocation.
Article XIIIB, as amended by both Proposition 98 and Proposition 111,is discussed above under
"Article X1HB."
The provisions of Sections 8 and 8.5 of Article XVI, as added to or amended by Propositions 98
and 111,may be summarized as follows:
(a) State Funding orf Schools(Section 8). Monies to be applied by the State for the support of
school districts must be at a level equal to the greater of the following"tests":
(i) The amount which, as a percentage of the State general fund revenues which may be
appropriated pursuant to Article XIIIB, equals the percentage of general fund revenues
appropriated for school districts in fiscal year 1986/87,
(ii) The amount actually appropriated to school districts in the prior fiscal year from
general fund proceeds and from allocated local proceeds of taxes (excluding any excess
state revenues allocated pursuant to Section 8.5),adjusted for changes in enrollment and
for the change in the cost of living(operative only in a fiscal year in which the percentage
growth in California per capita personal income is less than or equal to the percentage
growth in per capita general fund revenues plus the-half of one percent),
(iii) The amount actually appropriated to school districts in the prior fiscal year from
general fund proceeds and from allocated local proceeds of taxes (excluding any excess
State revenues allocated pursuant to Section 8.5)adjusted for changes in enrollment and
for the change in per capita general fund revenues, and, in addition, an amount equal to
one-half of one percent times the prior year appropriations (excluding any excess State
revenues)adjusted for changes in enrollment(operative only in a fiscal year in which the
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percentage growth in California per capita personal income is greater than the percentage
growth in per capita general fund revenues plus one-half of one percent).
If the third test is used in any year the difference between the third test and the second test
will become a"credit"to schools which will be paid in future years when the general fund
revenue growth exceeds personal income growth.
The State legislature by a two-thirds vote of both houses,with the Governor's concurrence,
may suspend for one year the minimum funding provisions for school districts as provided
for in Section 8.
(b) Allocations to the State School Fund(Section 8.5). In addition to the amounts applied to
school districts under the tests discussed above,the State Controller is directed to allocate
available excess State revenues (pursuant to Article XM) to the State School Fund.
However,no such allocation is required at any time that the Director of Finance and the
Superintendent of Public Instruction mutually determine that current annual expenditures
per student equal or exceed the average annual expenditures per student of the 10 states
with the highest annual expenditures per student and the average class size equals or is less
than the average class size of the 10 states with the lowest class size.
Such allocations do not constitute appropriations subject to Article XIII$limitations and
are to be made in an equal amount per enrollment.
Articles XIIIC and XIIID
On November 5, 1996,the voters of the State approved Proposition 218, the so-called"Right to
Vote on Taxes Act." Proposition 218 added Articles XIIIC and XIIID to the Constitution,which contain
a number of provisions affecting the ability of local agencies,including school districts,to levy and collect
taxes,assessments,fees and charges. Among other things,Article XIIIC establishes that every tax is either
a "general tax" (imposed for general governmental purposes) or a "special tax" (imposed for specific
purposes); prohibits special purpose government agencies such as school districts from levying general
taxes; and prohibits any local agency from imposing, extending or increasing any special tax beyond its
maximum authorized rate without a two-thirds vote. Article XIIIC also provides that no tax may be assessed
on property other than ad valorem property taxes imposed in accordance with Articles XIII and XIIIA of
the Constitution and special taxes approved by a two-thirds vote under Article XIIIA, Section 4.
Article XIIIC also provides that the initiative power shall not be limited in matters of reducing or
repealing local taxes,assessments,fees and charges.In respect to school district general obligation bonds,
the Constitution and laws of the State impose a mandatory duty on the county Treasurer-Tax Collector to
levy a property tax sufficient to pay debt service on such bonds coming due in each year. The initiative
power cannot be used to reduce or repeal the authority and obligation to levy such taxes which are pledged
as security for payment of such bonds or to otherwise interfere with performance of the mandatory duty of
a school district and its county with respect to such taxes which are pledged as security for payment of such
bonds. Legislation adopted in 1997 provides that Article XMC! shall not be construed to mean that any
owner or beneficial owner of a municipal security assumes the risk of,or consents to,any initiative measure
which would constitute an impairment of contractual rights under the contracts clause of the U.S.
Constitution.
Voter approved special taxes, including those levied pursuant to the Mello-Roos Community
Facilities Act,"parcel"taxes,and assessments levied pursuant to the Landscape and Lighting District Act
of 1972,that are not pledged by statute to the payment of bonds,may be subject to reduction or repeal by
voter initiative under the provisions of Article XIIIC.
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Article XIIID deals with assessments and property-related fees and charges. Article XIED explicitly
provides that nothing in Article XIIIC or XIIID shall be construed to affect laws existing prior to enactment
of Articles XIIIC and XIIID relating to the imposition of fees or charges as a condition of property
development;however it is not clear whether the initiative power is therefore unavailable to repeal or reduce
developer and mitigation fees imposed by a school district.
The interpretation and application of Article XIIIC and Article XMD will ultimately be determined
by the courts with respect to a number of the matters discussed above,and it is not possible at this time to
predict with certainty the outcome of such determination.
Future Initiatives
Articles XIIIA,XIIIB,XIIIC and XIIID and Propositions 98 and 111 were each adopted as measures
that qualified for the ballot pursuant to the State's initiative process. From time to time other initiative
measures could be adopted, further affecting school districts'revenues or ability to expend revenues.
GENERAL SCHOOL DISTRICT FINANCIAL INFORMATION
The information in this section concerningfundingprocedures of K 12 school districts in the State
is provided as supplementary information only. For specific financial information on the District, see
"DISTRICT INFORMATION"herein.
State Funding of School Districts
Annual State apportionments of basic and equalization aid to K-12 school districts for general
purposes are made according to a revenue limit per unit of average daily attendance ("A.D.A."). If a
district's total revenue limit exceeds its property tax revenue,its annual State apportionments, subject to
certain adjustments, amount to the difference between revenue limit and its actual property tax receipts
(after any redevelopment agency tax increment or other deductions or"shifts"that may be in effect under
State law). A.D.A.is determined by school districts twice a year,in December("First Period A.D.A.")and
April("Second Period A.D.A.").
The calculation of the amount of State apportionment a school district is entitled to receive each
year is summarized as follows: first,the prior year Statewide revenue limit per A.D.A.is recalculated with
certain adjustments for equalization and other factors; second,this adjusted prior year Statewide revenue
limit per A.D.A.is inflated according to formulas based on the implicit price deflator for government goods
and services and the Statewide average revenue limit per A.D.A. for each type of A.D.A., yielding the
school district's current year revenue limits per A.D.A.; third,the current year revenue limits per A.D.A.
are applied to the school district's A.D.A. for either the current or prior year,as the district elects; fourth,
revenue limit adjustments known as"add-ons"are calculated for each school district if the school district
qualifies for such add-ons(for example,add-ons to adjust for small school district size and providing meals
for needy pupils,among others);and fifth,local property tax revenues are deducted from the total revenue
limit calculated for each district to arrive at the amount of State apportionment each school district is
entitled to for the current year.
The State revenue limit is calculated three times a year for each school district on the basis of
projections submitted by the district on or about December 10,based on First Period A.D.A.,and April 15
and June 30,both based on Second Period A.D.A. Beginning in fiscal year 1998/99,A.D.A.calculations
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