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HomeMy WebLinkAboutMINUTES - 05071996 - C78 -7B i - h RES OLU ON NO. Dated: RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF CONTRA COSTA, STATE OF CALIFORNIA, AUTHORIZING THE ISSUANCE AND SALE OF BONDS OF THE LAFAYETTE ELEMENTARY SCHOOL DISTRICT, PRESCRIBING THE TERMS OF SALE OF SAID BONDS, APPROVING FORMS OF OFFICIAL NOTICE OF SALE AND OF NOTICE OF INTENTION TO SELL BONDS, DELEGATING.TO THE COUNTY TREASURER AUTHORIZATION TO AWARD BID FOR SAID BONDS, AND AUTHORIZING EXECUTION OF NECESSARY CERTIFICATES. WHEREAS, the Governing Board of Lafayette Elementary School District, County of Contra Costa, California(herein called the "District"), duly called and an election was regularly held in the District on November 7, 1995, at which the following proposition was submitted to the electors of the district: "Shall the Lafayette Elementary School District be authorized to finance the repair and renovation of Lafayette schools, including repairing leaky roofs; making seismic and safety upgrades to schools and classrooms; providing safe electrical wiring and adequate outlets; upgrading inefficient heating, ventilation and lighting systems;constructing facilities and renovating deteriorating classrooms, libraries, science, computer laboratories and school. facilities by issuing up to $27,300,000 of bonds at interest rates not to exceed the limit set by law?" and WHEREAS, more than two-thirds of the votes cast on said proposition were in favor of issuing said bonds; and WHEREAS, the Governing Board of the District has requested this Board of Supervisors to offer for sale on May 22, 1996, a series of general obligation bonds of said issue and to designate such bonds the "Lafayette Elementary School District General Obligation Bonds, Election of 1995, Series 1996 in an aggregate principal amount not to exceed $15,000,000, according to the terms and in the manner set forth in a resolution duly adopted by the Governing Board of the District on April 30, 1996, a certified copy of which has been filed with the Clerk of this Board of Supervisors; and WHEREAS, this Board of Supervisors has determined that it is necessary and desirable that bonds of said authorized issue be issued and sold for the purposes for which SF2-57152.2 authorized and on the terms and conditions set forth in said resolution of the Governing Board of the District; and WHEREAS, there have been submitted and are on file with the Clerk of this Board of Supervisors proposed forms of an Official Notice of Sale of Bonds and a Notice of Intention to Sell Bonds, with respect to not to exceed $15,000,000 aggregate principal amount of Lafayette Elementary School District General Obligation Bonds, Election of 1995, Series 1996, proposed to be sold; NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF SUPERVISORS OF THE COUNTY OF CONTRA COSTA AS FOLLOWS: Section 1. Recitals:. All of the above recitals are true and correct. Section 2. District Resolution Incorporated: The resolution of the Governing Board of the District adopted on April.30, 1996, and on file with the Clerk of this Board is hereby incorporated herein by reference and all of the provisions thereof are made a part hereof and shall be applicable to the bonds herein provided for, except as only herein otherwise expressly provided. Section 3. Authorization of Bonds: This Board of Supervisors hereby authorizes, on behalf of the Lafayette Elementary School,District, the sale on May 22, 1996 (or on such other date as shall be determined by the Treasurer-Tax Collector of the County of Contra Costa or a duly appointed deputy thereof (the "County Treasurer"), upon consultation with the Superintendent of the District and the financial advisor to the District, so long as such date is not later than August 9, 1996), of not to exceed $15,000,000 aggregate principal amount of general obligation bonds of the District, and designates said bonds to be sold as the "Lafayette Elementary School District General Obligation Bonds, Election of 1995, Series 1996" (the "Series 1996 Bonds" or the "Bonds"). The Bonds shall be issued in the principal amounts and maturing in the years as further described herein. Section 4. Terms of Bonds: The Bonds shall be issued in fully registered form without coupons, in the denomination of$5,000 or any integral multiple thereof (provided that no Bond shall have principal maturing on more than one principal maturity date). The Bonds shall be dated June 1, 1996, or such other date as the County Treasurer shall determine upon consultation with the Superintendent of the District and the financial advisor to the District,.and shall bear interest at a rate not to exceed twelve per cent (12%) per annum (the exact rate or rates to be determined upon sale of the Series 1996 Bonds), such interest to be payable commencing on May 15, 1997, and thereafter on May 15 and November 15 of each year. The Series 1996 Bonds shall be initially registered in the name of "Cede & Co.," as nominee of The Depository Trust Company, New York, New York, and shall be initially issued in the principal amounts set forth in the Official Notice of Sale. The Depository Trust Company is hereby appointed depository for the Series 1996 Bonds and registered ownership of the Series 1996 Bonds may not thereafter be transferred except as provided in Section 8 hereof. SM-67152.2 2 The Bonds shall mature, or shall be subject to mandatory sinking fund redemption, as described in Section 7(b) hereof, on May 15 of each of the years. from and including 2000 to and including 2021, in principal amounts to be determined by the County Treasurer upon receipt of a recommendation of the District as to such amounts, prior to distribution of the Official Notice of Sale. The maturity dates and principal amounts of each maturity of the.Bonds, and the aggregate principal amount of the Bonds, shall be designated by the County Treasurer in a Certificate of Award to be completed upon the sale of the Bonds. The principal of the Bonds shall be payable in lawful money of the United States of America to the owner thereof, upon the surrender thereof at the principal corporate trust office of First Trust California, National Association (herein called the "Paying Agent"), in Los Angeles, California, or at such other place or places as the Paying Agent shall designate. The interest on the Bonds shall be payable in like lawful money to the person whose name appears on the bond registration books of the Paying Agent as the owner thereof as of the close of business on the fifteenth day of the month immediately preceding an interest payment date (the "Record Date"), whether or not such day is a business day. Each Bond shall bear interest from the interest payment date next preceding the date of authentication thereof unless it is authenticated as of a date during the period from the sixteenth day of the month next preceding any interest payment date to the interest payment date, inclusive, in which event it shall bear-interest from such interest payment date; or, unless it is authenticated on or before the fifteenth day of the month immediately preceding the first interest .payment date, in which event such Bond shall bear interest from the date thereof; provided, however, that if, at the time of authentication of any Bond, interest.is in default on outstanding Bonds of said series, such Bond shall bear interest from the interest payment date to which interest has previously been paid or made available for payment on the outstanding Bonds. Payment of the interest on any Bond shall be made to the person appearing on the bond registration books of the Paying Agent as the owner thereof, such interest to be paid by check mailed to such owner at such owner's address as it appears on such registration books or at such address as the owner may have filed with the Paying Agent for that purpose. Upon the written request of the owner of Bonds aggregating not less than $1,000,000 in principal amount, given no later than the fifteenth day of the month. immediately preceding the applicable.interest payment date, interest shall be paid by wire transfer in immediately available funds at an account maintained in the United States at such wire address as such owner shall specify in its written request. So long as Cede & Co. or its registered assigns shall be the registered owner of the Series 1996 Bonds, payment shall be made by wire transfer as provided in Section 8(d) hereof. Only such of the Series 1996 Bonds as shall bear a certificate of authentication and registration in the form hereinafter recited, executed by the Paying Agent, shall be valid or obligatory for any purpose or entitled to the benefits of this Resolution, and such certificate of the Paying Agent shall be conclusive evidence that the Series 1996 Bonds so authenticated have been duly authenticated and delivered hereunder and are entitled to the benefits of this Resolution. The Paying Agent shall assign each Bond authenticated and registered by it a distinctive letter, or number, or letter and number, and shall maintain a record thereof which sF2-57152.2 3 shall be available to the District and the County of Contra Costa (herein called.the "County") for inspection. Section 5. Deposit and Investment of Proceeds. The proceeds of sale of the Series 1996 Bonds, exclusive of any premium and accrued interest received, shall be deposited in the County treasury to the credit of the building fund of the District. Any premium and accrued interest shall be deposited upon receipt in the interest and sinldng fund of the District within the County treasury. All funds held by the County Treasurer hereunder shall be invested at the County Treasurer's discretion pursuant to law and the investment policy of the County. At the written direction of the District, the County Treasurer shall invest the building fund of the District in the Local Agency Investment Fund in the Treasury of the State of California. Section 6. Payment of Bonds; Unclaimed Moneys: (a) Series 1996 Bonds shall be paid from the Interest and Sinking Fund of the District as provided in Section 15146 of the- Education Code. (b) Any money held in any fund 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 1996 Bonds and remaining unclaimed for two years after the principal of all of.the Series 1996 Bonds has become due and payable (whether by maturity or upon prior redemption) shall be transferred to the Interest and Sinking Fund of the District for payment of any outstanding general obligation bonds of the District; or, if no general obligation bonds of the District are at such time outstanding, said monies shall be transferred to the general fund of the District in the manner provided.by law. Section 7. Redemption Provisions: (a) Optional Redemption. Series 1996 Bonds maturing on or before May 15, 2006, shall not be subject to optional redemption prior to their respective stated maturity dates. Series 1996 Bonds maturing on and after May 15, 2007, shall be subject to redemption prior to their respective stated maturity dates, at the option of the District, from any source of available funds, as a whole or in part on any date on or after May 15, 2006, at the prices set forth below. If less than all of the Series 1996 Bonds are called for redemption, such Series 1996 Bonds shall be redeemed in inverse order of maturities or as otherwise directed by the District, and if less than all of the Series 1996 Bonds of any given maturity are called for redemption, the portions of such Series 1996 Bonds of a given maturity to be redeemed shall be determined by lot. Series 1996 Bonds shall be redeemed at the following optional redemption prices (expressed as a percentage of the principal amount of the Series 1996 Bonds called for redemption), together with interest accrued thereon to the date of redemption: sF2-57152.2 4 c 7g Redemption Date Redemption Price May 15, 2006 through May 14, 2007 102% May 15, 2007 through May 14, 2008 . 101 May 15, 2008 and thereafter 100 The "redemption date" is that date on which the Bonds which are called are to be presented for redemption. (b) Mandatory Sinking Fund Redemption. The Bonds shall also be subject to mandatory sinking fund redemption (in accordance with specifications to be contained in the Official Notice of Sale, described in Section 13 hereof) as shall be determined by the.County Treasurer upon consultation with the Superintendent of the District and the financial advisor to the District, and the terms of such redemption shall be designated in the Certificate of Award to be completed upon the sale of the Bonds. The Auditor-Controller of the County is hereby authorized to create such sinking funds or accounts for the Bonds as shall be necessary to accomplish the purposes of this section. (c) Notice of Redemption. Notice of any redemption of Bonds shall be mailed, postage prepaid, not less than thirty (30) nor more than sixty (60) days prior to the redemption date (i) to the respective registered' owners thereof at the addresses appearing on the bond registration books, (ii) to the Securities Depositories specified below, and (iii) to one or more of the Information Services specified below, and as may be further required in the Continuing Disclosure Certificate of the District. Notice of redemption to the Securities Depositories and the Information Services shall be given by registered mail. Each notice of redemption shall (a) state the date of such notice; (b) state the name of the Bonds and the date of issue of the Bonds; (c) state the redemption date; (d) state the redemption price; (e) state the dates of maturity of the Bonds to be redeemed, and, if less than all of the Bonds of any such maturity are to be redeemed, the distinctive numbers of the Bonds of such maturity to be redeemed, and in the case of Bonds redeemed in part only, the respective portions of the principal amount thereof to be redeemed; (f) state the CUSIP number, if any, of each maturity of Bonds to be redeemed; (g) require that such Bonds be surrendered by the owners at the principal corporate trust office of the Paying Agent in Los Angeles, California, or at any other place or places designated by the Paying Agent; and (h) give notice that further interest on such Bonds will not accrue after the designated redemption date. For the purposes of this Section 7, Information Services shall mean: o Financial Information, Inc.'s "Daily Called Bond Service,. 30 Montgomery Street,)10th Floor Jersey City, New Jersey 07302 Attention: Editor SP2-57152.2 5 � 7S Kenny Information Services' "Called Bond Service" 55 Broad Street, 28th Floor New York, New York 10004 Moody's "Municipal and Government" 99 Church Street, 8th Floor New York, New York 10007-2796 Attention: Municipal News Reports Standard and Poor's "Called Bond Record" 25 Broadway, 3rd Floor New York, New York 10004 Securities Depositories shall mean: The Depository Trust Company 711 Stewart Avenue Garden City, New York 11530 Fax: (516) 227-4039 or 4190 Midwest Securities Trust Company Capital Structures - Call Notification 440 South LaSalle Street Chicago, Illinois 60605 Fax: (312) 663-2343 Philadelphia Depository Trust Company Reorganization Division 1900 Market Street Philadelphia, Pennsylvania 19103 Attention: Bond Department Fax: (215) 496-5058 or, in accordance with then-current guidelines of the Securities and Exchange Commission, such other.addresses and/or such other services providing information with respect to called bonds and/or such other securities depositories, or no such services or depositories, as the District may designate in a certificate delivered to the County Treasurer and the Paying Agent. The actual. receipt by the owner of any Bond (hereinafter referred to as "Bondowner") or by any Information Service or Securities Depository of notice of such redemption shall not be a condition precedent to redemption, and failure to receive such notice, or any defect in the notice mailed, shall not affect the validity of the proceedings for the redemption of such Bonds or the cessation of interest on the date fixed for redemption. SF2-57152.2 6 c 7� The notice or notices required for redemption shall be given by the Paying Agent,, upon the written request of the District or the County. A certificate of the Paying Agent, the District or the County Treasurer that notice of call and redemption has been given to Bondowners and to the appropriate Securities Depositories and Information Services .as herein provided shall be conclusive as against all parties, and no Bondowner whose Bond is called for redemption may object thereto or object to the cessation of interest on the fixed redemption date by any claim or showing that said Bondowner failed to actually receive such notice of call.and redemption. (d) Redemption Fund. .Prior to the time the Governing Board of the District determines to call and redeem any of the Series 1996 Bonds there shall be established in the accounting records of the District a Redemption Fund to be described or known as the "Lafayette Elementary School District General Obligation Bonds, Election of 1995, Series 1996, Redemption Fund," and prior to or on the redemption'date there, shall be set aside in said Redemption Fund monies available for the purpose and sufficient to redeem, at the premiums payable as in this resolution.provided, the Bonds designated in said notice of redemption. Monies set aside in said Redemption Fund shall be applied on or after the redemption date solely for payment of principal of and premium, if any, on the Bonds to be redeemed upon presentation and surrender of such Bonds. Any interest due on or prior to the redemption date shall be paid from the Interest and Sinking Fund provided for herein. If, after all of the Series 1996 Bonds have been redeemed and cancelled or-paid and cancelled, there are monies remaining in said Redemption Fund or held by the Paying Agent in.trust for the payment of redemption price of the Series 1996 Bonds, said monies shall be transferred to'the Interest and Sinking Fund of the District for payment of any outstanding general obligation bonds of the District; provided, however, that if said monies are part of the proceeds of bonds of the District, said monies shall be transferred to the fund created for the payment of principal of and interest on such bonds. If no general obligation bonds of the District are at such time outstanding, said monies shall be transferred to the general fund of the District in the manner provided by law. When notice of redemption has been given, substantially as provided for herein, and when the amount necessary for the payment of the principal of and premium, if any, on the Series 1996 Bonds to be redeemed is set aside for such purposes in the Redemption Fund, as provided for herein, the Series 1996 Bonds designated for redemption shall become due and payable on the date fixed for redemption thereof, and upon presentation and surrender of said Bonds at the place specified in the notice of redemption, such Bonds shall be redeemed and paid at said redemption price out of the Redemption Fund, and no interest will accrue on such Bonds called for redemption after the redemption date specified in such notice, and the owners of said Bonds so called for redemption after such redemption date shall look for the payment of such Bonds and the premium thereon only to said Redemption Fund. All Bonds redeemed shall be cancelled forthwith by the Paying Agent or the County Treasurer and shall not be reissued. (e) Defeasance of Bonds. If at any time the District shall pay or cause to be paid or there shall otherwise be paid to the Bondowners of all outstanding Bonds all of the principal, interest and premium, if any, represented'by Series 1996 Bonds at the times and in the manner provided herein and in the Series 1996 Bonds, or as otherwise provided by law, then such Bondowners shall cease to be entitled to the obligation of the District as provided in Section 12 sF2-57152.2 7 hereof, and such obligation and all agreements and covenants of the District and of the County Treasurer to such Bondowners hereunder and under the Series 1996 Bonds shall thereupon be satisfied and discharged and shall terminate, except only that the District shall remain liable for payment of all principal, interest and premium, if any, represented by the Series 1996 Bonds, but only out of monies on deposit in the Interest and Sinking Fund or otherwise held in trust for such payment; and provided further, however, that the provisions of Section 6(b) hereof shall apply in all events. Section 8. Bond Depository; Discontinuation of Book-Entry System: (a) The Series 1996 Bonds shall be initially issued and registered as provided in Section 4. Registered ownership of the Series 1996 Bonds, or any portion thereof, may not thereafter be transferred except: (i) To any successor of Cede & Co., as nominee of The Depository Trust Company, or its nominee, or to any substitute depository designated pursuant to clause (ii) of this section (a "substitute depository"); provided, that any successor of Cede & Co., as nominee of The Depository Trust Company or substitute depository, shall be qualified under any applicable laws to provide the services proposed to be provided by it; (ii) To any substitute depository not objected to by the County, upon (1) the resignation of The Depository Trust 'Company or its successor (or any substitute depository or its successor). from its functions as depository, or (2) a determination by the County to substitute another depository for The Depository Trust Company (or its successor) because The Depository Trust Company or its successor (or any substitute depository or its successor) is no longer able to carry out its functions as depository; provided, that any such substitute depository shall be qualified under any applicable laws to provide the services proposed to be provided by it; or (iii) To any person as provided below, upon (1) the resignation of The Depository Trust Company or its successor (or substitute depository or its successor) from its functions as depository, or (2) a determination by the County to remove The Depository Trust Company or its successor (or any substitute depository or its successor) from its functions as depository. (b) In the case of any transfer pursuant to clause (i) or clause (ii) of subsection (a) hereof, upon receipt of the outstanding Bonds by the Paying Agent, together with. a written request of the County, a new Bond for each maturity shall be executed and delivered in the aggregate principal amount of the Series 1996 Bonds then outstanding, and registered in the name of such successor or such substitute depository, or their nominees, as the case may be, all as specified in such written request of the County. In the case of any transfer pursuant to clause (iii) of subsection (a) hereof, upon receipt of the outstanding Bonds by the Paying Agent together with a written request of the County, new Bonds shall be executed.and delivered in such denominations numbered in the manner determined by the Paying Agent and registered in the names of such persons as are requested in such written request of the County, subject to the limitations of Section 4 and the receipt of such a written request of the County, and thereafter, sF2-57152.2 8 the Series 1996 Bonds shall be transferred pursuant to the provisions set forth in this resolution; provided, that the Paying Agent shall not be required to deliver such new Bonds within fewer than sixty.(60) days. (c) The County and the Paying Agent shall be entitled to treat the person-in whose name any Bond is registered as the owner thereof, notwithstanding any notice to the contrary received by the Paying Agent or the County;.and the County and the Paying Agent shall have no responsibility for transmitting payments to;communicating with,notifying, or otherwise dealing with, any beneficial.owners of the Series 1996 Bonds. Neither the County nor the Paying Agent shall have any responsibility or obligation, legal or otherwise, to the beneficial owners or to any other party including The Depository Trust Company or its successor (or substitute depository or its successor), except as the holder of any Bonds. (d) So long as the outstanding Bonds are registered in the name of Cede & Co. or its registered assigns, the County and the Paying Agent shall cooperate with Cede & Co. or its registered assigns, as sole holder, in effecting payment of the principal and interest on the Series 1996 Bonds by arranging for payment in such manner that funds for such payments are properly identified and are made immediately available on the date they are due. Section 9. Transfer and Exchange: (a) Transfer. Any Bond may; in accordance with its terms, be transferred upon the books required to be kept pursuant to the provisions of . Section 10 hereof, by the person in -whose'name it is registered, in person or by the duly authorized attorney of such person, upon surrender, of such Bond to the Paying Agent for cancellation, accompanied by delivery of a duly executed written instrument of transfer in a form approved by the Paying Agent. Whenever any Bond or Bonds shall be surrendered for transfer, the designated County officials shall execute(as provided in Section 11)and the Paying Agent shall authenticate and deliver a new Bond or Bonds of the same series and maturity, for a like aggregate principal amount. The Paying Agent shall require the payment by the Bondowner requesting any such transfer of any tax or.other governmental charge required to be paid with respect to such transfer. No transfer of a Series 1996 Bond shall be required to be made by the Paying Agent during the period from the sixteenth day of the month next preceding any interest payment date, or date for which such Series 1996 Bond has been selected for redemption in whole or in part,. to and including such interest payment date or redemption date. (b) Exchange. Series 1996 Bonds may be exchanged at the principal corporate trust office of the Paying Agent for a like aggregate principal amount of Bonds of other authorized denominations of the same series and maturity. The Paying Agent shall require the payment by the Bondowner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. No exchange of Bonds shall be required to be made by the Paying Agent during the period from the sixteenth day of the month next preceding any interest payment date, or date SF2-57152.2 9 for which such Bond has been selected for redemption in whole or in part, to and including such interest payment date or redemption date. Section 10. Registration Books: The Paying Agent will keep or cause to be kept, at its principal corporate trust office sufficient books for the registration and transfer of the Series 1996 Bonds,. which shall at all times be open to inspection by the District and the County, . and, upon presentation for such purpose, the Paying Agent shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred on said books, Bonds as hereinbefore provided. Section 11. Form of Bonds: Execution: (a) The Series 1996 Bonds, including the Paying Agent's certificate of authentication and registration and the form of assignment to appear thereon, shall be in substantially the form attached hereto as Exhibit A, with necessary or appropriate variations, omissions and insertions as permitted or required by this Resolution; provided, that if a portion of the text. of any Bond is printed on the reverse of the Bond, the following legend shall be printed on the Bond: "THE PROVISIONS OF THIS BOND ARE CONTINUED ON THE REVERSE HEREOF AND SUCH CONTINUED PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE." (b) The Series 1996 Bonds shall be signed by the manual or facsimile signatures of the Chair of this Board of Supervisors and'of the County Treasurer, and countersigned by the manual or facsimile signature of the Clerk of this Board of Supervisors or by a deputy of either of said Clerk or of the County Treasurer, and the official seal of this Board of Supervisors shall be printed or impressed upon each of the Bonds. The Bonds shall be authenticated by a manual signature of a duly authorized officer of the Paying Agent. Section 12. General Obligation of District: The Series 1996 Bonds represent the general obligation. solely of the District. The money for the redemption of the Series 1996 Bonds and payment.of principal of and interest on the Series 1996 Bonds shall be raised by taxation upon all taxable property in the District and provision shall be made for the levy and collection of such taxes in the manner provided by law.and for such redemption and payment out of the Interest and Sinking Fund of the District.. Section 13. Sale of Bonds: (a) Official Notice of Sale: The form of proposed Official Notice of Sale inviting bids for the Series 1996 Bonds, in substantially the form on file with the Clerk of this Board of Supervisors, is hereby approved and adopted as the Official Notice of Sale inviting bids for the Series 1996 Bonds. The County Treasurer is hereby authorized to complete the Official Notice of Sale by inserting therein.the maturity schedules for the Series 1996 Bonds before the distribution of the Official Notice of Sale, and proposals shall be received on behalf of the Clerk of this Board of Supervisors on May 22, 1996 (or on such other date as shall be determined by the County Treasurer, so long as such date is not later than 'August 9, 1996), at the hour and place designated in said Official Notice of Sale by the County Treasurer upon consultation with the Superintendent of the District and the financial advisor to the District, for the purchase of the Series 1996 Bonds for cash at not less than their principal amount plus accrued interest thereon to the date of their delivery, and at the interest rate or rates SF2-57152.2 10 to be designated in the bid. Sutro & Co., Inc., 201 California Street, San Francisco, CA 94111, financial advisor to the District, is hereby authorized and directed to cause to be mailed to prospective bidders for the Series 1996 Bonds copies of said Official Notice of Sale,•subject to such corrections, revisions or additions hereafter deemed necessary by the Superintendent of the District and as may be acceptable to the County Counsel of the County. (b) Advertisement for Bids.- The form of proposed Notice of Intention to Sell Bonds in substantially the form on file with the Clerk of this Board of Supervisors is hereby approved and adopted as the Notice of Intention to Sell Bonds, and the Clerk of this Board of Supervisors is hereby authorized and directed to cause said Noticed Intention to Sell Bonds, subject to such corrections, revisions or additions as may be deemed necessary by the Superintendent of the District and as may be acceptable to the County Counsel of the County, to be published once at least fifteen days before the date of sale in a financial publication generally circulated throughout the State of California or which the Financial Advisor advises is expected to be disseminated among prospective bidders for the Bonds, and to be published, beginning on a date no later than the date fourteen days prior to the date of sale, once a week, on the same day of each week, for at least two weeks in a newspaper of general circulation published in the County. (c) Award of Bonds. The County Treasurer or his designee, as delegate of this Board of Supervisors, is hereby authorized to accept the best responsive bid for the Series 1996 Bonds, so long as such bid shall provide a true interest cost (as described in the Official Notice of Sale) to the District of not to exceed ten percent (10%) per annum and the price to be paid for the Bonds shall not be less than the par value thereof, or to reject all bids; and if such true interest cost and price are acceptable to the County Treasurer, the County Treasurer or his designee is hereby authorized and directed, on behalf of the District and.the County, to award the sale of the Series 1996 Bonds to the maker of the best responsive bid, all as provided in the Official Notice of Sale. (d) Consent to Financial Advisor to Bid for Bonds. The District, by its resolution referred to in Section 2 hereof, has expressly authorized Sutro & Co., Inc., financial advisor to the District, to bid for the Series 1996 Bonds, and to acquire such Series 1996 Bonds as principal either alone or'as a participant in a syndicate or other similar account formed for . the purpose of purchasing the Series 1996 Bonds, directly or indirectly from the County. Section 14. Tax Covenant: The District has represented that it shall not take any action, or fail to take any action, if such action or failure to take such action would adversely affect the exclusion from gross income of the interest payable on the Series 1996 Bonds under Section 103 of the Internal Revenue Code of 1986, as amended (the "Code"). Without limiting the generality of the foregoing, the District has covenanted that it will comply with the requirements of the Tax Certificate of the District.with respect to the Series 1996 Bonds, to be entered into by the District as of the date of issuance of the Series 1996 Bonds, and further stipulates that such representation and covenant shall survive,payment in full or defeasance of the Series 1996 Bonds. SM-57152.2 11 Section 15. Continuing Disclosure Certificate: The District has represented that it shall execute a Continuing Disclosure Certificate containing such covenants.of the District as shall be necessary to comply with the requirements of Securities and Exchange Commission Rule 15c2-12. The District has covenanted that it will comply with and carry out all of the provisions of such Continuing Disclosure Certificate. Section 16. Avproval of Actions: The Chair of this Board of Supervisors, the Clerk of this Board of Supervisors, the County Auditor/Controller and the County Treasurer and the designees of any of them, are hereby authorized and directed to execute and deliver any and all certificates and representations, as may be acceptable to the County Counsel of the County, including signature certificates, no-litigation certificates, and other certificates proposed to be distributed in connection with the sale of the Series 1996 Bonds, necessary and desirable to accomplish the transactions set forth above. Slz2-57152.2 12 C 7g. I Section 17. Effective Date: This resolution shall take effect from and after its adoption. PASSED AND ADOPTED this 7th day of May, 1996, by the following vote: AYES: SUPERVISORS: Rogers , Bishop, DeSaulnier, Torlakson and Smith NOES: None ABSENT: None CWaii of the Board of Supervisors ATTEST: Phil Batchelor, Clerk of the Board of Supervisors and County Administrator CL OJIWo 'a) Deputy Jerk of the oard of Supervisors sF2-57152.2 13 CERTIFICATE OF THE CLERK OF THE.BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR I, Phil Batchelor, Clerk of the Board of Supervisors (the "Board") .and County Administrator of the County of Contra Costa, do hereby certify that the attached is a full, true and correct copy of a resolution and order duly adopted at a regular meeting of the Board duly and regularly and legally held at the regular meeting place thereof on May 7, 1996, of which meeting all the members of the Board had due notice and at which a quorum thereof was present; that at said meeting said resolution was adopted by the following vote: AYES: Supervisors Rogers , Bishop, DeSaulnier, Torlakson�:.and Smith NOES: None ABSENT:. None An agenda of said meeting was posted at least 72 hours before said meeting at 651 Pine Street, Martinez, California, a location freely accessible to members of the public, and a brief description of said resolution appeared on said agenda. I further certify that I have carefully compared the same with the original minutes of said_meeting on file and of record in my office and that said resolution is duly entered of record and is a full, true and correct copy of the original resolution adopted at said meeting and entered in said minutes. Said resolution has not been amended, modified.or rescinded since the date of its adoption and the same is now in full_force and effect. WITNESS my hand this 7th day of May, 1996. PHIL BATCHELOR, Clerk of the Board of Supervisors and County Administrator 440 De uty Clerk of the Board of Supervisors County of Contra Costa sF2-57152.2 AFFIDAVIT OF POSTING OF AGENDA STATE OF CALIFORNIA ) ss. COUNTY OF CONTRA COSTA ) CHRISTINE WAMPLER hereby declares that s he is a citizen of the United States of America, over the age of 18 years; that acting for the Board of Supervisors of the County of Contra Costa s he posted on May 2 _, 1996, at 651 Pine Street, Martinez, California, an agenda for the regular meeting of the Board of.Supervisors of the County of Contra Costa to be held on May 7, 1996, a copy of which is attached hereto. Dated: May 21 , 1996. 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JL06 C) EXHIBIT A [Form of Series 1996 Bond] Number 'Amount R-_ $ UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF CONTRA COSTA LAFAYETTE ELEMENTARY SCHOOL DISTRICT GENERAL OBLIGATION BONDS, ELECTION OF 1995, SERIES 1996 Interest Rate Maturity Date Dated as of CUSIP NO. May 15, June 1, 1996 Registered Owner: CEDE & CO. Principal Sum: DOLLARS Lafayette Elementary School District, County of Contra Costa, State of California (herein called the "District"), acknowledges itself indebted to and promises to pay to the registered owner identified above or registered assigns, on the maturity date set forth above, the principal sum specified above in lawful money of the United States of America, and to pay interest thereon in like lawful money from the interest payment date next preceding the date of authentication of this bond (unless this bond is authenticated as of a date during the period from the sixteenth day of the month next preceding any interest payment date to such interest payment date, inclusive, in which event it shall bear interest from such interest payment date, or unless this bond is authenticated on or before April 15, 1997, in which event it shall bear interest from the date hereof) at the interest rate per annum stated above, payable commencing on .May 15, 1997, and thereafter on May 15 and November 15 in each year, until payment of said principal sum. The principal hereof is payable to the registered owner hereof upon the surrender hereof at the principal corporate trust office of First Trust California, National Association (herein called the "Paying Agent"), the paying agent/registrar and transfer agent of the District. The interest hereon is payable to,the person whose name appears on the bond registration books of the Paying Agent as the registered owner hereof as of the close of business on the fifteenth day sF2-57152.2 A-1 of the month immediately preceding an interest payment date (the "Record'Date"), whether or not such day is a business day, such interest to be paid by check mailed to such registered owner at the owner's address.as it appears on such registration books, or at such other address filed with the Paying Agent for that purpose. Upon written request, given no later than the Record Date immediately preceding an interest payment date, of the owner of Bonds (hereinafter defined) aggregating at least $1,000,000 in principal amount, interest will be.paid by wire transfer to an account maintained in the United States as specified by the owner in such request. So long as Cede & Co. or its registered assigns shall be the registered owner of this bond, payment shall be made by wire transfer as provided in the Resolution hereinafter.described. This bond is one of a duly authorized issue of bonds of like tenor (except for such variations, if any, as may be required to designate varying series, numbers, denominations, interest rates, maturities and redemption provisions), amounting in the aggregate to $ . , and designated as "Lafayette Elementary School District General Obligation Bonds, Election of 1995, Series 1996" (the "Bonds"). The Bonds were authorized by a vote of more than two-thirds of the voters voting at an election duly and legally called, held and conducted in the District on November 7, 1995. The Bonds are issued and sold by the Board of Supervisors of the County of Contra Costa, State of California, pursuant to and in strict conformity with the provisions of the Constitution and laws of said State, and of a resolution (herein called the "Resolution") adopted by said Board of Supervisors on May 7, 1996. The Bonds are issuable as fully registered bonds ,without coupons in the denomination of $5,000 or any integral multiple thereof, provided that no Bond shall have principal maturing on more than one principal maturity date. Subject to the limitations and conditions and upon payment of the charges, if any, as provided in the Resolution, Bonds may be exchanged for a like aggregate principal amount of Bonds of the same series and maturity of other authorized denominations. This bond is transferable by the registered owner hereof, in person or by attorney duly authorized in writing, at said office of the Paying Agent, but only in the manner, subject to the limitations and upon payment of the charges provided in the Resolution, and upon surrender and cancellation of this bond. Upon such transfer, a new Bond or Bonds of authorized denomination or denominations for the same series and same aggregate principal amount will be issued to the transferee in exchange herefor. The District and the Paying Agent may treat the registered owner hereof as the absolute owner hereof for all purposes, and the District and the Paying Agent shall not be affected by any notice to the contrary. Bonds maturing on or before May 15, 2006, are not subject to optional redemption prior to their respective stated maturity dates. Bonds maturing on and after May 15; 2007, are subject to redemption prior to their respective stated maturity dates, at the option of the District, from any source of available funds, as a whole or in part on any date on or after May 15, 2006. 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 sFn-57152.2 A-2 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. Bonds redeemed at the option of the District shall be redeemed at the following optional redemption prices (expressed as a percentage of the principal amount of the Bonds called for redemption), together with interest accrued thereon to the date of redemption: Redemption Date Redemption Price May 15, 2006 through May 14, 2007 .102% May 15, 2007 through May 14, 2008 101 May 15, 2008 and thereafter 100 [Bonds maturing on May 15, , are subject to redemption prior to maturity in part, by lot, at the principal amount thereof plus accrued interest to the date of redemption, without premium, from mandatory sinking account payments on May 15, , and. on each May 15 thereafter to and including May 15, , in the amounts and subject to the terms and. conditions set forth in the Resolution.] Notice of redemption shall be given by mail not less than thirty (30) nor more than sixty (60) days prior to the redemption date to the registered owner hereof, but neither. failure to receive such notice or any defect in the notice mailed shall affect the sufficiency of the proceedings for redemption or the cessation of interest on'the date fixed for redemption. If this bond is called for redemption and payment is duly provided therefor, interest shall cease to accrue hereon from and after the date fixed for redemption. In reliance upon the representations, certifications and declarations of the District, the Board of Supervisors hereby certifies and declares that the total amount of indebtedness of the District, including the amount of this bond, is within the limit provided by law, that all acts, conditions and things required by law to be done or performed precedent to and in the issuance of this bond have been done and performed in strict conformity with the laws authorizing the issuance of this bond, that this bond is in substantially the form prescribed by order of the Board of Supervisors duly made and entered on its minutes. The Bonds represent an obligation solely of the District payable solely out of the interest and sinking fund of the District, and the money for the redemption of this bond, and the payment of principal of and interest thereon, shall be raised by taxation upon the taxable property of the District. This bond shall not be entitled to any benefit under the Resolution, or become valid or obligatory for any purpose, until the certificate of authentication and registration hereon endorsed shall have been signed by the Paying Agent. sF2-57152.2 A-3 IN WITNESS WHEREOF the Board of Supervisors of the County of Contra Costa has caused this bond to be signed by its Chair and by the Treasurer-Tax Collector of the County; to be countersigned by the Clerk of said Board or by a deputy Clerk or deputy Treasurer, and the seal of said Board to be placed hereon, as of the date set forth above. Chair of the Board of Supervisors of the County of Contra Costa [SEAL] Treasurer-Tax Collector of the County of Contra Costa Countersigned: [Title] sF2-57152.2 A-4 [FORM OF PAYING AGENT'S CERTIFICATE OF AUTHENTICATION AND REGISTRATION TO APPEAR ON BONDS] This is .one of the Bonds described in the within-mentioned Resolution and authenticated and registered on , 1996. First Trust California, National Association, Los Angeles, California, as Paying Agent/Registrar and Transfer Agent By Authorized Officer [FORM OF DTC LEGEND]' Unless this certificatei,is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent for registration of transfer, exchange, or. payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative.of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest.herein. [STATEMENT OF INSURANCE] SF2-57152.2 A-5 r. [FORM OF ASSIGNMENT] For value received the undersigned do(es) hereby sell, assign and transfer unto the within-mentioned registered bond and hereby irrevocably constitute(s) and appoint(s) attorney, to transfer the same on the books of the Paying Agent/Registrar and Transfer Agent with full power of substitution in the .premises. Dated: NOTE: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within registered bond in every particular, without alteration or enlargement or any change whatsoever. Signature Guarantee: Notice: Signature must be guaranteed by,an eligible guarantor institution sx2-57152.2 A-6 4-T' v �1 Lafayette School District 3477 School Street • P.O. Box 1029 • Lafayette, CA 94549 I F Telephone: (510)284-7011 • Fax: (510)284-1525 RECEIVED May 1, 1996 MAY 1 1996 CLERK OARD OF SUPSZVSOR, Jeanne O. Maglio, Chief Clerk CONTRA COSTA CO. Clerk of the Board Contra Costa County Board of Supervisors 651 Pine St., Room 106 Martinez, CA 94553 Re: Lafayette School District Sale of Bonds Dear Ms. Maglio: Enclosed is an original copy of our Board Resolution 24-95, Prescribing and Authorizing the Terms and Sale of Bonds which is related to a resolution that the Board of Supervisors will act on at their May 7 meeting. We have also enclosed copies of other related documents for your information. If you need further information please contact me at 284-7011 Sincerely, JuJpn Frank erintendent JF/j s LAFAYETTE ELEMENTARY SCHOOL DISTRICT COUNTY OF CONTRA COSTA, STATE OF CALIFORNIA Res. No. 24-95 RESOLUTION PRESCRIBING THE TERMS OF SALE OF BONDS OF LAFAYETTE ELEMENTARY SCHOOL DISTRICT, REQUESTING THE BOARD OF SUPERVISORS OF THE COUNTY OF CONTRA COSTA TO SELL SAID BONDS, APPROVING FORMS OF OFFICIAL NOTICE OF SALE AND OF NOTICE OF INTENTION TO SELL BONDS, REQUESTING SAID BOARD OF SUPERVISORS TO DELEGATE TO THE COUNTY TREASURER OR HIS DESIGNEE AUTHORIZATION TO AWARD BID FOR SAID BONDS, AND AUTHORIZING AN OFFICIAL STATEMENT, ADVERTISING, AND EXECUTION OF NECESSARY CERTIFICATES. WHEREAS, this Governing Board of Lafayette Elementary School District, County of Contra Costa, California(herein called the "District"), duly called and an election was regularly held in the District on November 7, 1995, at which the following proposition was submitted to the electors of the District: "Shall the Lafayette Elementary School District be authorized to finance the repair and renovation of Lafayette schools, including repairing leaky roofs; making seismic and safety upgrades to schools and classrooms; providing safe electrical wiring and adequate outlets; upgrading inefficient heating, ventilation and lighting systems; constructing facilities and renovating deteriorating classrooms, libraries, science, computer laboratories and school facilities by issuing up to $27,300,000 of bonds at interest rates not to exceed the limit set by law?" and WHEREAS, more than two-thirds of the votes cast on said proposition were in favor of issuing said bonds; and WHEREAS, this Governing Board deems that it is necessary and desirable that the Board of Supervisors of the County of Contra Costa, California (the "County"), offer for sale on May 22, 1996, or such other date as may be determined, a portion of said bonds in a single series as "Lafayette Elementary School District General Obligation Bonds, Election of 1995, Series 1996," in an aggregate principal amount not exceeding $15,000,000, according to the terms and in the manner hereinafter set forth; and SF2-57152.2 WHEREAS, there have been submitted and are on file with the Clerk of this Governing Board proposed forms of an Official Notice of Sale of Bonds, a Notice of Intention to Sell Bonds, and-an Official Statement, all with respect to not to exceed$15,000,000 aggregate principal amount of Lafayette Elementary School District General Obligation Bonds, Election of 1995, Series. 1996, proposed to be sold; NOW, THEREFORE, THE GOVERNING BOARD OF LAFAYETTE ELEMENTARY SCHOOL DISTRICT DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS FOLLOWS: Section 1. All of the above recitals are true and correct. Section 2. The Board of Supervisors of the County is hereby requested to sell not to exceed $15,000,000 aggregate principal amount of general obligation bonds of the Lafayette Elementary School District on May 22, 1996, or such other date as the Treasurer-Tax Collector of the County or a duly appointed deputy thereof(the "County Treasurer"), acting as authorized by resolution of the Board of Supervisors of the County, shall determine upon consultation with the Superintendent of the District and the Financial Advisor to the District (as defined in Section 5 hereof), but in any event no later than August 9, 1996, and to designate said bonds as the "Lafayette Elementary School District General Obligation Bonds, Election of 1995, Series 1996 (herein called the "Series 1996 Bonds" or the "Bonds"). The final principal amount shall be as determined by the County Treasurer upon consultation with the Superintendent of the District and the Financial Advisor and specified in the Official Notice of Sale referred to in Section 5 hereof. Section 3. The maximum acceptable interest rate on the Series 1996 Bonds shall be twelve percent (12%) per annum. The principal and interest obligations represented by the Bonds shall be obligations solely of the District, payable as described in the Official Notice of Sale. The Bonds shall mature on May 15 in each year of maturity, and in such principal amounts, as shall be determined by the County Treasurer upon consultation with the Superintendent of the District and the Financial Advisor, and as specified in the Official Notice of Sale. No Bond shall mature prior to May 15, 2000, and no Bond shall mature later than May 15, 2021. The Series 1996 Bonds shall be dated June 1, 1996, or such other date as the County Treasurer shall determine upon consultation with the Superintendent of the District and the Financial Advisor, and shall be issued in denominations of $5,000 or any integral multiple thereof (provided that no Bonds shall have principal maturing on more than one principal maturity date). Interest on the Series 1996 Bonds shall by payable commencing on May 15, 1997, and thereafter on May 15 and November 15 in each year. Section 4. (a) Optional Redemption: Series 1996 Bonds maturing on or before May 15, 2006, shall not be subject to redemption prior to their respective stated maturity dates. Series 1996 Bonds maturing on and after May 15, 2007, shall be subject to redemption prior to their respective stated maturity dates, at the option of the District, from any source of available funds, as a whole or in part on any date on or after May 15, 2006, at the prices set forth below. SF2-57152.2 2 If less than all of the Series 1996 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 Series 1996 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. Series 1996 Bonds shall be redeemed at the following optional redemption prices (expressed as a percentage of the principal amount of the Series 1996 Bonds called for redemption), together with interest accrued thereon to the date of redemption: Redemption Date Redemption Price May 15, 2006 through May 14, 2007 102% May 15, 2007 through May 14, 2008 101 May 15, 2008 and thereafter 100 (b) Mandatory Sinking Fund Redemption: The Bonds shall also be subject to mandatory sinking fund redemption (in accordance with specifications to be contained in the Official Notice of Sale as shall be determined by the County Treasurer upon consultation with the Superintendent of the District and the Financial Advisor), as specified in the bid of the successful bidder, and as specified in a Certificate of Award to be completed by the County Treasurer upon the sale of the Bonds. Section 5. The form of proposed Official Notice of Sale inviting bids for the Bonds, in substantially the form on file with the Clerk of this Governing Board is hereby approved, and the Board of Supervisors of the County is hereby requested to adopt and use said form as the Official Notice of Sale inviting bids for the Bonds, subject to such corrections, revisions or additions as deemed necessary by the Superintendent of the District and as may be acceptable to the County Counsel of the County. Sutro & Co., Inc., 201 California Street, San Francisco, CA 94111 (herein called the "Financial Advisor"), is hereby authorized and directed to cause to be mailed to prospective bidders for the Bonds copies of said Official Notice of Sale in the form finally approved by the Superintendent of the District. Section 6. (a) The form of proposed Notice of Intention to Sell Bonds, in substantially the form on file with the Clerk of this Governing Board, is hereby approved, and the Board of Supervisors of the County is hereby requested to adopt said form of proposed Notice of Intention to Sell Bonds, subject to such corrections, revisions or additions as deemed necessary by the Superintendent of the District and as may be acceptable to the County Counsel of the County, and to cause said Notice of Intention to Sell Bonds to be published once at least fifteen days before the date of sale in a financial publication generally circulated throughout the State of California or which the Financial Advisor advises is expected to be disseminated among prospective bidders for the Bonds, and to publish said notice beginning on a date no later than the date fourteen (14) days prior to the date of sale, once a week, on the same day of each week, for at least two weeks in a newspaper of general circulation published in the County. (b) The Board of Supervisors of the County is hereby requested to authorize and direct the County Treasurer or his designee, on behalf of the District and the County, to accept sF2-57152.2 3 the best responsive bid for the Series 1996 Bonds, so long as such bid shall provide a true interest cost to the District of not to exceed twelve percent (12%) per annum and the price to be paid for the Bonds shall not be less than the par value thereof, or to reject all bids; and if such true interest cost and price are acceptable to the County Treasurer, the County Treasurer or his designee, acting at the direction of the Board of Supervisors of the County, is hereby authorized to award the sale of the Bonds to the maker of the best responsive bid. (c) This Governing Board hereby authorizes Sutro & Co., Inc., financial advisor to the District, to bid for the Series 1996 Bonds, and to acquire such Series 1996 Bonds as principal either alone or as a participant in a syndicate or other similar account formed for the purpose of purchasing the Series 1996 Bonds, directly or indirectly from the County. Section 7. The form of proposed Preliminary Official Statement describing the Bonds, in substantially the form on file with the Clerk of this Governing Board, is hereby approved and adopted as the Official Statement describing the Bonds, with such corrections, revisions or additions as deemed necessary or desirable by the Superintendent of the District in consultation with the Financial Advisor. The Superintendent of the District or, in the absence of the Superintendent, the President.of this Governing Board, is hereby authorized and directed to sign said Official Statement as so added to, corrected or revised. The Financial Advisor is hereby authorized and directed to cause to be printed and mailed to prospective bidders for the Bonds copies of the Preliminary Official Statement in substantially the same form of Official Statement approved and adopted as the Official Statement describing the Bonds, as so added to, corrected or revised, and to supply to the accepted bidder for the Bonds copies of the final Official Statement, completed to include the interest rate or rates and final sale information. Section 8. (a) The District shall not take any action, or fail to take any action, if such action or failure to take such action would adversely affect the exclusion from gross income of the interest payable on the Bonds under Section 103 of the Internal Revenue Code of 1986 (the "Code"). Without limiting the generality of the foregoing, the District hereby covenants that it will comply with the requirements of the Tax Certificate of the District with respect to the Bonds (the "Tax Certificate"), to be entered into by the District on the date of issuance of the Series 1996 Bonds. The provisions of this subsection (a) shall survive payment in full or defeasance of the Bonds. (b) In the event that at any time the District is of the opinion that for purposes of this Section it is necessary or helpful to restrict or limit the yield on the investment of any monies held by the County Treasurer on behalf of the District, in accordance with this Resolution or pursuant to law, the District shall so request of the County Treasurer in writing, and the District shall make its best efforts to ensure that the County Treasurer shall take such action as may be necessary in accordance with such instructions. (c) Notwithstanding any provision of this Section, if the District shall provide to the County Treasurer an opinion of counsel of nationally recognized standing in the field of law relating to municipal bonds (an "Opinion of Bond Counsel") that any specified action required under this Section is no longer required or that some further or different action is required to maintain the exclusion from federal income tax of interest on the Bonds, the County Treasurer sF2-57152.2 4 C.7� may conclusively rely on such Opinion of Bond Counsel in complying with the requirements of this Section and of the Tax Certificate, and the covenants hereunder shall be deemed to be modified to that extent. Section 9. The Superintendent of the District, or his designee, is hereby authorized on behalf of the District to execute a Continuing Disclosure Certificate containing such covenants of the District as shall be necessary to comply with the requirements of Securities and Exchange Commission Rule 15c2-12. The District hereby covenants and agrees that it will comply with and carry out all of the provisions of such Continuing Disclosure Certificate. Section 10. This Governing Board hereby'approves the investment of the building fund of the District, consisting of the proceeds of general obligation bonds of the District, in the Local Agency Investment Fund in the Treasury of the State of California, and the Superintendent of the District, or his designee, is hereby authorized on behalf of this Governing Board to request in writing that the County Treasurer so invest all or such portion of the building fund as the Superintendent shall determine. Section 11. The President of this Governing Board, the Clerk of this Governing Board, the Superintendent of the District and any delegate of the Superintendent and officers of the District are hereby authorized and directed to execute and deliver any and all certificates and representations, including signature certificates, no-litigation certificates, representation letters to The Depository Trust Company, the Tax Certificate and any other certificates proposed to be distributed in connection with the sale of the Bonds, which any of them deem necessary and desirable to accomplish the transactions set forth above. Section 12. The Clerk of this Governing Board is hereby authorized and directed to cause notices of the proposed sale and final sale of the Bonds to be filed in a timely manner with the California Debt Advisory Commission pursuant to California Government Code Section 8855. Section 13. The Clerk of this Governing Board is hereby authorized and directed to file a certified copy-of this Resolution upon the adoption hereof with the Board of Supervisors of the County. SF2-57152.2 5 Section 14. This resolution shall take effect from and after its adoption. PASSED AND ADOPTED this 30th day of April, 1996, by the following vote: AYES: Members Carney, Gold, McCosker, Silva NOES: none ABSENT: Sommer C. President of the Governing Board Lafayette Elementary School District Attest: Clerk o e Governing Board Lafayette Elementary School District F SF2-57152.2 6 SECRETARY'S CERTIFICATE I, Jon Frank, Secretary of the Governing Board of the Lafayette Elementary School District, County of Contra Costa, California, do hereby certify as follows: The attached is a.full, true and correct copy of a resolution duly adopted at a regular meeting of said Board of said District duly and regularly held at the regular meeting place thereof on April 30, 1996, of which meeting all of the members of said Governing Board had due notice and at which a quorum thereof was present; and that at said meeting said resolution was adopted by the following vote: AYES: Carney, Gold, McCosker, Silva NOES: none ABSENT: Sommer An agenda of said meeting was posted at least 72 hours before said meeting at 3477 School Street, Lafayette, California, a location freely accessible to members of the public, and a brief general description of said resolution appeared on said agenda. I have carefully compared the same with the original minutes of said meeting on file and of record in my office; the attached resolution is a full, true and correct copy of the original resolution adopted at said meeting and entered in said minutes; and said resolution has not been amended, modified or rescinded since the date of its adoption, and the same is now in full force and effect. WITNESS my hand this 30th day of A ril, 1996 S cretary of the Governing Board ayette Elementary School District SF2-57152.2 AFFIDAVIT OF POSTING OF AGENDA STATE OF CALIFORNIA ) ss. COUNTY OF CONTRA COSTA ) Jon Frank hereby declares tlt _he is a citizen of the United States of America, over the age of 18 years; that acting for the-Governing Board of the Lafayette Elementary School District _he posted on April 25 1996, at 3477 School; Street, Lafayette, California, a location freely accessible to members of the public, an agenda for the regular meeting of the Governing Board of the Lafayette Elementary School District to be held on April 30, 1996, a copy of which is attached hereto. Dated: April 30 1996. I declare under penalty of perjury that the foregoing is true and correct. Secr to of the Governing Board Laf ye a School District SF2-57152.2 �1 71 AGENDA, GOVERNING BOARD, SPECIAL MEETING LAFAYETTE SCHOOL DISTRICT Board Room,Administration Building 7:30 p.m.,Tuesday,April 30, 1996 TIME AGENDA ITEM FOR BOARD 7:30 p.m. Call Meeting tg Order 1. Adoption of Bd.Res.24-95.Prescribing and Authorizing the Terms Action and Sae of Bonds 2. Update on Modernization Planning Information Representatives from Arthur Tam&Associates and Lee Hansen, Construction Manager from 3DI will be present to update the Board on planning to date. 9:00 P.M. Adjournment UPCOMING BOARD MEETINGS Regular Meeting,May 21, 1996, 7:30 p.m., at Lafayette School OH&S DRAFT 4/16/96 OFFICIAL NOTICE OF SALE $15,000,000* LAFAYETTE ELEMENTARY SCHOOL DISTRICT (County of Contra Costa, State of California) GENERAL OBLIGATION BONDS ELECTION OF 1995, SERIES 1996 NOTICE IS HEREBY GIVEN that telecommunicated proposals as well as sealed proposals will be received on behalf of the Board of Supervisors of the County of Contra Costa, State of California (the "County"), at the offices of Orrick, Herrington & Sutcliffe, 400 Sansome Street, Second Floor Conference Room, San Francisco, CA 94111 (telephone (415) 392-1122; fax (415) 773-5759), on Wednesday, May 22, 1996 at 10:00 A.M. California time for the purchase of$15,000,000* principal amount of bonds of Lafayette Elementary School District, County of Contra Costa (herein called the "District"), designated "Lafayette Elementary School District General Obligation Bonds, Election of 1995, Series 1996" (herein called the 'Bonds") more particularly described below. The County, acting on behalf of and in consultation with the District, reserves the right to cancel, postpone or reschedule the sale of the Bonds upon notice given through the Munifacts News Service not less than twenty-four (24) hours prior to the time bids are to be received. If the sale is postponed, bids will be received at the place set forth above, at the date and time as the Treasurer-Tax Collector of the County (the "Treasurer") shall determine. Notice of the new sale date and time, if any, will be given through Munifacts News Service no later than twenty-four(24) hours prior to the new time bids are to be received. As an accommodation to bidders, telephone or fax notice of the postponement of the sale date and of the new sale date will be given to any bidder requesting such notice from Sutro & Co., Inc., 201 California Street, San Francisco, CA 94111 (telephone (415) 445-8681, fax (415) 392-1753). Failure of any bidders to receive such Munifacts News Service, telephone or fax notice shall not affect the legality of the sale. The Bonds are part of an issue of $27,300,000 authorized at an election held in the District on November 7, 1995, and are issued under and pursuant to the provisions of Sections 15000 and following of the Education Code of the State of California and all laws amendatory thereof or supplemental thereto, and pursuant to the provisions of a resolution of the Governing Board of the District, adopted on April 30, 1996 and a resolution of the Board * Approximate; subject to adjustment. SF2-37152.2 41933-1-JMH-04/13196 �,. 7, of Supervisors of the County of Contra Costa, adopted on May 7, 1996 (collectively, the "Resolution"), copies of which will be furnished to any interested bidder upon request. ISSUE: The Bonds will be issued in the principal amount of $15,000,000*, as fully registered Bonds, all dated June 1, 1996, first interest payable on May 15, 1997, and maturing on May 15 in each of the years, and in the amounts, as shown below, in the denomination of $5,000 or any integral multiple thereof; rop vided, that no Bond shall have principal maturing on more than one principal payment date. Maturity Date Principal Maturity Date Principal (May. 15) Amount (May 151 Amount Serial Bonds and/or Term Bonds: Bidders shall designate which maturities of Bonds shown in the table above shall be issued as serial Bonds and which as term Bonds. The principal amount of the mandatory sinking fund redemption in each year shall be equal to the principal amount shown in the table above to mature in such year. . ADJUSTMENT OF PRINCIPAL AMOUNTS: The principal amounts of each maturity of Bonds set forth above reflect certain estimates of the District and its financial advisor with respect to the likely interest rates of the winning bid and the premium contained in the winning bid. Following the determination of the successful bidder, the Treasurer, acting on behalf of and in consultation with the District, reserves the right to increase or decrease the principal amount of each maturity of the Bonds, in $5,000 increments, by an amount not to exceed ten percent (10%) of each such principal payment; provided, however, that the adjusted aggregate principal amount of the Bonds shall not exceed $15,000,000. Such adjustment shall be made within 26 hours of the bid opening and in the sole discretion of the Treasurer, upon a recommendation of the Superintendent of the District and the financial advisor to the District. The aggregate price bid by the successful bidder will be adjusted by the Treasurer proportionate to any increase or decrease in the aggregate principal amount of the Bonds and without consideration for the reoffering price by the successful bidder to the public of any individual maturity of the Bonds. THE SUCCESSFUL BIDDER MAY NOT WITHDRAW ITS BID► OR SF2-57152.2 2 41933-1-IMH-04/13/96 CHANGE THE INTEREST RATES BID OR ANY INITIAL REOFFERING PRICES AS A RESULT OF ANY CHANGES MADE TO THE STATED PRINCIPAL AMOUNTS. . BOOK-ENTRY ONLY: The Bonds shall be initially issued and,registered in the name of "Cede & Co.," as nominee of The Depository Trust Company ("DTC"), New York, New York, and shall be evidenced by a Bond or Bonds for each series, if more than one series are issued, pursuant to requirements of DTC. DTC will act as securities depository for the Bonds. Individual purchases will be made in book-entry form only, and individual purchasers will not receive certificates representing their interests in the Bonds purchased. As of the date of award of the Bonds, the successful bidder must either participate in DTC or must clear through or maintain a custodial relationship with an entity that participates in DTC. INTEREST RATE: The maximum interest rate coupon bid for the Bonds may not exceed ten percent (10%) per annum. Interest is payable commencing on May 15, 1997, and thereafter on May 15 and November 15 of each year. Interest is calculated on the basis of a 30-day month, 360-day year from the date of the Bonds. Bidders must specify the rate or rates of interest which the Bonds hereby offered for sale shall bear. Bidders will be permitted to bid a rate or rates of interest according to the following: (i) no Bond shall bear an annual rate of interest more than 3% greater than the rate borne by any other Bond; (ii) the interest rate specified in any bid must be in a multiple of one-eighth or one-twentieth of one per cent per annum and a zero rate of interest cannot be specified; (iii) no Bond shall bear more than one rate of interest; (iv) each Bond shall bear interest from its date to its stated maturity date at the interest rate specified in the bid; (v) all Bonds maturing at any one time shall bear the same rate of interest; and (vi) the interest rate for each successive maturity of the Bonds shall be greater than or equal to the rate for the immediately preceding maturity. REDEMPTION: Optional Redemption: Bonds maturing on or before May 15, 2006, are not subject to redemption prior to their respective stated maturity dates. Bonds maturing on and after May 15, 2007, are subject to redemption prior to their respective stated maturity dates, at the option of the District, from any source of available funds, as a whole or in part on any date on or after May 15, 2006. If less than all of the Bonds are called for redemption, such Bonds as are called for redemption 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 Bonds of a given maturity to be redeemed shall be determined by lot. The Bonds shall be redeemed at the following optional redemption, SF2-57152.2 3 41933-1-JMH-04113196 prices (expressed as a percentage of the principal amount of the Bonds called for redemption), together with interest accrued, if any, thereon to the date of redemption: Redemption Date Redemption Price May 15, 2006 through May 14, 2007 102% May 15, 2007 through May 14, 2008 101 May 15, 2008 and thereafter 100 Mandatory Sinking Fund Redemption: Term Bonds, if any, are further subject to redemption prior to their respective stated maturity dates, from monies in the "Lafayette Elementary School District General Obligation Bonds, Election of 1995, Series 1996 Mandatory Sinking Fund", on May 15 of each year for which a mandatory sinking fund redemption is specified by the successful bidder, by lot within any maturity if less than all of the Bonds of such maturity are to be redeemed, upon payment of the principal amount thereof plus accrued interest thereon to the date fixed for redemption, without premium, but only in amounts equal to, and in accordance with, the schedule of the principal amounts of Bonds to be redeemed in each such year from said Mandatory Sinking Fund. PAYMENT: Principal is payable to the registered owners of the Bonds in lawful money of the United States of America at the maturity or prior redemption of the Bonds upon surrender of the Bonds at the principal corporate trust office of First Trust California, National Association, the paying agent/registrar and transfer agent for the Bonds (the "Paying Agent"), in Los Angeles, California, or at such other place as the Paying Agent shall specify. Interest is payable in like lawful money to the person whose name appears on the bond registration books of the Paying Agent as the registered owner thereof as of the close of business on the fifteenth day of the month immediately preceding an interest payment date, whether or not such day is a business day, such interest to be paid by check mailed to such registered owner at the owner's address as it appears on such registration books. Interest shall be paid by wire transfer upon the written request of the owner of Bonds aggregating not less than $1,000,000 in principal amount, given no later than the fifteenth day of the month immediately preceding the applicable interest payment date. PURPOSE OF ISSUE: The Bonds are authorized by a vote of two-thirds of the qualified voters of the District voting at a special bond election for the purpose of raising money for authorized school purposes. SECURITY: The Bonds represent the general obligation solely of the District, payable from ad valorem taxes levied upon all property within the District subject to taxation by the District, without limitation of rate or amount (except certain personal property, which is taxable at limited rates). The Board of Supervisors of the County of Contra Costa has the power and is obligated to-levy said taxes for the payment of the Bonds and the interest thereon. SF2-57152.2 4 41933-14MH-04/13/96 TAX MATTERS: In the opinion of Orrick, Herrington & Sutcliffe, San Francisco, California, based on existing statutes, regulations, rulings and court decisions, and assuming, among other matters, compliance with certain covenants contained in the resolutions providing for the issuance of the Bonds, the interest received by the owners of the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 and is exempt from State of California personal income taxes. See the discussion of Tax Matters in the Official Statement hereinafter referred to. In the event that prior to the delivery of the Bonds (a) the income received by private holders from bonds of the same type and character shall be declared to be includable in gross income (either at the time of such declaration or at any future date) for purposes of federal income tax laws, either by the terms of such laws or by ruling of a federal income tax authority or official which is followed by the Internal Revenue Service, or by decision of any federal court, or (b) any federal income tax law is adopted which will have a substantial adverse tax effect on holders of the Bonds as such, the successful bidder may, at its option, prior to the tender of the Bonds by the District, be relieved of its obligation to purchase the Bonds, and in such case the deposit accompanying its bid will be returned. For purposes of the preceding sentence, interest will be treated as excludable from gross income for federal income tax purposes whether or not it is includable as an item of tax preference for calculating alternative minimum taxes or otherwise includable for purposes of calculating certain other tax liabilities. LEGAL OPINION: The legal opinion of Orrick, Herrington & Sutcliffe, San Francisco, California, approving the validity of the Bonds, will be furnished to the successful bidder upon delivery of the Bonds. Copies of said opinion will be filed with DTC and with the Paying Agent. TERMS OF SALE Highest Bid: The Bonds will be awarded to the responsible bidder submitting the highest responsive bid, considering the interest rate or rates specified and the premium offered, if any. The highest bid will be the bid which represents the lowest True Interest Cost ("TIC") to the District. The TIC will be the nominal interest rate which, when compounded semiannually and used to discount all debt service payments on the Bonds to the date of the Bonds, results in an amount equal to the price bid for the Bonds. In the event that two or more bidders offer bids at the same lowest TIC, the District will determine by lot which bidder will be awarded the Bonds. For the purpose of calculating the TIC, the mandatory sinking fund payments, if any (see "REDEMPTION--Mandatory Sinking Fund Redemption" above), shall be treated as serial maturities in such years. The determination of the bid representing the lowest TIC will be made without regard to any adjustments made or contemplated to be made after the award by the Treasurer, as described herein under "ADJUSTMENT OF PRINCIPAL AMOUNTS", even if such adjustments have the effect of raising the TIC of the successful bid to.a level higher than the bid containing the next lowest TIC prior to adjustment. Form of Bid: Each bid must be for not less than all of the Bonds hereby offered for sale and must be for not less than the par value thereof, plus accrued interest, if any, to the date of delivery, plus such premium as is specified in the bid, and no bid will be accepted which SF2-57152.2 5 41933-1-JMH-04/13/96 17' contemplates the waiver of any interest or other concession by the bidder as a substitute for payment in full of the purchase price. Each bid must be delivered by facsimile transmission, as described below, or enclosed in a sealed envelope addressed to the Clerk of the Board of Supervisors, County of Contra Costa, and received by 10:00 A.M. California time, Wednesday, May 22, 1996, at the offices of Orrick, Herrington & Sutcliffe, 400 Sansome Street, Second Floor Conference Room, San Francisco, CA 94111 (telephone (415) 392-1122; fax (415) 773- 5759). Each bid must be clearly marked "Proposal for Purchase of Lafayette Elementary School District General Obligation Bonds, Election of 1995, Series 1996", or words of similar import. Each bid must be in accordance with the terms and conditions set forth in this notice, and may (but need not) be submitted on the bid form provided. Neither the District, nor the County of Contra Costa, nor the District's financial advisor will accept responsibility for inaccurate, illegible or delayed proposals submitted by facsimile transmission, including illegibility due to garbled transmissions, delay due to engaged telephone or telecommunication lines at the place of bid opening, and delay arising out of any bidder's election to deliver its bid by means other than hand delivery. Statement of True Interest Cost(TIM: Each bidder is requested, but not required, to state in its bid the total percentage True Interest Cost (TIC), which shall be considered as informative only and not binding on either the bidder or the District. . Good Faith De osit: A good faith deposit (the "Deposit") in the form of a cashier's check in immediately available funds, or a financial surety bond, in each case in the amount of 1% of the principal amount of Bonds offered for sale, payable to the order of the Treasurer-Tax Collector of the County of Contra Costa, is required with each bid to secure the District from any loss resulting from the failure of the bidder to comply with the terms of its bid. If a check is used, it must accompany the bid. If a financial surety bond is used, it must be issued by 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, Sutro & Co., Inc., Attn: Stephanie Smith-Lovette, 201 California Street, San Francisco, CA 94111, Fax (415) 392- 1753, prior to opening of the bids. The financial surety bond must identify the bidder whose Deposit is guaranteed by such financial surety bond, and the District assumes no responsibility for any failure of a financial surety bond to list any bidder or to be received on a timely basis as described in the preceding sentence. .If the Bonds are awarded to a bidder submitting a financial surety bond, then said successful bidder is required to submit its Deposit to the Treasurer in the form of a cashier's check (meeting the requirements set forth above) or by wire transfer not later than 3:00 p.m. on the next business day following the award. If such Deposit is not received by that time, the financial surety bond shall be drawn by the Treasurer to satisfy the Deposit requirement. Wiring instructions will be provided to the successful bidder. The Treasurer does not endorse the use of a financial surety bond or any particular financial surety provider. The Treasurer will accept a financial surety bond in lieu of a cashier's check under the terms described herein solely as an accommodation to bidders, and it is understood and agreed by each bidder using such a bond that the bidder must make its own arrangements with the provider of the bond, including ensuring that evidence of the financial surety bond is provided to the District's financial advisor. SF2-57152.2 6 41933-1-JMH-04!13196 No interest will be paid upon the Deposit made by any bidder. Deposit checks of all bidders (except the successful bidder) will be returned by the County promptly following the award of the Bonds to the successful bidder. The Deposit of the successful bidder will, immediately upon acceptance of its bid, become the property of the District to be held and invested for the exclusive benefit of the District. The principal amount of such Deposit shall be applied to the purchase price of the Bonds at the time of delivery thereof. If the sale of the Bonds is cancelled or postponed, all sealed bids shall be returned unopened. If the purchase price is not paid in full upon tender of the Bonds, the successful bidder shall have no right in or to the Bonds or to the recovery of its Deposit, or to any allowance or credit by reason of such Deposit, unless it shall appear that the Bonds would not be validly issued if delivered to the successful bidder in the form and manner proposed. In the event of nonpayment by the successful bidder, the amount of the Deposit shall be retained by the District as and for liquidated damages for such failure by the successful bidder, and such retention shall constitute a full release and discharge of all claims by the District against the successful bidder arising from such failure. The District's actual damages in such event may be greater or may be less than the amount of the Deposit. Each bidder waives any right to claim that the District's actual damages are less than such amount. Right of Rejection: The Treasurer, acting on behalf of and in consultation with the District, reserves the right to reject any and all bids and to waive any irregularity or informality in-any bid. Prompt Award: The Treasurer or his designee 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 the bids, unless such time of award is waived by the successful bidder. Notice of the award will be given promptly to the successful bidder. Delivery and Payment: Delivery of the Bonds through the facilities of DTC will be made to the successful bidder in New York, New York, as soon as the Bonds can be prepared, which it is estimated will be on or about June 12, 1996. Payment for the Bonds must be made in funds immediately available in San Francisco, California, on the date of delivery. Any expense of providing immediately available funds, whether by transfer of Federal Reserve Bank funds or otherwise, shall be borne by the successful bidder. The cost of printing the Bonds will be borne by the District. Right of Cancellation: The successful bidder shall have the right, at its option, to cancel its obligation to purchase the Bonds if the Bonds are not executed and tendered for delivery within 60 days from the date of sale thereof, and in such event the successful bidder shall be entitled to the return of its good faith deposit. Liti ation: There is no litigation pending concerning the validity of the Bonds, the corporate existence of the District or the entitlement of the officers of the County of Contra Costa to their respective offices, and the District will furnish to the successful bidder a no-litigation certificate or certificates certifying the foregoing as of and at the time of the delivery of the Bonds. M-57152.2 7 41933-1-JMH-04/13/96 CUSIP Numbers and Other Fees: It is expected that the successful bidder will apply for CUSIP identification numbers for the Bonds, and furnish such numbers to.Bond Counsel. It is anticipated that such CUSIP numbers will be printed on the Bonds being delivered to DTC, but neither the failure to print such number on any Bond nor any error with respect thereto shall constitute cause for a failure or refusal by the successful bidder to accept delivery of and pay for the Bonds in accordance with the terms and conditions of its bid. All expenses in relation to the printing of CUSIP numbers on the Bonds shall be paid by the District, but the CUSIP Service Bureau charge for the assignment of such numbers shall be paid by the successful bidder. The successful bidder shall also be required to pay all fees required by The Depository Trust Company, New York, New York, the Public Securities Association, the Municipal Securities Rulemaking Board and any other similar entity imposing a fee in connection with the issuance of the Bonds. California Debt Advisory Commission Fee: Attention of bidders is directed to California Government Code Section 8856, which provides that the lead underwriter or the purchaser of the Bonds shall be charged any California Debt Advisory Commission fee payable with respect to the Bonds. Certification of Reoffering Prices: The successful bidder shall be required, as a condition to delivery of the Bonds, to certify to the District in writing, in form and substance satisfactory to the District and to Bond Counsel, (i) that as of the date of sale, all of the Bonds purchased were expected to be reoffered in a bona fide public offering; (ii) that as of the date of the certification, all of the Bonds purchased had actually been offered to the general public; (iii) the maximum initial bona fide offering prices at which a substantial amount (at least 10%) of each maturity of the Bonds purchased was sold to the general public. Bond Insurance at Bidder's Option: Bids will be accepted which are based upon the issuance of a municipal bond insurance policy for some or all of the Bonds, provided that payment of any insurance premium and any additional fees charged by any rating agency for rating insured Bonds shall be the sole responsibility of the bidder. The District intends to apply to Standard & Poor's Ratings Services for a rating on the Bonds and will be responsible'for the rating fee incurred only in connection with such rating. Bids shall not be conditioned upon the issuance of a municipal bond insurance policy. The District and the County will cooperate in any effort to qualify the Bonds for such bond insurance. Neither the District nor the County makes any representation as to whether the Bonds will qualify for municipal bond insurance, and satisfaction of any conditions to the issuance of a municipal bond insurance policy shall be the sole responsibility of the bidder. In particular, the County will neither amend nor supplement the Resolution in any way nor will it agree in advance of the sale of the Bonds to enter into any additional agreements with respect to the provision of any such policy. FAILURE OF THE INSURANCE PROVIDER TO ISSUE ITS POLICY SHALL NOT CONSTITUTE CAUSE FOR A FAILURE OR REFUSAL BY THE SUCCESSFUL BIDDER TO ACCEPT DELIVERY OF OR PAY FOR THE BONDS. The successful bidder must provide the District with the municipal bond insurance commitment and information with respect to the municipal bond insurance policy and the insurance provider for inclusion in the final Official Statement within two (2) business days SF2-57152.2 8 41933-1-JMH-04/13/96 following the award of the bid by the Treasurer. The District will require a certificate from the insurance provider substantially in the form attached hereto as Exhibit A on or prior to the date of delivery of the Bonds, as well as an opinion of counsel to the insurance provider regarding the enforceability of the municipal bond insurance policy, in form reasonably satisfactory to the District and the successful bidder. Official Statement: The District has authorized the adoption of an official statement relating to the Bonds. A copy of the Preliminary Official Statement will be furnished upon request to Sutro & Co., Inc., 201 California Street, San Francisco, CA 94111, telephone (415) 445-8681. The Preliminary Official Statement is in form "deemed final" by the issuer for purposes of Securities and Exchange Commission Rule 15c2-12(b)(1), but is subject to revision, amendment and completion in a final Official Statement. The. District will furnish to the successful bidder, at no expense to the successful bidder, up to 100 copies of the final Official Statement within seven (7) business days of the award date. Official Statement Certificate: The District will provide to the successful bidder for the Bonds a certificate, signed by an official of the District, confirming to the successful bidder that, at the time of the acceptance of the bid for the Bonds and at the time of delivery thereof, to the best of the knowledge of said official, the Official Statement (except for information regarding DTC and its book-entry only system, and except for information provided by the Treasurer regarding County investments, and except for information respecting a municipal bond insurance policy with respect to the Bonds and the provider thereof, as to which no view shall be expressed) does not contain any 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 that there has been no material adverse change in the financial condition or affairs of the District which would make it unreasonable for the purchaser of the Bonds to rely upon the Official Statement in connection with the resale of the Bonds. Continuing Disclosure Certificate: In order to assist bidders in complying with S.E.C. Rule 15c2-12(b)(5), the District will undertake, pursuant to a Continuing Disclosure Certificate, to provide certain annual financial information and notices of the occurrence of certain events, if material. 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: May 7, 1996. /s/ Phil Batchelor Clerk of the Board of Supervisors and County Administrator of the County of Contra Costa, California SF2-57152.2 9 41933-1-3MH-04113/96 EXHIBIT A CERTIFICATE OF BOND INSURER The undersigned, the duly authorized and acting of (the "Bond Insurer"), hereby certifies on behalf of the Bond Insurer as follows: 1. The statements contained in the Official Statement dated May 22, 1996 (the "Official Statement'% relating to the Lafayette Elementary School District General Obligation Bonds, Election of 1995, Series 1996(the "Bonds") under the captions , and , in Appendices and thereto, and on the cover page thereof, insofar as such statements constitute descriptions or summaries of the Bond Insurer or municipal bond insurance policy (the "Policy") of the Bond Insurer covering the Bonds, accurately reflect and fairly present the information set forth therein, and do 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 are made, not misleading; and 2. The form of Policy set forth in Appendix of the Official Statement is a true and complete copy of the form of Policy. [NAME OF BOND INSURER] By: Title: SF2-57152.2 41933-1-JMH-04113196 OH&S DRAFT 4/16/96 NOTICE OF INTENTION TO SELL Not to Exceed $15,000,000 LAFAYETTE ELEMENTARY SCHOOL DISTRICT (County of Contra Costa, State of California) GENERAL OBLIGATION BONDS ELECTION OF 1995, SERIES 1996 NOTICE IS HEREBY GIVEN that the above Bonds will be offered for public sale by the Board of Supervisors of the County of Contra Costa, State of California, on Tuesday, May 22, 1996, at the hour of 10:00 A.M., California time (or on such other date and time as may be determined by the County as provided in the paragraph below), at the offices of Orrick, Herrington & Sutcliffe, 400 Sansome Street, San Francisco, CA 94111, subject to all of the terms and conditions of the Oficial Notice of Sale describing the Bonds, copies of which (along with a Preliminary Official Statement relating to the Bonds) will be furnished upon request to Sutro & Co., Inc., 201 California Street, San Francisco, CA 94111 (telephone (415) 445-8681, fax (415) 392-1753). Any sale date for the Bonds may be changed at the sole discretion of the County by providing notice thereof on the Munifacts News Service at least twenty-four (24) hours prior to the then-scheduled sale date of the Bonds. Dated: May 7, 1996. /s/ Phil Batchelor Clerk of the Board of Supervisors and County Administrator of the County of Contra Costa, California SF2-57152.2 41933-1-JMH-04113196 — + P EL•IMIN RY OFFICIAL STATEMEENT DATED Rating* Standard&Poor's: NEW ISSUE - Book Entry Only (See "Rating" herein): In the opinion of Orrick Herrington & Sutcliffe, San Francisco, California, Bond Counsel, based upon an analysis of existing laws, regulations, rulings, and court decisions, and assuming, among other matters, compliance with certain covenants, interest on the Series 1996 bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 and is exempt from State of California personal income taxes. In the further opinion of Bond Counsel, interest on the Series 1996 Bonds is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes, although Bond Counsel observes that such interest is included in adjusted current earnings when calculating federal corporate alternative minimum taxable income. Bond Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposition of, or the accrual or receipt of interest on, the Series 1996 Bonds. (See "TAX MATTERS"herein.) $15,000,000* LAFAYETTE SCHOOL DISTRICT (CONTRA COSTA COUNTY, CALIFORNIA) GENERAL OBLIGATION BONDS ELECTION OF 1995, SERIES 1996 Dated: May 15, 1996 Due: May 15, as shown below The Lafayette School District General Obligation Bonds, Election of 1995, Series 1996 which comprise the issue described herein (the "Series 1996 Bonds" or the "Bonds") are being issued by the Board of Supervisors of Contra Costa County on behalf of the Lafayette School District (the "District"). The Series 1996 Bonds are being issued for authorized school purposes. Interest on the Series 1996 Bonds will be payable on May 15 and November 15 of each year commencing May 15, 1997. The Series 1996 Bonds are being delivered as fully registered bonds, without coupons in book- entry form only, and registered in the name of and held by Cede & Co., as nominee for The Depository Trust Company, New York, New York("DTC") and will be available to the beneficial owners thereof in denominations of$5,000 each or any integral multiple thereof, under the book-entry system maintained by DTC. Purchasers of the Series 1996 Bonds will not receive physical delivery of the Series 1996 Bonds. DTC will act as securities depository for the Series 1996 Bonds as more fully described herein. The principal and interest with respect to the Series 1996 Bonds will be paid by First Trust of California, National Association, as paying agent/registrar and transfer agent ("Paying Agent"), to DTC, which will in turn remit such principal and interest to its participants for subsequent disbursement to the beneficial owners of the Series 1996 Bonds as described herein. See "THE SERIES 1996 BONDS" -Book-Entry System". The Bonds are subject to redemption prior to maturity. See "Redemption Features" herein. The Series 1996 Bonds represent the general obligation of the District payable solely from the proceeds of ad valorem property taxes, which the Board of Supervisors of Contra Costa County has the power and is obligated to levy without limitation as to rate or amount, upon all property within the District subject to taxation by the District (except certain personal property that is taxable at limited rates) for the payment of interest on and principal of the Series 1996 Bonds when due. The Series 1996 Bonds maturing on and after May 15, 2007 are subject to redemption at the option of the District in whole on any date, beginning on or after May 15, 2006 at the redemption prices and as described herein. (See "The Series 1996 Bonds" - "Redemption Features-Optional Redemption".) Sutro & Co. The following firm serving as financial consultants to the Lafayette School District, has structured the issue. 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 essential to the making of an informed investment decision. MATURITY SCHEDULE* Maturity Date Principal Interest Maturity Date Principal Interest (May 15) Amount Rate (May 15) Amount Rate 1999............. 2010............. 2000............. 2011............. 2001............. 2012............. 2002............. 2013............. 2003............. 2014............. 2004............. 2015............. 2005............. 2016............. 2006............. 2017............. 2007............. 2018............. 2008............. 2019............. 2009............. 2020............. 2021............. The Series 1996 Bonds will be offered when, as and if issued and received by the purchasers, subject to the approval as to their legality by Orrick Herrington& Sutcliffe, San Francisco, California, Bond Counsel. It is anticipated that the Series 1996 Bonds, in definitive form, will be available for delivery in New York, New York on or about May 1996. * Preliminary, subject to change No dealer, broker, sales person, or other person has been authorized by the Lafayette School 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 an offer to buy nor shall there be any sale of the Series 1996 Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale. The information set forth herein has been obtained from official sources that are believed to be reliable but it is not guaranteed as to accuracy or completeness, and is not be construed as a representation by the District or the Financing Consultant. The information and expression of opinions 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 Series 1996 Bonds and may not be reproduced or used, in whole or in part, for any other purpose. TABLE OF CONTENTS INTRODUCTION..................................................................................................................................................4 THESERIES 1996 BONDS..................................................................................................................................4 Authorityfor Issuance.....................................................................................................................................4 PurposeOf The Issue......................................................................................................................................4 Security...........................................................................................................................................................5 Descriptionof the Bonds.................................................................................................................................5 Registration,Transfer and Exchange........................................................... 6 ..................................................... Book-Entry System..........................................................................................................................................7 Redemption Features-Optional Redemption..................................................................................................9 Redemption Features Mandatory Redemption...........................................:.....................................................9 RedemptionFeatures-Notices.........................................................................................................................9 DebtService.....................................................................................................................................................11 APPLICATIONOF FUNDS..................................................................................................................................12 BondProceeds..................................................................................................................................................12 Investment of Bond Proceeds,Tax Payments and Other Revenues.................................................................12 TaxRevenues...................................................................................................................................................13 Assessed Valuation and Tax Collections..........................................................................................................14 UnitaryProperty...............................................................................................................................................14 Teeter Plan ...........15 ............................................................................................................................................ LAFAYETTESCHOOL DISTRICT......................................................................................................................16 General.............................................................................................................................................................16 Assessed Value and Delinquencies...................................................................................................................16 MajorTax Payers.............................................................................................................................................17 Direct and Overlapping Bonded Debt..............................................................................................................18 CONSTITUTIONAL AMENDMENTS AFFECTING DISTRICT REVENUES.................................................19 Property Tax Rate Limitations-Article XIIIA.................................................................................................19 Article XIII B of the California Constitution....................................................................................................20 UnitaryProperty................................................................................................................................................20 StatutoryLimitations.........................................................................................................................................20 Proposition 98 and Proposition 111...................................................................................................................21 Proposition187..................................................................................................................................................22 FutureInitiatives................................................................................................................................................23 STATE OF CALIFORNIA FISCAL ISSUES.......................................................................................................23 StateFunding of Education...............................................................................................................................23 Legal Challenges Affecting State Funding of Education..................................................................................24 TAXMATTERS....................................................................................................................................................24 LEGALITY FOR INVESTMENT IN CALIFORNIA...........................................................................................26 CERTAINLEGAL MATTERS.............................................................................................................................26 MISCELLANEOUS...............................................................................................................................................26 PROFESSIONALS INVOLVED IN THE OFFERING.........................................................................................26 CLOSINGPAPERS...............................................................................................................................................26 RATINGS..............................................................................................................................................................27 UNDERWRITING.................................................................................................................................................27 CONTINUING DISCLOSURE.............................................................................................................................28 APPENDIXA.......................................................................................................................................................1 LAFAYETTE SCHOOL DISTRICT.....................................................................................................................1 DISTRICT FINANCIAL INFORMATION...........................................................................................................2 AccountingPractices..............................................................................................................................................3 DISTRICTDEBT STRUCTURE..........................................................................................................................3 �, 7g RetirementSystem.................................................................................................................................................3 Insurance....................................................................:...........................................................................................4 Direct and Overlapping Bonded Debt....................................................................................................................4 RevenueLimitations...............................................................................................................................................5 AverageDaily Attendance.....................................................................................................................................7 Assessed Valuation and Tax Collections................................................................................................................7 MajorTax Payers...................................................................................................................................................9 Appendix B-Financial Statements Fiscal Year Ending June 30, 1995.................................................................1 Appendix C-Proposed Form of Bond Counsel Opinion.......................................................................................l Appendix D-Form of Continuing Disclosure Certificate......................................................................................l 2 Lafayette School District (Contra Costa County, California) BOARD OF SUPERVISORS Chairman:Jeff Smith Member:Jim Rogers Member: Gayle Bishop Member:Mark De Saulnier Member: Thomas Torlakson COUNTY STAFF Auditor-Controller.Kenneth J. Corcoran Treasurer/Tax Collector:Alfred P. Lomeli DISTRICT BOARD OF TRUSTEES President:Judy Carney Member:Anne Marie Gold Member: Scott Sommer Member:Shayne Silva Clerk:Mary Mc Cosker DISTRICT ADMINISTRATION Superintendent:Jon Frank Director of Fiscal Services:Linda Grundhoffer SPECIAL SERVICES Bond Counsel: Orrick Herrington & Sutcliffe San Francisco, California Financial Advisor: Sutro & Co. Incorporated Underwriter: Paying Agent: First Trust of California, National Association, Los Angeles 3 �g OFFICIAL STATEMENT $15,000,000* LAFAYETTE SCHOOL DISTRICT (CONTRA COSTA COUNTY, CALIFORNIA) GENERAL OBLIGATION BONDS, ELECTION OF 1995, SERIES 1996 INTRODUCTION This Official Statement has been prepared under the direction of the Lafayette School District (the "District") in order to furnish information concerning its sale of General Obligation Bonds, Election of 1995, Series 1996 in the principal amount of $15,000,000* (the "Series 1996 Bonds"). The Series 1996 Bonds were authorized, at the request of the District, pursuant to a resolution of the Board of Supervisors adopted on , 1996 (the "Resolution"). The Series 1996 Bonds will be issued in full conformity with the Constitution and laws of the State of California, including the provisions under Title 1, Division 1, Part 10, Chapter 2 of the California Education Code, commencing with Section 15100. On November 7, 1995, the qualified electors of the District authorized the issuance of general obligation bonds in a total aggregate principal amount of$27,300,000. More than two-thirds of the qualified electors voting in the election authorized the Bonds. The Series 1996 Bonds constitute the first series of bonds authorized by such vote. The Board of Supervisors of Contra Costa County has the power and is obligated to levy ad valorem taxes, for the payment of the Series 1996 Bonds and the interest thereon upon all taxable property within the District without limitation as to rate or amount (except for certain classes of personal property which is taxable at limited rates). The Series 1996 Bonds are payable solely from the proceeds of such taxes. THE SERIES 1996 BONDS Authority for Issuance The Series 1996 Bonds are being issued under the provisions of Title 1, Division 1, Part 10, Chapter 2 of the State of California Education Code, commencing with Section 15100, (the "Law") and pursuant to a resolution of the Board of Supervisors of Contra Costa County adopted on , 1996 authorizing the issue in the aggregate principal amount of not to exceed$15,000,000. On November 7, 1995 the District held an election at which the following proposition (Measure B) was submitted to the electors of the District: "Shall the Lafayette Elementary School District be authorized to finance the repair and renovation of Lafayette schools, including repairing leaky roofs, making seismic and safety upgrades to schools and classrooms; providing safe electrical wiring and adequate outlets; upgrading inefficient heating, ventilation and lighting systems; constructing facilities and renovating deteriorating classrooms, libraries, science, computer laboratories and school facilities by issuing up to$27,300,000 of bonds at interest rates not to exceed the limit set by law?" 7,770 registered voters cast ballots in the election, 5,772 voted in favor of the Bonds. Purpose Of The Issue The District is authorized and plans to use the bond proceeds for the purposes set forth in Proposition B and the California Education Code. 4 Security The Series 1996 Bonds represent the general obligation of the District, payable solely from ad valorem taxes, unlimited as to rate or amount, levied against all taxable property in the District (except for certain classes of personal property which is taxed at limited rates). The Board of Supervisors is obligated to and shall, at the time of levy of general county taxes, levy and cause to be collected in the manner prescribed by law for county taxes, a tax on the taxable property within the District, sufficient to provide the amounts necessary for the payment of the interest (and redemption premium, if any) on and principal of the Series 1996 Bonds. Such taxes when collected, will be placed in the Interest and Sinking Fund of the District, which is maintained by the County and which is established by law for the payment of principal of and interest on the Bonds when due. Description of the Bonds The Series 1996 Bonds shall be in fully registered form without coupons of the denomination of$5,000 or any integral multiple thereof. The Series 1996 Bonds shall be initially registered in the name of "Cede &Co.", as nominee of The Depository Trust Company, New York, New York. The interest on the Series 1996 Bonds shall be payable to the person whose name appears on the bond registration books of First Trust California, National Association as Paying Agent(the "Paying Agent"). Each Series 1996 Bond shall bear interest from May 15 and November 15 (each an "Interest Payment Date"), next preceding the date of authentication thereof, unless it is authenticated as of a date during the period from the sixteenth day of the month next preceding any Interest Payment Date to the Interest Payment Date, inclusive, in which event it shall bear interest from such Interest Payment Date; or unless it is authenticated on or before fifteenth day of the month preceding the first Interest Payment Date, in which event it shall bear interest from the date thereof. The Series 1996 Bonds shall mature or be subject to mandatory sinking fund redemption (see "Redemption Features-Mandatory Redemption" herein) on May 15 in each of the designated years and in the principal amounts shown below: 5 Year of Principal Year of Principal Maturity Amount* Maturity Amount* 2000.......................... 25,000 2012........................... 700,000 2001.......................... 50,000 2013........................... 800,000 2002.......................... 100,000 2014........................... 900,000 2003.......................... 150,000 2015........................... 1,000,000 2004.......................... 175,000 2016........................... 1,100,000 2005.......................... 225,000 2017........................... 1,250,000 2006.......................... 300,000 2018........................... 1,350,000 2007.......................... 350,000 2019........................... 1,400,000 2008.......................... 400,000 2020........................... 1,500,000 2009.......................... 500,000 2020........................... 1,525,000 2010.......................... 550,000 2021........................... 2011.......................... 650,000 * Preliminary subject to change. Registration,Transfer and Exchange The Series 1996 Bonds are issued as fully registered bonds payable to the Owners thereof. When executed and delivered, the Series 1996 Bonds shall be registered in the name of Cede & Co., as nominee of DTC. DTC will act as securities depository of the Series 1996 Bonds. Ownership interests in the Series 1996 Bonds may be purchased in book-entry form only in the denominations set forth herein. See 'Book-Entry System" herein. Subject to the following discussions of the "Book-Entry System", transfer of ownership of a Series 1996 Bond shall be made by the Owner, in person, or by an attorney therefor duly authorized in writing, at the office of Paying Agent (in Los Angeles, California) but only in the manner, subject to the limitations and upon payment of the charges provided in the Resolution and upon surrender and cancellation of the Series 1996 Bond to be transferred. No transfer of a Series 1996 Bond is required to be made by the Paying Agent during the period from (1) the sixteenth day of the month next preceding any Interest Payment Date to such Interest Payment Date or (2) the date for which such Series 1996 Bond has been selected for redemption in whole or in part to and including such redemption date. Any duly authenticated and registered Series 1996 Bond may, in accordance with its terms, be exchanged at said office of the Paying Agent for new fully registered Series 1996 Bonds of a like aggregate principal amount of the Series 1996 Bonds of other authorized denominations of the same series and maturity. No such exchange is required to be made by the Paying Agent during the period from(1) the sixteenth day of the month next preceding the month of any Interest Payment Date to such Interest Payment Date, or(2) from the date for which such Series 1996 Bond has been selected for redemption in whole or in part to and including such redemption date. 6 Such registration and transfer shall take place at said office of the Paying Agent. The Paying Agent may make a charge for every exchange or transfer and shall require the Owner to pay any tax or governmental charge required to be paid with respect to such exchange or transfer. Book-Entry System The information in this section concerning DTC and DTC's book-entry system has been obtained from DTC, and the District assumes no responsibility for the accuracy or completeness thereof. DTC has established the book-entry depository system pursuant to certain agreements between DTC and its Participants. The District is not a parry to those agreements. As long as a book-entry only system is used for the Series 1996 Bonds, the Paying Agent will send any notice of redemption or other notices to holders only to DTC. Any failure of DTC to advise any participant, or of any participant to notify any Beneficial Owner (as hereinafter defined), of any notice and its content or effect will not affect the validity or sufficiency of the proceedings relating to the prepayment of the Series 1996 Bonds called for redemption or of any other action premised on such notice. The District, County and the Paying Agent do not have any responsibility or obligation to DTC Participants (as hereinafter defined), to the persons for whom they act as nominees, or to any other person who is not shown on the registration books as being an owner of the Series 1996 Bonds, with respect to (i) the accuracy of any records maintained by DTC or any of its Participants, (ii) the payment by DTC or its Participants of any amount with respect to the payment of the principal of or interest on, or premium, if any, on the Series 1996 Bonds, (iii) the delivery of any notice which is permitted or required to be given to owners under the Resolution, (iv) the selection by DTC or any of its Participants of any person to receive payment in the event of a partial redemption of the Series 1996 Bonds, (v) any consent given or other action taken by DTC as registered owner, or (vi) any other matter. The District, County and Paying Agent cannot and do not give any assurances that DTC, its Participants or others will distribute payments of principal of and interest on or premium, if any, on the Series 1996 Bonds paid to DTC or its nominee, as the registered owner, or any notices to the Beneficial Owners or that they will do so on a timely basis or will serve and act in a manner described in this Official Statement. The District, County and Paying Agent are not responsible or liable for the failure of DTC or any of its Participants to make any payment or give any notice to a Beneficial Owner in respect of the Series 1996 Bonds or any error or delay relating thereto. The Depository Trust Company, New York, New York ("DTC") will act as the securities depository for the Series 1996 Bonds. The Series 1996 Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC's partnership nominee). One fully registered Series 1996 Bond will be issued for each maturity of the Series 1996 Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC 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 securities that its participants (the "Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly -7g or indirectly ("Indirect Participants"). The Rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. Purchases of the Series 1996 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 1996 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 1996 Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are 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 Series 1996 Bonds are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Series 1996 Bonds, except in the event that use of the book-entry system for the Series 1996 Bonds is discontinued. To facilitate subsequent transfers, all Series 1996 Bonds deposited by Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Series 1996 Bonds with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 1996 Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 1996 Bonds are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. 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. Redemption notices shall be sent to Cede & Co. If less than all of the Series 1996 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. will consent or vote with respect to Series 1996 Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to the District as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Series 1996 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Series 1996 Bonds will be made to DTC. DTC's practice is to credit Direct Participants' accounts on payable date in accordance with their respective holdings shown'on DTC's records unless DTC has reason to believe that it will not receive payment on payable date. 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, the Paying Agent, the County or the District, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the County, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. 8 DTC may discontinue providing its services as securities depository with respect to the Series 1996 Bonds at any time by giving reasonable notice to the District or Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, Series 1996 Bond certificates are required to be printed and delivered. The District may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Series 1996 Bond certificates will be printed and delivered. Redemption Features-Optional Redemption The Series 1996 Bonds maturing on or before May 15, 2006, are not subject to redemption prior to their respective stated maturity dates. Series 1996 Bonds maturing on and after May 15, 2007, are subject to redemption prior to their respective maturity dates, at the option of the District, from any source of available funds, as whole or in part on any date, on or after May 15, 2006. If less than all of the Series 1996 Bonds are called for redemption, such Bonds shall be redeemed in inverse order of maturity, and if less than all of the Bonds of any given maturity are called the portions of such Bonds of a given maturity to be redeemed shall be determined by lot. Series 1996 Bonds shall be redeemed at the following redemption prices (expressed as a percentage of the principal amount of the Series 1996 Bonds called for redemption), together with interest accrued thereon to the redemption date: Redemption Dates Redemption Prices May 15, 2006 through May 14, 2007 102% May 15, 2007 through May 14, 2008 101% May 15, 2008 and thereafter 100% Redemption Features Mandatory Redemption The Bonds shall also be subject to mandatory sinking fund redemption( in accordance with specifications to be contained in the Official Notice of Sale as shall be determined by the County Treasurer upon consultation with the Superintendent of the District and the Financial Advisor), as specified in the bid of the successful bidder, and as specified in a Certificate of Award to be completed by the County Treasurer upon the sale of the Bonds. Redemption Features-Notices Notice of redemption shall be given by mail not less than thirty (30) nor more than sixty (60) days prior to the redemption date to the registered owner, and to the Securities Depositories and Information Services, and to one or more of the Information Services as set forth in the Resolution, but neither failure to receive such notice nor any defect in the notice so mailed shall affect the sufficiency of the proceedings for redemption. In addition, the District has covenanted to give notice of optional, unscheduled and contingent bond calls with respect to the Series 1996 Bonds to the Municipal Securities Rulemaking Board and to the applicable state information repository, if any. 9 Each notice of redemption shall (a) state the date of such notice; (b) state the name of the Series 1996 Bonds and the date of issue of the Series 1996 Bonds; (c) state the redemption date; (d) state the redemption price; (e) state the dates of maturity of the Series 1996 Bonds to be redeemed and, if less than all of the Series 1996 Bonds of any such maturity are to be redeemed, the distinctive numbers of the Series 1996 Bonds of such maturity to be redeemed, and in the case of Series 1996 Bonds redeemed in part only, the respective portions of the principal amount thereof to be redeemed; (f) state the CUSIP number, if any, of each maturity of Series 1996 Bonds being redeemed; (g) require that such Series 1996 Bonds be surrendered by the owners at the office of the Paying Agent, in Los Angeles, California, or at such other place or places as shall be designated by Paying Agent; and (h) give notice that further interest on such Series 1996 Bonds will not accrue after the designated redemption date. If a Series 1996 Bond is called for redemption and payment and is duly provided therefore, interest shall cease to accrue thereon from and after the date fixed for redemption. Any money held in any fund created pursuant to the Resolution, or by the Paying Agent in trust, for the payment of the principal of, any redemption premium, or interest on the Bonds and remaining unclaimed for two years after the principal of all the Series 1996 Bonds has become due and payable (whether by maturity or redemption) shall be transferred to the Interest and Sinking Fund of the District for payment of any outstanding general obligation bonds of the District, or if no such bonds are at the time outstanding,.shall be returned to the District for deposit to the District's general fund in accordance with Law. 10 r - Debt Service Annual debt service obligations for the Bonds, assuming no optional redemptions are made are as follows: Maturity Qty 15) Principal* Interest* Told 2000 25,000 2001 50,000 2002 100,000 2003 150,000 2004 175,000 2005 225,000 2006 300,000 2007 350,000 2008 400,000 2009 500,000 2010 550,000 2011 650,000 2012 700,000 2013 800,000 2014 900,000 2015 1,000,000 2016 1,100,000 2017 1,250,000 2018 1,350,000 2019 1,400,000 2020 1,500,000 2021 1,525,000 TOTAL * Preliminary Subject to Change. 11 APPLICATION OF FUNDS Bond Proceeds Pursuant to California Education Code Section 15146, $15,000,000 plus accrued interest from the proceeds of the sale of the Series 1996 Bonds, will be deposited with the Treasurer of the County of Contra Costa in the following funds: 1. Deposit in the Building Fund, $15,000,000, net of costs of issuance, to be used to pay costs of the authorized projects. 2. Deposit in the Interest and Sinking Fund, accrued interest and any premium received from the purchaser thereof. Investment of Bond Proceeds,Tax Payments and Other Revenues State law establishes that the treasurer of each county is the ex officio treasurer of all school districts in that county. Substantially all District funds are held by the Treasurer-Tax Collector of the County (the "Treasurer"). Pursuant to the Education Code, proceeds of the Bonds are held in the Building Fund of the District, and tax collections for repayment of the Bonds are held in the District's Interest and Sinking Fund. Upon delivery of the Series 1996 Bonds the Treasurer will deposit the net Bond proceeds in the District's Building Fund. The District intends that all of the proceeds in the Building Fund will be invested with the California State Treasurer's Local Agency Investment Fund. Although separately accounted for, District cash is commingled and invested on a pooled basis with other funds held in the County Treasury and not invested at the direction of the District or other pool participants. The pooled investment fund is invested by the County Treasurer pursuant to State law and the County's investment policies. This pooled investment fund consists primarily of operating funds of the County and local agencies including other school districts, cities and special districts. The aggregate market value of the pooled investment fund as of December 31, 1995 was approximately $923 million. District's may direct investments within this pool. As of March 31, 1996, the District's directed investments totaled approximately$560,914. Funds held in the pool are invested by the Treasurer in accordance with State law and the County's investment policy. The current policy was prepared by the Treasurer and approved by the Board of Supervisors in October, 1994. The County's investment policy sets forth the Treasurer's investment objectives as mandated by state law: legality, safety of principal, liquidity, and yield. In addition, the County's investment policy describes the instruments eligible for inclusion in the investment portfolio subject to certain limitations. In general, the pooled investment fund may be invested in any investments permitted under state law, subject to certain additional limitations, including minimum credit quality, maximum maturity, and the maximum percentage of the pooled investment fund which may be held in certain instruments. In December 1994, the investment policy was further restricted by explicitly prohibiting the future use of derivatives, floating rate notes, and reverse repurchase agreements. 12 As of February 15, 1996 the County Treasury held investments having a book value of$863.3 Million and a market value of$863.4 Million. The portfolio consists of the following, expressed in thousands, (000 removed): (000's) Percentage of (000's) (000's) QQ51 Portfolio Market Par Value Book Value Value US Treasury $66,472 7.70% $68,489 $70,265 CASH 11,847 1.37% 11,847 11,847 US Agencies (Federal, State &Local) 306,065 35.45% 304,621 306,350 Other 478.965 55.48% 479,081 478.797 Total 863,349 100% 867,259 Note: Information is expressed in thousands (000's removed). Information provided by Contra Costa County Treasurer-Tax Collector's office. Source of market valuation data is principally Interactive Data Corporation Waltham, MA, except for structured notes which are from securities firms. As of February 15, 1996 the dollar weighted average portfolio maturity was 188 days The compensation and value of investments under management in the County pool will vary from time to time depending on cash flow needs of the County and public agencies invested in the pool, maturity or sale of investment, purchase of new securities, and due to fluctuations in interest rates generally. The average rate of return on the pooled investment fund as of February 15, 1996 equaled 5.50%. More information on the County investment pool and a copy of the County's investment policy may be obtained from the office of the County Treasurer-Tax Collector, County of Contra Costa, Martinez, California. Tax Revenues The Series 1996 Bonds are being issued under the provisions of Title 1, Division 1, Part 10, Chapter 2 of the California Education Code, Commencing with Section 15100. The Bonds will be paid solely from property tax revenues levied on property in the District for payment of the interest on and redemption price of the Series 1996 Bonds. The annual tax levy will based on the assessed value of taxable property in the District. Fluctuations in the assessed value of property in the District may cause the annual tax levy to fluctuate. The reduction of assessed values of taxable property in the District caused by economic factors beyond the District's control, such as economic recession, deflation of land values, a relocation out of the District by one or more major property owners, or the complete or partial destruction of such property caused by, among other eventualities, an earthquake, flood or other natural disaster, could cause a reduction in the assessed value of the District and necessitate a subsequent increase in the annual tax levy. Because of the recent decrease in property values in certain areas of the State, certain counties have publicly announced that they will review the assessed values of properties within those counties. Such a review may result in a decrease in assessed values which would result in a decrease in the amount of money received from the collection of the property tax by such county. (Nevertheless, the tax levied for payment of the Bonds is not a fixed percentage of assessed value, but will be levied at the rate necessary to provide for payment of all amounts coming due in such year). The District cannot predict to what extent any such review may result in a decrease in assessed values of properties within Contra Costa County. 13 The Contra Costa County Auditor-Controller has reported appeals brought by Contra Costa County taxpayers with respect to the assessed values of property located in the District. Appeals have been brought for prior year property valuation by one of the assesses who is among the twenty largest assesses located in the District. See the Table under "Major Taxpayers" for a description of the major property taxpayers within the District. There can be no assurance as to whether further appeals by assesses located in the District will be brought in the future. Such appeals, if successful, will result in reductions in assessed value and corresponding increases in the tax levied on other property owners to pay the Bonds. Assessed Valuation and Tax Collections The District utilizes the services of the County for the assessment and collection of taxes for District purposes, except for public utility property which is assessed by the State Board of Equalization. Beginning with fiscal year 1981-82 all property is assessed at full cash value. The State Constitution and sections of various Codes provide exemptions from ad valorem property taxation for certain classes of property such as churches, colleges, nonprofit hospitals, and charitable institutions. State law allows exemptions from ad valorem property taxation of$7,000 of full value of owner occupied dwellings. However, the State reimburses all local taxing authorities for the loss of revenues imputed to this exemption. State law also allows exemptions from ad valorem property taxation of 100% of business inventories. The business inventories exemption, which formerly was reimbursed 50%, then 100%, by the State, has been repealed. This subvention for local agencies within the State has been replaced by increased motor vehicle license fees. In California, property which is subject to ad valorem taxes is classified as "secured" or "unsecured". Secured and unsecured property are entered on separate parts of the assessment roll maintained by the County Assessor. The secured classification includes property on which any property tax levied by the County becomes a lien on that property sufficient, in the opinion of County Assessor, to secure payment of the taxes. Every tax which becomes a lien on secured property has priority over all other liens on the secured property, regardless of the time of the creation of other liens. A tax levied on unsecured property does not become a lien against the taxes on unsecured property, but may become a lien on certain other property owned by the taxpayer. Unitary Property AB 454 (Statutes of 1987, Chapter 921) provides that revenues derived from unitary property (consisting primarily of State-assessed operational property owned by public utility companies), commencing with Fiscal Year 1988-89, will be allocated as follows: (i) for revenues generated from the one percent tax rate, (a) each jurisdiction, will receive a percentage up to 102% of its prior year State-assessed unitary revenue; and (b) if county-wide revenues generated from unitary property are greater than 102% of the previous year's revenues, each jurisdiction will receive a percentage share of the excess unitary revenues by a specified formula; and(ii) for revenue generated from the application of the debt service tax rate to county-wide unitary taxable value, each jurisdiction will receive a percentage share of revenue based on the jurisdiction's annual debt service requirements and the percentage of property taxes received by each jurisdiction from unitary property taxes. This provision applies to all unitary property except railroads whose valuation will continue to be allocated to individual tax rate areas. The provisions of AB 454 do not constitute an elimination of the assessment of any State-assessed properties or a revision of the method of assessing utilities by the State Board of Equalization. Generally, AB 454 allows valuation growth or decline of unitary property to be shared by all jurisdictions in a county. 14 On July 14, 1993, the Superior Court of Sacramento entered a judgment validating a settlement agreement among all California counties and several public utility companies affecting the collection of unitary property taxes. The settlement agreement provides for a method of valuing unitary property for eight years, beginning in Fiscal Year 1991-92. This method of valuation will result in a reduction of unitary property taxes collected by counties. Teeter Plan The Board of Supervisors of the County, in Fiscal Year 1950/51, adopted 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. Pursuant to the Teeter Plan, the County established a tax losses reserve fund and a tax resources account and each entity levying property taxes in the County may draw on the amount of uncollected taxes and assessments credited to its fund, in the same manner as if the amount credited had been collected. Under the Teeter Plan, the County realizes the benefit of the interest and penalties collected from delinquent taxpayers and those interest and penalties are not available to individual taxing entities. The County is responsible for determining the amount of the tax levy on each parcel in the taxing entity, which is entered onto the secured real property tax roll. Upon completion of the secured real property tax roll, the County's Auditor-Controller determines the total amount of taxes and assessments actually extended on the roll for each fund for which a tax levy has been included, and apportions 100% of the tax and assessment levies to that fund's credit. Such moneys may thereafter be drawn against by the taxing agency in the same manner as if the amount credited had been collected. Historically, such apportionment occurs in September of each year. The County determines which moneys in the County treasury (including those credited to the losses reserve fund) shall be available to be drawn on to the extent of the amount of uncollected taxes credited to each fund for which a levy has been included. When amounts are actually received on the secured tax roll for the current year, or for redemption of tax-defaulted property, Teeter Plan moneys are distributed to the apportioned tax resources accounts. Contra Costa County applies the Teeter Plan to ad valorem general obligation bonds. Therefore, as long as the Teeter Plan remains in effect, the District's receipt of revenues with respect to the levy of ad valorem property taxes will not be dependent upon actual collections of the ad valorem property taxes by the County. However, under the statute creating the Teeter Plan, the Board of Supervisors could under certain circumstances terminate the Teeter Plan in its entirety and, in addition, the Board of Supervisors could terminate the Teeter Plan as to taxing entities in the County if the delinquency rate for all ad valorem property taxes levied within those entities in any year exceeds three percent. In the event that the Teeter Plan were terminated, the amount of the levy of ad valorem property taxes in the District would depend upon the collections of the ad valorem property taxes and delinquency rates experienced with respect to the parcels within the District and the District would realize the benefit of interest and penalties collected from delinquent taxpayers according to Law. 15 LAFAYETTE SCHOOL DISTRICT The information in this section concerning the operations of the District and the District's finances is provided as supplementary information only, and it should not be inferred from the inclusion of this information in this Official Statement that the principal of or interest on the Series 1996 Bonds is payable from the General Fund of the District. The Series 1996 Bonds are payable only from the proceeds of an ad valorem tax levied by the County for the payment thereof. See "THE SERIES 1996 BONDS-Security"herein. General The Lafayette School District is located in Contra Costa County, approximately 30 miles east of San Francisco. The District originated in approximately 1852. The District's boundaries encompass 560 square miles in the City of Lafayette and the County. As of January, 1995 23,900 persons resided within the City boundaries. The Lafayette School District was formed in approximately 1852. The District operates four elementary schools and one intermediate school. Enrollment in 1994-95 was 3,190 average daily attendance and enrollment for the current fiscal year (1995-96) is projected at 3,287 average daily attendance. The District operates four elementary schools and one intermediates school for students from kindergarten to eighth grade. In 1995, the District employed 145 full time equivalent certified instructional staff. The management staff consists of the District Superintendent, and principals. In 1995, the District had 46.75 full time equivalent classified employees. The employees are represented by the Lafayette Teachers Association (California Teachers Association) and California School Employees Association(Classified Personnel). Assessed Value and Delinquencies Application of Funds The table below shows the assessed value of properties located in the District. See Teeter Plan herein for a discussion of property tax collection procedures. LAFAYETTE SCHOOL DISTRICT Assessed Valuation Fiscal Year 1991-1996 Fiscal Year Secured Utility Unsecured Total 1989-90............... $1,309,885,875 $1,740 $24,576,249 $1,334,463,864 1990-91............... 1,469,087,028 1,696 27,786,751 1,496,875,475 1991-92............... 1,610,231,874 2,550 37,098,713 1,647,333,137 1992-93............... 1,719,360,470 885 36,081558 1,755,442,913 1993-94............... 1,813,854,284 2,553 38,604,998 1,852,461,835 1994-95............... 1,896,378,533 2,351 28,206,262 1,924,587,146 1995-96............... 2,547,372,629 851,870 43,711,594 2,591,936,093 Source: California Municipal Statistics 16 The table below shows property tax delinquency rates for the County of Contra Costa for fiscal years 1989-90 through 1994-95. COUNTY OF CONTRA COSTA PROPERTY TAX DELINQUENCY RATES (Full Roll) 1989-1990.......................... 2.99% 1990-1991 .......................... 3.25% 1991-1992.......................... 4.15% 1992-1993 .......................... 3.61% 1993-1994.......................... 2.82% 1994-1995.......................... 2.37% Source: California Municipal Statistics Major Tax Payers The twenty largest taxpayers within the Lafayette School District, as shown on the 1995-96 secured tax rolls, and the assessed value attributable to those taxpayers are shown below. These 20 property owners represent 4.65% of the total assessed value of the District. LAFAYETTE SCHOOL DISTRICT Largest 1995-96 Local Secured Proper Taxpayers(l) 1995-96 %of PropererOwner Assessed Valuation Total(1) 1. Lafayette Highlands Investment $12,101,486 0.48% 2. Lafayette Park Hotel Associates 12,086,188 0.47 3. Connecticut Mutual Life Insurance Co. 9,236,907 0.36 4. Russell J. &Joan E. Bruzzone 8,605,634 0.34 5. Ki LaFiesta Square 8,570,182 0.34 6. Execucenter 7,131,805 0.28 7. Gray Horse Investors 6,511,000 0.26 8. Ki Lafayette BART, Inc. 5,987,638 0.24 9. Leman 5,740,000 0.23 10. Lafayette Terrace Properties 5,238,605 0.21 11. David R. &Kim H. Metcalf 4,764,933 0.19 12. . Martin I. Zankel 4,110,331 0.16 13. Daniel L. Scher 4,024,326 0.16 14. Oakhill West Associates 3,879,398 0.15 15. Phillip R. &Kathleen Lemos 3,727,976 0.15 16. Robert&Maudellen Greenhood 3,569,000 0.14 17. Raymond J. &Angelina M. Leal 3,530,713 0.14 18. William&Janet Cronk III 3,326,030 0.13 19. Michael S. Radcliffe 3,182,528 . 0.12 20. George T. Argyis 3.152.991 012 $118,477,671 4.65% (1) 1995-96 Total Local Secured Assessed Valuation: $2,547,372,629 Source:.California Municipal Statistics 17 Direct and Overlapping Bonded Debt Within the geographic boundaries of the District are contained a number of agencies providing public services. These agencies have issued bonds and certificates of participation which are outstanding. The following table represents the direct and overlapping "bonded" debt of the District, according to California Municipal Statistics. There can be no assurance of the accuracy of the table. Additional information can be received from California Municipal Statistics, Inc, San Francisco, CA. LAFAYETTE SCHOOL DISTRICT DIRECT AND OVERLAPPING BONDED DEBT 1995-96 Assessed Valuation : $2,591,936,093 DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: applicable Debt 4/1/96 San Francisco Bay Area Rapid Transit District 1.393% $2,334,320 Acalanes Union High School District 24.957 7,751,644 Lafayette School District 100. - (1) City of Lafayette 99.920 5,995,200 Contra Costa County Service Area#R-8 2.547 98,060 Contra Costa County Storm Drainage District#16 0.887 444 East Bay Municipal Utility District 3.613 489,381 East Bay Regional Park District 2.016 3,192,235 Central Contra Costa Sanitary District 1915 Act Bonds 100. 265.000 TOTAL GROSS DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT 20,126,284 Less: East Bay Municipal Utility District (489.381) TOTAL NET DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT 19,636,903 OVERLAPPING LEASE OBLIGATION DEBT: Contra Costa County General Fund Obligations 4.381% $12,187,023 Contra Costa County Pension Obligations 4.381 14,754,113 Contra Costa County Board of Education Certificates of Participation 4.381 189,040 Contra Costa County Mosquito Abatement District Certificates of Participation 4.381 97,696 City of Walnut Creek Authorities 1.233 17,200 San Ramon Valley Fire Protection District Certificates of Participation 0.019 1,917 Mt. Diablo Hospital Authority 1.530 66.555 TOTAL OVERLAPPING LEASE OBLIGATION DEBT $27,313,544 GROSS COMBINED TOTAL DEBT $47,439,828 (2) NET COMBINED TOTAL DEBT $46,950,447 (1) Excludes general obligation bonds to be sold. (2) Excludes tax and revenue anticipation notes, revenues, mortgage revenue and tax allocation bonds and non- bonded capital lease obligations. Ratios to Assessed Valuation: DirectDebt.............................................................:................... -% Total Gross Direct and Overlapping Tax and Assessment Debt.......................0.78% Total Net Direct and Overlapping Tax and Assessment Debt .........................0.76% Gross Combined Total Debt ................................................................1.83% Net Combined Total Debt...................................................................1.81% STATE SCHOOL.BUILDING AID REPAYABLE AS OF 6/30/96: $0 18 CONSTITUTIONAL AMENDMENTS AFFECTING DISTRICT REVENUES The information in this section concerning the State of California financing is provided as supplementary information only, and it should not be inferred from the inclusion of this information in this Official Statement that the principal of or interest on the Series 1996 Bonds is payable from the State or from revenues received from the State. The Series 1996 Bonds are payable only from the proceeds of an ad valorem tax levied by the County for the payment thereof. See "THE SERIES 1996 BONDS-Security"herein. Property Tax Rate Limitations-Article XIIIA On June 6, 1978, the California voters added Article XIIIA to the California Constitution in an initiative known as Proposition 13 ("Proposition 13") which limits the amount of any ad valorem taxes on real property to one percent (I%) of the full cash value, except that the additional taxes may be levied to pay debt service on general obligation bonds and certain other indebtedness approved by the voters prior to August 1, 1978. Article XIIIA 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 period." This full cash value maybe increased at a rate not to exceed two percent(2%) per year to account for inflation. Section 1(b) of Article XII A provides that the one percent limitation does not apply to ad valorem taxes to pay interest or redemption charges on (1) indebtedness approved by the voters prior to July 1, 1978 or (2) any bonded indebtedness for the acquisition or improvement of real property approved on or after July 1, 1978, by two-thirds of the votes cast by the voters voting on the proposition. Legislation enacted by the California Legislature to implement Article XIII A provides that notwithstanding any other law, local agencies may not levy any ad valorem property tax except to pay debt service on indebtedness approved by the voters as described above. Such legislation further provides that each county will levy the maximum tax permitted by Article XIII A of$4.00 per$100 of assessed valuation(based on the traditional practice of using 25 percent of full cash value as the assessed value for tax purposes). Beginning with the 1981/82 fiscal year, assessors in California no longer record property values on the tax rolls at the assessed value of 25 percent of market value and now record them at full market value. Consequently, the tax of$4.00 per $100 of assessed value is now expressed as $1.00 per $100 of taxable value. In the general elections of 1986, 1988, and 1990, the voters of the State approved various measures which further amended Article XIII A. One such amendment generally provides that the purchase or transfer of (i) real property between spouses or (ii) the principal residence and the first $1,000,000 of the full cash value of other real property between parents and children, do not constitute a "purchase" or "change or ownership" triggering reassessment under Article XIII A. Other amendments permitted the Legislature to allow persons over 55 who sell their residence and on or after November 5, 1986, buy or build another of equal or lesser value within two years in the same county, to transfer the old residence's assessed value to the new residence, and permitted the Legislature to authorize each county under certain circumstances to adopt an ordinance making such transfers or assessed value applicable to situations in which the replacement dwelling purchased or constructed after November 8, 1988, is located within that county and the original property is located in another county within California. The County of Contra Costa does not participate in the program to allow transfers,of assessed value for persons over 55. In the June 1990 election, the voters of the State approved additional amendments to Article XIII A permitting the State Legislature to extend the replacement dwelling provisions applicable to persons over 55 to severely disabled homeowners for replacement .dwellings purchased or newly constructed on or after June 5, 1990, and to exclude from the definition of "new construction" triggering reassessment improvements to certain dwellings for the purpose of making the dwelling more accessible to disabled persons. In the November 1990 election, the voters approved the amendment of Article XIII A to permit the State Legislature to exclude from the 19 7g definition of "new construction" seismic retro fitting improvements or improvements utilizing earthquake hazard mitigation technologies constructed or installed in existing buildings after November 6, 1990. Article XIII B of the California Constitution On November 6, 1979, California voters approved Proposition 4, the Gann Initiative, which added Article XIII B to the California Constitution. The principal effect of Article XIII B is to limit the annual appropriations of the State and any city, county, school district, authority or other political subdivision of the State to the level of appropriations for the prior fiscal year, as adjusted for changes in the cost of living, population and services rendered by the government entity. The "base year" for establishing such appropriation limit is fiscal year 1978/79 and the limit is to be adjusted annually to reflect changes in population, consumer prices and certain increases in the cost of services provided by these public agencies. Appropriations subject to Article XIII B include generally the proceeds of taxes levied by the State or other entity of local government, exclusive of certain State subventions, refunds of taxes, benefit payments from retirement, unemployment insurance and disability insurance funds. Unitary Property AB 454 (Chapter 921, Statutes of 1987) provided that revenues derived from most utility property assessed by the State Board of Equalization ("Unitary Property"), commencing with the 1988/89 fiscal year, will be allocated as follows: (a) each jurisdiction will receive up to 102% of its prior year State-assessed revenue; and (b) if county-wide revenues generated from Unitary Property are less than the previous year's revenues or greater than 102% of the previous year's revenues, each jurisdiction will share the burden of the shortfall or excess revenue by a specified formula. This provision applies to all Unitary Property except railroads whose valuations will continue to be allocated to individual tax rate areas. The provisions of AB 454 do not constitute an elimination of the assessment of any State-assessed properties nor a revision of the methods of assessing utilities by the State Board for Equalization. Generally, AB 454 allows valuation growth or decline for Unitary property to be shared by all jurisdiction in a county. Statutory Limitations Principal.of and interest on the Bonds are payable only from the proceeds of an ad valorem tax levied by the County for the payment thereof. (See "THE BONDS-Security" herein.) Articles XIIIA and XIIIB of the Constitution, and Proposition 98, 111, 62 and 187 [and other initiatives discussed in this section] are discussed in this section to describe the potential effect of these Constitutional and statutory measures on the ability of the District to levy taxes Constitutional and statutory measures on the ability of the District to levy taxes and spend tax proceeds for operating and other purposes, and it should not be inferred from the inclusion of such materials that these laws impose any limitation on the ability of the District to levy taxes for payment of the Bonds. The tax levied by the County for payment of the Bonds was approved by the District's voters in compliance with Article XIIIA and all applicable laws. On November 4, 1986, State voters approved Proposition 62, an initiative statute. Proposition 62 requirements include the following: (a) limitations on the imposition of new or higher general taxes unless approved by two-thirds of the local agency's governing body and a majority of its voters; (b) the inclusion of specific information in all local ordinances or resolutions proposing new or higher general or special taxes; (c) penalizes local agencies that fail to comply with the foregoing; and (d) required local agencies to stop collecting any new or higher general tax adopted after July 31, 1985, unless a majority of the voters approved the tax by November 1, 1988. 20 The majority of the provisions of Proposition 62 were reaffirmed by the California Supreme Court in 1995 in Santa Clara County Local Transportation Authority v. Guardino. Proposition 62 does apply to school districts by its terms. However, the District does not receive any material amount of tax revenues from any tax levied in contradiction to Proposition 62. Therefore, the District has not and does not expect to experience any substantive adverse financial impact as a result of the passage of this initiative. Proposition"98 and Proposition 111 On November 8, 1988, voters approved Proposition 98, a combined initiative constitutional amendment and statute called the "Classroom Instructional Improvement and Accountability Act" (the "Accountability Act"). The Accountability Act changes State funding of public education below the university level, and the operation of the State's Appropriations Limit. The Accountability Act, as modified Proposition 111 discussed below, guarantees State funding for K-12 school districts and community college districts (collectively, "K-14 districts") at a level equal to the greater of(a) the same percentage of General Fund revenues as the percentage appropriated to such districts in 1986-87, which percentage is equal to 40.9%, (the "first test") or (b) the amount appropriated in the prior year adjusted for changes in the cost of living (measured as in Article XIIIB by reference to per-capita personal income) and enrollment (the "second test"). Under Proposition 111, school districts would receive the greater of(a) the first test, (b) the second test or (c) a third test, which would replace the second test in any year when growth in per-capita General Fund revenues from the prior year was less than the annual growth in State per-capita personal income. Under the third test, school districts would receive the amount appropriated in the prior year adjusted for changes in enrollment and per-capita General Fund revenues, plus an additional small adjustment factor. If the third test were used in any year, the difference between the third test and the second test would become a "credit" to be paid in future years when General Fund revenue growth exceeds personal income growth. Since the Accountability Act is unclear in some details, there can be no assurance that the Legislature or a court might not interpret the Accountability Act to require a different percentage of General Fund revenues to be allocated to K-14 districts than the 40.9% percentage, or to apply the relevant percentage to the State's budgets in a different way than is proposed in the Governor's Budget. In any event, the Governor and other fiscal observers expect the Accountability Act to place increasing pressure on the State's budget over future years, potentially reducing resources available for other State programs, especially to the extent the Article XIIIB spending limit would restrain the State's ability to fund such other programs by raising taxes. The Accountability Act also changes how tax revenues in excess of the State Appropriations Limit are distributed. Any excess State tax revenues up to a specified amount would, instead of being returned to taxpayers, be transferred to K-14 districts. Such transfer would be excluded from the Appropriations Limit of K-14 districts and the K-14 school Appropriations Limits for the next year would automatically be increased by the amount of such transfer. These additional moneys would enter the base funding calculation for K-14 districts for subsequent years, creating further pressure on other portions of the State budget, particularly if revenues decline in a year following an Article XIIIB surplus. The maximum amount of excess tax revenues which could be transferred to schools is four percent of the minimum State spending for education mandated by the Accountability Act, as described above. On June 5, 1990 the voters approved Proposition 111 (Senate Constitutional Amendment 1), which further modified the Constitution to alter the spending limit and education funding provisions of Proposition 98. Most significantly, Proposition 111: (1) liberalized the annual adjustments to the spending limit by measuring the "change in the cost of living" by the change in State per-capita personal income rather than the. Consumer Price Index, and specified that a portion of the State's spending limit would be adjusted to reflect changes in school attendance; (2)provided that 50% of the "excess" tax revenues, determined based on a two-year cycle, would be transferred to K-14 school districts with the balance returned to taxpayers (rather than the 21 previous 100% but only up to a cap of four percent of the district's minimum funding level), and that any such transfer to K-14 school districts would not be built into the school districts' base expenditures for calculating their entitlement for State aid in the following year and would not increase the State's appropriations limit; (3) excluded from the calculation of appropriations that are subject to the limit appropriations for certain "qualified capital outlay projects" and certain increases in gasoline taxes, sales and use taxes, and receipts from vehicle weight fees; (4) provided that the Appropriations Limit for each unit of government, including the State, would be recalculated beginning in the 1990-91 as if SCA 1 had been in effect; (5) adjusted the Proposition 98 formula that guarantees K-14 school districts a certain amount of General Fund revenues, as described below. Proposition 187 On November 8, 1994, California voters approved Proposition 187. Proposition 187 makes persons with foreign citizenship who have entered California illegally ineligible for public social services, public health care services (unless an emergency), and public school education at elementary, secondary and post-secondary levels. The United States Immigration and Naturalization Service ("INS") estimates that currently there are over 1.5 million illegal immigrants in California. Further, Proposition 187.requires every school district to verify the status of every child enrolling for the first time on or after January 1, 1995. By January 1, 1996, every school district will be required to have verified the legal status of every child enrolled in the school district as well as the parents or guardian. If any student, (parent or guardian) is not legally in the United States, such district must report the student to the United States Immigration and Naturalization Service and certain other parties. The measure also prohibits a school district from providing education to a student it does not verify as either a United States citizen or a person legally admitted to the United States. The California Legislative Analyst estimates that verification costs could be in the tens of millions of dollars on a statewide level (including verification costs incurred by other local governments under Proposition 187) with fust-year costs potentially in excess of$100 million. The California Legislative Analyst also estimates that approximately 300,000 students in the California public education system are illegal immigrants. It is possible that for every student the District would be forced to exclude under Proposition 187, it may lose a portion of the State revenues it receives annually. However, since the District does not have a reliable means of estimating what proportion of its student population may be in California illegally, it is not possible to estimate what, if any, impact Proposition 187 may have on the District or the State revenues it receives. Additionally, school districts must comply with a variety of federal laws in order to receive federal funds. Both the exclusion of students and the verification and reporting requirements of Proposition 187 appear to be at odds with various federal and State laws. The reporting requirements specifically may violate the Family Educational Rights and Privacy Act ("FERPA") which generally prohibits schools that receive federal funds from disclosing information in student records without parental consent. Compliance with FERPA is a condition of receiving federal education funds, which total $2.3 billion annually to California school districts. The Secretary of the U.S. Department of Education has indicated that the reporting requirement in Proposition 187 could jeopardize the ability of school districts to receive these funds. Approximately 2.00% of the District's funding is from federal sources. The United State Supreme Court held in Plyler v. Doe (1982) that access to public education must be granted to all children. According to the State Legislative Analyst, the exclusion of illegal immigrant children as set forth in Proposition 187 is in direct conflict with Plyler v. Doe. Unless the Supreme Court alters the position it took in Plyler v. Doe, the provision of Proposition 187 mandating the exclusion of illegal immigrant children appears likely to be struck down. Even assuming an effective challenge regarding exclusion of students, it is possible that the District might still bear the financial burden of verifying the legal status of its students and reporting that status to the INS as well as a loss of federal funds as discussed above. The District cannot currently estimate what that reporting cost may be. 22 Opponents of Proposition 187 have filed at least eight lawsuits challenging the constitutionality and validity of the measure. A United States District Court judge overseeing four of the lawsuits has granted a preliminary injunction enjoining the implementation of most of the provisions of Proposition 187. It cannot be predicted what the nature or outcome of such litigation will be of what the ultimate fiscal impact or Proposition 187 will be, nor can its effect on the District's finances be predicted. Future Initiatives Article XIIIA, Article XIIIB and Propositions 62, 98, 111 and 187 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 District revenues or the District's ability to expend revenues. STATE OF CALIFORNIA FISCAL ISSUES The information in this section concerning the state funding of public education is provided as supplementary information only, and it should not be inferred from the inclusion of this information in this Official Statement that the principal of or interest on the Series 1996 Bonds is payable by the State or from revenues received from the State. The Series 1996 Bonds are payable only from the proceeds of an ad valorem tax levied by the County for the payment thereof. See "THE SERIES 1996 BONDS-Security"herein. State Funding of Education Since the start of the 1990-91 fiscal year, California has faced economic, fiscal and budget constraints due to the ongoing recession. The recession has seriously affected State tax revenues, and increased expenditures for health and welfare programs. The State is also facing a structural imbalance in its budget with the largest programs supported by the General Fund: K-14 education, health,.welfare and corrections - growing at rates significantly higher than the growth rates for the principal revenue sources of the General Fund. As a result, the State entered a period of chronic budget imbalance. The District receives a significant portion of its operating funding from the State. Continued adverse developments in the State's finances could result in a reduction of the historical levels of State financial support for K-12 education and thereby reduce the financial resources to operate the district. The Series 1996 Bonds are secured by and will be repaid from local property tax collections in the District, and decreases in State Financial support to the District will have no direct effect on the repayment of the Series 1996 Bonds. When the State's economy first began to decline in the 1990-91 fiscal year, spending levels for education had already been irreversibly established. Schools and community colleges had received more than the minimum guaranteed them under the Proposition 98 funding formula, discussed herein. The 1995-96 Budget appropriated $23.3 billion of Proposition 98 Funds for K-12 schools. Included in this figure is $372 million to be received in 1996-97 but counted towards the 1995-96 Proposition 98 guarantee. This is equivalent to$4,404 funding per average daily attendance (ADA). The 1995-96 Budget increased spending per pupil by $91 to $4,544 per ADA for K-12 school districts. This amount included a cost of living adjustment of approximately 2.73%. ' Additionally a Block Grant of approximately $53.00 per ADA was allocated to each District. This Block Grant is restricted to the following areas: instructional materials, deferred maintenance, education technology or other non-recurring costs. 23 Legal Challenges Affecting State Funding of Education J California Teachers Association v. Russel S. Gould: The California Teachers Association(CTA) filed a lawsuit against the State arguing that accounting shifts used to fund the public the public schools under Proposition 98 are illegal. These shifts were enacted by the Legislature and the public schools and at the same time avoid permanently increasing the constitutional minimum funding level dictated by Proposition 98. However-, on April 26, 1994, a Sacramento Superior Court entered judgment that K-14 districts are not obligated to repay,,such loans. The decision has been appealed. It is not known at this time whether the plaintiffs in this case will be successful on appeal, or what the response of the legislature or the Governor will be if the decision is upheld. If this case is overturned on appeal and the loans are held to be enforceable, repayment of the loans will essentially cause school district funding growth to lag a State fiscal recovery, as initial growth in Proposition 98 guarantees will be allocated to loan repayment. A tentative settlement of Gould v. CTA, a legal challenge by the California Teachers Association (CTA) regarding the status of Proposition 98 "loan" repayments, would result in two additional funding augmentations for school districts. Upon settlement, the deficit factor for revenue limits would be lowered by 0.89 percentage points, thereby reducing the factor from 11.01% to 10.12%. Also, Equalization Aid to low wealth school districts, would be adjusted to the State-wide average for the same size and type districts. The tentative settlement is contained in the Budget Trailer legislation signed on August 3, 1995. TAX MATTERS In the opinion of Orrick Herrington& Sutcliffe, San Francisco, California, Bond Counsel, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, compliance with certain covenants, interest on the Series 1996 Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the "Code") and is exempt from State of California personal income taxes. Bond Counsel is of the further opinion that interest on the Series 1996 Bonds is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes, although Bond Counsel observes that such interest is included in adjusted current earnings when calculating federal corporate alternative minimum taxable income. A complete copy of the proposed form of opinion of Bond Counsel is set forth-in Appendix C hereto. The difference (if any) between the issue price of any maturity of the Series 1996 Bonds and the amount to be paid at maturity of such Series 1996 Bonds (excluding amounts stated to be interest and payable at least annually over the term of such Series 1996 Bonds) constitutes "original issue discount," the accrual of which, to the extent properly allocable to each owner thereof, is treated as interest on the Series 1996 Bonds which is excluded from gross income for federal income tax purposes and which is exempt from State of California personal income taxes. For this purpose, the issue price of a particular maturity of the Series 1996 Bonds is.the first price at which a substantial amount of such maturity of the Series 1996 Bonds is sold to the public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers). The original issue discount with respect to any maturity of the Series 1996 Bonds accrues daily over the term to..maturity of such Series 1996 Bonds on the basis of a constant interest rate compounded semiannually (with straight-line interpolations between compounding dates). The accruing original issue discount is added to the adjusted basis of such Series 1996 Bonds to determine taxable gain or loss upon,disposition (including sale, redemption, or payment on maturity) of such Series 1996 Bonds. Owners of the Series 1996 Bonds should consult their own tax advisors with respect to the tax consequences of ownership of Series 1996 Bonds with original issue discount, including the treatment of purchasers who do not purchase such Series 1996 Bonds in the original offering to the public at the first price at which a substantial amount of such Series 1996 . Bonds is sold to the public. 24 The Code imposes various restrictions, conditions, and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Series 1996 Bonds. The District has covenanted to comply with certain restrictions designed to ensure that interest on the Series 1996 Bonds will not be included in federal gross income. Failure to comply with these covenants may result in interest on the Series 1996 Bonds being included in gross income for federal income tax purposes, possibly from the date of original issuance of the Series 1996 Bonds. The opinion of Bond Counsel assumes compliance with these covenants. Bond Counsel has not undertaken to determine (or to inform any person), whether any actions taken(or not taken) or events occurring (or not occurring) after the date of issuance of the Series 1996 Bonds may adversely affect the value of, or the tax status of interest on the Series 1996 Bonds. Further, no assurance can be given that pending or future legislation or amendments to the Code, if enacted into law, or any proposed legislation or amendments to the Code, will not adversely affect the value of, or the tax status of interest on, the Series 1996 Bonds. Prospective Bondholders are urged to consult their own tax advisors with respect to proposals to restructure the federal income tax. Certain requirements and procedures contained or referred to in the Resolution, the Tax Certificate (to be entered into by the District on the date of issuance of the Series 1996 Bonds) and other relevant documents may be changed and certain actions (including, without limitation, defeasance of the Series 1996 Bonds) may betaken or omitted under the circumstances and subject to the terms and conditions set forth in such documents. Bond Counsel expresses no opinion as to any Series 1996 Bond or the interest thereon if any such change occurs or action is taken or omitted upon the advice or approval of bond counsel other than Orrick Herrington& Sutcliffe. Although Bond Counsel is of the opinion that interest on the Series 1996 Bonds is excluded from gross income for federal income tax purposes and is exempt from State of California personal income taxes, the ownership or disposition of, or the accrual or receipt of interest on, the Series 1996 Bonds may otherwise affect a Bondholder's federal or state tax liability. The nature and extent of these other tax consequences will depend upon the Bondholder's particular tax status or Bondholder's other items of income or deduction. Bond Counsel expresses no opinion regarding any such other tax consequences. 25 7� LEGALITY FOR INVESTMENT IN CALIFORNIA Under provisions of the California Financial Code, the Series 1996 Bonds are legal investment for commercial banks in California, and under provisions of the California Government Code are eligible to secure deposits of public moneys in California. CERTAIN LEGAL MATTERS The validity of the Bonds and certain other legal matters are subject to the approving opinion of Orrick, Herrington & Sutcliffe, Bond Counsel. A complete copy of the proposed form of Bond Counsel opinion is contained in Appendix C hereto. Bond Counsel undertakes no responsibility for the accuracy, completeness or fairness of this Official Statement. MISCELLANEOUS References made herein to certain documents and reports which are brief summaries thereof do not purport to be complete or definitive, and reference is made to such documents and reports for a full and complete statement of the contents thereof. Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not be construed as a contract or agreement between the District and the purchasers or holder of any of the Series 1996 Bonds. The execution and delivery of this Official Statement has been duly authorized by the District. PROFESSIONALS INVOLVED IN THE OFFERING The District has retained Sutro & Co. Incorporated, San Francisco, to serve as Financial Consultant and Orrick, Herrington & Sutcliffe, San Francisco, to serve as Bond Counsel with respect to the Series 1996 Bonds. The Financial Consultant and Bond Counsel will receive compensation from the District contingent upon the sale and delivery of the Series 1996 Bonds. CLOSING PAPERS The District will furnish to the Underwriter, without charge, concurrently with payment for and delivery of the Series 1996 Bonds the following closing papers, each dated the date of such delivery. (a) The opinion of Bond Counsel, substantially in the form set forth in Appendix C herein 26 (b) The certificate of the District 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 Series 1996 Bonds will be used in a manner that would cause the Series 1996 Bonds to be arbitrage bonds; (c) The certificate or certificates on behalf of the District that there is no litigation threatened or pending affecting the validity of the Series 1996 Bonds; (d) The certificate or certificates of an appropriate District official, acting on behalf of the District solely in his or her official capacity and not in his or her personal capacity, that at the time of the sale of the Series 1996 Bonds and at all times subsequent thereto up to and including the time of delivery of the Series 1996 Bonds to the initial purchasers thereof, this Official Statement (except for information regarding DTC and its book-entry only system, as to which no view is expressed), 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 certificate of an appropriate official of the County, acting on behalf of the County solely in his or her official capacity and not in his or her personal capacity, that at the time of the sale of the Series 1996 Bonds and at all times subsequent thereto up to and including the time of delivery of the Series 1996 Bonds to the initial purchasers thereof, the information contained in the Official Statement of the District pertaining to said Series 1996 Bonds solely with respect to the information contained under the heading of "APPLICATION OF FUNDS-Investment of Bond Proceeds, Tax Payments and Other Revenues", 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; (f) The signature certificate of the officials of the County showing that they have signed the Series 1996 Bonds, whether by facsimile or manual signature, and that they were respectively duly authorized to execute the same; (g) The receipt of the County Treasurer/Tax Collector of the County showing that the purchase price of the Series 1996 Bonds, including interest accrued to the date of delivery thereof, has been received by him. (h) A continuing disclosure certificate of the District in substantially the form shown in Appendix D herein. RATINGS Standard & Poor's Ratings Services, A Division of McGraw-Hill, Inc., has assigned the Bonds a rating of----. An explanation of the significance of each rating may be obtained from the rating agency furnishing the same at the following addresses: Standard & Poor's Ratings Group, A Division of McGraw-Hill, Inc., 25 Broadway, New York, New York 10004. There is no assurance that such rating will continue for any given period of time or will not be revised or withdrawn entirely by such rating agency if, in the judgment of such rating agency, circumstances so warrant. A revision or withdrawal of such rating, may have an effect on the market price of the Bonds. UNDERWRITING The Series 1996 Bonds are being purchased by -------(the "Underwriter") 27 117$ The Series 1996 Bonds are being purchased by the Underwriter for a price equal to $-----—. The Underwriter has committed to purchase all of the Series 1996 Bonds if any of such Series 1996 Bonds are purchased. The Underwriter may offer and sell the Series 1996 Bonds to certain dealers (including dealers depositing Series 1996 Bonds into investment trusts), dealer banks, banks acting as agents and others at prices lower than said public offering prices. The true interest cost under such bid was %. CONTINUING DISCLOSURE The District has covenanted for the benefit of the holders and beneficial owners of the Series 1996 Bonds to provide 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 (which currently would be March 31) (the "Annual Report"), commencing with the report for the 1995-1996 Fiscal Year, and to provide notices of the occurrence of certain enumerated events, if material. The Annual Report will be filed by the District with each Nationally Recognized Municipal Securities Information Repository (and with the State Information Repository, if any). The notices of material events will be filed by the District with the Municipal Securities Rulemaking Board (and with the State Repository, if any). The specific nature of the information to be contained in the Annual Report or the notices of material events is summarized below under the caption "APPENDIX D - Form of Continuing Disclosure Certificate." These covenants have been made in order to assist the Underwriters 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. Lafayette School District By: Jon Frank Superintendent 28 APPENDIX A LAFAYETTE SCHOOL DISTRICT 1 c. 79 DISTRICT FINANCIAL INFORMATION The following audited summaries of certain Funds of the District have been prepared by the District from audited financial statements. Audited Financial Statements of the District for the year ending June 30, 1995 are attached hereto as "Appendix B". LAFAYETTE SCHOOL DISTRICT SUMMARY OF GENERAL FUND REVENUES AND EXPENDITURES Year Ended June 30 1995 1994 Revenues: Federal.......................................................... 141,201 142,782 Revenue Limit................................................. 9,662,107 9,531,429 Other State..................................................... 1,841,308 1,671,876 Other Local.................................................... 1,422,680 1,379,840 Total Revenues................................................. 13,067,296 12,725,927 Expenditures: Certified salaries.............................................. 6,663,962 6,360,500 Classified salaries............................................. 2,117,747 2,021,362 Employee benefits ............................................ 2,000,982 1,988,617 Books and supplies............................................ 498,283 600,932 Services and Other............................................ 1,153,364 957,146 Capital outlays................................................. 246,059 554,596 Other outlays .................................................. 216,606 155,380 Total Expenditures............................................ 12,897,003 12,638,533 Excess of Revenues Over(Under) Expenditures......... 170,293 87,394 Other Financial Sources (Uses) Operating Transfers Out................................... (134,093) (187,000) Operating Transfers In..................................... 153,590 (438) Vacation Payable Adjustment................................. (16,859) (20,056) Fund Balances: July 1.......................................................... 3,211,969 3,332,069 June 30....................................................... 3,384,900 3,211,969 Source: District Audited Financial Statements 2 Accounting Practices The accounting practices of the District conform to Generally Accepted Accounting Principles in accordance with policies and procedures of the California School Accounting Manual. This manual, according to Section 41010 of the California Education Code, is to be followed by all California school districts. Revenue is recorded on an accrual basis except for District taxes which are considered revenue in the year collections are made and therefore are fully reserved. Expenditures are recorded according to receipt of goods and services on an accrual basis. Differences between estimated and actual accounts receivable and payable, as of the beginning of the year, are reflected as adjustments to fund balance. The District's outside auditing firm is currently Buckman, Patchen, Riemann & Phillips, Lafayette, California. DISTRICT DEBT STRUCTURE Accounts Payable As of June 30, 1995, the District had no short term debt and no lease obligations. The District did have accounts payable of $557,075 including salaries, benefits books and supplies other operating expenses, capital outlay and other. For more information see Note 6 of Appendix B. Retirement System The District participates in the State of California Teacher's Retirement System (STRS). This plan covers all certified employees working half time or more. In Fiscal Year 1995, the District employed 185 certified employees with a�STRS total payroll of $6,458,909. The District also participates in the State of California School Employee's Retirement System (PERS). This plan covers all classified personnel who are employed four or more hours per day. In Fiscal Year 1995, the District employed 62 classified employees with a total PERS payroll of$1,536,411. Both systems are operated on a statewide basis. LAFAYETTE SCHOOL DISTRICT EMPLOYER RETIREMENT SYSTEM CONTRIBUTIONS Fiscal Year STRS PERS 1992-93 .................................... 395,073 69,628 1993-94 .................................... 412,225 69,866 1994-95 .................................... 531,860 58,964 Note: The District has met the required contribution rate as set by law. The actuarially determined contribution rate for STRS exceeds the employee rate set law, the District has no obligation for the deficit. The District's employer contributors to PERS met the required contribution rate and satisfied the plan's funding requirements as determined by the PERS actuary. The PERS funded contribution included amortization of the unfunded actuarial liability through the year 2011. See "Appendix B-District Financial Statements". 3 c. 79 Insurance The District participates in three Joint Powers Authorities: Contra Costa& Solano Counties School District Self-Insurance (Liability and property claims) Contra Costa Schools Insurance Group Workers Compensation Claims (workers compensation) School Self-Insurance of Contra Costa County(health, dental and vision coverage) Each JPA is independently accountable for its fiscal matters and maintains its own accounting records. Condensed financial information for FY 1993-94 is included in "Appendix B" herein. 4 Direct and Overlapping Bonded Debt LAFAYETTE SCHOOL DISTRICT DIRECT AND OVERLAPPING BONDED DEBT 1995-96 Assessed Valuation : $2,591,936,093 DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: applicable Debt 4/1/96 San Francisco Bay Area Rapid Transit District 1.393% $2,33,320 Acalanes Union High School District 24.957 7,751,644 Lafayette School District 100. - (1) City of Lafayette 99.920 5,995,200 Contra Costa County Service Area#R-8 2.547 98,060 Contra Costa County Storm Drainage District#16 0.887. 444 East Bay Municipal Utility District 3.613 489,381 East Bay Regional Park District 2.016 3,192,235 Central Contra Costa Sanitary District 1915 Act Bonds 100. 265.000 TOTAL GROSS DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT Less: East Bay Municipal Utility District TOTAL NET DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT OVERLAPPING LEASE OBLIGATION DEBT: Contra Costa County General Fund Obligations 4.381% $12,187,023 Contra Costa County Pension Obligations 4.381 14,754,113 Contra Costa County Board of Education Certificates of Participation 4.381 189,040 Contra Costa County Mosquito Abatement District Certificates of Participation 4.381 - 97,696 City of Walnut Creek Authorities 1.233 17,200 San Ramon Valley Fire Protection District Certificates of Participation 0.019 1,917 Mt. Diablo Hospital Authority 1.530 66.555 TOTAL OVERLAPPING LEASE OBLIGATION DEBT $27,313,544 GROSS COMBINED TOTAL DEBT $47,439,828 (2) NET COMBINED TOTAL DEBT $46,950,447 (1) Excludes general obligation bonds to be sold. (2) Excludes tax and revenue anticipation notes, revenues, mortgage revenue and tax allocation bonds and non- bonded capital lease obligations. Ratios to Assessed Valuation: DirectDebt................................................................................. -% Total Gross Direct and Overlapping Tax and Assessment Debt.......................0.78% Total Net Direct and Overlapping Tax and Assessment Debt .........................0.76% Gross Combined Total Debt ................................................................1.83% Net Combined Total Debt...................................................................1.81% STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/96: $0 Revenue Limitations 5 O , Since 1973-74, California school districts have operated under general purpose revenue limitations established by the State. In general, revenue limits are calculated for each school district by multiplying (1) the average daily attendance ("ADA") for the district by (2) a base revenue limit per unit of ADA. The revenue limit calculations are adjusted annually in accordance with a number of factors designed primarily to provide cost of living increases and to equalize revenues among all State school districts of the same type. In 1994-95, the District's revenue limit per unit of average daily attendance was $3,320.52. For the 1995-96 fiscal year, revenue limit per unit of average daily attendance for the District is estimated to be$3,498.39. The District's revenue limit is funded by (1) real property taxes and (2) State apportionment of basic and equalization aid. State apportionment amount to the difference between the District's revenue limit and its local property tax revenues. 6 Average Daily Attendance The following table summarizes the average daily attendance for the past five years within the District. LAFAYETTE SCHOOL DISTRICT Average Daily Attendance Fiscal Years 1990 through 1995 Average Daily Fiscal'Year Attendance Ending June 30 (Reporting Period-2) 1991.................................................. 2,814 1992.................................................. 2,924 1993.................................................. 2,998 1994.................................................. 3,122 1995.................................................. 3,190 Source: District Assessed Valuation and Tax Collections The table below shows the assessed value of properties located in the District. LAFAYETTE SCHOOL DISTRICT Assessed Valuation Fiscal Year 1991-1996 Fiscal Year Secured Utility Unsecured Total 1990-91 $1,309,885,875 $1,740 $24,576,249 $1,334,463,864 1991-92 1,469,087,028 1,696 27,786,751 1,496,875,475 1992-93 1,610,231,874 2,550 37,098,713 1,647,333,137 1993-94 1,719,360,470 885 36,081,558 1,755,442,913 1994-95 1,813,854,284 2,553 38,604,998 1,852,461,835 1995-96 1,896,378,533 2,351 28,206,262 1,924,587,146 1,969,293,678 2,430 29,049,065 1,998,345,173 Source: California Municipal Statistics 7 The table below shows property tax delinquency rates for the County of Contra Costa for fiscal years 1989-90 through 1993-94. COUNTY OF CONTRA COSTA - PROPERTY TAX DELINQUENCY RATES (Full Roll) 1989-1990.............................. 2.99% 1990-1991 .............................. 3.25% 1991-1992.............................. 4.15% 1992-1993.............................. 3.61% 1993-1994.............................. 2.82% Source: California Municipal Statistics 8 Major Tax Payers The twenty largest tax payers within the Lafayette School District, as shown on the 1995-96 secured tax rolls, and the assessed value attributable to those taxpayers are shown below. These 20 property owners represent 4.65% of the total assessed value of the District. T. FAYETTE SCHOOL DISTRICT Largest 1995-96 Local Secured P=eM T_$a ayers(1) 1995-% %of Property Owner Assessed Valuation Total(1) 1. Lafayette Highlands Investment $12,101,486 0.48% 2. Lafayette Park Hotel Associates 12,086,188 0.47 3. Connecticut Mutual Life Insurance Co. 9,236,907 0.36 4. Russell J. &Joan E. Bruzzone 8,605,634 0.34 5. Ki LaFiesta Square 8,570,182 0.34 6. Execucenter 7,131,805 0.28 7. Gray Horse Investors 6,511,000 0.26 8. Ki Lafayette BART, Inc. 5,987,638 0.24 9. Lemana 5,740,000 0.23 10. Lafayette Terrace Properties 5,238,605 0.21 11. David R. &Kim H. Metcalf 4,764,933 0.19 12. Martin I. Zankel 4,110,331 0.16 13. Daniel L. Scher 4,024,326 0.16 14. Oakhill West Associates 3,879,398 0.15 15. Phillip R. &Kathleen Lemos 3,727,976 0.15 16. Robert&Maudellen Greenhood 3,569,000 0.14 17. Raymond J. &Angelina M. Leal 3,530,713 0.14 18. William&Janet Cronk III 3,326,030 0.13 19. Michael S. Radcliffe 3,182,528 0.12 20. George T. Argyis 3.152.991 4.12 $118,477,671 4.65% (1) 1995-96 Total Local Secured Assessed Valuation: $2,547,372,629. Source: California Municipal Statistics 9 Appendix B-Financial Statements Fiscal Year Ending June 30, 1995 1 r 75 Appendix C-Proposed Form of Bond Counsel Opinion 1 Appendix D-Form of Continuing Disclosure Certificate 1