HomeMy WebLinkAboutMINUTES - 06101997 - C63 c. 63
�r
RESOLUTION OF THE BOARD OF SUPERVISORS
CONTRA COSTA COUNTY, CALIFORNIA
RESOLUTION NO,' 97,/298
RESOLUTION OF THE BOARD OF SUPERVISORS OF CONTRA COSTA
COUNTY AUTHORIZING THE ISSUANCE AND SALE OF TAX AND
REVENUE ANTICIPATION NOTES IN THE NAME OF THE WEST CONTRA
COSTA UNIFIED SCHOOL DISTRICT FOR FISCAL YEAR 1997/98 IN THE
PRINCIPAL AMOUNT OF NOT TO EXCEED $25,000,000 AND
AUTHORIZING PROCEEDINGS RELATING TO THE ISSUANCE AND SALE
OF SUCH NOTES
On motion of Supervisor Gerber duly seconded and carried, the following
resolution was adopted:
RESOLVED, by the Board of Supervisors of Contra Costa County, California, as
follows:
WHEREAS, pursuant to Article 7.6 (commencing with Section 53850) of Chapter 4 of
Part 1 of Division 2 of Title 5 of the California Government Code (the "Law'), a school district
organized and existing under the laws of the State of California is authorized to borrow money
by the issuance of temporary notes, the proceeds of which may be used and expended for any
purpose for which such school district is authorized to spend moneys; and
WHEREAS, pursuant to the Law, such notes are required to be issued in the name of
such school district by the board of supervisors of the county, the county superintendent of
which has jurisdiction over such school district, as soon as possible following receipt of a
resolution of the governing board of such school district requesting such borrowing;and
WHEREAS, the Board of Education of the West Contra Costa Unified School District
(the "District") has heretofore adopted its Resolution on May 7, 1997 (the "District Resolution)
finding and determining that it is desirable that the District borrow funds in an amount not to
exceed $25,000,000 with respect to the fiscal year 1997/98 for authorized purposes of the
District, and requesting that the Board of Supervisors (the 'Board") of the County of Contra
Costa (the "County") for that purpose authorize the sale and issuance of tax and revenue
anticipation notes in the name of the District in the principal amount of not to exceed
$25,000,000 under and pursuant to the provisions of the Law; and
WHEREAS, pursuant to the District Resolution, the District has approved proceedings
for the sale of such notes and has approved the form of an official statement (the "Official
Statement") relating to the offering and sale of such notes for the District;
NOW, THEREFORE,it is hereby DETERMINED and ORDERED as follows:
Section 1. Recitals True and Correct. All of the recitals herein set forth are true and
correct and the Board so finds and determines.
Section 2. Approval of Request of District. The Board hereby approves the request of
the District for the Board of Supervisors to issue notes in its name.
-1-
Section 3. Authorization and Terms of Notes. Solely for the payment of current
expenses, capital expenditures and other obligations payable from the general fund of District
during or allocable to fiscal year 1997/98, and not pursuant to any common plan of financing,
the Board hereby determines to and shall borrow the aggregate principal sum of not to exceed
Twenty-Five Million Dollars ($25,000,000) in the name of the District. Such borrowing shall be
by the issuance of temporary notes under the Law, designated the "West Contra Costa Unified
School District (Contra Costa County, California) 1997/98 Tax and Revenue Anticipation
Notes" (the "Notes"). The Notes shall be dated as of their date of issuance. The Notes shall
mature and shall bear interest from their date, payable at maturity and computed on a 30-day
month/360-day year basis, at the rate of interest to be set forth upon the sale of the Notes
pursuant to Section 14 hereof. Both the principal of and interest on the Notes shall be payable
in lawful money of the United States of America,as described below.
Section 4. Form of Notes; Book-Entry System. The Notes shall be issued in fully
registered form, without coupons, and shall be substantially in the form and substance set forth
in Exhibit A attached hereto and by reference incorporated herein, the blanks in said form to be
filled in with appropriate words and figures. The Notes shall be numbered from 1 consecutively
upward,shall be in the denomination of$5,000 each or any integral multiple thereof.
"CUSIP" identification numbers shall be imprinted on the Notes,but such numbers shall
not constitute a part of the contract evidenced by the Notes and any error or omission with
respect thereto shall not constitute cause for refusal of any purchaser to accept delivery of and
pay for the Notes. In addition, failure on the part of the Board or the District to use such
CUSIP numbers in any notice to registered owners of the Notes shall not constitute an event of
default or any violation of the District's contract with such registered owners and shall not
impair the effectiveness of any such notice.
Except as provided below, the owner of all of the Notes shall be The Depository Trust
Company, New York, New York ("DTC'), and the Notes shall be registered in the name of
Cede & Co., as nominee for DTC. The Notes shall be initially executed and delivered in the
form of a single fully registered Note in the full aggregate principal amount of the Notes. The
Board and the District may treat DTC (or its nominee) as the sole and exclusive owner of the
Notes registered in its name for all purposes of this Resolution, and neither the Board nor the
District shall be affected by any notice to the contrary. Neither the Board nor the District shall
have any responsibility or obligation to any participant of DTC (a "Participant"), any person
claiming a beneficial ownership interest in the Notes under or through DTC or a Participant, or
any other person which is not shown on the register of the Board or the District as being an
owner, with respect to the accuracy or adequacy of any records maintained by DTC or any
Participant or the payment by DTC or any Participant by DTC or any Participant of any
amount in respect of the principal or interest with respect to the Notes. The District shall pay
all principal and interest with respect to the Notes only to DTC, and all such payments shall be
valid and effective to fully satisfy and discharge the District's obligations with respect to the
principal and interest with respect to the Notes to the extent of the sum or sums so paid.
Except under the conditions noted below, no person other than DTC shall receive a Note.
Upon delivery by DTC to the Board of written notice to the effect that DTC has determined to
substitute a new nominee in place of Cede&Co.,the term "Cede &Co." in this Resolution shall
refer to such new nominee of DTC.
If the Board and the District determine that it is in the best interest of the beneficial
owners that they be able to obtain Notes and deliver a written certificate to DTC to that effect,
DTC shall notify the Participants of the availability through DTC of Notes. In such event, the
Board shall issue, transfer and exchange Notes as requested by DTC and any other owners in
appropriate amounts. DTC may determine to discontinue providing its services with respect to
-2-
the Notes at any time by giving notice to the Board and the District and discharging its
responsibilities with respect thereto under applicable law. Under such circumstances (if there is
no successor securities depository), the Board shall be obligated to deliver Notes as described in
this Resolution. Whenever DTC requests the Board to do so, the Board will cooperate with
DTC in taking appropriate action after reasonable notice to (a) make available one or more
separate Notes evidencing the Notes to any DTC Participant having Notes credited to its DTC
account or (b) arrange for another securities depository to maintain custody of Certificates
evidencing the Notes.
Notwithstanding any other provision of this Resolution to the contrary, so long as any
Note is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to
the principal and interest with respect to such Note and all notices with respect to such Note
shall be made and given, respectively, to DTC as provided as in the representation letter
delivered on the date of issuance of the Notes.
Section 5. Use of Proceeds. The moneys so borrowed shall be deposited in the Treasury
of the County in a proceeds fund to the credit of the District to be withdrawn, used and
expended by the District for any purpose for which it is authorized to expend funds from the
general fund of the District, including,but not limited to,current expenses, capital expenditures
and the discharge of any obligation or indebtedness of the District.
Moneys in such proceeds fund shall, to the greatest extent possible, be invested by the
Treasurer-Tax Collector of the County (the "Treasurer-Tax Collector"), or such other
appropriate investment officer of the County, directly in investments, or through an investment
agreement, as permitted by the laws of the State of California as now in effect and as hereafter
amended, and in accordance with such procedures and subject to such requirements as the
Treasurer-Tax Collector or such other appropriate investment officer of the County shall
establish.
Section 6. Security. The principal amount of the Notes, together with the interest
thereon, shall be payable from taxes, revenues and other moneys which are received by the
District for the general fund of the District for the fiscal year 1997/98. As security for the
payment of the principal of and interest on the Notes, the Board, in the name of the District,
hereby pledges the first "unrestricted moneys",as hereinafter defined, (a) in an amount equal to
fifty percent (50%) of the principal amount of the Notes to be received by the County on behalf
of the District in April, 1998, (b) in an amount equal to fifty percent (50%) of the principal
amount of the Notes to be received by the County on behalf of the District in May, 1998, and
(c) in an amount equal to all interest due on the Notes at maturity to be received by the County
on behalf of the District in June, 1998 (the "Pledged Revenues"). The principal of the Notes and
the interest thereon shall constitute a first lien and charge thereon and shall be paid from the
Pledged Revenues. To the extent not so paid from the Pledged Revenues, the Notes shall be
paid from any other moneys of the District lawfully available therefor. In the event that there
are insufficient unrestricted moneys received by the District to permit the deposit in the
Repayment Fund, as hereinafter defined, of the full amount of the Pledged Revenues to be
deposited in any month on the last business day of such month, then the amount of any
deficiency shall be satisfied and made up from any other moneys of the District lawfully
available for the repayment of the Notes and interest thereon. The term "unrestricted moneys"
shall mean taxes,income,revenue and other moneys intended as receipts for the general fund of
the District and which are generally available for the payment of current expenses and other
obligations of the District.
Section 7. Paying Agent. The Treasurer-Tax Collector is hereby appointed to act as the
paying agent of the District (the "Paying Agent") for the purpose of paying to the registered
-3-
owners of the Notes both the principal of and interest on the Notes at maturity and to perform
such other duties and powers of the Paying Agent as are prescribed in this Resolution.
Section 8. Repayment Fund. There is hereby created a special fund to be held on behalf
of the District by the Treasurer-Tax Collector separate and distinct from all other County and
District funds and accounts designated the "West Contra Costa Unified School District
1997/98 Tax and Revenue Anticipation Notes Repayment Fund" (the "Repayment Fund") and
applied as directed in this Resolution. Any money placed in the Repayment Fund shall be for
the benefit of the registered owners of the Notes, and until the Notes and all interest thereon are
paid or until provision has been made for the payment of the Notes at maturity with interest to
maturity, the moneys in the Repayment Fund shall be applied solely for the purposes for which
the Repayment Fund is created; provided, however, that any interest earned on amounts
deposited in the Repayment Fund shall periodically be transferred to the general fund of the
District.
All Pledged Revenues shall, during the months in which received, be deposited into the
Repayment Fund. On the maturity date of the Notes, the Treasurer-Tax Collector shall transfer
to DTC the moneys in the Repayment Fund necessary to pay the principal and interest on the
Notes at maturity and,to the extent said moneys are insufficient therefor,an amount of moneys
from the District's general fund which will enable payment of the full principal of and interest
on the Notes at maturity. Any moneys remaining in the Repayment Fund after the Notes and
the interest thereon have been paid, or provision for such payment has been made, shall be
transferred to the District's general fund.
Section 9. Deposit and Investment of Repayment Fund. All moneys held on behalf of
the District in the Repayment Fund, if not invested, shall be held in time or demand deposits as
public funds and shall be secured at all times by bonds or other obligations which are
authorized by law as security for public deposits, of a market value at least equal to the
amount required by law.
Moneys in the Repayment Fund shall, to the greatest extent possible,be invested by the
Treasurer-Tax Collector, or such other appropriate investment officer of the County, directly in
investments, or through an investment agreement, as permitted by the laws of the State of
California as now in effect and as hereafter amended, and the proceeds of any such
investments shall, as received, be deposited in the Repayment Fund and shall be part of the
Pledged Revenues.
Section 10. Execution of Notes. The Notes shall be executed in the name of the District,
with the manual or facsimile signature of the Treasurer-Tax Collector or one or more of his duly
authorized deputies and the manual or facsimile counter-signature of the Clerk of the Board of
Supervisors (although at least one of such signatures shall be manual) with the seal of the Board
impressed thereon, and said officers are hereby authorized to cause the blank spaces thereof to
be filled in as may be appropriate.
Section 11. Transfer and Exchange of Notes. Any Note may, in accordance with its
terms,but only if the District determines to no longer maintain the book entry only status of the
Notes, DTC determines to discontinue providing such services and no successor securities
depository is named or DTC requests the Treasurer-Tax Collector to deliver Note certificates to
particular DTC Participants,be transferred,upon the books required to be kept pursuant to the
provisions of Section 12 hereof,by the person in whose name it is registered, in person or by his
duly authorized attorney, upon surrender of such Note for cancellation at the office of the
Treasurer-Tax Collector, accompanied by delivery of a written instrument of transfer in a form
approved by the Treasurer-Tax Collector,duly executed. Whenever any Note or Notes shall be
-4-
surrendered for transfer, the Treasurer-Tax Collector shall execute and deliver a new Note or
Notes, for like aggregate principal amount.
Notes may be exchanged at the office of the Treasurer-Tax Collector for a like aggregate
principal amount of Notes of authorized denominations and of the same maturity.
Section 12. Note Register. The Treasurer-Tax Collector shall keep or cause to be kept
sufficient books for the registration and transfer of the Notes if the book entry only system is no
longer in effect and, in such case, the Treasurer-Tax Collector shall register or transfer or cause
to be registered or transferred, on said books, Notes as herein before provided. While the book
entry only system is in effect, such books need not be kept as the Notes will be represented by
one Note registered in the name of Cede&Co.,as nominee for DTC.
Section 13. Covenants and Warranties. Based on the representations and covenants of
the District, it is hereby covenanted and warranted by the Board that all representations and
recitals contained in this Resolution as to the County are true and correct, and that the Board
has reviewed all proceedings heretofore taken relative to the authorization of the Notes and has
found, as a result of such review, and hereby finds and determines that all acts, conditions and
things required by law to exist, happen and be performed precedent to and in the issuance of
the Notes have existed, happened and been performed in due time, form and manner as
required by law,and the Board is duly authorized to issue the Notes in the name of the District
and incur indebtedness in the manner and upon the terms provided in this Resolution. The
Board and the District and their appropriate officials have duly taken all proceedings necessary
to be taken by them, and will take any additional proceedings necessary to be taken by them,
for the prompt collection and enforcement of the taxes,revenue,cash receipts and other moneys
pledged hereunder in accordance with law and for carrying out the provisions of this
Resolution.
Section 14. Sale of Notes. Vogel Lopez & Associates, Inc., as financial advisor to the
District, on behalf of the District and the Board, is authorized to identify a purchaser for the
Notes and to negotiate an interest rate and purchase price for the Notes, so long as the net
interest cost to the District does not exceed six percent (6%) per annum. The definitive
principal amount of Notes to be issued shall be determined by the District's financial advisor,
on behalf of the District and the Board, at the time of sale of the Notes to such purchaser. The
Treasurer-Tax Collector is hereby authorized and directed to accept an offer from such
purchaser, for and in the name of the Board, by notice to the successful bidder. The Treasurer-
Tax Collector is hereby authorized to execute a Note purchase agreement or other document in
connection with such award.
The District's financial advisor is hereby delegated the responsibility of negotiating,
receiving, opening and analyzing bids submitted for the purchase of the Notes and to report the
results thereof to the Treasurer-Tax Collector.
Section 15. Official Statement. The District has, in the District Resolution, approved
and deemed nearly final within the meaning of Rule 15c2-12 of the Securities Exchange Act of
1934, the preliminary Official Statement describing the Notes, in the form on file with the
Secretary. The Board hereby authorizes the District's financial advisor and the purchaser of the
Notes to distribute said Official Statement in connection with the sale of the Notes.
Section 16. Preparation of Notes. Jones Hall Hill & White, A Professional Law
Corporation, as bond counsel to the District, is directed to cause suitable Notes to be prepared
showing on their face that the same bear interest at the rate aforesaid, and to cause the blank
spaces therein to be filled in to comply with the provisions of this Resolution in accordance with
the identified purchaser of the Notes, and to procure their execution by the proper officers, and
-5-
to cause the Notes to be delivered when so executed to DTC on behalf of the identified
purchaser therefor upon the receipt of the purchase price by the Treasurer-Tax Collector on
behalf of the District.
Section 17. Further Approvals. The Treasurer-Tax Collector,the Clerk of the Board, and
any officer of the Board or the County, is further authorized and directed to make, execute and
deliver to the purchaser of the Notes: (a) a certificate attesting to the use of the proceeds of the
Notes, the investment thereof,and any other matters relating to the exclusion of the interest on
the Notes from gross income for federal income taxation purposes pursuant to applicable
federal tax law; (b) a certificate certifying to the due execution of the Notes; (c) a receipt
evidencing the payment of the purchase price of the Notes, which receipt shall be conclusive
evidence that said purchase price has been paid and has been received by the County on behalf
of the District; and (d) such other certifications and documentation as may be required in
connection with the sale and issuance of the Notes. The purchaser of the Notes is hereby
authorized to rely upon and shall be justified in relying upon any such certificate or other
document with respect to the Notes executed pursuant to the authority of this Resolution.
Section 18. Limited Liability. Notwithstanding anything to the contrary contained
herein, in the Notes or in any other document mentioned herein, neither the County nor the
Board shall have any liability hereunder or by reason hereof or in connection with the
transactions contemplated hereby and the Notes shall be payable solely from the moneys of the
District available therefor as set forth in Section 6 hereof.
Section 19. Effectiveness of Resolution. This Resolution shall take effect from and after
its passage and adoption.
I hereby certify that the foregoing is a true and correct copy of a resolution adopted by
the Board of Supervisors of Contra Costa County at a regular meeting held on June 10 1997, by
the following vote:
AYES: Supervisors Rogers , Uilkema , Gerber, Canciamilla, DeSaulnier
NOES: (none)
ABSENT: (none)
By
Chairman
[SEAL]
Attest: Phil Batchelor, Clerk of the
Board of Supervisors and
County Administrator
By x__X�o Deputy
Clerk of the Boar of Supervisors
-(r
• EXHIBIT A
BOARD OF SUPERVISORS OF CONTRA COSTA, CALIFORNIA
IN THE NAME OF THE
WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT
(CONTRA COSTA COUNTY, CALIFORNIA)
1997/98 TAX AND REVENUE ANTICIPATION NOTE
RATE OF INTEREST: MATURITY DATE: ORIGINAL ISSUE DATE: CUSIP:
June _, 1998 July _, 1997
REGISTERED OWNER:
PRINCIPAL AMOUNT:
The WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT, a unified school district
organized and existing under the laws of the State of California (the "District"), for value
received, hereby promises to pay (but only out of the Pledged Revenues and other moneys and
securities hereinafter referred to) to the Registered Owner identified above or registered assigns
(the "Registered Owner"), on the Maturity Date identified above, the Principal Amount
identified above in lawful money of the United States of America; and to pay interest thereon
at the Rate of Interest identified above in like money from the Original Issue Date identified
above. The Principal Amount hereof and interest hereon are payable by check of the Treasurer-
Tax Collector of the County of Contra Costa, as Paying Agent (the "Paying Agent"), mailed by
first class mail on the Maturity Date to the Registered Owner hereof at the address of the
Registered Owner as it appears on the Registration Books of the Paying Agent as of the fifteenth
calendar day of the month preceding such Interest Payment Date.
This Note is one of an authorized issue of Notes in the aggregate principal amount of
Dollars ($ ), all of like tenor, issued
pursuant to the provisions of a resolution of the Board of Supervisors (the "Board") of the
County of Contra Costa (the "County") duly passed and adopted on June _, 1997 (the
"Resolution"), and pursuant to Article 7.6 (commencing with Section 53850) of Chapter 4, Part
1, Division 2, Title 5, of the California Government Code, and that all things, conditions and
acts required to exist, happen and be performed precedent to and in the issuance of this Note
exist, have happened and have been performed in regular and due time, form and manner as
required by law, and that this Note, together with all other indebtedness and obligations of the
District, does not exceed any limit prescribed by the Constitution or statutes of the State of
California.
The principal amount of the Notes, together with the interest thereon, shall be payable
from taxes, revenue and other moneys which are received by the County on behalf of the
District for Repayment Fund of the District (as defined in the Resolution) for the fiscal year
1997/98. As security for the payment of the principal of and interest on the Notes, the Board,
in the name of the District, has pledged the first "unrestricted moneys", as hereinafter defined,
(a) in an amount equal to fifty percent (50%) of the principal amount of the Notes to be
received by the County on behalf of the District in April, 1998, (b) in an amount equal to fifty
percent (50%) of the principal amount of the Notes to be received by the County on behalf of
the District in May, 1998, and (c) in an amount equal to all interest due on the Notes at
maturity to be received by the County on behalf of the District in June, 1998 (such pledged
amounts being hereinafter called the "Pledged Revenues"). The principal of the Notes and the
A-1
interest thereon shall constitute a first lien and charge thereon and shall be paid from the
Pledged Revenues. To the extent not so paid from the Pledged Revenues, the Notes shall be
paid from any other moneys of the District lawfully available therefor. The term "unrestricted
moneys" shall mean taxes, income, revenue and other moneys intended as receipts for the
general fund of the District and which are generally available for the payment of current
expenses and other obligations of the District.
The Notes are issuable as fully registered Notes without coupons in denominations of
$5,000 or any integral multiple thereof. Subject to the limitations and upon payment of the
charges, if any, provided in the Resolution, Notes may be exchanged at the office of the Paying
Agent for a like aggregate principal amount and maturity of Notes of other authorized
denominations. This Note is transferable by the Registered Owner hereof, in person or by his
attorney duly authorized in writing, at the 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 Note. Upon such transfer a new Note or Notes, of
authorized denomination or denominations,for the same aggregate principal amount and of the
same maturity will be issued to the transferee in exchange herefor. The County, the District and
the Paying Agent may treat the Registered Owner hereof as the absolute owner hereof for all
purposes, and the County, the District and the Paying Agent shall not be affected by any notice
to the contrary.
The Notes are not subject to redemption prior to maturity.
Unless this Note is presented by an authorized representative of The Depository Trust
Company to the Board or the Paying Agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede&Co. or such other name as requested by
an authorized representative of The Depository Trust Company and any payment is made to
Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof,
Cede &Co.,has an interest herein.
IN WITNESS WHEREOF, the Board of Supervisors of the County of Contra Costa,
California has caused this Note to be issued in the name of the District and to be executed by
the manual signature of the Treasurer-Tax Collector and countersigned by the facsimile
signature of the Clerk of the Board, all as of the Original Issue Date stated above.
BOARD OF SUPERVISORS OF THE
COUNTY OF CONTRA COSTA
By
Treasurer-Tax Collector
(S E A L)
Countersigned:
By
Clerk of the Board
A-2
PAYING AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes described in the within-mentioned Resolution and registered on
the Registration Books.
Date:
By
Treasurer-Tax Collector
of the County of Contra Costa
FORM OF ASSIGNMENT
For value received the undersigned do(es)hereby sell,assign and transfer unto
(Name,Address and Tax Identification or Social Security Number of Assignee)
the within registered Note and hereby irrevocably constitute(s) and appoint(s)
attorney, to transfer the same on the
Registration Books of the Paying Agent with full power of substitution in the premises.
Dated:
Signature Guaranteed:
Note: Signature(s) must be guaranteed by an eligible guarantor Note: The signature(s)on this Assignment must correspond
institution. with the name(s)as written on the face of the within
Note in every particular, without alteration or
enlargement or any change whatsoever.
A-3
C)4
C• &
VOGEL LOPEZ & ASSOCIATES, INC.
Financial Advisory and Education Management Consultants
5959 Contra Costa Road
Oakland, CA 94618
510.547.1976 510.595.3485 (fax)
MEMORANDUM
To: Prospective Underwriters
From: Vogel Lopez & Associates, Inc.
Date: June 3, 1997
Re: $15,000,000*
West Contra Costa Unified School District
1997/98 Tax and Revenue Anticipation Notes
As financial advisor to the West Contra Costa Unified School District, Contra Costa County,
California (the 'District"), Vogel Lopez & Associates, Inc. will be accepting pricing quotes for
the above-referenced new issue (the "Notes") at the offices of Jones Hall Hill & White, Bond
Counsel, at 10:00 AM California time on Wednesday, June 11, 1997, at Four Embarcadero
Center, 19'Floor, San Francisco, California 94111 or by fax at the following fax lines: (415)
391-5784 or (415) 391-5785.
Enclosed are the following: Preliminary Oficial Statement, Purchase Offer Summary and draft
Purchase Contract. The District will offer to sell the Notes the same day, June 11, 1997 on the
basis of the quote providing the stated interest rate and premium, if any, resulting in the lowest
net interest cost to the District. The minimum required purchase price for the Notes is par.
The sale will be according to the terms of the draft Purchase Contract, subject to any changes
mutually agreed to by the District and the buyer of the Notes and incorporated into the final
Purchase Contract.
The Notes are as described in the Preliminary Official Statement. Ratings from both Standard &
Poor's and Moody's are expected June 6, 1997.
If there are any questions, please call Aquacena Lopez at Vogel Lopez & Associates, Inc. at (5 10)
547-1976.
* Preliminary; subject to change.
$1590009000*
WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT
1997/98 TAX AND REVENUE ANTICIPATION NOTES
PURCHASE OFFER SL7vB4ARY
TO: Vogel Lopez & Associates, Inc.
FAX NO.: (415) 391-5784 or (415) 391-5785
The undersigned offers to purchase the West Contra Costa Unified School District 1997/98 Tax and
Revenue Anticipation Note issue. Minimum purchase price is par. Award will be made on the basis of
the lowest net interest cost to the District as calculated by Vogel Lopez & Associates, Inc. on the basis
of the par amount and the interest rate and premium, if any, quoted below. Interest will be calculated on
the basis of a 30 day month, 360 day year. Dated date and maturity date of the Notes are July 1, 1997
and June 30, 1998, respectively. The Notes are not bank qualified.
Net Interest Cost
Interest Rate Premium- If-Any (_Information Only)
By
Title
Phone No.
June 11, 1997
* Preliminary; subject to change.
PURCHASE CONTRACT
WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT
THE BOARD OF SUPERVISORS
OF CONTRA COSTA COUNTY
STATE OF CALIFORNIA
1997/98 TAX AND REVENUE ANTICIPATION NOTES
, 1997
WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT
MEMBERS OF THE BOARD OF SUPERVISORS
CONTRA COSTA, CALIFORNIA
Ladies and Gentlemen:
The undersigned (the "Underwriter"), acting on behalf of ourselves, offer to enter into this
agreement ("the Purchase Contract") with the West Contra Costa Unified School District (the "District")
and the Board of Supervisors of Contra Costa County, California (the "Board"), acting on behalf of the
District. The Purchase Contract, upon your acceptance and acknowledgment hereof, will be binding upon
the District, the Board, and the Underwriter. This offer is made subject to execution of this Purchase
Contract by the Board prior to 5:00 PM, Pacific Time, on the date hereof, unless the District, the Board,
and the Underwriter agree to an extension.
I. Purchase and Sale of the Notes. Upon the terms and conditions and in reliance on the
representations, warranties, and agreements set forth herein, the Underwriter hereby agrees to purchase
from the Board, acting in the name of the District, for reoffering to the public, and the Board, acting in
the name of the District, hereby agrees to sell to the Underwriter for such purpose, all (but not less than
all) of $ in aggregate principal amount of the 1997/98 Tax and Revenue Anticipation
Notes issued by Contra Costa County (the "County") in the name of the District (the "Notes"). The Notes
shall bear interest at a rate of % per annum, such interest being payable at maturity. The
Underwriter shall purchase the Notes at an aggregate purchase price of$
2. The Notes. The Notes shall be dated their date of delivery, shall mature (without option
of prior redemption) on June 30, 1998, and shall otherwise be as described herein. The Notes shall be
issued and secured pursuant to the Resolution of the Board adopted on , 1997 (the "Note
Resolution") and Article 7.6, Chapter 4, Part 1, Division 2, Title 5 (commencing with Section 53850) of
the California Government Code (the "Act"). The Notes shall be secured by a pledge of and first lien and
charge against the first Unrestricted Monies to be received by the County on behalf of the District in such
months and in such amounts as described below.
Month of Pledge Amount of Pledge
April 1998 $
May 1998 $
June 1998 $
3. Delivery of Official Statement, The District has previously provided the Underwriter
with a copy of its Preliminary Official Statement dated July 3, 1997. As of its date, the Preliminary
Official Statement has been "deemed final" by the Board of Education District for purposes of SEC
Rule 15c2-12(b)(1). The District agrees to deliver a reasonable number of the final Official Statements
(not to exceed 100) to the Underwriter within seven business days from the date hereof.
4. Deliveryna_-d Payment of the Notes. The Notes shall be in the form of a single fully
registered note registered in the name of Cede& Co., as nominee for The Depository Trust Company
(DTC). It is estimated that the delivery of the Notes will be made to DTC for the account of the
Underwriter on or about July 1, 1997. Payment of the purchase price must be made in funds
immediately available to the County Treasurer by wire transfer or other means acceptable to the
County Treasurer. The Underwriter shall have the right at its option to cancel its obligation to
purchase the Notes if the Board shall fail to execute the Notes and tender the same for delivery within
45 days from the date of sale thereof.
5. Change in Tax_ Exempt Status, At any time before the Notes are tendered for delivery,
the Underwriter may disaffirm and withdraw its offer if the interest received by private holders from
notes of the same type and character shall be declared to be taxable income under present federal
income tax laws, either by a ruling of the Internal Revenue Service or by a decision of any federal
court, or shall be declared taxable or be required to be taken into account in computing any federal
income taxes by the terms of any federal income tax law enacted subsequent to the date of this notice.
6. Certification of Reoffering Price. The Underwriter shall be required, as a condition
to the delivery of the Notes by the Board, to certify to the Board and the District in writing the price
at which at least ten percent (10%) of the Notes were sold to the public, in form and substance
satisfactory to the Board, the District, and Bond Counsel.
7. Closing Papers; Legal Qpinion. The Underwriter's obligations hereunder will be
conditioned upon the District furnishing to the Underwriter, without charge, concurrently with payment
for and delivery of the Notes, the following closing papers, each dated the date of such delivery:
(a) Certified copies of the District Resolution and the Note Resolution.
(b) A certificate of the Superintendent or other appropriate official of the District, acting
on behalf of the District solely in his or her official and not in his or her personal capacity, that at the
time of the sale of the Notes and at all times subsequent thereto up to and including the time of the
delivery of the Notes to the initial purchasers thereof, the Official Statement pertaining to the Notes
did not, and does not, contain any untrue statement of a material fact or omit to state a material fact
necessary which would make the statements misleading in the light of the circumstances under which
they were made;
(c) The opinion of Jones Hall Hill & White, A Professional Law Corporation, Bond
Counsel, approving the validity of the Notes and stating that, subject to certain qualifications, under
existing law, the interest on the Notes is excluded from gross income for federal income tax purposes,
such interest is not an item of tax preference for purposes of the federal alternative minimum tax
imposed on individuals and corporations, although for the purpose of computing the alternative
minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is
taken into account in determining certain income and earnings, and is exempt from State of California
personal income taxes.
(d) A certificate of the Superintendent or other appropriate official 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 Notes will be used in a manner that would cause the Notes to be "arbitrage
bonds" within the meaning of the Internal Revenue Code of 1986;
(e) The officers certificate on behalf of the District and the Board stating, among other
things, that there is no litigation threatened or pending affecting the validity of the Notes;
2
(f) The incumbency and signature certificate of the officials of the Board, showing that
they have signed the Notes and impressed the seal of the Board thereon, and that they were respectively
duly authorized to execute the same; and
(g) The receipt of the County Treasurer showing that the purchase price of the Notes has
been received.
(h) Such other certificates or documents as may reasonably be required by Bond Counsel
or the Underwriter.
8. Exp�,nses. (A) The District shall pay any expenses incident to the performance of
its obligations or the obligations of the Board hereunder, including but not limited to the following:
(i) the cost of the preparation and reproduction of the Note Resolution; (ii) the fees and disbursement
of Bond Counsel; (iii) the fees and disbursements of the District's Financial Advisor; (v) the cost of
the preparation, printing and delivery of the Notes; (vi) the fees, if any, for Note ratings and costs
incurred in gathering the information required for the Note rating; (vii) the cost of the preparation,
printing and distribution of the Official Statement; (viii) any costs or expenses incurred with any
printing company incident to reproducing facsimile signatures on the Notes; and (vii) costs of
preparation and reproduction of this Purchase Contract.
(B) The Underwriter shall pay all other costs and disbursements incurred by them
in connection with the transactions contemplated hereby, including, but not limited to, the fees of the
California Debt Investment and Advisory Commission, the CUSIP Service Bureau, and DTC.
9. Defined Terms. All capitalized terms used herein and not otherwise defined shall have
the respective meanings given such terms in the Note Resolution.
10. Execution in Counterparts. This Purchase Contract may be executed in several
counterparts each of which shall be regarded as an original and all of which shall constitute one and
the same document.
11. Applicable Law, This Purchase Contract shall be interpreted, governed and enforced
in accordance with the laws of the State.
3
Very truly yours,
Underwriter
By:
Address:
The foregoing is hereby acknowledged and accepted as of the date first above written.
CONTRA COSTA COUNTY TREASURER
By
ACKNOWLEDGMENT
WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT
By
4
PRELIMINARY OFFICIAL STATEMENT DATED JUNE 3, 1997
W O
N 07
C d
° NEW ISSUE—BOOK-ENTRY ONLY RATINGS:
Moody's:
E ° Standard & Poor's:
.° (See "MISCELLANEOUS—Ratings" herein).
N a
In the opinion of Jones Hall Hill& White,A Professional Law Corporation, San Francisco, California, Bond Counsel, subject,
w however to certain qualifications described herein, under existing law, the interest on the Notes is excluded from gross income for
o federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum fax
imposed on individuals and corporations, although for the purpose of computing the alternative minimum tax imposed on certain
o corporations,such interest is taken into account in determining certain income and earnings. In the further opinion of Bond Counsel,
'O such interest is exempt from California personal income taxes. See "LEGAL MATTERS—Tax Masters"herein.
ro 3
y �
y $15,000,000*
° WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT
N
co (CONTRA COSTA COUNTY, CALIFORNIA)
y
� o
1997/98 TAX AND REVENUE ANTICIPATION NOTES
y N
C
70
•
O 1. -
0 ,C [31°f
O U
C 7
y
O L
� U
C L
C
C .-
4)
C Dated: Date of Delivery Due: June 30, 1998
-0 U
C ,—
E y The Notes have been authorized by the West Contra Costa Unified School District (the "District"). The Notes are by
9 statute general obligations of the District. The principal amount of the Notes, together with interest thereon, will be payable from
taxes, income, revenue and other moneys which are received b the District during fiscal year 1997/98 and which are generally
co C Y Y 9 Y 9 Y
C 10 available for the payment of current expenses and other obligations of the District. As security for the payment of principal of and
_- interest on the Notes, the District has pledged certain Pledged Revenues, as defined herein, to be deposited in a Repayment Fund,
a as defined herein, at certain times prior to June 30, 1998. See "THE NOTES—Security and Sources of Payment" herein.
E
o Principal of and interest on the Notes will be payable at maturity. The Notes are not subject to redemption prior to
maturity. See "THE NOTES—General Provisions" herein.
U N
N N
N
� L
N O
t9 �
N The following firm, serving as financial advisor to the District, has structured this issue:
>
C
L t0
-
VOGEL LOPEZ & ASSOCIATES, INC.
C � V
O
U {p
Ct L
O y O
.rlO
_ N N
Interest Rate Yield
E _ >
O > C
9 %
C .0O
N w yN
N >
N l9
0
C
C O N
The Notes will be offered when, as and if issued and received by the Underwriter, subject to the approval of their legality
E o by Jones Hall Hill& White, A Professional Law Corporation, San Francisco, California, Bond Counsel. It is anticipated that the
C ^' Notes, in book-entry form, will be available for delivery through DTC in New York, New York, on or about July 1, 1997.
o
THE COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THIS
y ISSUE. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING
o s c, OF AN INFORMED INVESTMENT DECISION.
c
y w
1997
a
L
0 0
F" O O
*Preliminary; subject to change.
WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT
District Board of Education
Dr. W. W. Snodgrass
President
Diana Easton Karen Leong Fenton
Clerk Member
Adrienne Harris Pitts Charles T. Ramsey
Member Member
District Administration
Dr, Herbert M. Cole, Jr. Eve Manalo
Superintendent Associate Superintendent,
Business Services
PROFESSIONAL SERVICES
Financial Advisor
Vogel Lopez & Associates, Inc.
Oakland, California
Bond Counsel
Jones Hall Hill & White, A Professional Law Corporation
San Francisco, California
Paying Agent
Contra Costa County
Office of the Treasurer-Tax Collector
Martinez, California
TABLE OF CONTENTS
Pau
INTRODUCTION . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
TheDistrict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Purpose of the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Authority for Issuance of the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Sources of Payment for the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Description of the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
District Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I . . . . 2
TaxMatters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Offering and Delivery of the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Noteowners' Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Professionals Involved in the Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Continuing Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
THE NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Purpose of the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Authority for Issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Investment of Note Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Security and Sources of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Available Sources of Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Book-Entry System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Discontinuation of Book-Entry System; Payment to Beneficial Owners . . . . . . . . . . . . . . 7
CONSTITUTIONAL AND STATUTORY PROVISIONS
AFFECTING DISTRICT REVENUE AND APPROPRIATIONS . . . . . . . . . . . . . . . . . . . . . . 8
Article XIIIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Legislation Implementing Article XIIIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Unitary Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Proposition 62 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Article XIIIB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Propositions 98 and 1 1 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Applications of Constitutional and Statutory Provisions . . . . . . . . . . . . . . . . . . . . . . . 11
Proposition 187 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Proposition 218 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Future Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
GENERAL SCHOOL DISTRICT FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . 13
State Funding of Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
StateBudget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
State Lottery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Ad Valorem Property Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Assessed Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Tax Levies, Collections and Delinquencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
TeeterPlan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Budget Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Accounting Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Availability of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
THE DISTRICT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Average Daily Attendance and Revenue Limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Appropriations Limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Lottery Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Retirement Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Assessed Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Tax Levies, Collections and Delinquencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
TaxRates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Largest Taxpayers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Assessment District . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
1997/98 Budget Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Comparative Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
CashFlows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Unrestricted Moneys Available for Note Repayment . . . . . . . . . . . . . . . . . . . . . . . . . 27
District Debt Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Plan of Payment of the State Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Statement of Direct and Overlapping Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
COUNTY INVESTMENT POLICIES AND PRACTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
PRIOR FINANCIAL HISTORY OF THE DISTRICT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Financial Difficulties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
The 1988 Certificates . . . . . . . . . . . . . . . . . . I . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Loans From the State of California . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Bankruptcy of the District . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Assembly Bill 535 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Assembly Bill 536 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Assembly Bill 404 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Management Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . . . . . . . . 39
The Five-Year Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ECONOMIC PROFILE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Population . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Largest Employers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Commercial Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Median Household Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Building Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Legality for Investment in California . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
No Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . 46
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Ratings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
APPENDIX A: FORM OF LEGAL OPINION OF BOND COUNSEL . . . . . . . . . . . . . . . . . . . . . . . A-1
APPENDIX B: FORM OF CONTINUING DISCLOSURE CERTIFICATE . . . . . . . . . . . . . . . . . . . . B-1
APPENDIX C: EXCERPTS FROM THE DISTRICT'S 1995/96
AUDITED FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C=1
$15,000,000*
WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT
(CONTRA COSTA COUNTY, CALIFORNIA)
1997/98 TAX AND REVENUE ANTICIPATION NOTES
INTRODUCTION
This introduction is not a summary of this Official Statement. h is only a brief description of
and guide to, and is qualified by, more complete and detailed information contained in the entire Official
Statement, including the cover page and appendices hereto, and the documents summarized or
described herein. A full review should be made of the entire Official Statement. The offering of the
Notes to potential investors is made only by means of the entire Official Statement.
This Official Statement, which includes the cover page and appendices hereto, is provided to
furnish information in connection with the sale of $15,000,000* West Contra Costa Unified School
District (Contra Costa County, California) 1997/98 Tax and Revenue Anticipation Notes (the "Notes"),
as described more fully herein.
The District
The West Contra Costa Unified School District (the "District") is located in Contra Costa County
(the "C'ounty"), California (the "State") approximately 15 miles northeast of San Francisco. It
encompasses approximately 110 square miles and provides educational services to the residents of the
cities of EI Cerrito, Hercules, Pinole, Richmond and San Pablo, the unincorporated communities of EI
Sobrante and Kensington and certain other unincorporated areas within the County. The District's
estimated average daily attendance for fiscal year 1996/97 is 31,409 and its 1996/97 general fund
budget is approximately $160 million. The District has a 1996/97 assessed valuation of approximately
$12 billion. See "THE DISTRICT" herein.
Purpose of the Notes
Proceeds of the Notes will be used and expended for any purpose for which the District is
authorized to expend funds from the general fund of the District, including, but not limited to, current
expenses, capital expenditures, investment and reinvestment, and the discharge of other obligations
or indebtedness of the District. See "THE NOTES —Purpose of the Notes" herein.
Authority for Issuance of the Notes
The Notes are issued pursuant to certain provisions of the California Government Code and
pursuant to certain resolutions adopted by the District Board of Education and by the County Board of
Supervisors. See "THE NOTES—Authority for Issuance" herein.
Sources of Payment for the Notes
The Notes are by statute general obligations of the District. The principal amount of the Notes,
together with interest thereon, will be payable from taxes, income, revenue and other moneys intended
as receipts for the general fund of the District and which are generally available for the payment of
*Preliminary; subject to change.
1
current expenses and other obligations of the District ("Unrestricted Moneys"). As security for the
payment of principal of and interest on the Notes, the District has pledged certain Unrestricted Moneys
as Pledged Revenues, as defined herein, to be deposited in a Repayment Fund, as defined herein, at
certain times on or before June 30, 1998. See "THE NOTES — Security and Sources of Payment"
herein.
Description of the Notes
Denominations. The Notes will be issued in denominations of $5,000 each or any integral
multiple thereof. See "THE NOTES—General Provisions" herein.
Registration, Transfers and Exchanges. The Notes will be issued as fully-registered Notes,
without coupons and, when delivered, will be registered in the name of Cede & Co., as nominee of The
Depository Trust Company ("DTC"), New York, New York. DTC will act as securities depository for
the Notes and all transfers and exchanges will occur through book-entries made by DTC. See "THE
NOTES —Book-Entry System" herein.
Payments. Principal of and interest on the Notes will be payable at maturity. See "THE NOTES
—General Provisions" herein.
Redemption. The Notes are not subject to redemption prior to maturity. See "THE NOTES —
General Provisions" herein.
District Investments
Proceeds from the sale of the Notes will be deposited in the Treasury of the County in a
proceeds fund to the credit of the District. See "THE NOTES —Investment of Note Proceeds" herein.
Substantially all of the District's operating funds are held by the County Treasurer-Tax Collector
(the "Treasurer") and invested pursuant to County investment policies as permitted by law. See
"COUNTY INVESTMENT POLICIES AND PRACTICES" herein for a description of the County's
investment policy, current portfolio holdings and valuation procedures.
Tax Matters
In the opinion of Jones Hall Hill & White, A Professional Law Corporation, San Francisco,
California, Bond Counsel, subject, however to certain qualifications described herein, under existing law,
the interest on the Notes is excluded from gross income for federal income tax purposes and such
interest is not an item of tax preference for purposes of the federal alternative minimum tax imposed
on individuals and corporations, although for the purpose of computing the alternative minimum tax
imposed on certain corporations, such interest is taken into account in determining certain income and
earnings. In the further opinion of Bond Counsel, such interest is exempt from California personal
income taxes. See "LEGAL MATTERS —Tax Matters" herein.
Offering and Delivery of the Notes
The Notes will be offered when, as and if issued and received by the Underwriter, subject to
the approval of their legality by Bond Counsel. It is anticipated that the Notes, in book-entry form, will
be available for delivery through DTC in New York, New York on or about July 1, 1997.
2
'1
Noteowners' Risks
Noteowners' risks include the adequacy of Unrestricted Moneys, from which payment of the
Notes may be made and the setting aside of Pledged Revenues, as defined herein, on or before June
30, 1998, by the District into the Repayment Fund, as defined herein, held by the County on behalf of
the District. The District is required by law to balance expenditures with revenue, and by resolution
to set aside sufficient Pledged Revenues as stated.
Professionals Involved in the Offering
Vogel Lopez & Associates, Inc., Oakland, California, is acting as financial advisor to the District
with respect to the Notes. Vogel Lopez & Associates, Inc. is located at 5959 Contra Costa Road,
Oakland, California 94618. Jones Hall Hill & White, A Professional Law Corporation, San Francisco,
California, is acting as Bond Counsel to the District with respect to the Notes. Jones Hall Hill & White,
A Professional Law Corporation, is located at Four Embarcadero Center, 19th Floor, San Francisco,
California 94111. Both Vogel Lopez & Associates, Inc. and Jones Hall Hill & White will receive
compensation from the District contingent upon the sale and delivery of the Notes.
Continuing Disclosure
The District has covenanted for the benefit of the holders and beneficial owners of the Notes
to provide notices of the occurrence of certain enumerated events, if material. 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 notices of material
events is set forth in "APPENDIX C —Continuing Disclosure Certificate." These covenants have been
made in order to assist the Underwriter in complying with S.E.C. Rule 15c2-12(b)(5). The District has
never failed to comply in all material respects with any previous undertakings with regard to said Rule.
Other Information
This Official Statement speaks only as of its date, and the information contained herein is
subject to change.
Copies of documents referred to herein and information concerning the Notes are available from
the District. The District may impose a charge for copying, mailing and handling.
No dealer, broker, salesperson or other person has been authorized by the District to give any
information or to make any representations other than as contained herein and, if given or made, such
other information or representations 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 Notes by a person in any jurisdiction in which it is unlawful for such person
to make such an offer, solicitation, or sale.
This Official Statement is not to be construed as a contract with purchasers of the Notes.
Statements contained in this Official Statement which involve estimates, forecasts, or matters of
opinion, whether or not expressly so described herein, are intended solely as such and are not to be
construed as representations of fact. The summaries and references to documents, statutes, and
constitutional provisions referred to herein do not purport to be comprehensive or definitive, and are
qualified in their entireties by reference to such documents, statutes, and constitutional provisions.
The information set forth herein has been obtained from sources which are believed to be
reliable, but is not guaranteed as to accuracy or completeness, and is not to be construed as a
representation by the District. The information and expressions of opinions herein are subject to change
without notice and neither delivery of this Official Statement nor any sale made hereunder shall, under
3
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 Notes
referred to herein and may not be reproduced or used, in whole or in part, for any other purpose.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES AT A LEVEL
ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITER MAY OFFER AND SELL
THE NOTES TO CERTAIN DEALERS AND DEALER BANKS AND BANKS ACTING AS AGENT AT PRICES
LOWER THAN THE PUBLIC OFFERING PRICE STATED ON THE COVER PAGE HEREOF AND SAID
PUBLIC OFFERING PRICE MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER.
END OF INTRODUCTION
4
THE NOTES
Purpose of the Notes
The Notes are issued in anticipation of future receipt of moneys intended as general fund
revenues of the District. Proceeds of the Notes will be used and expended by the District for any
purpose for which the District is authorized to expend funds from the general fund of the District,
including, but not limited to, current expenses, capital expenditures, investment and reinvestment, and
the discharge of other obligations or indebtedness of the District.
Authority for Issuance
The Notes are issued in conformity with the laws of the State including Article 7.6 (commencing
with Section 53850) of Chapter 4, Part 1, Division 2, Title 5 of the Government Code, and pursuant
to resolutions adopted by the Board of Education of the District on May 7, 1997 and by the County
Board of Supervisors on 1997 authorizing the sale and issuance of the Notes (together, the
"Resolution").
General Provisions
The Notes will be dated the date of delivery thereof, will mature 364 days from such date of
delivery (or 359 days computed on a 30-day month/360-day year basis), and will bear interest, payable
at maturity and computed on a 30-day month/360-day year basis, from such date at the rate per annum
set forth on the cover page hereof. Principal of and interest on the Notes is payable at maturity. The
Notes will be issued in book-entry form only (see "THE NOTES — Book-Entry System" and " —
Discontinuation of Book-Entry System; Payment to Beneficial Owners" herein) and in denominations of
$5,000 each or any integral multiple thereof. The Notes are not subject to redemption prior to maturity.
Investment of Note Proceeds
Proceeds from the sale of the Notes will be deposited in the Treasury of the County in a
proceeds fund to the credit of the District. Monies in such proceeds fund shall, to the greatest extent
possible, be invested by the Treasurer, by such other appropriate investment officer of the County, or
by a third-party fiscal agent, directly in investments, or through an investment agreement, as permitted
by the laws of the State of California and the Resolution, including those permitted under Section
53601 of the Government Code, as now in effect and as hereafter amended, and in accordance with
such procedures and subject to such requirements as the Treasurer or such other appropriate
investment officer of the County shall establish.
Security and Sources of Payment
The Notes are by statute general obligations of the District. The principal amount of the Notes,
together with interest thereon, will be payable from Unrestricted Moneys, pledged by the District as
security for the payment of the principal of and interest on the Notes as follows: (a) an amount equal
to fifty percent (50%) of the principal amount of the Notes from the Unrestricted Moneys received by
the District in April, 1998; (b) an amount equal to fifty percent (50%) of the principal amount of the
Notes from the Unrestricted Moneys received by the District in May, 1998; and (c) an amount sufficient
to pay interest on the Notes from the Unrestricted Moneys received by the District in June, 1998 (all,
the "Pledged Revenues"). The principal of the Notes and the interest thereon will be a first lien and
charge against the Pledged Revenues and will be payable from the first moneys received by the District
from such Pledged Revenues.
5
To the extent not so paid from the Pledged Revenues, the Notes will be paid from any other
moneys of the District lawfully available therefor. In the event that there are insufficient Unrestricted
Moneys received by the District to permit the deposit into the Repayment Fund, as hereinafter defined,
of the full amount of the Pledged Revenues to be deposited from Unrestricted Moneys in any month,
on the last day of such month, then the amount of any deficiency will be satisfied and made up from
any other monies of the District lawfully available for the repayment of the principal of and interest on
the Notes.
The Resolution creates a special fund to be held on behalf of the District by the Treasurer
separate and distinct from all other County and District funds and accounts, designated the "West
Contra Costa Unified School District 1997/98 Tax and Revenue Anticipation Notes Repayment Fund"
(the "Repayment Fund"). Any moneys placed in the Repayment Fund will be for the benefit of the
holders of the Notes and, until the Notes and all interest thereon are paid or until provision has been
made for payment of the Notes at maturity, will be applied solely for the purposes for which the
Repayment Fund is created.
At or before maturity, the Treasurer (the "Paying Agent") shall transfer to DTC (defined below)
the moneys in the Repayment Fund necessary to pay the principal of and interest on the Notes.
Available Sources of Repayment
A "Note Coverage Ratio" can be calculated by dividing the estimated Unrestricted Moneys
available to pay principal of and interest on the Notes by the amount required to pay principal of and
interest on the Notes. See "THE DISTRICT — Unrestricted Moneys Available for Note Repayment"
herein for further detail as to the estimated Unrestricted Moneys and Note Coverage Ratio.
Book-Entry System
The information in this section concerning DTC and DTC's book-entry system has been obtained
from sources that the District believes to be reliable, but the District takes no responsibility for the
accuracy thereof. The District cannot and does not give any assurances that DTC, DTC Participants
or Indirect Participants will distribute to the Beneficial Owners (a)principal and interest payments on
the Notes, (bl certificates representing ownership interest in or other confirmation of ownership interest
in the Notes, or (c) notices sent to DTC or Cede & Co., its nominee, as the registered owner of the
Notes, or that they will so do on a timely basis or that DTC, DTC Participants or DTC Indirect
Participants will act in the manner described in this Official Statement. The current "Rules"applicable
to DTC are on file with the Securities and Exchange Commission and the current "Procedures" of DTC
to be followed in dealing with DTC Participants are on file with DTC.
The Depository Trust Company, New York, New York ("DTC") will act as securities depository
for the Notes. The ownership of one fully registered Note in the aggregate principal amount of the
Notes will be registered in the name of Cede & Co., as nominee for 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 ("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,
6
and trust companies that clear through or maintain a custodial relationship with a Direct Participant,
either directly or indirectly ("Indirect Participants"). The Rules applicable to DTC and its Participants
are on file with the Securities and Exchange Commission.
Purchases of Notes under the DTC system must be made by or through Direct Participants,
which will receive a credit for the Notes on DTC's records. The ownership interest of each actual
purchaser of each Note ("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
the Notes 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 Notes, except in the event that use of the book-entry system for the Notes is discontinued.
DTC's records reflect only the identity of the Direct Participants to whose accounts such Notes
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.
Principal and interest payments on the Notes will be made to DTC. DTC's practice is to credit
Direct Participants' accounts on a 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 a 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 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 District, 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.
If the District and the County determine that it is in the best interest of the Beneficial Owners
that they be able to obtain physical Notes, and deliver a written certificate to DTC to that effect, DTC
shall notify the Participants of the availability through DTC of physical Notes. In such event, the County
on behalf of the District shall issue, transfer and exchange Notes as requested by DTC and any other
owners in appropriate amounts. DTC may determine to discontinue providing its services with respect
to the Notes at any time by giving notice to the District and discharging its responsibilities with respect
thereto under applicable law. Under such circumstances (if there is no successor securities depository),
the County on behalf of the District shall be obligated to deliver physical Notes as described in the
Resolutions. Whenever DTC requests the District to do so, the District will cooperate with DTC in
taking appropriate action after reasonable notice to (a) make available one or more separate Notes
evidencing the Notes to any DTC Participant having Notes credited to its DTC account or (b) arrange
for another securities depository to maintain custody of certificates evidencing the Notes.
Discontinuation of Book-Entry System; Payment to Beneficial Owners
In the event that the book-entry system described above is no longer used with respect to the
Notes, the following provisions will govern the registration, transfer, exchange and replacement of the
Notes.
If the District fails to replace DTC with another qualified securities depository, then principal of
and interest on the Notes will be paid by the Paying Agent (Contra Costa County, Office of the
Treasurer-Tax Collector, 625 Court Street, Room 100, Martinez, California 94553; telephone (510)
646-4115) by check mailed to the person whose name appears on the registration books of the Paying
7
Agent as the registered owner, and to that person's address appearing on the registration books as of
the close of business on the 15th day of the month prior to their maturity date.
Any Note may be exchanged for Notes of any authorized denomination upon presentation and
surrender at the office of the Paying Agent, together with a request for exchange signed by the
registered owner or by a person legally empowered to do so in a form satisfactory to the Paying Agent.
A Note may be transferred only on the Note registration books upon presentation and surrender of the
Note at the office of the Paying Agent together with an assignment executed by the registered owner
or by a person legally empowered to do so in a form satisfactory to the Paying Agent. Upon exchange
or transfer, the Paying Agent shall complete, authenticate and deliver a new Note or Notes of any
authorized denomination or denominations requested by the owner equal in the aggregate to the
unmatured principal amount of the Note surrendered and bearing interest at the same rate and maturing
on the same date.
The Paying Agent will not be required to transfer or exchange any Note later than the 15th day
of the month prior to their maturity date.
CONSTITUTIONAL AND STATUTORY PROVISIONS
AFFECTING DISTRICT REVENUE AND APPROPRIATIONS
Article XIIIA
Article XIIIA of the State Constitution limits the amount of ad valorem taxes on real property
to 1% of "full cash value" as determined by the county assessor. 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," subject to exemptions in certain
circumstances of property transfer or reconstruction. The "full cash value" is subject to annual
adjustment to reflect increases, not to exceed 2% for any year, or decreases in the consumer price
index or comparable local data, or to reflect reductions in property value caused by damage, destruction
or other factors.
Article XIIIA requires a vote of two-thirds of the qualified electorate of a city, county, special
district or other public agency to impose special taxes, and except for ad valorem taxes described in
the next sentence, prohibits the imposition of any additional ad valorem, sales or transaction taxes on
real property. Article XIIIA exempts from the 1% tax limitation any taxes above that level required to
pay debt service (a) on any indebtedness approved by the voters prior to July 1, 1978, and (b), as the
result of an amendment approved by California voters on June 3, 1986, on any bonded indebtedness
approved by two-thirds of the votes cast by the voters for the acquisition or improvement of real
property on or after July 1, 1978. In addition, Article XIIIA requires the approval of two-thirds of all
members of the State legislature to change any State taxes for the purpose of increasing tax revenues
while prohibiting the imposition of any new ad valorem, sales or transaction taxes on real property.
Legislation Implementing Article XIIIA
Legislation has been enacted and amended a number of times since 1978 to implement Article
XIIIA. Under current law, local agencies are no longer permitted to levy directly any property tax
(except to pay voter-approved indebtedness). The 1% property tax is automatically levied by the
county and distributed according to a formula among taxing agencies. The formula apportions the tax
roughly in proportion to the relative shares of taxes levied prior to 1989.
That portion of annual property tax revenues generated by increases in assessed valuations
within each tax rate area within a county, subject to redevelopment agency, if any, claims on tax
8
increment and subject to changes in organizations, if any, of affected jurisdictions, is allocated to each
jurisdiction within the tax rate area in the same proportion that the total property tax revenue from the
tax rate area for the prior year was allocated to such jurisdictions.
Beginning in the 1981/82 fiscal year, assessors in California no longer record property values
on tax rolls at the assessed value of 25% of market value. All taxable property is now shown at "full
cash value" on the tax rolls. The tax rate is expressed as $.1 per $100 of taxable value.
Unitary Property
AB 454 (Chapter 921, Statutes of 1987) provides that revenues derived from most utility
property assessed by the State Board of Equalization ("Unitary Property"), commencing with the
1988/89 fiscal year, are 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 revenues by a specified formula. 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 nor a.revision of the methods 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.
Proposition 62
A statutory initiative ("Proposition 62") was adopted by the voters at the November 4, 1986
general election which requires voter approval for new or higher taxes for general governmental
purposes imposed by local government entities.
The District has not experienced any substantive adverse financial impact as a result of the
passage of this initiative.
Article XIIIB
Article XIIIB of the State Constitution, as subsequently amended by Propositions 98 and 1 1 1,
respectively, limits the annual appropriations of the State and of any city, county, school district,
authority or other political subdivision of the State to the level of appropriations of the particular
governmental entity for the prior fiscal year, as adjusted for changes in the cost of living and in
population and for transfers in the financial responsibility for providing services and for certain declared
emergencies. As amended, Article XIIIB defines:
(a) "change in the cost of living" with respect to school districts to mean the percentage
change in California per capita income from the preceding year, and
(b) "change in population" with respect to a school district to mean the percentage change
in the average daily attendance of the school district from the preceding fiscal year.
For fiscal years beginning on or after July 1, 1990, the appropriations limit of each entity of
government shall be the appropriations limit for the 1986/87 fiscal year adjusted for the changes made
from that fiscal year pursuant to the provisions of Article XIIIB, as amended.
The appropriations of an entity of local government subject to Article XIIIB limitations include
the proceeds of taxes levied by or for that entity and the proceeds of certain state subventions to that
9
entity. "Proceeds of taxes" include, but are not limited to, all tax revenues and the proceeds to the
entity from (a) regulatory licenses, user charges and user fees (but only to the extent that these
proceeds exceed the reasonable costs in providing the regulation, product or service), and (b) the
investment of tax revenues.
Appropriations subject to limitation do not include (a) refunds of taxes, (b) appropriations for
debt service, (c) appropriations required to comply with certain mandates of the courts or the federal
government, (d) appropriations of certain special districts, (e) appropriations for all qualified capital
outlay projects as defined by the legislature, (f) appropriations derived from certain fuel and vehicle
taxes and (g) appropriations derived from certain taxes on tobacco products.
Article XIIIB includes a requirement that all revenues received by an entity of government other
than the state in a fiscal year and in the fiscal year immediately following it in excess of the amount
permitted to be appropriated during that fiscal year and the fiscal year immediately following it shall be
returned by a revision of tax rates or fee schedules within the next two subsequent fiscal years.
Article XIIIB also includes a requirement that fifty percent of all revenues received by the State
in a fiscal year and in the fiscal year immediately following it in excess of the amount permitted to be
appropriated during that fiscal year and the fiscal year immediately following it shall be transferred and
allocated to the State School Fund pursuant to Section 8.5 of Article XVI of the State Constitution.
See "Propositions 98 and 111" below.
Propositions 98 and 111
On November 8, 1988 the voters approved Proposition 98, an initiative constitutional
amendment and statute called "The Classroom Instructional Improvement and Accountability Act"
("Proposition 98"). In addition to adding certain provisions to the Education Code, Proposition 98 also
amended Article XIIIB and Section 8 of Article XVI of the State Constitution and added Section 8.5 of
Article XVI to the State Constitution, the effects of which are to establish a minimum level of State
funding for school districts, to allocate to school districts, within limits, State revenues in excess of the
State's appropriations limit and to exempt such excess funds from school district appropriations limits.
On June 5, 1990, the voters approved Proposition 1 1 1 (Senate Constitutional Amendment No.
1) called the "Traffic Congestion Relief and Spending Limit Act of 1990" ("Proposition 1 1 1") which
further modified Article XIIIB and Sections 8 and 8.5 of Article XVI of the State Constitution with
respect to appropriations limitations and school funding priority and allocation.
Article XIIIB, as amended by both Proposition 98 and Proposition 111, is discussed above under
"Article XIIIB."
The provisions of Sections 8 and 8.5 of Article XVI, as added and/or amended by Propositions
98 and 1 1 1, may be summarized as follows:
a) State Funding of Schools (Section 8). Monies to be applied by the State for the support
of school districts must be at a level equal to the greater of the following "tests":
(i) The amount which, as a percentage of the State general fund ("General Fund")
revenues which may be appropriated pursuant to Article XIIIB, equals the percentage of
General Fund revenues appropriated for school districts in fiscal year 1986/87;
(ii) The amount actually appropriated to school districts in the prior fiscal year from
General Fund proceeds and from allocated local proceeds of taxes (excluding any excess
state revenues allocated pursuant to Section 8.5), adjusted for changes in enrollment
and for the change in the cost of living (operative only in a fiscal year in which the
percentage growth in California per capita personal income is less than or equal to the
percentage growth in per capita General Fund revenues plus one-half of one percent);
10
(iii) The amount actually appropriated to school districts in the prior fiscal year from
General Fund proceeds and from allocated local proceeds of taxes (excluding any excess
State revenues allocated pursuant to Section 8.5) adjusted for changes in enrollment and
for the change in per capita General Fund revenues, and, in addition, an amount equal
to one-half of one percent times the prior year appropriations (excluding any excess
State revenues) adjusted for changes in enrollment (operative only in a fiscal year in
which the percentage growth in California per capita personal income is greater than the
percentage growth in per capita General Fund revenues plus one-half of one percent).
If the third test is used in any year the difference between the third test and the second
test will become a "credit" to schools which will be paid in future years when the
General Fund revenue growth exceeds personal income growth.
The State legislature by a two-thirds vote of both houses, with the Governor's
concurrence, may suspend for one year the minimum funding provisions for school
districts as provided for in Section 8.
b) Allocations to the State School Fund (Section 8.5). In addition to the amounts applied
to school districts under the tests discussed above, the State Controller is directed to
allocate available excess State revenues (pursuant to Article XIIIB) to the State School
Fund. However, no such allocation is required at any time that the Director of Finance
and the Superintendent of Public Instruction mutually determine that current annual
expenditures per student equal or exceed the average annual expenditures per student
of the 10 states with the highest annual expenditures per student and the average class
size equals or is less than the average class size of the 10 states with the lowest class
size.
Such allocations do not constitute appropriations subject to Article XIIIB limitations and
are to be made in an equal amount per enrollment.
Applications of Constitutional and Statutory Provisions
The application of Proposition 98 and other statutory regulations has become increasingly
difficult to predict accurately in recent years. For a discussion of how these provisions of Proposition
98 have been applied to school funding see "GENERAL SCHOOL DISTRICT FINANCIAL INFORMATION"
herein.
Proposition 187
At the November 1994 general election, 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. 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
student enrolled in the school district as well as the legal status of the student's parents or guardian.
If any student, parent, or guardian is not legally in the United States, the school district must report the
student to the Unities States Immigration and Naturalization Service ("INS") and certain other parties.
Proposition 187 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.
Proposition 187 could have a significant impact on funding for California school districts. It is
possible that, for every student that the District excludes under Proposition 187 and for every student
who does not attend school in the District as a result of Proposition 187, the District may lose a portion
of the State revenue it receives based on average daily attendance. In addition, it is possible that, to
11
the extent that the exclusion of students and the verification and reporting requirements are found to
be at odds with various federal laws, the District may lose all or a portion of the federal revenue it
receives. Further, the cost of compliance with the verification and reporting requirements may prove
significant.
Proposition 187 may prove to be in conflict with the holding of the United States Supreme
Court in P/yer v. Doe (1982) that access to public education must be granted to all children. Opponents
of Proposition 187 have filed at least eight lawsuits challenging the constitutionality and validity of
Proposition 187. A United State 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 or what the ultimate fiscal
impact of Proposition 187 will be.
Proposition 218
Under the California Constitution, the power of initiative is reserved to the voters for the
purpose of enacting statutes and constitutional amendments. Over the past 18 years, the voters have
exercised this power through the adoption of Proposition 13 and similar measures, including the
enactment of Proposition 218 which was approved in the general election held on November 5, 1996.
On November 5, 1996, California voters approved Proposition 218 - Voter Approval for Local
Government Taxes - Limitation on Fees, Assessments, and Charges - Initiative Constitutional
Amendment. Proposition 218 added articles XIIIC and MID to the California Constitution, imposing
certain vote requirements and other limitations on the imposition of new or increased taxes,
assessments and property-related fees and charges. Proposition 218 states that all taxes imposed by
local governments shall be deemed to be either general taxes or special taxes. Special purpose districts,
including school districts, have no power to levy general taxes. No local government may impose,
extend or increase any general tax unless and until such tax is submitted to the electorate and approved
by a majority vote. No local government may impose, extend or increase any special tax unless and
until such tax is submitted to the electorate and approved by a two-thirds vote.
Proposition 218 also provides that no tax, assessment, fee or charge shall be assessed by any
agency upon any parcel of property or upon any person as an incident of property ownership except:
(i) the ad valorem property tax imposed pursuant to Article XIII and Article XIIIA of the California
Constitution, (ii) any special tax receiving a two-thirds vote pursuant to the California Constitution, and
(iii) assessments, fees and charges for property related services as provided in Proposition 218.
Proposition 218 then goes on to add voter requirements for assessments and fees and charges imposed
as an incident of property ownership, other than fees and charges for sewer, water, and refuse
collection services. In addition, all assessments and fees and charges imposed as an incident of
property ownership, including sewer, water, and refuse collection services, are subjected to various
additional procedures, such as hearings and stricter and more individualized benefit requirements and
findings. The effect of such new provisions will presumably be to increase the difficulty a local agency
will have in imposing, increasing or extending such assessments, fees and charges.
Proposition 218 also provides that the initiative power shall not be prohibited or otherwise
limited in matters of reducing or repealing any local tax, assessment, fee or charge. This provision is
not limited to taxes imposed on or after November 6, 1996, the effective date of Proposition 218, and
could result in retroactive repeal or reduction in any existing taxes, assessments, fees and charges,
subject to overriding federal constitutional principles relating to the impairments of contracts.
Like its antecedents, Proposition 218 is likely to undergo both judicial and legislative scrutiny
before its impact on the District and its obligations can be determined. Certain provisions of Proposition
218 may be examined by the courts for their constitutionality under both State and federal
constitutional law. The District is not able to predict the outcome of any such examination.
12
The foregoing discussion of Proposition 218 should not be considered an exhaustive or
authoritative treatment of the issues. The District does not expect to be in a position to control the
consideration or disposition of these issues and cannot predict the timing or outcome of any judicial or
legislative activity in this regard. Interim rulings, final decisions, legislative proposals and legislative
enactments may all affect the impact of Proposition 218. Legislative and court calendar delays and
other factors may prolong any uncertainty regarding the effects of Proposition 218.
Future Initiatives
Article XIIIA, Article XIIIB, Proposition 62, Proposition 98, Proposition 187 and Proposition 218
were each adopted as measures that qualified for the ballot pursuant to California'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. The nature and impact of these measures cannot be anticipated
by the District.
GENERAL SCHOOL DISTRICT FINANCIAL INFORMATION
State Funding of Education
State school districts receive a significant portion of their funding from State appropriations.
As a result, decreases in State revenues significantly affect appropriations made by the legislature to
school districts.
Annual State apportionments of basic and equalization aid to school districts for general
purposes are computed up to a revenue limit per unit of average daily attendance (the "A.D.A.").
Generally, these apportionments amount to the difference between the school district's revenue limit
and its property tax allocation. 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. See "THE DISTRICT—Average Daily Attendance and
Revenue Limit" herein.
State Budget
The 1996/97 State Budget was signed by the Governor on July 15, 1996. Ongoing Proposition
98 funding for K-12 education totals $25.9 billion, an increase of $2.5 billion, or 11%, from the funding
level included in the 1995 Budget Act. This large increase includes an allocation of $1.2 billion to
provide inflation and growth adjustments. (Specifically, the budget includes $800 million for a 3.21%
COLA and $400 million to accommodate a projected 2.6% increase in student population.) The budget
directs the remaining $1.3 billion for other purposes, including new programs and existing categorical
programs. The major programs include $771 million for class size reduction and $178 million in
revenue limit increases. The class size reduction program is targeted for grades K-3. To participate,
a district must reduce class size to a maximum of 20 students per teacher.
The 1996/97 State Budget also contains approximately $1.1 billion in one-time funding for
education. The major expenditures for these funds include $387 million in block grants to individual
school sites and $200 million in block grants to school districts, $200 million for facilities for class size
reduction, and $167 million for a reading initiative.
The 1997/98 proposed State Budget, as of January, 1997, provides for an increase of $1.677
billion in ongoing Proposition 98 funding for K-12 education. This increase includes an allocation of
$598 million for a 2.53% COLA, $530 million for enrollment growth, and $549 million for various
initiatives. The major initiative is $488 million for the expansion of the class-size reduction program
13
to include fourth grade and to allow for a COLA and the higher than projected costs of the program.
The 1997/98 proposed budget also includes $308 million for revenue limit deficit reduction, $308
million for equalization aid, and $101 million in other one-time funds.
The Governor's May Revision of the proposed 1997/98 State budget includes significant
increases for K-12 education beyond those contained in the initial 1997/98 State budget released in
January, 1997. Such increases are the result of a strong State economy and higher State income tax
collections upward revisions in both 1996/97 and projected 1997/98 budget year augmentations.
Major augmentations for 1996/97 include: K-12 enrollment growth, equalization and deficit reduction,
and funding for child care facilities, deferred maintenance, special education and unfunded mandates.
Programs targeted to receive additional 1997/98 funding include: K-12 revenue limit, class-size
reduction, equalization and deficit reduction, adult education, categorical mega-item, testing services,
child care services and ROP/ROC. The Governor's May Revision must be passed by the Legislature to
be implemented as part of the 1997/98 State budget.
State Lottery
In the November 1984 general election, the voters of the State approved a constitutional
amendment establishing a State lottery (the "State Lottery"), the net revenues of which are used to
supplement money allocated to public education. The amendment stipulated that the funds derived
from the State Lottery be used for the education of students and prohibited their use for non-
instructional purposes, such as the acquisition of real property, the construction of facilities, or the
financing of research. School districts receive an amount proportional to their total A.D.A.. See "THE
DISTRICT— Lottery Income" herein.
Ad Valorem'Property Taxation
The District uses the services of the County for the assessment and collection of taxes for
District purposes. District property taxes are assessed and collected by the County at the same time
and on the same rolls as county, special district, and city property taxes.
The valuation of secured property and a statutory tax lien is established as of January 1 and
is subsequently equalized in August. The resulting secured property tax is payable in two equal
installments due November 1 and February 1, and payments become delinquent on December 10 and
April 10, respectively. Taxes on unsecured property (personal property and leasehold) are due on
August 31 of each year. Taxes on unsecured property are levied at the preceding fiscal year's secured
tax rate and become delinquent on October 10.
State law exempts from taxation $7,000 of the full cash value of an owner-occupied dwelling
provided that the owner files for such exemption. This exemption does not result in any loss of revenue
to local agencies, since the State reimburses local agencies for the value of the exemptions.
Assessed Valuation
All property is assessed using full cash value as defined by Article XIIIA of the State
constitution. State law provides exemptions from ad valorem property taxation for certain classes of
property such as churches, colleges, non-profit hospitals, and charitable institutions.
Future assessed valuation growth allowed under Article XIIIA (new construction, certain
changes of ownership, 2% inflation) will be allocated on the basis of "situs" among the jurisdictions
that serve the tax rate area within which the growth occurs. Local agencies and school districts will
share the growth of "base" revenues from the tax rate area. Each year's growth allocation becomes
part of each agency's allocation in the following year. The availability of revenue from growth in tax
bases to such entities may be affected by the establishment of redevelopment agencies which, under
14
certain circumstances, may be entitled to revenues resulting from the increase in certain property
values.
For assessment and collection purposes, property is classified as either "secured" or
"unsecured" and is listed accordingly on separate parts of the assessment roll. The "secured roll" is
that part of the assessment roll containing State-assessed property and real property having a tax lien
which is sufficient, in the opinion of the assessor, to secure payment of the taxes. Unsecured property
comprises all property not attached to land such as personal property or business property. Boats and
airplanes are examples of unsecured property. Unsecured property is assessed on the "unsecured roll."
The passage of AB 454 in 1987 changed the manner in which unitary and operating nonunitary
property is assessed by the State Board of Equalization. The legislation deleted the formula for the
allocation of assessed value attributed to such property, and imposed a State-mandated local program
by requiring the assignment of the assessed value of all unitary and operating nonunitary property in
each county of each State assessee other than a regulated railway company. The legislation established
formulas for the computation of applicable county-wide tax rates for such property and for the
allocation of property tax revenues attributable to such property among taxing jurisdictions in the
county beginning in fiscal year 1988/89. The legislation requires each county to issue each State
assessee, other than a regulated railway company, a single tax bill for all unitary and operating
nonunitary property. See `THE DISTRICT—Assessed Valuation" herein.
Tax Levies, Collections and Delinquencies
A 10% penalty attaches to any delinquent payment for secured roll taxes. In addition, property
on the secured roll with respect to which taxes are delinquent becomes tax-defaulted. Such property
may thereafter be redeemed by payment of the delinquent taxes and the delinquency penalty, plus a
redemption penalty to the time of redemption. If taxes are unpaid for a period of five years or more,
the property is subject to auction sale by the County Tax Collector.
In the case of unsecured property taxes, a 10% penalty attaches to delinquent taxes on
property on the unsecured roll, and an additional penalty of 1.5% per month begins to accrue beginning
November 1 st of the fiscal year, and a lien is recorded against the assessee. The taxing authority has
four ways of collecting unsecured personal property taxes: (a) a civil action against the taxpayer; (b)
filing a certificate in the office of the County Clerk specifying certain facts in order to obtain a judgment
lien on specific property of the taxpayer; (c) filing a certificate of delinquency for record in the County
Recorder's office in order to obtain a lien on specified property of the taxpayer; and (d) seizure and sale
of personal property, improvements or possessory interests belonging or assessed to the assessee. See
"THE DISTRICT—Tax Levies, Collections and Delinquencies"herein.
Teeter Plan
The County has 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 California
Revenue and Taxation Code and has created a tax loss reserve fund. Under the Teeter Plan, each
participating local agency, including school districts, levying property taxes in their county receives the
amount of uncollected taxes credited to its fund, in the same manner as if the amount credited had
been collected. In return, the county receives and retains delinquent payments, penalties and interest
as collected, that would have been due the local agency.
The Teeter Plan is to remain in effect unless the county board of supervisors orders its
discontinuance or unless, prior to the commencement of any fiscal year of the county, the board of
supervisors receives a petition for its discontinuance from two-thirds of the participating revenue
districts in the county. No county has ever received a petition from any governing board to discontinue
the Teeter Plan. A board of supervisors may, after holding a public hearing on the matter, discontinue
the procedures under the Teeter Plan with respect to any tax levying agency in its county.
15
Budget Process
School districts are required by provisions of the State Education Code to maintain a balanced
budget each year, in which the sum of expenditures and the ending fund balance cannot exceed the
sum of revenues and the carry-over fund balance from the previous year. The State Department of
Education imposes a uniform budgeting and accounting format for school districts.
School districts must adopt a budget on or before July 1 of each year. The budget must be
submitted to the county superintendent within five days of adoption or by July 1, whichever occurs
first. A district may be on either a dual or single budget cycle. The dual budget option requires a
revised and readopted budget by September 1 that is subject to State mandated standards and criteria.
The revised budget must reflect changes in projected income and expenses subsequent to July 1. The
single budget is only readopted if it is disapproved by the county office of education, or as needed.
For both dual and single budgets submitted on July 1, the county superintendent will examine
the adopted budget for compliance with the standards and criteria adopted by the State Board of
Education and identify technical corrections necessary to bring the budgetinto compliance, will
determine if the budget allows the district to meet its current obligations and will determine if the
budget is consistent with a financial plan that will enable the district to meet its multi-year financial
commitments. On or before August 15, the county superintendent will approve or disapprove the
adopted budget for each school district. Pursuant to State law, the county superintendent has available
various remedies by which to impose and enforce a budget that complies with State criteria, depending
on the circumstances, if a budget is disapproved.
Subsequent to approval, each county superintendent of schools throughout the fiscal year will
monitor each school district pursuant to its adopted budget to determine on an ongoing basis if the
district can meet its current or subsequent year financial obligations. If a county superintendent
determines that a district cannot meet its current or subsequent year obligations, the superintendent
will notify the district's governing board of the determination and the superintendent may do either or
both of the following: (a) assign a fiscal advisor to enable the district to meet those obligations or (b)
if a study and recommendations are made and a district fails to take appropriate action to meet its
financial obligations, the county superintendent will so notify the State Superintendent of Public
Instruction, and then may do any or all of the following for the remainder of the fiscal year: (i) request
additional information regarding the district's budget and operations; (ii) develop and impose, after also
consulting with the district's board, revisions to the budget that will enable the district to meet its
financial obligations; and (iii) stay or rescind any action inconsistent with such revisions. However,
the county superintendent may not abrogate any provision of the collective bargaining agreement that
was entered into prior to the date upon which the county superintendent assumed authority.
Accounting Practices
The accounting policies of the District conform to generally accepted accounting principles in
accordance with policies and procedures of the State School Accounting Manual. This manual,
according to Section 41010 of the State Education Code, is to be followed by all State school districts.
Revenues are recognized in the period in which they become both measurable and available to finance
expenditures of the current fiscal period. Expenditures are recognized in the period in which the liability
is incurred.
16
Availability of Documents
California school districts are required by State law to file certain financial documents with the
appropriate county superintendent of schools on specific dates throughout the fiscal year. Each
district's board adopted budget must be filed with the county superintendent of schools on or before
July 1. In addition, two interim reports, covering the periods through October 31 and through
January 31, are required to be board approved and filed with the county superintendent of schools on
or before December 15 and March 15, respectively. The Board adopted budget and the interim reports
will be made available upon request to the District.
THE DISTRICT
General
The District, unified in November, 1964, is located approximately 15 miles northeast of San
Francisco, California and consists of approximately 110 square miles in western Contra Costa County.
It provides educational services to the residents of the cities of EI Cerrito, Hercules, Pinole, Richmond
and San Pablo, the unincorporated communities of EI Sobrante and Kensington and certain other
unincorporated areas in the County.
The District maintains 38 elementary schools, 5 middle/junior high schools, 5 comprehensive
high schools, 1 alternative high school, 6 continuation high schools, 1 specialized school serving
independent study students, 1 adult education center, 2 special education sites and 9 state-funded
preschools. The pupil-teacher ratio is 28:1.
Management
The District is governed by a Board of Education consisting of five members. Members are
elected to four-year terms in staggered years. The day-to-day operations are managed by a board-
appointed Superintendent of Schools. Dr. Herbert M. Cole, Jr. has served in this capacity since May,
1992.
As part of legislation signed by the Governor of the State in 1990 providing for a $9.525 million
loan to the District, a State trustee was appointed to oversee District operations. On July 1, 1990, Dr.
Fred Stewart was named as State trustee and was given the power to stay or rescind any action of the
District Board which might have an adverse effect on the financial condition of the District. The State
trustee will remain with power to stay or rescind any action of the District Board which might have an
adverse effect on the financial condition of the District until the State Loan, as defined herein, has been
paid. See "PRIOR FINANCIAL HISTORY OF THE DISTRICT", herein.
17
Average Daily Attendance and Revenue Limit
The following table sets forth the average daily attendance based on the Second Period Report
of Attendance for the past four years and an estimate for 1997/98:
WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT
Average Daily Attendance
Academic Year Averaae Daily Attendance
1993/94 30,140
1994/95 30,596
1995/96 30,817
1996/97 31,409
1997/98(Estimated) 31,609
Note: Includes grade levels K- 12 and special education.
Source: The District.
The District's undeficited annual revenue limit was $112,967,000 for 1995/96 and is expected
to be $119,802,646 for 1996/97. The District's deficited annual revenue limit was $101,601,000
for 1995/96 and is expected to be $107,861,916 for 1996/97. See "GENERAL SCHOOL DISTRICT
FINANCIAL INFORMATION—State Funding of Education"herein.
Appropriations Limit
The District has a 1995/96 appropriations limit of $120,896,698 and had appropriations subject
to the limit of $106,176,200. The District projects a 1996/97 appropriations limit of $126,542,574
and appropriations subject to the limit of $108,722,227. See "CONSTITUTIONAL AND STATUTORY
PROVISIONS AFFECTING DISTRICT REVENUES AND APPROPRIATIONS—Article XIIIB" herein.
Lottery Income
The District's State lottery revenue was $3,813,990 for 1995/96 and is projected to be
$3,493,645 for 1996/97. See "GENERAL SCHOOL DISTRICT FINANCIAL INFORMATION — State
Lottery" herein.
18
Labor Relations
The District employs 1,632.4 full-time equivalent (FTE) certificated and 1,037 FTE classified
employees including management and confidential employees.
The following table summarizes the labor organizations in the District.
WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT
Labor Organizations
Labor Oraanization Number of Employees"' Contract Expiration
United Teachers of Richmond 2,436 full- and part-time June 30, 1998121
Public Employees Union, Local 1 2,330 full-and part-time June 30, 1998j2'
School Supervisors Association 58 full-and part-time June 30, 1998'2j
"' Includes substitutes.
(2' Contracts are subject to annual reopeners on salaries and benefits.
Source: The District.
Retirement Programs
The District participates in the State Teachers Retirement System ("STRS"). This plan covers
all full-time certificated employees. In order to receive STRS benefits, an employee must be at least
55 years old and have provided five years of service to California public schools. The District's actual
contribution to STRS for fiscal year 1995/96 was $5,148,305 and in fiscal year 1996/97 is expected
to be $5,852,504.
The District also participates in the State Public Employees Retirement System ("PERS"). This
plan covers all classified personnel who are employed more than four hours per day. In order to receive
PERS benefits, an employee must be at least 50 years old and have provided five years of covered
service in PERS. The District's actual contribution to PERS for fiscal year 1995/96 was $1,233,490
and is projected to be $1,594,024 for 1996/97.
See the notes to the District's audited financial statements which are excerpted and contained
in APPENDIX A for additional information concerning STRS and PERS.
19
Assessed Valuation
The historical secured and unsecured assessed valuation for the District is listed in the following
table:
WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT
Five-Year Summary of Assessed Valuation
Fiscal Year Local Secured i it Unsecured Total
1992/93 $10,168,626,140 $18,860,952 $563,704,654 $10,751,191,746
1993/94 10,543,809,466 21,765,166 612,302,635 11,177,877,267
1994/95 11,060,198,941 32,489,980 619,430,514 11,712,119,435
1995/96 11,325,170,813 32,313,118 532,789,718 11,890,273,449
1996/97 11,539,491,478 27,220,140 526,135,436 12,092,847,054
Source: California Municipal Statistics, Inc. and the Contra Costa County Auditor's Office.
Tax Levies, Collections and Delinquencies
The secured historical tax levy and year-end delinquencies for all ad valorem taxes levied within
the District's boundaries are shown in the following table:
WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT
Secured Tax Charges and Delinquencies
Amount Delinquent Percent Delinquent
Fiscal Year Secured Tax Charge') as of June 30 June 30
1991/92 128,690,354.47 5,264,614.59 4.09%
1992/93 135,217,189.44 5,509,067.05 4.07
1993/94 142,828,595.73 4,795,674.99 3.36
1994/95 156,399,125.75 5,742,816.57 3.67
1995/96 162,510,719.26 4,334,764.78 2.67
All taxes collected by the County within the District.
Source: California Municipal Statistics, Inc.
20
Tax Rates
The District has a total of 200 tax rate areas (TKAs). The largest TRA in the District, TRA
08001 has a 1996/97 net total assessed valuation of $3,764,018,989, representing approximately
31% of the District's total assessed valuation. The components of the 1993/94 through 1996/97 tax
rate levied in TRA 08001 are set forth below:
WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT
Tax Rate Area 08001
Summary of Tax Rates
1993/94 Tax Rates 1994/95 Tax Rates 1995/96 Tax Rates 1996/97 Tax Rates
Countywide Taxi'' 1.0000% 1.0000% 1.0000% 1.0000%
City of Richmond Retirement Levy .1400 .1400 .1400 .1400
Bay Area Rapid Transit .0240 .0235 .0230 .0225
East Bay Regional Park .0069 .0066 .0094 .0080
TOTAL TAX RATE 1.1709% 1.1701% IJ2 °° 1.1705%
Maximum rate for purposes other than paying debt service in accordance with Article XIIIA of the State Constitution.
Source: Contra Costa County Auditor-Controller's Office.
21
Largest Taxpayers
The 20 largest taxpayers in the District, as shown on the 1996/97 secured tax roll, and the
amounts of their assessed valuation for all taxing jurisdictions within the District, are shown below.
Assessed valuation for the 20 largest taxpayers amounted to $2,864,011,758 or approximately
24.82% of the District's total 1996/97 secured tax roll.
WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT
Major Taxpayers 1996/97
1996/97 % of
Name Products/Services Assessed ValuationTotal"'
Chevron USA, Inc. Heavy Industrial $2,100,073,633 18.20%
Berlex Laboratories, Inc. Heavy Industrial 117,493,354 1.02
ICI Americas, Inc. Heavy Industrial 88,825,564 0.77
Bio-Rad Laboratories, Inc. Heavy Industrial 62,774,741 0.54
Chevron Chemicals Company Heavy Industrial 53,519,139 0.46
PRC Joint Venture Heavy Industrial 49,735,034 0.43
Hilltop Properties Apartments 47,045,000 0.41
Security Trust Company Shopping Centers 42,855,400 0.37
Chronicle Publishing Company Heavy Industrial 39,726,589 0.34
Marina Cove Associates Apartments 34,272,702 0.30
Dayton Hudson Corporation Shopping Centers 30,369,991 0.26
Atlantic Richfield Company Heavy Industrial 28,982,826 0.25
California Fats & Oils, Inc. Heavy Industrial 23,876,492 0.21
Valacal Company Heavy Industrial 23,103,067 0.20
Union Oil Company of California Heavy Industrial 22,217,541 0.19
Pinole Point Steel Company Heavy Industrial 21,952,210 0.19
Ladbroke San Pablo LP Commercial 20,192,912 0.17
GATX Terminals Corp. Heavy Industrial 19,571,221 0.17
Levin Metals Corporation Heavy Industrial 18,904,030 0.16
General Chemicals Corporation Heavy Industrial 18.520.312 0.16
$ 2.864.011.758 24.82%
". 1996/97 Total Local Secured Assessed Valuation: $11,539,491,478.
Source: California Municipal Statistics, Inc.
Assessment District
On August 3, 1994, the District completed formation of a Maintenance and Recreation
Assessment District ("MRAD") pursuant to the Landscape and Lighting Act of 1972. Annual
assessments are $72 per living unit (a single family residence is a "living unit"; for multi-family housing
the number of living units are assigned on a sliding scale according to the number of apartments in the
complex). There are approximately 70,000 defined living units within the MRAD. The District has
received approximately $5 million annually in assessment revenue since 1994/95. On November 5,
1996, the MRAD received over 2/3 majority approval at the general election. Although no assurances
can be given, such election may exempt the District from the provisions of Proposition 218 "The Right
to Vote on Taxes" initiative which became effective November 6, 1996. See "CONSTITUTIONAL AND
STATUTORY PROVISIONS AFFECTING DISTRICT REVENUE AND APPROPRIATIONS— Proposition
218." The use of MRAD revenue is restricted to expenditures for recreation, lighting, and landscape
operations and maintenance; it does not count towards the District's revenue limit and effectively
relieves the District from funding these expenditures from general fund revenue. MRAD assessments
must be levied annually by the District Board acting in its capacity as the MRAD governing board.
22
1997/98 Budget Assumptions
The comparative financial tables and cash flows that follow are based on updated budget
estimates provided by the District. See "GENERAL SCHOOL DISTRICT FINANCIAL INFORMATION—
Budget Process."
The largest part of the District's general fund revenue is received from revenue limit sources.
The District calculates its own revenue limit per unit of A.D.A. according to State formulas. The
revenue limit defines the fixed amount of general purpose revenue that the District may receive from
local property taxes (a fixed amount based on the distribution of the one percent levy) plus state aid
(an amount equal to the difference between the amount a district is entitled to receive under the
revenue limit formulas and the amount of local property taxes to be received). Changes in revenue limit
income received from year to year primarily are based upon annual State budget considerations and the
year to year change in A.D.A. in the District. Changes usually have been expressed as a cost of living
adjustment ("COLA") to the State formulas. In recent years the State has applied a percentage "deficit"
reduction to the stated COLA.
In its 1997/98 budget, the District projects that it will receive $111,191,956 in aggregate
revenue limit income, or approximately 65.2% of its general fund revenues. This amount represents
an increase of 3.1 % over the $107,861,916 that it received in 1996/97. This increase reflects a
projected decrease in the statutory COLA from 3.21% to 2.65%, a decrease in the deficit factor applied
to the statutory COLA from 9.967% to 8.358% and an increase in A.D.A. from 31,225 to 31,409.
The largest part of each school district's general fund expenditures are used to pay certificated
and classified salaries and employee benefits. Changes in salary and benefit expenditures from year
to year are generally based on changes in staffing levels, negotiated salary increases, and the overall
cost of employee benefits.
- In its 1997/98 budget, the District projects that it will expend $140,198,547 in salaries and
benefits in 1997/98, or approximately 82.1% of its general fund expenditures. This amount represents
an increase of approximately 7.1% from the $130,946,386 expended in 1996/97. The budget contains
step and column increases, average raises in base salary of 3.0% for employees, and an increase of
110 full-time equivalent employees, predominantly to accommodate the class-size reduction program.
Employee benefits represent approximately 32% of salaries, which is consistent with prior years.
23
Comparative Financial Statements
The following table summarizes the District's general fund revenue, expenditures and fund
balances from fiscal year 1993/94 through 1997/98, excluding revenue of approximately $5 million
annually from the District's MRAD and the corresponding expenditures:
WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT
General Fund
Revenue, Expenditures and Fund Balances
1993/94 through 1997/98
(In Thousands)
Estimated
Actual Actual Actual Actual Budget
1993/94"' 1994/951' 1995/96') 1996/97121 1997/98")
REVENUE
Revenue Limit Sources $ 95,744 $ 97,128 $ 101,940 107,862 111,192
Federal Revenue 9,683 8,732 7,823 9,405 9,405
Other State Revenue 26,265 27,436 31,708 38,337 41.,832
Other Local Revenue 2,290 2,259 2,250 3,011 3,000
TOTAL REVENUE 133.982 135,555 143,721 158,615 165,429
EXPENDITURES
Certificated Salaries 62,899 64,126 66,278 73,911 79,699
Classified Salaries 22,253 19,431 21,296 22,561 23,670
Employee Benefits 26,698 25,557 26,778 29,891 31,999
Books and Supplies 4,620 3,786 4,558 5,863 5,817
Services and Other Operating Expenses 14,844 15,017 15,806 17,790 18,049
Capital Outlay 1,1 1 1 1,112 1,364 4,167 5,051
Other Outgo 951 1,571 913 1,052 1,094
Direct Support/Indirect Costs (531) (505) (683) (589) (628)
Debt Service 28 159 11 10 _0
TOTAL EXPENDITURES 132,873 130,253 136,320 154,656 164,750
EXCESS REVENUE OVER/
(UNDER) EXPENDITURES 1,109 5,302 7,401 3,959 679
OTHER FINANCING SOURCES/(USES)
Transfers In/Other Sources 700 1 139 O 0
Transfers Out/Other Uses (3,239) (2,594) (2,936) 3( ,488) 3I ,060)
TOTAL OTHER FINANCING SOURCE/(USES) (2,539) (2,593) (2,797) 31 ,488) (3.060)
BEGINNING FUND BALANCE, JULY 1 4,689 3,259 5,968 10,573 11,044
ADJUSTMENTS 0 _0 0 0 0
ENDING FUND BALANCE,JUNE 30 $ 3,259 $ 5.968 10,573 $ 11,044 L&6U
Sources:
... Excerpted from the District's respective Audited Financial Reports.
District's unaudited Financial Statements and Budget as of April 30, 1997.
24
Cash Flows
The District's general fund expenditures tend to be heaviest in the middle and end of the school
year and lightest during the summer months. Receipts follow an uneven pattern, primarily because
secured tax installment payment dates are in December and April.
Exhibits 1 and II which follow show actual cash receipts and disbursements for July through
April of 1996/97 and projected cash receipts and disbursements for May and June of fiscal year
1996/97 and for fiscal year 1997/98 when the Notes will be outstanding. The projected 1997/98
monthly receipts and disbursements take the receipt and payment of the Notes into consideration.
25
P CO
J DD K P P MM P 1 ^ vN O O vO m O vM
F, — Pn O P 00 ^ O Cl) Q '0 N co O
ONy M m m\ vO O
J v) O 0 t\ v) •O ^ M P
Q •O M ap N M�f\ �O < N M O Q O CO M •O O CO N Cl) M v) M
H M N (n 00 n ^ Q n 10 co f\ Ht` OD O n C)
0 C") O 00 f\ O f\ P M n O P O 0 O ^ O M
�-- M M T v) c0 O CV m N (V 1-- CV V n O N -n O M v)CT P
v) v) n 00 M M ^ aD v) v) 10 ^ aD Q M ^ CO
m O P O f\ ^ v) N •O v) CD N N O N N 10 N M v
n R 00 P f` ^ 10 O 00 R <\ f` 8 n M N N P
co .- N N 0 v) Op O v) O r• N IO
W O n P v) Cb O N N O w n n O v) CO O M N M
Z .0 M W v) m f\ 10 v1 n Z .O M P P v1 M r\ �O P
q m C`') C0 M Pn O P n Iq P M P `O P
Cl) N Cl) Cl) P N �O O N m N M VO M •0 P P
N ^ N ^
O O O P O P •O N c::, ^ f\ O N O M N M O v) v)
O O O V N �• O N N Cl) O v) CO
N N O m a0 n N Q P V O M O
Y P P v) Q v) f\ O N O Y N f\ N n 10 O V
M 00 O P f\ •O O -q R Q � P ^ �O N O N •O
•O CO P n M P O M N P V V M O v) OP n
M CV •O M N P v) M v) Cl) Cl) I, M M N C`7 m
Q r- N N Cl) C`/
N O O v) O O t` O O M N m O C0 V n 0 :; t:
N t`-10 N O v) O •0 10 n N r\ P 00 N O
a0 N •O P 00 O f\ a [O N ^ N 00 f` O v)
J r\ O P v) v) 0 m P J R v r\ O CV v P O v N
ac R O M P co V P O V O K n 10 P P v) O v O v) t\
d ^ r m P N t\ O OCi M n P N M CO v) v N
Q O Cl) M 10 Q N ^ P M ^ Q < Cl) n 10 C")^ n CV v)
M N M ^ N ? N N M ^ N Cl)
O O P O P n O M N 10 O N v) O N N O M O
M •O f\ Cl) O P P N 00 C` P 10 h p n
= P N n O f\ v CD = a0 N M O P
U Q P O O 10 O n n U co t` CO O N N v
v m •O v) P v7 v v w m P v) � v)
Q N m Cl ^ O Cl Q V P O O O
CV) Cl) n N N ? O 'n M n M N v)
Cl) ^ M N N
P O O m O m v) O •O N O v m O N M v) O m -10
y M (14v) f\ v) O Cl) m } N Q N n M N v) m
P v) •O m n IR P f\ v) N n M M •O CO
N 0^0 M ^ OD R M V Q O Q Cl) n 00 P W
P 00 00 r\ Q D v) P M N Q V m 00
w CO f\ m v) N 00 N Cr M P N N P O <
w N n O O ^ Q f\ w V n 00 M ^ v) v)
w M M w N N
N '0M v O M ^ v) O P O •O ^ 10 O M t� R O ^ N
O O O 00 P N M v) Cl) O 2 00 M 00 N 1l
O N O M v) •O O 0; N t`
Q M V O N P O P v) 10 Q O V CO N v M C) Q O
v O M N 00 v v) O (14 =) O O 10 10 Cl) O 00 CO N,
Z O Q f\ N N N v) ccZ N Q v) v) v) ^ N M
QQ f\ N N ^ M N Q CO R v)At
^
M M N N
Q P ^ M f, O ^ N O CO ^ ^ O v) v) co O M O
Cr P O N M Cl) �O O v) P ^ v) v) Cl) •O O
w P CO v M M P N t` P O w r\ C M Cl) v) IO M O M
m ^ O M ^ N n P Cl) m C) 0p v) v) N Cl) 10 O
m
C) 0'
P 0' R 10 m < Q OD m d 0 v) M O Cl) O
w N 10 v O v) c ^ •O O W O N v) P r` M M •O N
Q rwvwv min) v r) Q m C14 c Mr v) N m
^ N
t\ O Q P O N O n O t\ V O Cl) O V n M O O m
O M �{ Q t� ^ m Cl) R v) ^ M v)
m n O ^ �O ^ OO P m 0 M lO P Cl) OD
'0 O M M n OD Cl) Wv) Cl) v) n O
•O M v) 00 P y N 10 O t" v) O
j ^ ^ ? v) 11 O v) OD � ^ v) O L' < ^ O O
O — v v c0 N Cl) v) N O v) v v) P M •O 00
Z Z
N O M N O 00 •O r\ O M O �O O c0 N O O v
WO O P P f\ O ^ K N Cl) Cl)
^ O V t\ ^ P w 7 M n O P v) v) P
m Q O P P `O O 10 10 m ' 00 O P0 Q M
O ^ Cl) O M O 00 co O P 10 M P v) n N
r V ^ Oct P v1 'O ^ ^ tj O v) ClCD C`•) v) aD
O OD v C14o IN e O v M n
M O M n O O O O N m O ^ M O Q ^ In O
w n O O N � w v) C) O c r\ N 7
N O P P m O aD m M �• n
w 0 M PC
O O v N Q v) O N f` m v)
.i Cl) c CN .p O^ c0 Cl C0 Q N M N
W W N ^ N
N N
v O v) to O O In M O '0 '0 O N P M O N M
N O In v) C\ M v) Q 10 < P M M N
H NO O m v) M f\ N N ^ Q v1
•0 v) n N h CO O N j M N c m Q N Ln
v) P ^ Q �O O 10 N O v) OD P m M
O N M CO M N O CO 00 O OD N P N v
Q00 Q O V v) M Q N �O v) v) b N
P O M CO O ^ CO O O •O V 10 O Cl) O O M v N 0 10 Cl)
N O r\ m N O Cl) N O CO 10 O P O v) v) v
n OR v) N � f\ f\ V N v) N v) O 1l N M v) n
P •0
O 7 O r` P CO 00 10 O 'd n O M CV OD O
M ppn OOV vP
O N cl v) f")
OD
M M N O O OD N M M 2 N n O N
`u t `u
O 30
O O
N V <<WL V� y N C w Z
C W d N U N In C1'
.0 SO w Z W V) Z W j �LLI W Z O L Z W
C r W CL
U w V U w W m m 7 ~ V 1- w U V w m m
Q = Z wO W w Qcc 4
w Z � Ow NOQ !-n w
yw °' Op
U U Z m d w r Q o w F Q Z V a Z m d F = Q = F Q Z
P, U- U � ,Q � Op � Q � Op ¢ gao � � � � 0 ¢ COQ Q
C P J Z N O. N O Z �..• W N O Z F- m _ C J Z d N O Z H N N
pQ� V) U Z n
Z Z_ m _ ^ Z_ w _Z
N 0, Z W m '^ P Z (� U m
�53 � c� m � o w X53 ° c� m w o W
Unrestricted Moneys Available for Note Repayment
Unrestricted Moneys consist of taxes, revenues, and other moneys which are received by the
District for the general fund of the District for the fiscal year 1997/98 and which are generally available
for the payment of current expense and other obligations of the District. The table below gives detail
as to the sources of Unrestricted Moneys and Note Coverage Ratio. See "THE NOTES —Security and
Sources of Payment" herein.
WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT
Estimated Unrestricted Moneys
Available for Note Repayment
Source Amount
Cash Balance, July 1, 1997 12,970,506
Property Tax Receipts 54,088,070
State Revenue Limit Receipts 57,103,886
Other Receipts 60,176,775
Notes 15.000.000
TOTAL UNRESTRICTED MONEYS 199.339.237
PRINCIPAL PLUS INTEREST NEEDED 15,673,125
NOTE COVERAGE RATIO 12.7:1
Source: The District.
District Debt Structure
Tax and Revenue Anticipation Notes — The District issued 1996 Tax and Revenue Anticipation
Notes dated December 12, 1996 due December 11, 1997 in the aggregate principal amount of
$18,000,000 at an interest rate of 4.25° (the "1996 Notes"). The principal amount of the 1996
Notes, together with interest thereon, will be payable from taxes, income, revenue and other moneys
which are received by the District during fiscal year 1996/97 and which are generally available for the
payment of current expenses and other obligations of the District. As of the date of issuance of the
Notes, the District will have set aside Pledged Revenues in the Repayment Fund in the full amount
required to pay the principal of and interest on the 1996 Notes at maturity.
27
Long-Term Debt Summary — Long-term obligations of the District are described further below
and consist of the following as of June 30, 1996:
WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT
Long-term Obligations
Balance Balance
July 1. 1995 Additions Deductions June 30. 1996
Emergency Apportionment Loan $ 27,560,337 $ 0 $ (618,377) $26,941,960
Certificates of Participation 11,140,000 0 (65,000) 11,075,000
Voluntary Integration Program Audit
Exceptions 7,452,000 0 0 7,452,000
Computer Equipment Acquisition Loans 2,459,111 339,255 0 2,798,366
Compensated Absence 0 921,536 0 921,536
Reimbursement Due State and Federal
Funds - Unallowable Audit Costs 600,000 0 (300,000) 300,000
Long-Term Lease Obligations 330.965 0 184.656) 246.309
Total $ 49.542.413 $ 1.260.791 L(1.068_0331 $ 49.735,171
Source: State Controller's Office
Emergency Apportionment Loans — In July 1990, the District obtained an emergency
apportionment loan from the State of California in the amount of $9,525,000. In May of 1991, the
District received an additional loan from the State of California for $19,000,000. The State agreed to
restructure the payment of these loans by consolidating them into a single loan with a 15-year
repayment period as of June 30, 1995 (the "State Loan"). The revised principal and interest payments
of the State Loan are as shown below. The outstanding balance on the consolidated loan is
$26,941,960. See "PRIOR FINANCIAL HISTORY OF THE DISTRICT — Loans From the State of
California" and " —AB 535."
WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT
Payment of State Loan
Year Endina June 30 Amount Due
1997 1,870,443
1998 5,570,443
1999 1,870,443
2000 1,870,443
2001 5,570,443
2002 1,870,443
2003 1,870,443
2004 5,570,443
2005 1,870,443
2006 1,870,443
2007 5.267.705
TOTAL $35.072.130
28
Certificates of Participation—On May 15, 1988, the West Contra Costa Unified School District
Financing Corporation (the "Corporation") issued Certificates of Participation (the "1988 Certificates")
in order to provide additional working capital for the District's continuing operations. The 1988
Certificates were to be repaid solely from the semi-annual lease payments made to the Corporation
under the terms of the lease-purchase agreement between the Corporation and the District.
On July 15, 1991, the District defaulted on its obligation to make payments under the lease-
purchase agreement that secured the 1988 Certificates. In October 1993, the Education Code was
amended to provide for the refunding of the 1988 Certificates by allowing the District to enter into a
lease of its property and use the proceeds of such lease for the purpose of terminating the 1988 lease.
On April 1, 1994, the Corporation issued certificates of participation in the aggregate principal amount
of $11,150,000 for such purpose (the "1994 Certificates"). The trustee, as assignee of the
Corporation, will receive the following base rental payments for the benefit of the owners of the 1994
Certificates:
WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT
Base Rental Payments
Year Endina June 30 rinci al Interest Total
1997 95,000 777,563 872,563
1998 135,000 771,413 906,413
1999 155,000 763,013 918,013
2000 165,000 753,214 918,214
2001 175,000 741,698 916,698
Thereafter 10.350.000 10.829.717 21.179.718
Totals: S 1 1.075.000 $14.636.616 S 25.71 1.616
Source: State Controller's Office
On December 30, 1996, the District issued variable rate demand certificates of participation in
the aggregate principal amount of $2,040,000 to finance modular classrooms for class size reduction
in the District (the "1996 Certificates"). The final maturity of the 1996 Certificates is July 1, 2016.
Interest with respect to the 1996 Certificates is payable quarterly on each January 1, April 1, July 1
and October 1 beginning July 1, 1997. The interest rate will be reset on Wednesday each week by the
remarketing agent to equal the rate that, in the judgement of the remarketing agent, would equal the
interest rate necessary to enable the remarketing agent to sell the 1996 Certificates on that day at one
hundred percent (100%) of the principal amount thereof. Principal on the 1996 Certificates is payable
each July 1, commencing July 1, 1998. Following is a schedule of principal payments of the 1996
Certificates to be made by the District:
29
WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT
Variable Rate Demand Certificates of Participation
Year Ending June 30 Priciwal Payment
1998 $ 70,000
1999 75,000
2000 75,000
2001 80,000
2002 85,000
2003 85,000
2004 90,000
2005 95,000
2006 100,000
2007 105,000
2008 110,000
2009 115,000
2010 120,000
2011 125,000
2012 130,000
2013 135,000
2014 140,000
2015 150,000
2016 155.000
TOTAL $2.040.000
Voluntary Integration Program — The Voluntary Integration Program debt represents cost
disallowances of $7,652,000 based on State audits of program expenditures in fiscal years 1988/89
to 1989/90. Subsequently, the District entered into an agreement with the State to repay this amount
to the Voluntary Integration Program beginning in June of 1993. During the 1992/93 fiscal year, the
original agreement was restructured allowing the District to make the June 30, 1993 payment as
scheduled, with the remaining balance scheduled to be paid over a longer period. Remaining payments
of the Voluntary Integration Program debt are shown below:
WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT
Payment of the Voluntary Integration Program Debt
Year Endina June 30 Annual Payment
1998 $300,000
1999 300,000
2000 300,000
2001 300,000
2002 300,000
2003 300,000
2004 300,000
2005 300,000
2006 300,000
2007 300,000
2008 790,000
2009 790,000
2010 1,000,000
2011 1,000,000
2012 872.000
Total S 7.452.000
30
Computer Equipment Acquisition Loans— During the fiscal year 1989/90, the District financed
the acquisition of an administrative and instructional computer system with a loan from IBM. The loan
is secured by the acquired assets. Subsequent to June 30, 1993, the District restructured the debt
allowing for one payment during fiscal year 1993/94 and the remaining payments in the aggregate
amount of $5,000,000 represented by $2,798,366 of principal and $2,201,634 of interest payable in
fiscal years 2007/08 through 2010/11. The Pooled Money Investment Rate at June 30, 1993, of
4.402 percent, was used to impute the interest costs implicit in the repayment amounts.
As of June 30, 1996, the District's long-term debt obligation to IBM is $2,798,366. Payments
of principal are as follows:
WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT
IBM Contract Payment Schedule
Year Endina June 30 Amount Due
2008 $1,250,000
2009 1,250,000
2010 1,250,000
2011 1.250.000
TOTAL $5.000.000
The restructuring agreement with IBM provides that if, prior to August 16, 2011, the District
receives funding for the specific purpose of paying outstanding debts, the above amounts will be
considered then-due for purposes of that payment, and amounts owing to IBM will be paid to the same
extent as outstanding debts of other creditors.
Reimbursement Due State and Federal Funds - Unallowable Audit Costs — The District's
1989/90 fiscal year Consolidated Application grants were audited by the California Department of
Education to determine whether they were properly allocated and expended. The audit report disclosed
misappropriations of $1,500,000 in restricted Consolidated Application Grant funds. The District
entered into an agreement with the State to pay this amount in five annual payments beginning in June,
1993. The District has one payment remaining of $300,000 in June, 1997.
Long-Term Lease Obligations - The District has various commitments under long-term lease
agreements relating to portable classrooms, buildings and other equipment. These lease agreements
have varying terms, conditions and interest rates. The District leases equipment under agreements
which provide for title to pass upon expiration of the lease period. Future minimum lease payments are
as follows:
WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT
Future Minimum Lease Payments
Year Endina June 30 Lease Payment
1997 107,537
1998 99,439
1999 96.740
Total: $303,720
Less Amount Representing Interest (57,411)
(Present Value of Net Minimum Lease Payments) $246.309
The District will receive no sublease rental nor pay any contingent rentals for this equipment.
Source: State Controller's Office
31
Plan of Payment of the State Loan
Pursuant to a resolution adopted by the District in June 1993, the District transfers $1,500,000
per year from its general fund to a special sinking fund held by the District with the Treasurer, to be
used only for payment of the State Loan (the "State Loan Fund"). In addition, the District intends to
sell surplus property owned by the District, as permitted under AB 535, to fund the State Loan Fund.
Interest earned in the State Loan Fund also is applied to State Loan payments. See "PRIOR FINANCIAL
HISTORY OF THE DISTRICT" for further discussion of the State Loan and AB 535.
The District has sold eight surplus properties for $7.369 million. The District owns
approximately nine properties designated as surplus, which the District estimates have a total market
value of approximately $10.45 million. The District plans to sell surplus properties at a sufficient pace
that annual transfers from the District's general fund of $1,500,000 plus surplus property sale
proceeds, plus State Loan Fund interest earnings, will entirely fund the scheduled State Loan payments,
including payments of $5,570,443 in fiscal years 1997/98, 2000/01 and 2003/04, and $5,267,705
in 2006/07 (see "District Debt Structure"), without any additional transfers or payments from any other
District fund. If it is not possible to sell surplus properties in a timely manner sufficient to generate
revenue in the State Loan Fund to fund State Loan payments as scheduled, the District can elect to
make additional transfers from the general fund or other District funds to the extent that there are
moneys available for such purpose in such funds, or request postponement of principal payments on
the State Loan as permitted under AB 404. Otherwise, pursuant to AB 535, the State will reduce the
amount of the next available payment that would be made as a State apportionment by the amount
necessary to fund the scheduled State Loan payment. See "PRIOR FINANCIAL HISTORY OF THE
DISTRICT" for further discussion of AB 404 and AB 535.
Statement of Direct and Overlapping Debt
Set forth below is a direct and overlapping debt report (the "Debt Report") dated July 1, 1997
prepared by California Municipal Statistics, Inc. The Debt Report is included for general information
purposes only. The District has not reviewed the Debt Report for completeness or accuracy and makes
no representations in connection therewith.
The Debt Report generally includes long term obligations sold in the public credit markets by
public agencies whose boundaries overlap the boundaries of the District in whole or in part. Such long
term obligations generally are not payable from revenues of the District (except as indicated) nor are
they necessarily obligations secured by land within the District. In many cases long term obligations
issued by a public agency are payable only from the general fund or other revenues of such public
agency.
32
WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT
Statement of Direct and Overlapping Debt
1996/97 Assessed Valuation: $10,265,943,197 (after deducting $1,826,903,857 redevelopment incremental valuation)
DIRECT AND OVERLAPPING BONDED DEBT: % Applicable Debt 7/1/9Z
San Francisco Bay Area Rapid Transit District 5.372% $4,555,456
East Bay Municipal Utility District 13.957 1,227,518
East Bay Municipal Utility District, Special District No. 1 5.932 2,792,489
City of Hercules 91.383 1,430,144
West Contra Costa Sanitary District 100. 600,000
East Bay Regional Park District 7.731 11,971,840
City and County 1915 Act Bonds 100. 71.359.528
TOTAL GROSS OVERLAPPING TAX AND ASSESSMENT DEBT $93,936,975
Less: East Bay Municipal Utility District (100% self-supporting) 1,227,518
East Bay Municipal Utility District, Special District No. 1 (100%self supporting) 2.792.489
TOTAL NET OVERLAPPING TAX AND ASSESSMENT DEBT $89,916,968
DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT:
Contra Costa County General Fund Obligations 16.782% $47,956,411
Contra Costa County Pension Obligations 16.782 55,147,330
Contra Costa County Board of Education Certificates of Participation 16.782 684,706
Contra Costa County Mosquito Abatement District Certificates of Participation 16.782 346,548
Alameda-Contra Costa Transit District Certificates of Participation 11,983 3,103,597
Contra Costa Community College District Certificates of Participation 16.793 264,490
West Contra Costa Unified School District Certificates of Participation 100. 12,955,000"'
City of Hercules Certificates of Participation 91.383 5,798,251
City of Richmond General Fund Obligations 100. 30.390.958
TOTAL DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT $156,647,291
GROSS COMBINED TOTAL DEBT $250,584,266''
NET COMBINED TOTAL DEBT $246,564,259
Excludes tax and revenue anticipation notes.
IZ' Excludes tax and revenue anticipation notes, revenue, mortgage revenue and tax allocation bonds and non-bonded
capital lease obligations.
Ratios to 1996/97 Assessed Valuation:
Total Gross Overlapping Tax and Assessment Debt . . . . . . . . . . . . . . . . . 0.78%
Total Net Overlapping Tax and Assessment Debt . . . . . . . . . . . . . . . . . . 0.74%
Ratios of Adjusted Assessed Valuation:
Combined Direct Debt ($12,995,000) 0.13%
Gross Combined Total Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.44%
Net Combined Total Debt . . . . . . . . . . . . . . . . . . . . . . . . . : . . . . . . . . 2.40%
STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/96: $0
Source: California Municipal Statistics, Inc.
COUNTY INVESTMENT POLICIES AND PRACTICES
In accordance with Education Code Section 41001, the District maintains substantially all of
its cash in the Contra Costa County Treasury Investment Pool (the "County Pool"). The County pools
the District's funds with those of other districts in the County for investment purposes. Pooled funds
in the County Pool are carried at cost which approximates market value.
33
The following information provides a general description of the County's investment policy,
current portfolio holdings, and valuation procedures. For the most part, the information has been
adapted from material prepared by the County for use as disclosure information on securities issues.
The information has been obtained from sources which are believed to be reliable but is not guaranteed
as to accuracy or completeness, nor has such information been audited by the District nor its financial
advisor. Further information may be obtained directly from the Treasurer..
State law requires that substantially all operating moneys of the County, school and community
college districts operating within the County, and certain special districts operating in the County be
held in the County Pool by the Treasurer. The Treasurer has authority to implement and oversee the
investment of such funds in the County Pool in accordance with State Government Code Section 53600
et seq. The Treasurer accepts funds only from agencies located within the County. The moneys on
deposit are predominantly derived from local government revenues consisting of property taxes, State
and federal funding and other fees and charges, There are 37 participants in the County Pool, the
largest being the County itself. As of March 31, 1997, the cost value of the County Pool was
$1,073,295,657 and the market value was $1,070,855,796.
As of March 31, 1997, the County Pool had 51.00% of its assets invested in cash, U.S.
Treasury, and U.S. Agency Securities, 40.14% of its assets invested in other money market
instruments (including bankers acceptances, certificates of deposit, commercial paper, repurchase
agreements, and time deposits), and 8.86% of its assets invested in structured notes or funds managed
by outside contractors. The following table summarizes the composition of the County Pool as of
March 31, 1997.
CONTRA COSTA COUNTY TREASURY INVESTMENT POOL
PORTFOLIO COMPOSITION
(As of March 31, 1997)
Percent of Total
Tyne of Investment Cost Value Market Value (Cost Value)
U. S.Treasury Securities and Cash $ 210,246,794.00 S 209,484,704.00 19.60°
U. S. Agency Securities 337,036,080.00 336,860,444.00 31.40
Money Market Instruments 430,854,889.00 430,677,073.00 40.14
Structured Notes 35,000,000.00 33,530,000.00 3.26
Other 60,157.893.00 60.303.574.00 5_6
TOTAL $1,073,295.657.00 $1.070.855,796.00 100.000/2
As of March 31, 1997, the County Pool had an average maturity of 175 days with 81.61% of
its assets invested in securities maturing in less than one year, 14.02% in securities maturing in one
to two years, 1.81% in securities maturing in two to three years, and 2.56% in securities maturing in
more than three years. The following table summarizes the portfolio liquidity of the County Pool as of
March 31, 1997.
34
CONTRA COSTA COUNTY TREASURY INVESTMENT POOL
PORTFOLIO LIQUIDITY
(As of March 31, 1997)
Percent of
Term of Maturity Cost Value (Cost Value)
Less than 1 year $875,968,597 81.61%
1 year to 2 years 150,455,188 14.02%
2 years to 3 years 19,440,315 1.81%
3 years to 4 years 24,033,925 2.24%
4 years to 5 years 1,248,095 0.12%
Greater than 5 years 2.149.537 0.20%
TOTAL $1.073.295.657 100.0001
The County reports that none of the County Pool investments consists of leveraged funds. The
County holds derivatives that are U.S. Treasury Strips that are targeted for debt service. The County
reports that it is current practice for the County Treasurer to mark the portfolio to market on a monthly
basis. Such evaluations are performed by the County. The County reports that it follows a "buy and
hold" investment strategy and was not required to liquidate securities at a loss to meet disbursement
requirements of the County Pool participants during the past fiscal year. The County reports that it
expects the County Pool will have sufficient liquid funds to meet the disbursement requirements of its
participants through the next six months.
PRIOR FINANCIAL HISTORY OF THE DISTRICT
General
The District experienced substantial financial difficulties beginning in 1986. These difficulties
resulted in, among other things, the District filing for bankruptcy in April 1991 and failing to pay certain
lease payments on the District's $9,800,000 original aggregate principal amount of Certificates of
Participation (1988 Financing Project) (the "1988 Certificates"). Since that time, all new Board of
Education members have been elected and the Superintendent and certain other administrative officers
of the District have been replaced, the District has implemented measures to improve its financial
condition, has borrowed substantial amounts of money from the State and has cured the defaults with
respect to, and defeased to maturity, the 1988 Certificates. No assurance can be given with respect
to the future financial condition of the District.
Financial Difficulties
The District's financial difficulties resulted in part from an accumulation of several years of
deficit spending, which began in fiscal year 1983/84. In 1986/87, the District overspent by
$2.6 million. In 1987/88, the District overspent by $4.6 million and accumulated $10.4 million in debt
obligations. These circumstances contributed to the decision of the then-management of the District
to execute and deliver the 1988 Certificates. In 1988/89 State auditors found that the District
misspent $7.7 million in Voluntary Pupil Integration funds provided by the State, increasing the
District's debt obligations by $11.5 million. In 1989/90, the District overspent by $10 million and
added $19.3 million to its debt. In 1990/91, the District overspent by $20 million and added $33.3
35
million to its debt. The District ran out of funds and filed for federal bankruptcy protection in April
1991. These financial difficulties of the District are discussed in greater detail in the following sections.
The 1988 Certificates
The 1988 Certificates were executed and delivered to provide $6,700,000 for deposit into the
District's general fund to correct general fund budget deficits projected for the 1987/88 and 1988/89
fiscal years, as well as to provide $800,000 for a computerized management system and $1,000,000
for the construction of one multipurpose room at three elementary schools. At the time of execution
and delivery of the 1988 Certificates, the District viewed the primary causes of the deficits as increased
expenditures for employee salaries due to an adverse arbitration award and less than anticipated
revenues due to a shortfall in projected student enrollment. At that time, the District was considering
several alternatives to eliminate future deficits, including negotiating a cap on future salary increases,
pursuing joint ventures in connection with the development of surplus property, and reducing staff.
The District failed to make the lease payments due on July 15, 1991 and thereafter with respect
to the 1988 Certificates, causing a default on the 1988 Certificates. Legislation provided for the
refunding of the 1988 Certificates by allowing the District to enter into a lease of its property and use
the proceeds of such lease for the purpose of terminating the 1988 Lease (see "Assembly Bill 536"
below). In April 1994, the District executed and delivered $11,150,000 original aggregate principal
amount Certificates of Participation (1994 Refunding) (the "1994 Refunding Certificates"). The
proceeds from the execution and delivery of the 1994 Refunding Certificates were sufficient to pay the
outstanding principal amount of the 1988 Certificates, including principal payments in default, together
with interest thereon, including interest payments in default, as well as legal expenses, interest and
other costs related to the default. The District has made all payments as due on the 1994 Refunding
Certificates and expects to continue to do so.
Loans From the State of California
The District encountered severe difficulties in attempting to produce a balanced budget for the
1989/90 fiscal year, resulting in a rejection of its proposed budget by the State in April 1990. In the
following month, the District requested an emergency $14 million loan from the State and on June 22,
1990, the governor signed Assembly Bill 171 which authorized a $9.525 million loan. This loan was
only sufficient to fund the District through the end of the 1990/91 fiscal year. The loan legislation
required that a State trustee be appointed to oversee District operations. Other provisions of the
legislation required the District to obtain an audit of its current financial condition, a management review
and a financial recovery plan. See "Management Changes" below.
Notwithstanding the first loan from the State, a budget review by the District administration and
auditors in October 1990 projected a $21 million deficit and resulted in a request to the State for a
second emergency loan. The April 1991 bankruptcy filing by the District (see "Bankruptcy of the
District" below) and decision of the District Board to close the District's schools, together with lawsuits
related to the school closure decision, led to a loan proposal coupled with financial accountability
measures. In May 1991 a superior court approved a second loan from the State to the District in the
amount of $19 million. Conditions to the loan included suspension of the District Board's powers,
establishment of a State appointed administrator of the District with the ability to set wages, benefits
and terms and conditions of employment and to accelerate the collective bargaining process. See
"Management Changes" below.
In June 1993, further legislation was enacted providing that the two loans from the State be
consolidated into one debt. See "Assembly Bill 535" below.
36
Bankruptcy of the District
Beginning in March 1988 the Contra Costa County Office of Education expressed concern over
what it perceived as the District's potential insolvency and reliance on uncertain revenue sources. Two
months after the issuance of the 1988.Certificates, a $125 parcel tax initiative was defeated by voters.
Audits by the State determined in early 1989 that $9 million in Voluntary Pupil Integration Program
funds received by the District had been inappropriately spent in fiscal years 1988/89 and 1989/90, and
in July 1989 the District added $8.75 million to its debt by signing a contract with IBM for instructional
and business systems. These occurrences, among others, caused the rejection of the District's
proposed 1989/90 budget by the State. Under State law, such a rejection mandated the establishment
of a three-member State budget review committee to resolve the District's budget issues. In February
1990 the budget review committee, in a preliminary report, concluded that the District would end
1989/90 with a $6.4 million deficit which would increase to a $15 million deficit in 1990/91. The
budget committee's efforts resulted in the rejection of the District's budget by the State in April 1990
and the subsequent District request for an emergency $14 million loan from the State. See "Loans
From the State of California" above. As to the budget process generally for school districts in
California, see "GENERAL SCHOOL DISTRICT FINANCIAL INFORMATION—Budget Process" herein.
A budget review by the District administration and auditors in October 1990 projected a
$21 million deficit and led to a request to the State for a second emergency loan. Officials of the State
resisted loan legislation, and in April 1991 the District Board voted to proceed with a Chapter 9
bankruptcy filing, which occurred on April 18, 1991. Six days later, the board agreed to close schools
effective April 1991. The school closure decision immediately generated lawsuits, one filed by
concerned parents of students in the special education program asking that the program remain open,
one by the California Teacher's Association alleging that the State allocates less money per student to
those in the District over other similar districts, and a third by concerned parents alleging that their
children were not being afforded a free and equal education as guaranteed by the California
Constitution. Legal activity with respect to these lawsuits contributed to the decision of the State to
provide a second loan to the District in the amount of $19 million.
Dr. Fred Stewart, as the State-appointed trustee of the District, developed a balanced 1991/92
budget by providing for $30 million in budget reductions, primarily through the layoff of 450 certified
and 40 classified positions, the elimination of 40 administrative positions and a 9% salary reduction.
The Contra Costa County Office of Education chose not to act on this budget, however, in part because
the budget did not provide for payment of the 1988 Certificates or for the obligations of the District
under the IBM contract.
The District withdrew from bankruptcy in November of 1991 upon determining that operation
of the District while remaining under the bankruptcy proceeding did not result in economic advantages
to the District.
Assembly Bill 535
Assembly Bill 535 ("AB 535") was signed by the Governor of the State on June 30, 1993. This
legislation created the State Loan by providing that the loans of $9,525,000 and $19,000,000 made
to the District in 1991 be consolidated into one outstanding debt, with an outstanding balance of
$30,313,895 as of September 1, 1993. See "Loans From the State of California" above. AB 535
provided for a 15-year payment schedule for the State Loan with an interest rate of 4.543° per annum.
Payments on the loan are due on February 1 of each year with a final payment due February 1, 2007
(see "District Debt Structure" herein). In the event payment is not made within 60 days after the
scheduled payment date, AB 535 provides that the State Controller will pay the defaulted payment by
withholding that amount from the next available payment that would otherwise be made to the District
as a State apportionment (see "GENERAL SCHOOL DISTRICT FINANCIAL INFORMATION — State
Funding of Education"). AB 535 additionally provides that proceeds from the sale of surplus property
owned by the District may be used to generate money to pay the State Loan.
37
Under AB 535, monies sufficient to pay the District's payment obligations under the State Loan
as they become due are a superior claim on the District's State apportionment and may reduce the
amount of State apportionment moneys available for the AB 536 Intercept (see "AB 536" below) or
for the Notes.
Assembly Bill 536
On October 1, 1993, the Governor of the State signed Assembly Bill 536 ("AB 536"). This
legislation provided for the refunding of the 1988 Certificates by allowing the District to enter into a
lease of its property and use the proceeds of such lease for the purpose of terminating the lease on the
1988 Certificates. AB 536 also established an intercept program with the State (the "AB 536
Intercept") wherein the trustee of the 1994 Refunding Certificates may notify the State Controller that
one or more of the lease payments due under the lease related to the 1994 Refunding Certificates (the
"Base Rental Payments") has not been paid. Upon such notification by April 1 for Base Rental Payments
due July 1 and by October 1 for Base Rental Payments due January 1, the State Controller will pay to
the Trustee from the District's next available State apportionment entitlement the defaulted rental
payment no later than on its respective due date. The payment by the State Controller may not exceed
the amount of any apportionment entitlement of the District to moneys in the State School Fund, less
any payments required in that fiscal year to pay any State loans made to the District (including the State
Loan). The State Controller will withhold the amount of any payment made under AB 536, which will
include reimbursement of the State Controller's administrative costs as determined under a schedule
approved by the California Debt Advisory Commission, from the next available payment that would
otherwise be made by the State to the District as a State apportionment from the State School Fund.
The AB 536 Intercept is only available to pay defaulted Base Rental Payments which the District
is legally obligated to pay and therefore does not apply to Base Rental Payments which have been
abated or are otherwise not payable under the terms of the Lease Agreement of the 1994 Refunding
Certificates or under applicable laws, or to any other obligations of the District, including the Notes.
Moneys available to pay Base Rental Payments under the AB 536 Intercept do not constitute a
guarantee by the State. The AB 536 Intercept provides a method whereby monies otherwise payable
to the District as its State apportionment may be diverted to the Trustee to pay Base Rental Payments
and the availability of the AB 536 Intercept is limited to the amount available to the District as a State
apportionment at the time the Trustee of the 1994 Refunding Certificates requests money under the
AB 536 intercept program. As to apportionments generally, see "GENERAL SCHOOL DISTRICT
FINANCIAL INFORMATION —State Funding of Education" herein.
Assembly Bill 404
On October 2, 1995, the Governor of the State signed Assembly Bill 404 ("AB 404"). This
legislation authorized the Director of the State Department of Finance, upon request of the State
Superintendent of Public Instruction, to amend the payment schedule and defer principal on the State
Loan if the Director concludes that such amendment is warranted in the best interests of both the State
and the District's education program. Upon that determination, the Director must notify the Joint
Legislative Budget Committee of the proposed change. If the Joint Legislative Budget Committee does
not act to block the change within 90 days, the payment schedule for the State Loan is so amended.
Any amendment of the payment schedule would defer payment to the earliest fiscal year in which no
other payment is scheduled. Interest continues to accrue on the unpaid portion. If the payment
schedule is amended, the District is required to apply all proceeds from surplus properties sold towards
prepayment of the State Loan.
38
Management Changes
As a condition of the $9.525 million first State loan, a State trustee was appointed to oversee
District operations with the power to stay or rescind any action of the District Board which might have
an adverse effect on the financial condition of the District. On July 1, 1990, Dr. Fred Stewart was
named as the State trustee. Soon thereafter Walter Marks resigned as Superintendent of the District,
a position held by him since July 1987. Conditions of the second State loan included suspension of
the District Board's powers, establishment of a State appointed administrator of the District with the
ability to set wages, benefits and terms and conditions of employment and requirements to accelerate
the collective bargaining process. The powers and duties of the District Board were suspended
effective May 3, 1991 and the State appointed Dr. Fred Stewart as the District Administrator.
Upon withdrawal of the District from bankruptcy in November 1991, the search for a
superintendent commenced, leading to the hiring of Dr. Herbert Cole for that position'in April 1992.
Dr. Fred Stewart remains as State trustee for the District. A State trustee will remain with the power
to stay or rescind any action of the District Board which might have an adverse effect on the financial
condition of the District until the State Loan has been paid.
The Five-Year Plan
Under legislation providing for the first State loan to the District (described in "Loans From the
State of California" above) the District was required to produce a financial recovery plan, resulting in
the adoption of the Five-Year Plan by the District Board in February 1992. The Five-Year Plan includes
the following major components: (a) an agreement to develop a balanced budget for 1992/93; (b) an
agreement to update the Five-Year Plan on an annual basis; and (c) an agreement to develop a
comprehensive Education Plan (as described in the Five-Year Plan) consistent with the approved Five-
Year Plan.
ECONOMIC PROFILE
Introduction
The District is located in western Contra Costa County. Cites within the District include El
Cerrito, Hercules, Pinole, Richmond and San Pablo; also, within the District are certain unincorporated
areas, including the communities of EI Sobrante and Kensington. The County is situated northeast of
San Francisco, bounded by San Francisco and San Pablo bays to the west and north, the Sacramento
River delta to the north, San Joaquin County to the east, and by Alameda County on the south. Ranges
of hills effectively divide the County into three distinct regions. The western portion, with its access
to water, contains much of the County's heavy industry. The central section is rapidly developing from
a suburban area into a major commercial and financial headquarters center. The eastern part of the
County is also undergoing substantial change, from a rural, agricultural area to a suburban region. The
County has extensive and varied transportation facilities — ports accessible to ocean-going vessels,
railroads, freeways, and rapid transit lines connecting the area with Alameda County and San Francisco.
These advantages, combined with a mild climate and available land, make Contra Costa County
attractive for industrial and residential development.
39
Population
CONTRA COSTA COUNTY
Population
Year Contra Costa County City of EI Cerrito City of Hercules City of Pinole City of Richmond City of San Pablo
1970 555,805 25,190 252 13,266 79,043 21,461
1980 656,380 22,731 5,963 14,253 74,676 19,750
1990 803,732 22,850 16,829 17,460 87,425 25,158
1991"' 815,700 22,900 17,500 17,850 87,600 26,650
1992"' 829,200 22,800 17,950 17,900 90,200 26,150
1993'" 843,700 23,100 18,350 17,900 90,900 25,750
1994"' 856,000 22,250 18,600 18,050 91,300 25,800
199511' 863,300 23,250 18,600 18,100 90,900 26,000
1996"' 870,000 23,250 18,800 18,100 90,900 25,950
As of January 1 of each year. Revised in 1996.
Source: U.S.Bureau of Census for 1970-1990 figures. State Department of Finance, Demographic Research Unit, for 1991-
1996 figures.
Employment
_ The following table summarizes historical employment and unemployment in Contra Costa
County.
CONTRA COSTA COUNTY
Civilian Labor Force, Employment and Unemployment
Annual Averages
1992 1993 1994 1995 1996
Civilian Labor Force"'
Employment 421,300 419,400 425,600 426,000 435,500
Unemployment 29.000 29.100 28.000 26,100 22.600
Total 450,300 448,500 453,600 452,100 458,100
Unemployment Ratejz' 6.5% 6.5% 6.2% 5.8% 4.9%
Notes-
(1) Based on place of residence; based on a March 1996 benchmark.
12' The unemployment rate is calculated using unrounded data.
Source: California Employment Development Department, Labor Market Information Division
40
The following table summarizes the historical numbers of workers in the Oakland Metropolitan
Statistical Area (MSA), which includes Alameda and Contra Costa Counties by industry.
OAKLAND IMSA
Estimated Number of Wage and Salary Workers by Industry
1992 1993 1994 1995 1996
Agricultural 2,500 2,700 2,500 2,200 2,200
Mining &Construction 44,000 44,000 43,500 45,300 48,500
Manufacturing 109,100 102,700 102,300 106,300 113,700
Transportation & Public Utilities 54,800 56,800 57,300 58,900 58,900
Wholesale Trade 52,600 51,100 51,700 53,700 55,700
Retail Trade 152,000 152,800 151,800 151,700 152,900
Finance, Insurance & Real Estate 57,800 58,700 56,500 53,400 51,800
Services 230,000 237,800 244,400 256,500 266,200
Government 169.800 169.600 169,900 0 00061 8.100
Total All Industries 9Z2 700 876.100B2L800 897.800 =_0_00
Note: Does not include proprietors, self-employed, unpaid volunteers or family workers, domestic workers in households,
and persons involved in labor/management trade disputes. Employment reported by place of work. Items may not
add to totals due to independent rounding. March 1996 benchmark.
Source: California Employment Development Department
41
Largest Employers
The following table summarizes the largest employers in Contra Costa County.
CONTRA COSTA COUNTY
Largest Employers
Employer Product/Service Number of Employees
Contra Costa County County Government 6,855
Chevron Corporation Petroleum Products 5,150
Mt. Diablo Unified School District Education 5,000
John Muir Medical Center Health Care 2,100
Kaiser Permanente Health Care 1,600
Bio-Rad Laboratories Chemical Products Manufacturing 1,300
Lesher Communications, Inc. Newspaper Publishing 1,150
Diablo Valley College Education 1,100
Shell Oil Products Company Petroleum Products 1,000
Mt. Diablo Medical Center Health Care 1,000
Ygnacio/Positions Clinical Lab Clinical Testing 1,000
Contra Costa Community College District Education 1,000
USS-POSCO Industries Sheet Steel Processing 990
Nortel Communications Systems, Inc. Telecommunications 925
Pacific Gas & Electric Utilities 925
California & Hawaiian Sugar Sugar Cane Refineries 900
Pittsburg Unified School District Education 850
Taylor Made Office Systems, Inc. Office Equipment Distributor 850
Merrithew Memorial Hospital Health Care 800
Safeway, Inc. Groceries 750
Sources: "1996 Alameda County Commerce&Industry Directory,"Oakland Chamber of Commerce.
Commercial Activity
The following table summarizes historical taxable transactions in Contra Costa County.
CONTRA COSTA COUNTY
Taxable Transactions
(Dollars in Thousands)
Year Outlets Taxable Transactions
1991 23,093 $7,360,566
1992 23,868 7,565,171
1993 23,781 7,476,420
1994 24,034 7,818,165
1995 24,755 8,339,755
First two quarter of 1995 taxable transactions were $3,964,572.
First two quarter of 1996 taxable transactions were $4,037,340.
Source: State Board of Equalization.
42
WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT
.Taxable Transactions for Cities in the District"'-All Outlets
(In Thousands of Dollars)
Citv 1990 1991 1992 1993 1994 1995
EI Cerrito $173,012 $158,040 $165,139 $172,481 $174,727 $185,434
Hercules 26,293 29,478 42,704 41,026 42,210 44,499
Pinole 125,057 129,365 130,057 125,947 126,652 143,454
Richmond 778,008 737,520 740,439 696,905 725,405 760,107
San Pablo 165,295 169,584 173,658 151,699 138,251 122,359
Excludes taxable transactions occurring in unincorporated territory within the District.
Source: State Board of Equalization.
Median Household Income
Effective Buying Income (EBI) is defined as personal income (for 1995 and prior years) or money
income (for 1996) less personal income tax and non-tax payments, such as fines, fees or penalties.
Median household EBI for the County is shown in the table below.
CONTRA COSTA COUNTY
Median Household Effective Buying Income
1992 - 1996
Year... Contra Costa County
1992 $ 46,184
1993 47,305
1994 49,295
1995 51,814
1996'' 45,119
As of January 1.
121 1996 EBI not directly comparable to prior years due to change in definition of EBI.
Source: "Survey of Buying Power,"Sales and Marketing Management Magazine.
43
Building Activity
Shown below is a history of building activity in the County:
CONTRA COSTA COUNTY
Building Permit Valuation
(In Thousands of Dollars)
Year Residential Permits Residential Valuation Total Valuation
1991 3,980 $488,939 $685,104
1992 3,893 638,714 845,812
1993 4,355 588,625 770,293
1994 3,912 699,395 865,555
1995 3,366 598,346 788,789
1996 3,530 580,506 N/A
Source: "California Building Permit Activity,"Economic Sciences Corporation.
WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT
Building Permit Valuation for Cities in the District"'
0 996 —In Thousands of Dollars)
Citv Residential Units Residential Valuation
El Cerrito 4 $ 1,003
Hercules 20 4,268
Pinole 6 1,047
Richmond 127 15,580
San Pablo 60 5,339
'°' Excludes building permit valuation for unincorporated territory within the District.
Source: "California Building Permit Activity," Economic Sciences Corporation.
LEGAL MATTERS
Tax Matters
In the opinion of Jones Hall Hill & White, A Professional Law Corporation, San Francisco,
California, Bond Counsel, subject, however to the qualifications set forth below, under existing law, the
interest on the of Notes is excluded from gross income for federal income tax purposes and such
interest is not an item of tax preference for purposes of the federal alternative minimum tax imposed
on individuals and corporations, provided, however, that, for the purpose of computing the alternative
minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is
taken into account in determining certain income and earnings.
The opinions set forth in the preceding paragraph are subject to the condition that the District
complies with all requirements of the Internal Revenue Code of 1986 (the "Code") that must be satisfied
subsequent to the issuance of the Notes in order that such interest be, or continue to be, excluded from
44
gross income for federal income tax purposes. The District has covenanted to comply with each such
requirements. Failure to comply with certain of such requirements may cause the inclusion of such
interest in gross income for federal income tax purposes-to be retroactive to the date of issuance of the
Notes.
Purchasers should be aware that the Internal Revenue Service has issued Notice 94-84 which
may have certain tax ramifications with respect to the Notes. This Notice provides generally that, in
the case of short-term tax-exempt obligations (such as the Notes), the Service is studying whether
interest payable at maturity on the obligations should, or should not, be included in stated redemption
price at maturity, for purposes of the rule that original issue discount represents the excess of stated
redemption price at maturity over issue price.
Notice 94-84 states that until the Internal Revenue Service provides further guidance, taxpayers
may treat stated interest on certain short-term obligations, such as the Notes, either as includable in
stated redemption price at maturity or as not included in stated redemption price at maturity. A
taxpayer, however, must treat stated interest payable at maturity on all short-term tax-exempt bonds
in a consistent manner. A short-term tax-exempt bond is defined as a tax-exempt bond with a term
that is not more than 1 year from the date of issue.
Purchasers of the Notes are cautioned that the opinion of Bond Counsel does not identify the
amount of interest that is excluded from gross income for federal income tax purposes.
Purchasers of the Notes should consult their tax advisors regarding effects of Notice 94-84
upon individual tax circumstances.
In the further opinion of Bond Counsel, interest on the Notes is exempt from California personal
income taxes.
Owners of the Notes should also be aware that the ownership or disposition of, or the accrual
or receipt of interest on, the Notes may have federal or state tax consequences other than as described
above, Bond Counsel expresses no opinion regarding any federal or state tax consequences arising with
respect to the Notes other than as expressly described above.
A copy of the proposed form of opinion of Bond Counsel is attached hereto as "APPENDIX A".
Legality for Investment in California
Under the provisions of the Financial Code of the State, the Notes are legal investments for
commercial banks in the State to the extent that the Notes, in the informed opinion of the bank, are
prudent for the investment funds of its depositors, and under provisions of the Government Code of
the State are eligible to secure deposits of public moneys in the State.
No Litigation
No litigation is pending or threatened against the District concerning the validity of the Notes
and a certificate of the District to that effect will be available at the time of original delivery of the
Notes. The District is not aware of any litigation pending or threatened questioning the political
existence of the District or contesting the District's ability, to levy and collect ad valorem taxes, or to
collect other revenues, or contesting its ability to issue and retire the Notes.
There are a number of lawsuits and claims pending against the District. The aggregate amount
of the uninsured liabilities of the District, and the timing of any anticipated payments of judgments
which may result from suits and claims will not materially affect the finances of the District or impair
their ability to repay the Notes. A certificate of the District to this effect will be available at the time
of original delivery of the Notes.
45
Legal Opinion
The opinion of Jones Hall Hill & White, A Professional Law Corporation, San Francisco,
California, Bond Counsel to the District with respect to the Notes, approving the validity of the Notes
and stating that, in the opinion of Bond Counsel, interest on the Notes is excluded from gross income
for federal income tax purposes and is exempt from personal income taxation by the State will be
provided free of charge to the purchasers at the time of the original delivery of the Notes.
MISCELLANEOUS
Ratings
Standard & Poor's has assigned its municipal note rating of " " to the Notes. Moody's
Investors Service has assigned its municipal note rating of " " to the Notes. The ratings issued
reflect only the views of such rating agencies, and any explanation of the significance of such ratings
should be obtained from such rating agencies at the following addresses: Standard & Poor's, 25
Broadway, New York, NY 10004; Moody's Investors Service, 99 Church Street, New York, New
York 10007.
Generally, a rating agency bases its rating on the information and materials furnished to it, and
on investigations, studies, and assumptions of its own. There is no assurance that a rating assigned
will continue for any given period of time or that a rating will not be revised downward or withdrawn
entirely by a rating agency if, in the judgment of the rating agency, circumstances so warrant. Any
such downward revision or withdrawal of a rating obtained may have an adverse effect on the market
price of the Notes.
Underwriting
The Notes are being purchased for reoffering to the public by (the
"Underwriter") pursuant to the terms of a purchase contract dated 1997 between the
County, acting on behalf of the District, and the Underwriter (the "Purchase Contract") at a purchase
price of $ . The Purchase Contract obligates the Underwriter to purchase all of the Notes
if any are purchased. The Underwriter may offer and sell the Notes to certain dealers and others at
prices lower than the public offering price shown on the cover page hereof. The offering price may be
changed from time to time by the Underwriter.
Additional Information
The purpose of this Official Statement is to supply information in connection with the sale of
the Notes. Quotations from and summaries and explanations of the Notes, the Resolution, and the
constitutional provisions, statutes, and other documents contained herein do not purport to be
complete, and reference is hereby made to said Notes, Resolution, constitutional provisions, statutes,
and other documents for full and complete statements of their provisions.
46
All data contained herein have been taken or constructed from the District's records and other
sources. The appropriate District official acting in his or her official capacity, has reviewed this Official
Statement and has determined that, as of the date hereof, the information contained herein is, to the
best of his or her knowledge and belief, true and correct in all material respects and does not contain
an untrue statement of a material fact or omit to state a material fact necessary in order to make the
statements made, in light of the circumstances under which they were made, not misleading. The
appropriate official of the District will execute a certificate to this effect upon delivery of the Notes.
This Official Statement and its distribution have been duly authorized and approved by the District.
WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT
By:
Superintendent
47
NONE S HALL HILL & WHITE,
A PROFESSIONAL LAN' CORPORATION
ATTORNEYS AT LAW
CHARLES F.ADAMS FOUR EMBARCADERO CENTER
STEPHEN R.CASALEGGIO APPENDIX A NINETEENTH FLOOR
THoMAS A.DOWNEY SAN FRANCISCO,CA 94111
ANDREW C.HALL.JR. (415)391-5780
COURTNEY L.JONES
FACSIMILE
CHRISTOPHER K.LYNCH
(415)391-5784
WILLIAM H.MADISON
DAVID J.OSTER KENNETH L JONES
DAVID A.WALTON
OF COUNSEL
SHARON STANTON WHITE
[Closing Date] ROBERT J.HILL(1922-1988)
HOMEPAGE:http://wv w.ihhw.com
Board of Education
West Contra Costa Unified School District
1108 Bissell Avenue
Richmond, California 94801-3135
OPINION: $ West Contra Costa Unified School District (Contra Costa
County, California) 1997/98 Tax and Revenue Anticipation Notes
Members of the Board of Education:
We have acted as bond counsel to the West Contra Costa Unified School District (the
"District") in connection with the issuance by the Board of Supervisors of Contra Costa County
(the "Board") of $ principal amount of West Contra Costa Unified School
District (Contra Costa County, California) 1997/98 Tax and Revenue Anticipation Notes, (the
"Notes"), pursuant to Article 7.6 (commencing with section 53850), Chapter 4, Part 1, Division
2, Title 5 of the California Government Code, and a resolution of the Board adopted on May
13, 1997 (the "Resolution"). We have examined the law and such certified proceedings and
other papers as we deemed necessary to render this opinion.
As to questions of fact material to our opinion, we have relied upon representations of
the Board contained in the Resolution and in the certified proceedings and certifications of
public officials and others furnished to us, without undertaking to verify such facts by
independent investigation.
Based upon our examination, we are of the opinion, as of the date hereof, that:
1. The District is duly created and validly existing as a unified school district with the
power to cause the Board to issue the Notes in its name and to perform its obligations under the
Resolution and the Notes.
2. The Resolution has been duly adopted by the Board and creates a valid first lien on
the funds pledged under the Resolution for the security of the Notes.
3. The Notes have been duly authorized, issued and delivered by the Board and are
valid and binding general obligations of the District enforceable in accordance with their terms.
A-1
West Contra Costa Unified School District
[Closing Date]
Page 2
4. The interest on the Notes is excluded from gross income for federal income tax
purposes and is not an item of tax preference for purposes of the federal alternative minimum
tax imposed on individuals and corporations; it should be noted, however, that, for the
purpose of computing the alternative minimum tax imposed on corporations (as defined for
federal income tax purposes), such interest is taken into account in determining certain income
and earnings. The opinions set forth in the preceding sentences are subject to the condition that
the District comply with all requirements of the Code that must be satisfied subsequent to the
issuance of the Notes in order that interest thereon be, or continue to be, excluded from gross
income for federal income tax purposes. The District has covenanted to comply with each such
requirement. Failure to comply with certain of such .requirements may cause the inclusion of
interest on the Notes in gross income for federal income tax purposes to be retroactive to the
date of issuance of the Notes. We express no opinion regarding other federal tax consequences
arising with respect to the Notes.
5. The interest on the Notes is exempt from personal income taxation imposed by the
State of California.
The rights of the owners of the Notes and the enforceability thereof may be subject to
bankruptcy, insolvency, moratorium and other similar laws affecting creditors' rights heretofore
or hereafter enacted and their enforcement may be subject to the exercise of judicial discretion in
accordance with general principles of equity.
Respectfully submitted,
/ones Hall Hill & White,
A Professional Law Corporation
A-2
APPENDIX B
CONTINUING DISCLOSURE CERTIFICATE
This CONTINUING DISCLOSURE CERTIFICATE (the "Disclosure Certificate") is
executed and delivered by the WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT (the
"District") in connection with the issuance of $ West Contra Costa Unified School
District (Contra Costa County, California) 1997/98 Tax and Revenue Anticipation Notes (the
"Notes"). The Notes are being issued pursuant to a resolution of the District, adopted on May
7, 1997, and by a resolution of the Board of Supervisors of Contra Costa County, adopted on
May 13, 1997 (collectively, the "Resolution"). The District covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being
executed and delivered by the District for the benefit of the holders and beneficial owners of the
Notes and in order to assist the Participating Underwriters in complying with S.E.C. Rule 15c2-
12(b)(5).
Section 2. Definitions. In addition to the definitions set forth in the Resolution, which
apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in
this Section 2, the following capitalized terms shall have the following meanings:
"Dissemination Agent" shall mean the District, or any successor Dissemination Agent
designated in writing by the District and which has filed with the District a written acceptance
of such designation.
"Listed Events" shall mean any of the events listed in Section 3(a) of this Disclosure
Certificate.
"Participating Underwriter" shall mean any of the original underwriters of the Notes
required to comply with the Rule in connection with offering of the Notes.
"Repository" shall mean any public or private repository or entity designated by the
State of California as a state repository for the purpose of the Rule and recognized as such by
the Securities and Exchange Commission. As of the date of this Disclosure Certificate, there is
no State Repository.
"Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange
Commission under the Securities Exchange Act of 1934,as the same may be amended from time
to time.
Section 3. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 3, the District shall give, or cause to be
given, notice of the occurrence of any of the following events with respect to the Notes, if
material:
(i) Principal and interest payment delinquencies.
(ii) Non-payment related defaults.
B-1
(iii) Unscheduled draws on debt service reserves reflecting
financial difficulties.
(iv) Unscheduled draws on credit enhancements reflecting
financial difficulties.
(v) Substitution of credit or liquidity providers, or their failure
to perform.
(vi) Adverse tax opinions or events affecting the tax-exempt
status of the security.
(vii) Modifications to rights of security holders.
(viii) Contingent or unscheduled bond calls.
(ix) Defeasances.
(x) Release, substitution, or sale of property securing
repayment of the securities.
(xi) Rating changes.
(b) Whenever the District obtains knowledge of the occurrence of a Listed Event, the
District shall as soon as possible determine if such event would be material under applicable
Federal securities law.
(c) If the District determines.that knowledge of the occurrence of a Listed Event would
be material under applicable Federal securities law, the District shall promptly file a notice of
such occurrence with the Municipal Securities Rulemaking Board and each Repository.
Notwithstanding the foregoing, notice of Listed Events described in subsections (a)(viii) and
(ix) need not be given under this subsection any earlier than the notice (if any) of the underlying
event is given to holders of affected Notes pursuant to the Resolution.
Section 4. Termination of Reporting Obligation. The District's obligations under this
Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in
full of all of the Notes. If such termination occurs prior to the final maturity of the Notes, the
District shall give notice of such termination in the same manner as for a Listed Event under
Section 3(c).
Section 5. Dissemination Agent. The District may, from time to time, appoint or engage
a Dissemination Agent to assist it in carrying out its obligations under this Disclosure
Certificate, and may discharge any such Agent, with or without appointing a successor
Dissemination Agent. The Dissemination Agent, if other than the District, shall not be
responsible in any manner for the content of any notice prepared by the District pursuant to
this Disclosure Certificate. The initial Dissemination Agent shall be the District.
Section 6. Amendment: Waiver. Notwithstanding any other provision of this
[Disclosure Certificate, the District may amend this Disclosure Certificate, and any provision of
this Disclosure Certificate may be waived, provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Section 3(a), it may only be
made in connection with a change in circumstances that arises from a change in legal
B-2
requirements, change in law, or change in the identity, nature, or status of an obligated person
with respect to the Notes, or type of business conducted;
(b) the undertakings herein, as proposed to be amended or waived, would, in the
opinion of nationally recognized bond counsel,have complied with the requirements of the Rule
at the time of the primary offering of the Notes, after taking into account any amendments or
interpretations of the Rule,as well as any change in circumstances; and
(c) the proposed amendment or waiver either (i) is approved by holders of the Notes, or
(ii) does not, in the opinion of nationally recognized bond counsel, materially impair the
interests of the holders or beneficial owners of the Notes.
A. If an amendment is made to the undertaking specifying the accounting principles to
be followed in preparing financial statements, the annual financial information for the year in
which the change is made shall present a comparison between the financial statements or
information prepared on the basis of the new accounting principles and those prepared on the
basis of the former accounting principles. The comparison shall include a qualitative discussion
of the differences in the accounting principles and the impact of the change in the accounting
principles on the presentation of the financial information, in order to provide information to
investors to enable them to evaluate the ability of the District to meet its obligations. To the
extent reasonably feasible, the comparison shall be quantitative. A notice of the change in the
accounting principles shall be sent to the Repositories in the same manner as for a Listed Event
under Section 3(c).
Section 7. Additional Information. Nothing in this Disclosure Certificate shall be
deemed to prevent the District from disseminating any other information, using the means of
dissemination set forth in this Disclosure Certificate or any other means of communication, or
notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure
Certificate. If the District chooses to include any information in any notice of occurrence of a
Listed Event in addition to that which is specifically required by this Disclosure Certificate, the
District shall have no obligation under this Disclosure Certificate to update such information or
include it in any future notice of occurrence of a Listed Event.
Section 8. Default. In the event of a failure of the District to comply with any provision
of this Disclosure Certificate any holder or beneficial owner of the Notes may take such actions
as may be necessary and appropriate, including seeking mandate or specific performance by
court order, to cause the District to comply with its obligations under this Disclosure
Certificate; provided that any such action may be instituted only in Superior Court of the State
of California in and for the County of Contra Costa or in U.S. District Court in or nearest to
the County of Contra Costa. A default under this Disclosure Certificate shall not be deemed an
Event of Default under the Resolution,and the sole remedy under this Disclosure Certificate in
the event of any failure of the District to comply with this Disclosure Certificate shall be an
action to compel performance.
Section 9. Duties, Immunities and Liabilities of Dissemination Agent. The
Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure
Certificate, and the District agrees to indemnify and save the Dissemination Agent, its officers,
directors, employees and agents, harmless against any loss, expense and liabilities which it may
incur arising out of or in the exercise or performance of its powers and duties hereunder,
including the costs and expenses (including attorneys fees) of defending against any claim of
liability, but excluding liabilities due to the Dissemination Agent's negligence or willful
misconduct. The obligations of the City under this Section shall survive resignation or removal
of the Dissemination Agent and payment of the Notes.
B-3
Section 10. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of
the District, the Dissemination Agent, the Participating Underwriters and holders and beneficial
owners from time to time of the Notes,and shall create no rights in any other person or entity.
Date: July 1997
WEST CONTRA COSTA UNIFIED
SCHOOL DISTRICT
By:
Superintendent
B-4
APPENDIX C
EXCERPTS FROM THE DISTRICT'S
1995/96 AUDITED FINANCIAL STATEMENTS
C-1
Financial and Compliance Audit
KATHLEEN CONNELL
Controller of the State of California
Board of Trustees
West Contra Costa Unified School District
1108 Bissell Avenue
Richmond, California 94802
INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS
We have audited the combined and combining financial statements of the West Contra Costa
Unified School District as of and for the year ended June 30, 1996, as listed in the table of
contents. These financial statements are the responsibility of the district's management. Our
responsibility is to express an opinion on these financial statements based on our audit.
Except as discussed in the following paragraphs, we conducted our audit in accordance with
generally accepted auditing standards and Government Auditing Standards. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
The district has not maintained a record of its general fixed assets and, accordingly, a
statement of the general fixed assets account group, as well as a statement of changes in
general fixed assets, are not included in the financial statements, as required by generally
accepted accounting principles. The amount that should be recorded in the general fixed asset
account group is not known.
Because of the lack of internal controls and insufficient records for transactions in the
student body funds and expendable trust (scholarship) funds, the ending fund balances have
not been audited and thus are not included in the financial statements in accordance with
generally accepted accounting principles. The amount that should be recorded is not known.
In our opinion, except for the effects on the financial statements of the omissions described
in the two preceding paragraphs. the combined financial statements referred to above present
fairly, in all material respects. the financial position of the West Contra Costa Unified
School District at June 30, 1996. and the results of its operations and the cash flows of its
proprietary fund for the year then ended, in conformity with generally accepted accounting
principles.
_1_ State Controller's Office
West Contra Costa Unified School District
Also, in our opinion, except for the effects on the financial statements of the omission of the
student body funds as described in the second preceding paragraph, the combining financial
statements referred to above present fairly, in all material respects, the financial position of
each individual fund of the West Contra Costa Unified School District at June 30, 1996, and
the results of operations of such funds for the year then ended, in conformity with generally
accepted accounting principles.
In accordance with government auditing standards, we have also issued a report dated
December 11, 1996, regarding our consideration of West Contra Costa Unified School
District's internal control structure and a report dated December 11, 1996, on its compliance
with laws and regulations.
/0-7
CAROL NEBEL, CPA, Acting Chief
Division of Audits
December 11, 1996
Paul R. Criss, CPA, Audit Manager
Telephone: (916) 322-4941
Audit Staff: Jim Lowrey, CPA, Audit Supervisor
Carolyn Baez, CPA, Auditor-in-Charge
Al Comage
Carol Dillard
Renee Encoyand, CPA
Anthony Lewis
Financial and Compliance Audit
BLANK PAGE
_3_ State Controller's Office
West Contra Costa Unified School District
Exhibit 1
Combined Balance Sheet
All Fund Types and Account Groups
June 30, 1996
Proprietary Fiduciary Account
Governmental Fund Types Fund Type Fund Type Group Totals
Special Debt Capital internal Expendable Long-Term (Memorandum
General Revenue Service Proiects Service Trust Debt Only)
Assets
Undivided interest in cash
in county treasury(Note 2) $11,906,437 $7,732,805$ 730,181 $15,008,674 $1,808,221 S 600.342 - S 37,786,660
Cash on hand and in banks(Note 2) 28,149 13,502 - - - - - 41,651
Cash in revolving fund (Note 2) 60,000 - - - - - - 60.000
Cash with fiscal agent(Note 2) - - 1,372,176 - - - - 1,372,176
Investments(Note 2) 18,898,244 50,483 4,143,239 12,405 19,308 - - 23,123,679
Accounts receivable(Note 4) 5,723,735 1,239,179 101,155 55,005 944 - - 7,120,018
Notes receivable (Note 4) - - 294,000 538,408 - - - 832,408
Stores inventories(Note IG2) 607,712 116,967 - - - - - 724,679
Other current assets 92 649 - - - - - 741
Amount to be provided for
retirement of general
long-term debt - - - - - - 549,735,171 49,735.171
Total assets $37.224.369 $9,153.585 $6,640.751 $15.614.492 $1,828,473 S 600,342 $49,735,171 $120,797,183
Liabilities and fund equity
Liabilities:
Accounts payable S 7,599,422 S 695.109 $ 3.000 $'1.,137,593 S 11,488 - - S 10,446,612
Liability for open claims(Note 5) - - - - 1,279,103 - - 1,279,103
Current loans(Note 6) 18,000,000 - - - - - - 18,000,000
Deferred revenue (Note 1G3) . 1,052,145 873 294,001 633,788 - - - 1,980,807
Emergency apportionment loan(Note 7) - - - - - - 526,941,960 26,941,960
Certificates of participation(Note 8) - - - - - - 11,075,000 11.075,000
Voluntary integration program audit
exceptions(Note 9) - - - - - - 7,452,000 7.452,000
Computer equipment acquisition
loans(Note 10) - - - - - - 2.798,366 2,798,366
Compensated absences (Note 1G4) - - - - - - 921,536 921,536
Reimbursement due state and _
federal funds -unallowable
audit costs (Note l l) - - - - - - 300,000 300,000
Capital lease obligations(Note 12) - - - - - 246,309 246,309
Total liabilities 26,651,567 695.982 297.001 2.771.381 1,290,591 - 49,735,171 81.441.693
Fund equity:
Retained earnings - - - - 537,882 - - 537,882
Reserved for revolving fund 60,000 - - - - - - 60,000
Reserved for stores inventories 607,712 116.%7 - - - - - 724,679
Designated for economic uncertainties 3,300.000 - - - - - - 3,300,000
Designated for administrative
carryover 1,097,171 - - - - - - 1,097,171
Designated for wellness 61.443 - - - - - - 61,443
Designated for year round schools 73,000 - - - - - - 73,000
Designated for mandated costs 83,725 - - - - - - 83,725
Undesignated fund balance 5,289.751 8.340.636 6,343.750 12.843,111 600,342 33,417.590
Total fund equity 10.572.802 8.457.603 6,343.750 12.843.111 537,882 600,342 39.355.490
Total liabilities and fund equity $37,221.369 59.153.585 56.640.751 515.614,492 51.828,473 5 600,342 $49.735,171 5120,797,183
The notes to the financial statements at-- an integral part of tht_c statement.
-4-
Financial and Compliance Audit
Exhibit 2
Combined Statement of Revenues, Expenditures, and
Changes in Fund Balances
All Governmental Fund Types and Fiduciary Fund Type
Year Ended June 30, 1996
Fiduciary
Governmental Fund Types Fund Type Totals
Special Debt Capital Expendable (Memorandum
General Revenue Service Projects Trust Only)
Revenues:
Revenue limit sources:
State apportionments S 48,469,552 $2,413.022 — — — S 50.882,574
Local sources 53,470,603 744,785 — — — 54,215.388
Federal _ 7,822,922 4,508,775 — — — 12,331,697
Other state 31.708.208 2,104,095 — — — 33.812,303
Other local 2,249.667 7,253,629 $ 367,601 $ 2.175,280 $5.536,203 17,582,380
Total revenues 143.720.952 17.024.306 367.601 2.175,280 5.536,203 168.824,342
Expenditures:
Certificated salaries 66,277,733 1,695,789 — — — 67,973,522
Classified salaries 21,295.607 5,050,469 — 48,602 — 26.394,678
Employee benefits 26,777.527 1,756,027 — 16,086 4,935,861 33,485,501
Books and supplies 4,558.472 3,104,911 — 1.946 — 7,665,329
Services and other operating expenditures 15,806,485 1,710,544 — 64,724 — 17,581,753
Capital outlay 1.363,628 1,358,338 — 8,640,790 — 11,362,756
Other outgo 912.740 185,072 — 2,917 — 1,100,729
(Direct support)/indirect costs (683.449) 683,449 — — — —
Debt service:
Principal 9,197 — 683,377 75,459 — 768,033
Interest 1.600 — 2.033,978 21.281 2,056.859
Total expenditures 136.319.540 15.544,599 2,717,355 8.871,805 4.935.861 168.389.160
Excess (deficiency)of revenues
over(under)expenditures 7.401.412 1.479,707 (2.349,754) (6,696.525) 600.342 435.182
Other financing sources(uses):
Other financing sources — — 2,606,706 — — 2.606.706
Operating transfers in(Note 15) 139.487 441,969 2.301,269 192,770 — 3,075.495
Proceeds from sale of land — — — 116,054 — 116,054
School facilities apportionment — — — 16,243,895 — 16,243,895
Operating transfers out(Note 15) (2,936.008) — (139,487) (3,075,495)
Total other financing sources(uses) (2,796,521) 441.969 4.768.488 16,552,719 18.966.655
Excess of revenues and other financing
sources over expenditures and
other sources (uses) 4,604.891 1.921,676 2.418.734 9,856,194 600,342 19,401.837
Fund balances. July 1, 1995 5.967.911 6,535.927 3.925.016 2.986.917 19,415.771
Fund balances. June 30, 1996 S 10.572.802 S 8.457,603 S 6.343.750 512.843.111 S 600.342 $38.817,608
The notes to the financial statements at-. an integral part of this statement.
-5- State Controller's Office
West Contra Costa Unified School District
Combined Statement of Revenues, Expenditures,
and Changes in Fund Balances—Budget and Actual
All Governmental Fund Types and Fiduciary Fund Type
Year Ended June 30, 1996
General Fund Special Revenue
Variance Variance
Favorable Favorable
Budget Actual (Unfavorable) Budget Actual (Unfavorable)
Revenues:
Revenue limit sources:
State apportionments $48,469,552 $ 48,469,552 — $ 2,004,820 $ 2,413,022 $ 408,202
Local sources 52,124,235 53,470,603 S 1,346,368 660,005 744,785 84,780
Federal 9,218,609 7,822,922 (1,395,687) 4,281,078 4,508,775 227,697
Other state 27,763,884 31,708,208 3,944,324 949,289 2,104,095 1,154,806
Other local 6.470,953 2:249,667 _(4.221,286) 7.126,582 7,253,629 127.047
Total revenues 144,047,233 143.720,952 (326,281) 15.021.774 17,024,306 2,002,532
Expenditures:
Certificated salaries 67,074.095 66,277,733 796,362 1,794,031 1,695,789 98,242
Classified salaries 24,155,476 21,295,607 2,859,869 4,856,835 5,050,469 (193,634)
Employee benefits 27,715.435 26,777,527 937,908 2,156,021 1,756,027 399,994
Books and supplies 4.516.961 4,558,472 (41,511) 3,128,607 3,104,911 23,696
Services and other
operating expenditures 15,512.350 15,806,485 (294,135) 1,010,861 1,710,544 (699,683)
Capital outlay 818.054 1,363,628 (545,574) 1,316,022 1,358,338 (42,316)
Other outgo 1,184,663 912,740 271,923 76,829 185,072 (108,243)
(Direct support)/indirect costs (479.552) (683,449) 203,897 479,552 683,449 (203,897)
Debt service:
Principal 9.528 9,197 331 — — —
Interest 1.600 (1.600)
Total expenditures 140.507.010 136.319.540 4,187.470 14.818,758 15,544.599 (725,841)
Excess (deficiency) of revenues
over (under) expenditures 3.540.22: 7,401.412 3.861.189 203.016 1,479,707 1.276,691
Other financing sources (uses):
Operating transfers in (Note 15) — 139.487 139,487 200,000 441,969 241,969
Proceeds from sale of land — — — — — —
School facilities apportionment — — — — — —
Operating transfers out (Note 15)(2.501.269) (2,936,008) (434.739) — — —
Total other financing
sources (uses) (2.501.269) (2,796.521) _29( 5.252) 200.000 441.969 241,969
Excess (deficiency) of revenues
and other financing sources
over (under) expenditures and
other financing sources (uses) 1.038.95: 4,604,891 3.565.937 _ 403.016 1,921,676 1,518,660
Fund balances, July 1, 1995 5.967.911 5.967,911 — 6,535.927 6,535,927 —
Fund balances. June 30, 1996 S 7.006.86 S 10.572.802 $ 3.565.937 S 6,938.943 $ 8,457.603 $ 1,518,660
The notes to the financial statements are an itrtegral part of this statement.
-6-
Financial and Compliance Audit
Exhibit 3
Capital Proiects Funds Expendable Trust Funds Totals (Memorandum Only)
Variance Variance Variance
Favorable Favorable Favorable
Budget Actual (Unfavorable) Budget Actual (Unfavorable) Budget Actual (Unfavorable)
— — — $ 50,474,372 S 50,882,574 $ 408,202
— 52,784,240 54,215,388 1,431,148
— — 13,499,687 12,331,697 (1.167,990)
— — — — — — 28,713,173 33,812,303 5,099,130
$ 425,000 $ 2,175,280 S 1.750.280 $5,750.000 $5.536,203 $(213,797 19.772.535 17.214.779 (2.557.756)
425.000 2.175.280 1.750.280 5.750.000 5.536.203 (213.797) 165.244.007 168,456.741 3,212.734
— — — — — — 68,868,126 67,973,522 894,604
48,000 48,602 (602) — — — 29.060.31I 26,394,678 2,665,633
15,752 16,086 (334) 5.750.000 4,935,861 814,139 35,637,208 33,485,501 2.151,707
8,900 1,946 6,954 — — — 7,654,468 7,665,329 (10,861)
328,160 64,724 263,436 — — — 16,851,371 17,581,753 (730,382)
12,894,014 8,640,790 4,253,224 — — — 15,028,090 11,362,756 3,665,334
— 2,917 (2,917) — — — 1,261,492 1,100,729 160,763
75,459 75,459 — — — — 84,987 84,656 331
21.341 21.281 60 21.341 22.881 (1.540)
13.391.626 8.871.805 4.519,821 5.750.000 4.935.861 814.139 174,467.394 165.671.805 8,795.589
(12,966,626 (6.696,525 6,270.101 — 600.342 600.342 (9.223.387) 2,784,936 12.008,323
— 192,770 192,770 — — — 200.000 774,226 574,226
118,216 116,054 (2,162) — — — 118.216 116,054 (2,162)
10,688,000 16,243.895 5,555,895 — — — 10,688,000 16,243,895 5,555,895
(2.501,269) (2.936.008) (434,739)
10,806.216 16,552.719 5.746.503 — 8.504.947 14,198.167 5.693.220
(2,160,410) 9.856,194 12,016.604 600.342 600.342 (718.440) 16.983.103 17,701.543
2.986,917 2986.917 — — — — 15,490,755 15.490,755 —
S 826.507 $12.843.111 512.016,604 S — S 600.342 S 600.342 S 14,772.315 S 32,473,858 $17.701,543
_�_ State Controller's Office
West Contra Costa Unified School District
Exhibit 4
Statement of Revenues, Expenses, and Changes
in Retained Earnings—Proprietary Fund Type
Internal Service Fund
Year Ended June 30, 1996
Total operating revenues consisting of self-insurance premiums $700,000
Total operating expenses consisting of contracted services 739,843
Operating loss (39,843)
Non-operating revenue:
Interest income 78,538
Other local income 40,007
Total non-operating revenue 118,545
Net income 78,702
Retained earnings, July 1, 1995 459,180
Retained earnings, June 30, 1996537 882
The notes to the financial statements are an integral part of this statement.
-8-
Financial and Compliance Audit
Exhibit 5
Statement of Cash Flows
Proprietary Fund Type—Internal Service Fund
Year Ended June 30, 1996
Cash flows from operating activities:
Cash received from premiums $ 707,858
Cash paid for contracted services and other operating expenditures (757,546)
Net cash provided (used) by operating activities (49,688)
Cash flows from investing activities:
Interest income 78,538
Other local income 40,007
Net increase in cash 68,857
Cash, July 1, 1995 1,739,364
Cash, June 30, 1996 $1,808,221
Reconciliation of Operating Income to Net Cash
Provided (Used) by Operating Activities
Operating loss $ (39,843)
Adjustments to reconcile operating loss to net cash
provided (used) by operating activities:
Decrease in accounts receivables 7,858
Increase in investments (15,864)
Decrease in accounts payables (1,839)
Total adjustments (9,845)
Net cash provided (used) by operating activities $ (49,688)
The notes to the financial statements are an integral part of this statement.
-9- State Controller's Office
West Contra Costa Unified School District
Notes to the Financial Statements
Year Ended June 30, 1996
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
A. Accounting. Policies
The district accounts for its financial transactions in accordance with the
policies and procedures of the California Department of Education's
California School Accounting Manual. The accounting policies of the district
conform to generally accepted accounting principles as prescribed by the
Governmental Accounting Standards Board (GASB) and the American
Institute of Certified Public Accountants (AICPA).
The district has not maintained a record of its general fixed assets and,
accordingly, a statement of the general fixed assets account group as well as
a statement of changes in general fixed assets are not included in the general
purpose financial statements, as required by generally accepted accounting
principles (GAAP).
B. Reporting Entity
The West Contra Costa Unified School District is the level of government
primarily accountable for activities related to public education in Richmond,
El Cerrito, El Sobrante, San Pablo,.Pinole, and Hercules, California. The
governing authority consists of five elected officials who, together, constitute
the Board of Trustees. As a result of the emergency apportionment loan, a
state appointed administrator was granted full authority and responsibilities
formerly held by the Board of Trustees.
On March 15, 1988, certain members of the district's Board of Education
and certain employees formed a nonprofit benefit corporation, known as the
West Contra Costa Unified School District Financing Corporation, which is
organized under the Nonprofit Benefit Corporation Law of the State of
California. The purpose of this corporation is to provide financial assistance
to the district by financing, constructing, and leasing various public
facilities, land, and equipment for the use, benefit, and enjoyment of the
public served by the district. The corporation issued Certificates of
Participation (COPs), a form of long-term debt, which the district used to
finance continuing operations. The COPs are collateralized by an underlying
lease-purchase agreement between the corporation, and the district.
The district and the corporation have a financial and operational relationship
which meets the reporting entity definition of GASB Codification Section
2100 for inclusion of the corporation as a component unit of the district. The
basic, but not the only, criterion for including a governmental department,
-10-
Financial and Compliance Audit
agency, institution, commission, public authority, or other governmental
organization in a governmental unit's reporting entity for general purpose
financial reports is the ability to exercise oversight responsibility over such
agencies by the governmental unit's elected officials. Oversight responsibility
implies that one governmental unit is dependent on another and the dependent
unit should be reported as part of the other.
Oversight responsibility is derived from the governmental unit's power and
includes, but is not limited to:
• Financial interdependency
• Selection of governing authority
• Designation of management
• Ability to significantly influence operations
• Accountability for fiscal matters
Accordingly, for the year ended June 30, 1996, the financial activities of the
corporation have been blended in the financial statements of the district. The
corporation's financial activities are presented in the general fund and
corporation debt service fund. CON issued by the corporation are included
in the General Long-Term Debt Account Group.
C. Fund Accounting
The accounts of the district are organized on the basis of funds or account
groups, each of which is considered to be a separate accounting entity. The
operations of each fund are accounted for with a separate set of
self-balancing accounts that comprise its assets, liabilities, fund equity (or
retained earnings), revenues, and expenditures or expenses, as appropriate.
District resources are allocated to and accounted for in individual funds
based upon the purpose for which they are to be spent and the means by
which spending activities are controlled. The district's accounts are
organized into three broad categories which in aggregate include six fund
types and one account group as follows:
Governmental Funds:
The General Fund is the general operating fund of the district. It is used to
account for all financial resources except those required to be accounted for
in another fund.
Special Revenue Funds are used to account for the proceeds of specific
revenue sources that are legally restricted to expenditures for specific
purposes. The district maintains six special revenue funds:
• The Cafeteria Fund is used to account for revenues received and
expenditures made to operate the district's cafeterias.
• The Child Development Fund is used to account for resources committed
to child development programs maintained by the district.
-11- State Controller's Office
r
West Contra Costa Unified School District
• The Adult Education Fund is used to account for resources committed to
adult education programs maintained by the district.
• The Maintenance and Recreation Assessment District (MRAD) Fund is
used for the installation, improvement, and maintenance of recreational
facilities, irrigation systems, lighting, and landscaping.
• The Deferred Maintenance Fund is used for the purpose of major repair
or replacement of district property.
• The Special Reserve Fund was established to account for resources
reserved for economic uncertainties.
Debt Service Funds are used to account for the accumulation of resources
for, and the payment of, general long-term debt principal, interest, and
related costs. The district maintains four debt service funds:
• The Debt Service Fund is used for debt items not accounted for by the
following three funds.
• The Tax Override Fund is used to account for the accumulation of
resources from ad valorem tax levies for the repayment of State School
Building Fund apportionments.
• The Bond Interest and Redemption Fund is used to account forthe
accumulation of resources for, and the repayment of, district bonds,
interest, and related costs.
• The Corporation Debt Service Fund is used to account for the interest and
redemption of principal of COPS issued by the West Contra Costa Unified
School District Financing Corporation.
Capital Projects Funds are used to account for the acquisition:and/or
construction of all major governmental general fixed assets. However, the
district does not maintain a general fixed asset group of accounts. The
district maintains three capital projects funds:
• The Building Fund is used primarily to account for proceeds from the sale
of real property.
• The State School Building Lease-Purchase Fund is used primarily to
account for state apportionments provided for construction and
reconstruction of school facilities.
• The Capital Facilities Fund is used to account for resources received from
developer impact fees assessed under provisions of the California
Environmental Quality Act (CEQA).
-12-
Financial and Compliance Audit
Proprietary Funds:
Internal Service Funds are used to account for services rendered on a
cost-reimbursement basis within the district. The district maintains one
internal service fund:
The Self-Insurance Fund is used to account for resources committed to
pay for costs arising from property losses and liability claims which are
not covered, or are only partially covered, through purchased insurance.
Fiduciary Funds:
Agency Funds are used to account for assets of others for which the district
acts as an agent. The district maintains an agency fund for the student body
accounts and scholarship trust funds. Because of the lack of internal controls
and insufficient records of the student body accounts and scholarship trust
funds, these funds are not presented in the financial statements.
The Expendable Trust Fund is used to account for restricted monies from
salary reduction agreements and other in-district contributions for employees'
retirement benefit payments.
Account Groups:
The accounting and reporting treatment applied to the fixed assets and
long-term liabilities associated with a fund are determined by its
measurement focus. All governmental funds and expendable trust funds are
accounted for on a spending or "financial flow" measurement focus. This
means that only current assets and current liabilities are generally included
on their balance sheet. Their reported fund balance is considered a measure
of "available spendable resources." Thus, long-term liabilities associated
with governmental funds and expendable trust funds are accounted for in the
account groups of the district.
The General Long-Term Debt Account Group accounts for long-term
liabilities expected to be financed from governmental funds.
The General Fixed Asset Account Group accounts for general fixed assets
other than those accounted for in the proprietary fund types. The district did
not maintain a general fixed asset account group which is required by
generally accepted accounting principles.
D. Basis of Accounting
Basis of accounting refers to when revenues and expenditures or expenses are
recognized in the accounts and reported in the financial statements. Basis of
accounting relates to the timing of measurement made, regardless of the
measurement focus applied.
-13- State Controller's Office
West Contra Costa Unified School District
Governmental funds are generally accounted for using the modified accrual
basis of accounting. Their revenues are recognized in the accounting period
in which they become both measurable and available to finance expenditures
of the current fiscal period. Expenditures are recognized in the accounting
period in which the liability is incurred (when goods are received or services
rendered).
Trust and agency fund assets and liabilities are also accounted for on the
modified accrual basis.
The accrual basis of accounting is followed for proprietary fund types. Under
this basis of accounting, revenues are recognized in the accounting period in
which they are earned and become measurable, and expenses are recorded
when they are incurred.
E. Budgets and Budgetary Accounting
By state law, the district's governing board must approve a final budget no
later than July 1. A public hearing must be conducted to receive comments
prior to adoption. The district's governing board satisfied these
requirements.
These budgets are revised by the district's governing board and district
superintendent during the year to give consideration to unanticipated income
and expenditures.. It is the final revised budget that is presented in the
financial statements.
Formal budgetary integration was employed as a management control device
during the year for all budgeted funds. The district employs budget control
by minor object and by individual appropriation accounts. Expenditures
cannot legally exceed appropriations by major object account.
F. Encumbrances
Encumbrance accounting is used in all budgeted funds to reserve portions of
applicable appropriations for which commitments have been made.
Encumbrances are recorded for purchase orders, contracts, and other
commitments when they are written. Encumbrances are liquidated when the
commitments are paid. All encumbrances are liquidated at June 30.
G. Assets, Liabilities, and Equity
1. Deposits and Investments
Cash balances held in banks and in revolving funds are insured to
S100,000 by the Federal Depository Insurance Corporation. All cash held
by the financial institutions is fully insured or collateralized.
-14-
Financial and Compliance Audit
In accordance with Education Code Section 41001, the district maintains
substantially all of its cash in the West Contra Costa County Treasury.
The county pools these funds with those of other districts in the county
and invests the cash in low risk (category 1) investments that are insured
or registered or for which the securities are held by the county or its
agent and lists the county as the legal owner. These pooled funds are
carried at cost which approximates market value. Any investment losses
are proportionately shared by all funds in the pool.
2. Stores Inventories
Inventories are recorded using the consumption method, in that inventory
acquisitions are initially recorded in inventory (asset) accounts, and are
charged as expenditures when used.
The district's inventory is valued at a moving average cost for
presentation.
3. Deferred Revenue
Cash received for federal and state special projects and programs is
recognized as revenue to the extent that qualified expenditures have been
incurred. Deferred revenue is recorded to the extent cash received on
specific projects and programs exceeds qualified expenditures.
The district also has deferred revenue equal to the amount of notes
receivable from the sale of property. The district receives periodic
payments from these notes which are recognized as revenue when due and
receivable in future periods. Because these future receipts are not
available to finance current operations, they have been recorded as
deferred revenue.
4. Compensated Absences
Accumulated unpaid employee vacation benefits are recognized as
liabilities of the district. The current portion of the liabilities are
recognized in the general fund at year-end. The.noncurrent portion of the
liabilities are recognized in the general long-term debt account group.
Accumulated sick leave benefits are not recognized as liabilities of the
district. The district's policy is to record sick leave as an operating
expense in the period taken since such benefits do not vest nor is payment
probable; however, unused sick leave is added to the creditable service
period for calculation of retirement benefits when the employee retires.
-15- State Controller's Office
West Contra Costa Unified School District
5. Long-Term Obligations
The district reports long-term debt of governmental funds at face value
in the general long-term debt account group. Long-term debt and other
obligations financed by the proprietary fund are reported as liabilities in
the appropriate fund.
6. Fund Balance Reserves and Designations
Reservations of the ending fund balance indicate the portions of fund
balance not appropriable for expenditure or amounts legally segregated
for a specific future use. The reserve for revolving fund and reserve for
stores inventories reflect the portions of fund balance represented by
revolving fund cash and stores inventories, respectively. These amounts
are not available for appropriation and expenditure at the balance sheet
date. —
Designations of the ending fund balance indicate tentative plans for
financial resource utilization in a future period.
H. Revenue Limit/Property Tax
The districts revenue limit is received from a combination of local property
taxes, state apportionments, and other local sources.
The County of Contra Costa is responsible for assessing, collecting, and
apportioning property taxes. Taxes are levied for each fiscal year on taxable
real and personal property in the county. The levy is based on the assessed
values as of the preceding March 1, which is also the lien date. Property
taxes on the secured roll are due on November 1 and February 1. Taxes
become delinquent after December 10 and April 10, respectively. Property
taxes on the unsecured roll are due on the lien date (March 1), and become
delinquent if unpaid by August 31.
Secured property taxes are recorded as revenue when apportioned, in the
fiscal year of the levy. The county apportions secured property tax revenue
in accordance with the alternate method of distribution prescribed by Section
4705 of the State Revenue and 'Taxation Code. This -alternate method
provides for crediting each applicable fund with its total secured taxes upon
completion of the secured tax roll, approximately October 1 of each year.
The Contra Costa County Auditor reports the amount of the district's
allocated property tax revenue to the California Department of Education.
Property taxes are recorded as local revenue limit sources by the district.
The California Department of Education reduces the districts entitlement by
the district's local property tax revenue. The balance is paid from the state
General Fund, and is known as the State Apportionment.
-16-
Financial and Compliance Audit
The district's Base Revenue Limit is the amount of general purpose tax
revenue, per average daily attendance (ADA), that the district is entitled to
by law. This amount is multiplied by the second period ADA to derive the
district's total entitlement.
I. Self-Insurance Internal Service Fund
The district is self-insured for property damage up to $50,000 per claim, and
for general liability and automobile liability up to $1,000,000 per claim. The
General Fund is charged premiums by the Self-Insurance Fund, which is
accounted for as an Internal Service Fund. The district also participates in
two joint power authorities which provide excess liability and workers'
compensation coverage to the district.
J. Total Columns on Combined Statements
Total columns on the combined statements are captioned "Memorandum
Only" to indicate that they are presented only to facilitate financial analysis.
Data in these columns do not present financial position, results of operations,
or changes in financial position in conformity with generally accepted
accounting principles. Neither is such data comparable to a consolidation.
Interfund eliminations have not been made in the aggregation of this data.
NOTE 2 - CASH AND INVESTMENTS
Undivided Interest in Cash in County Treasury
In accordance with Education Code Section 41001, the district maintains
substantially all of its cash in the Contra Costa County Treasury as part of the
common investment pool ($37,786,660 as of June 30, 1996). The county is
restricted by Government Code Section 53635 pursuant to Section 53601 to invest
in time deposits, U.S., government securities, state registered warrants, notes or
bonds, State Treasurer's investment pool, bankers' acceptances, commercial
paper, negotiable certificates of deposit, and repurchase or reverse repurchase
agreements.
Cash on Hand, in Banks and in Revolving Fund
Cash balances on hand and in banks ($41,651 as of June 30, 1996) and in the
revolving fund ($60,000) are insured up to $100,000 by the Federal Depository
Insurance Corporation. All individual account balances are less than $100,000
and are therefore fully insured.
Cash With Fiscal Agent
At June 30, 1996, the Nest Contra Costa Unified School District Financing
Corporation had investments on deposit in a money market account with the Bank
of New York. The carrying amount and market value of this account was
$1,372.176. The deposits represent Category 1 investments which are either
-17- State Controller's Office
West Contra Costa Unified School District
insured or collateralized. This is the remainder of funds held in trust in
accordance with the terms of the 1.994 refunding agreement between the
West Contra Costa Unified School District Financing Corporation and the
investors in the corporation's Certificates of Participation (COPs).
Investments
The district directs the county treasurer to invest excess funds in investment
pools, such as Local Agency Investment Funds (LAIF) and Guaranteed
Investment Contracts (GIC). Cash held in investment pools is not subject to
categorization.
Investments at June 30, 1996, are presented below:
LAIF $18,989,960
GIC (Transamerica) 4,133.719
Total $23.123,679
NOTE 3 - EXCESS OF EXPENDITURES OVER APPROPRIATIONS
At June 30, 1996, expenditures exceeded appropriations in individual funds as
follows:
Excess
Appropriations Cateeory Expenditures
General Fund:
Books and supplies S 41,511
Services and other operating expenditures 294,135
Capital outlay 545,574
Debt service: Interest 1,600
Cafeteria Fund:
Classified salaries 50,698
Books and supplies 169,727
Capital outlay 42,454
(Direct support)/indirect costs 229,375
Child Development Fund:
Employee benefits 6,382 .
Books and supplies 17,612
(Direct support)/indirect costs 12,901
Adult Education Fund:
Services and other operating expenditures 221,485
-18-
Financial and Compliance Audit
Excess
Appropriations Category Expenditures
Maintenance and Recreation Assessment Fund:
Classified salaries 160,031
Capital outlay 414,840
Other outgo 132,293
Deferred Maintenance Fund:
Books and supplies 100
Services and other operating expenditures 664,638
Building Fund:
Classified salaries 602
Employee benefits 334
Books and supplies 1,946
Capital outlay 67,628
Other outgo 2,917
Capital Facilities Fund:
Services and other operating expenditures 11,151
Capital outlay 131,607
These amounts were partially offset by appropriations that were underspent.
NOTE 4 - ACCOUNTS AND NOTES RECEIVABLES
Accounts receivable at June 30, 1996, consist of the following:
Special Debt Capital Internal
General Revenue Service Project Service
Fund Funds Funds Funds Funds Totals
Federal government:
Categorical aid
programs $1.157,612 S1,047,829 — — — $2.205,441
State government:
Supplemental grants 1.843,368 — — — — 1,843,368
Categorical aid
programs 977,676 158,444 — — — 1,136,120
Lottery 760.440 — — — — 760,440
Total state government 3.581.484 158,444 — — — 3,739.928
Total local government 732.010 32.643 101.025 54.835 680 921.193
Interest 252.629 263 130 170 264 253.456
Total accounts receivable5.723 735 S iS i,239 179 5101,155 55 005 944 7 120 018
Notes receivable at June 30, 1996, totaled $832,408 and represent amounts of
$538,408 and $294,000 to be received in future years from the sale of the
Prospect and Sierra school sites. respectively. These notes are collateralized by
the related real properties.
The note for the sale of the Prospect school site bears a rate of 11 percent per
annum and requires monthly principal and interest payments of $7,793 for
20 years. The note matures on :august 1, 2005.
-19- State Controller's Office
West Contra Costa Unified School District
The note for.the sale of the Sierra school site bears a rate of 8.35 percent per
annum and requires monthly principal and interest payments of $2,275 for 30
years. The note matures on December 1, 2000.
NOTE 5 - LIABILITY FOR OPEN CLAIMS
The accrued liability for open claims in the amount of$1,279,103 represents an
estimate of the eventual loss on claims arising prior to year-end, including losses
incurred but not reported.
NOTE 6 - CURRENT LOANS
Tax and Revenue Anticipation Notes (TRANS) .
On January 17, 1996, the district issued $18,000,000 of Tax and Revenue
Anticipation Notes with an interest rate of 5 percent. The TRANS are due on
January 18, 1997.
NOTE 7 - EMERGENCY APPORTIONMENT LOANS
In July 1990, the district obtained an emergency apportionment loan from the
State of California in the amount of $9,525,000. In May 1991 the district
received an additional loan from the State of California for $19,000,000 under
the conditions of a court order. The state agreed to restructure the repayment of
these loans at June 30, 1993. The restructure provides for the consolidation of
the two loans and a 15-year repayment period with an annual interest rate of
4.543 percent. The outstanding balance on the consolidated loan is $26,941,960.
The revised principal and interest payments of the loan are shown below:
Year Ending June 30 Principal Interest Total
1997 $ 646,470 $ 1,223,973 $ 1,870,443
1998 4,375,839 1,194,604 5,570,443
1999 874,633 995,810 1,870,443
2000 914,368 956,075 1,89'0,443
2001 4,655,908 914,535 5,570,443
Thereafter 15 474,742 2.845,173 18,319.915
Totals JZ6130
NOTE 8 - CERTIFICATES OF PARTICIPATION
On April 1, 1994, the West Contra Costa Unified School District Financing
Corporation issued Certificates of Participation (COPS). The proceeds were used
to refund a 1988 COPS issuance. Semi-annual payments are made at varying
interest rates from 6 percent to 7.125 percent.
The trustee, as assignee of the corporation, will receive the following payments
for the benefit of the certificate owners:
-20-
Financial and Compliance Audit
Year Ending June 30 Principal Interest Total
1997 $ 95,000 $ 777,562 $ 872,562
1998 135,000 771,412 906,412
1999 155,000 763,012 918,012
2000 165,000 753,213 918,213
2001 175,000 741,697 916,697
Thereafter 10.350.000 9.829,718 20,179.718
Totals I 1075 000 $13,6 $24,711.614
NOTE 9 - VOLUNTARY INTEGRATION PROGRAM AUDIT EXCEPTIONS
The Voluntary Integration Program debt represents cost disallowances of
$7,652,000 based on state audits of program expenditures in fiscal years
1988-89 and 1989-90. Subsequently, the district entered into an agreement with
the State of California to-repay this amount beginning in June 1993. During the
1992-93 fiscal year, the original agreement was restructured allowing the
district to make the June 30, 1993, payment of$200,000 as scheduled with the
remaining balance scheduled to be repaid beginning in 1998. Repayment of the
voluntary integration debt is shown below:
Year Ending June 30 Total Payments
1998 $ 300,000
1999 300,000
2000 300,000
2001 300,000
Thereafter 6,252.000
Total $7,452,000
NOTE 10 - COMPUTER EQUIPMENT ACQUISITION LOANS
During fiscal year 1989-90, the district financed the acquisition of an
administrative and instructional computer system with a loan from IBM. The
loans are collateralized by the acquired assets.
Subsequent to June 30. 1993, the district restructured the debt allowing for one
payment during fiscal year 1993-94 and the remaining payments of$5,000,000
represented by $2,798.366 of principal and $2,201,634 of interest payable in
fiscal years 2007-08 through 2010-11. The Pooled Money Investment Rate at
June 30, 1993, of 4.402 percent, was used to impute the interest costs implicit
in the repayment amounts.
-21- State Controller's Office
West Contra Costa Unified School District
NOTE 11 - REIMBURSEMENT DUE STATE AND FEDERAL FUNDS -
UNALLOWABLE AUDIT COSTS
The district's 1989=90 fiscal year Consolidated Application grants were audited
by the California Department of Education to determine whether they were
properly allocated and expended. The district entered into an agreement with
the State of California to repay this amount in payments beginning in June
1993. At June 30, 1996, the district owed $300,000 to the state for misuses of
restricted Consolidated Application grant funds.
NOTE 12 - CAPITAL LEASE OBLIGATIONS
As of June 30, 1996, the district has various con=itments under long-term
lease agreements relating to portable classrooms, buildings, and other
equipment. These lease agreements have varying terms, conditions, and interest
rates. The district leases equipment under agreements which provide for title
to pass upon expiration of the lease period. Future minimum lease payments are
as follows:
Year Ending June 30 Lease Payment
1997 $107,537
1998 99,443
1999 96,740
Total 303,720
Less amount representing interest (57,411)
Present value of net minimum lease! payments 24� 6,309
The district will receive no sublease rental nor pay any contingent rentals for
this equipment.
NOTE 13 - GENERAL LONG-TERM DEBT - SCHEDULE OF CHANGES
A schedule of changes in long-term debt for the year ended June 30, 1996, is
shown below:
Balance Balance
July 1. 1995 Additions Deductions June 30, 1996
Emergency apportionment loan $27,560,337 $ 0 $(618,377) $26,941,960
Certificates of participation 11,140,000 0 (65,000) 11,075,000
Voluntary integration program
audit exceptions 7,452,000 0 0 7,452,000
Computer equipment acquisition
loans 2,459,11.1 339,255 0 2,798,366
Compensated absence 0 921,536 0 921,536
Reimbursement due state and federal
funds - unallowable audit costs 600,000 0 (300,000) 300,000.
Capital lease obligations 330.9E6 0 (84,656) 246,309
Totals $49,542,413 S1,260.791 S(1,068,033) $49,735,171
-22-
C7, p% v1 . M O N t-
`� O N %0 00 O
t� 00 00 w W N m h
F O 00 _ O t� t, r� O t" ti
�p M M
EH t� N V O
O �
O
C M en 0 0 0 0 N C
.�. H •� to st r- t Mri
c2 V C7, io to N
:r O v�
cr
r~
ch 00 0 0 0 0 0 00 O 00
p o 0 0
ci oU o 0 0
E H X000000
A u M M M
C C V'1 V'1
u u
N N
E
U
to
0 0 0 0 0 0 C
Z 3 = y o o %0 M
uj
cc 2 •n o 0 0 o a
p Q Q `� to O O N tl t�1
o:
cc W ¢ v, .n N N N
u '
W R o 0 0 0 0 0 0 0 0 0
cQ '= � ° 00000 0 0
W O H O .0 0 0 0 0 N h v1
U E ^O u to M M N
> > 0 4. W t.� r
V) C p N N N en r- 00 .:r O
F � � •eo v'i v O N �O t� � �p O
cmis N 00 00
Q 0U t- O _. .... M t-
00
'y D\ O� O� O� — P- �D O
N VN N M
F 6. C6 tH
O C
W E T uM M M M M O O O
O C C 7 en
�� --• _' O�
C
00.0 C 00000 N
EG -� ccooh000000 %n O a
E.. E W nom'. _ ,, .. . ,n ern oo civ
C� cu Q 40�
Z p
O o• vs m ea
H
Q: C W
uj
Z e0 C 1 p\ 0� O O
Liz ^ Q\ p. os O O
V F
Q
L�
O
Z
West Contra Costa Unified.School District
NOTE 15 - OPERATING TRANSFERS
Interfund transfers principally consist of operating transfers from the fund
receiving revenues to funds from which the resources are to be expended.
Interfund transfers for fiscal year 1996 were as follows:
Transfers In Transfers Out Amount
Debt Service General $2,301,269
Deferred Maintenance General 441,969
State School Building Lease General 192,770
General Bond Interest and Redemption 116,190
General Tax Override 23.297
Total $3,075.495
NOTE 16 - JOINT VENTURES (JOINT POWERS AGREEMENTS)
The district participates with other Contra Costa County school districts in two
joint powers agreements (JPAs): the Contra Costa County Schools Insurance
Group (CCCSIG) and the Schools Excess Liability Fund (SELF). CCCSIG
enters into reinsurance agreements whereby it cedes various amounts of risk to
other insurance companies. Risks ceded to insurance companies are treated as
though they are not risks for which CCCSIG is liable. CCCSIG's excess
workers' compensation policies were purchased with a retention amount of
$500,000 per claim and its members are covered by insurance for individual
claims to the statutory maximum. The district pays a premium commensurate
with the level of coverage required. SELF arranges for and provides liability
coverage for its member public educational agencies for claims of $1 million
to $14 million per occurrence. The district pays a premium commensurate with
the level of coverage requested. The agreements between the district and both
JPAs contain retrospective premium provisions. As a result, the district may
be assessed additional premiums or may receive premium refunds.
The JPAs are governed by a board consisting of a representative from each
member district. Each governing board controls the operations of its JPA
independent of any influence by the district beyond the district's representation
on the governing board. The JPAs are independently accountable for their fiscal
matters. CCCSIG and SELF maintain their own accounting records, and their
budgets are not subject to any approval other than that of the respective
governing boards. Member districts share JPA surplus and deficits in
proportion to their participation in each JPA. As such, the JPAs are not
component units and are not included in the accompanying district financial
statements for financial reporting purposes.
Condensed financial information for CCCSIG and SELF for the year ended
June 30, 1996, is as follows:
-24-
Financial and Compliance Audit
CCCSIG SELF
Total assets $52,995,264 $116,478,889
Total liabilities 18.727,610 74,746,785
Net assets available for claims $34,267,654 $ 41,732,104
Total revenues $14,592,919 $ 11,757,445
Total expenses 5.451,381 5.120,761
Net increase in net assets
available for claims $ 9,141,538 $ 6,6361684
Neither CCCSIG nor SELF had long-term debt outstanding for the year ended
June 30, 1996.
The district's participating percentage in SELF at June 30, 1996, has not been
determined by SELF's governing board.
NOTE 17 - COMMITMENTS AND CONTINGENCIES
A. Litigation - Personnel Issues
The district is a defendant in several pending lawsuits related to personnel
disputes over pay reductions, contract negotiations, and layoffs which
resulted from the district's financial situation in addition to other legal
matters. The outcome of the litigation and maximum possible judgments
against the district in these lawsuits is unknown at the present time.
B. Federal Funds - Contingent Liabilities
The district has received federal funds for specific purposes that are
subject to review and audit. The results of audits performed indicate that
the district has potential liabilities of approximately $355,254.
The current status of findings for the federal program, Elementary and
Secondary Education Act (ESEA) Chapter 1, as disclosed in audit reports
for fiscal years 1990-91 and 1991-92 are potential liabilities of $175,000
and $180,254, respectively. A final determination on these audit results has
not been made by the federal and state departments of education.
NOTE 18 - EMPLOYEE RETIREMENT SYSTEMS
Qualified employees are ,covered under multiple-employer defined benefit
pension plans maintained by agencies of the State of California. Classified
employees are members of the Public Employees' Retirement System (PERS)
and certificated employees are members of the State Teachers' Retirement
System (STRS).
-25- State Controller's Office
West Contra Costa Unified School District
Plan Description and Provisions
PERS:
All full-time classified employees participate in the Public Employees'
Retirement Fund which is administered by PERS, an agent multiple-employer
contributory public employee retirement system that acts as a common
investment and administrative agent for participating public entities within the
State of California. The West Contra Costa Unified School District is part of
a "cost-sharing" pool within PERS. One actuarial valuation is performed for
those employers participating in the pool, and the same contribution rate
applies to each. At June 30, 1996, the district employed 886 classified
employees with a total payroll of $26,394,678.
Employees are eligible for retirement at the age of 60 and. are entitled to a
monthly benefit of 2 percent of final compensation for each year of service
credit. Retirement compensation is reduced if the plan is coordinated with
Social Security. Retirement may begin at age 50 with a reduced benefit rate,
or after age 60 to 63 with an increased rate. The plan also provides death and
disability benefits. Retirement benefits fully vest after five years of credited
service. Upon separation from the district, members' accumulated contributions
are refundable with interest credit through the date of separation.
Benefit provisions for PERS are established by the Public Employees'
Retirement Law (Part 3 of the California Government Code, Section 20000
et seq.).
STRS:
All full-time certificated employees participate in STRS, a cost-sharing
multiple-employer contributory public employee retirement system. At
June 30, 1996, the district employed 3,200 certificated employees with a total
payroll of $68,472,979.
Employees attaining the age of 60 with five years of California service credit
(service) are eligible for normal retirement and are entitled to.-.a monthly benefit
of 2 percent of their final compensation for each year of service. Final
compensation is defined as the average salary earnable for the highest three
consecutive years of service. The plan permits early retirement options at age
55 or as early as age 50 with 30 years of service. Disability benefits of up to
90 percent of final compensation are available to members with five years of
service. A family benefit is available if the deceased member had at least one
year of service. After five years of credited service, members become
100 percent vested in retirement benefits earned to date. If a member's
employment is terminated, the accumulated member contributions are
refundable. The current rate of interest credited to members' accounts is
6.0 percent per annum-
-26-
Financial and Compliance Audit
Benefit provisions for STRS are established by the Public Employees'
Retirement Law (Part 13 of the California Education Code, Section 20000
et seq.).
Funding Status and Progress of the Retirement Plans
The "pension benefit obligation" reported below is a standardized disclosure
of the present value of pension benefits adjusted for the effects of projected
salary increases and any step-rate benefits estimated to be payable in the future
as a result of employee service to date. The measure is the actuarial present
value of credited projected benefits and is intended to help users assess the
retirement plan's funding status on a going-concern basis, assess progress made
in accumulating sufficient assets to pay benefits when due, and make
comparisons among retirement systems and employers. The measure is
independent of the funding method used to determine contributions to the
retirement systems.
The pension benefit obligation for PERS was computed as part of actuarial
valuation performed June 30, 1995. Significant actuarial assumptions used to
compute the PERS pension benefit obligation include an actuarial interest rate
of 8.50 percent per annum and projected salary increases of 4.5 percent for
inflation.
PERS does not make separate measurements of assets and pension benefit
obligations for individual school districts or county offices. The total unfunded
pension benefit obligation for local educational agencies as a whole, as of
June 30, 1995, is as follows:
Pension Benefit Obligation PERS
Retirees and beneficiaries currently receiving benefits and
terminated employees not yet receiving benefits $7,032,915,534
Current employees:
Accumulated employee contributions including
allocated investment earnings 3,506,097,044
Employer-financed vested 4,165,611,630
Employer-financed nonvested 257.451.403
Total pension benefit obligation 14,962,075,610
Net assets available for benefits at cost
(market value is 517,314,566,705) 16.288.397.653
Overfunded pension benefit obligation $ 1.326.322.042
The pension benefit obligation for STRS was computed as part of the actuarial
valuation performed June 30, 1995. The significant actuarial assumptions used
by STRS to compute the June 30, 1995, actuarial valuation do not differ from
those applied in prior years.
-27- State Controller's Office
West Contra Costa Unified School District
The assumed long-term investment yield is 8.0 percent, and the assumed
long-term salary increase assumption for inflation is 5.5 percent. The normal
cost rate is 16.07 percent of covered payroll and the 18-year amortization rate
for the unfunded actuarial obligation is 4.53 percent. Member and employer
contribution rates are set by law and are not affected by the actuarial valuation.
Under current law the pension benefit obligation for STRS is not the
responsibility of the district. The State of California makes annual contributions
to STRS toward the unfunded obligation. The pension benefit obligation for
STRS is included in the financial statements for STRS and the State of
California.
Contributions Required and Contributions Made
For PERS, the district's required contribution rate was 6.979 percent from July
through December 1995, and 6.599 percent of gross salary expenditures
effective January 1996. PERS participants are required to contribute 7 percent.
For STRS, the district is required to contribute 8.25 percent of gross salary
expenditures, while participants are required to contribute 8 percent of gross
salary expenditures.
The district contribution information for the year ended June 30, 1996, is as
follows:
PERS STRS
Number of employees covered 886 3,200
Total employee contributions $ 1,268,972 $ 5,093,286
Total employer contributions $ 1,3.13.494 $ 5,255,129
District's current-year covered payroll $19,427,914 $63.698,458
Employee contribution as a percentage
of covered payroll 6.53% 8.00%
Employer contribution as a percentage
of covered payroll 6.76% 8.25%
The district's contribution represented .08 percent and .49 percent of the total
contributions required of all participating employers in PERS and STRS,
respectively.
The district's employer contribution to PERS met the required contribution rate
and satisfied the plan's funding requirements as determined by the PERS
actuary. The funded contribution included amortization of the unfunded
actuarial liability through the year 2011. The significant actuarial assumptions
used to compute the actuarially determined contribution requirement are the
same as those used to compute the pension benefit obligation, as previously
described.
-28-
Financial and Compliance Audit
The district's employer contribution to STRS met the required contribution rate
established by law. Although the actuarially determined contribution rate
exceeds the employer rate set in law, the district has no obligation for the
deficit.
Trend Information .
Ten-year historical trend information giving an indication of PERS' and STRS'
progress in accumulating sufficient assets to pay benefits when due is presented
in the California Public Employees' Retirement System's Annual Report for the
year ended June 30, 1995 and the State Teachers' Retirement System's
Comprehensive Annual Financial Report for the year ended June 30, 1995.
The three-year trend information required to be reported for PERS is presented
below:
June 30
1993 1994 1995
Net assets available for benefits as percentages
of the pension benefit obligation 101.2% 109.7% 108.9%
Overfunded pension benefit obligation as
percentages of annual covered payroll 3.7% 31.5% 30.0%
Employer contributions made in accordance with
actuarially determined requirements, as
percentages of annual covered payroll 8.67% 6.72% 6.98%
Other Information
Under STRS law, certain early retirement incentives require the employer to
the resent value of the additional benefit which may be aid on either a
pay P Y P
current or deferred basis. The district has no obligation to STRS for early
retirement incentives granted to terminated employees.
NOTE 19 - POST-EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS
In addition to the pension benefits described in Note 11, the district provides
post-retirement health care benefits to all employees who (1) have been
employed by the district continuously for a period of ten years immediately
prior to retirement if the retiree is 65 years or older; (2) have been employed
continuously by the district for a period of ten years immediately prior to
retirement if the employee retires at less than age 65 and has accumulated a
total of 30 years in public education including the ten years with the district;
and (3) have accumulated one additional year (over the ten-year minimum) in
the district for each year under the age 65 at the time of retirement, up to a
total of ten additional years (for example, a 58-year-old retiree must have
accumulated 17 years of district service immediately prior to retirement). On
June 30, 1996, 1,712 retirees met these requirements.
_-)9- State Controller's Office
West Contra Costa Unified School District
The district offers retirees a choice of two health maintenance organizations
(HMOs) for health benefits; dental benefits are offered through one insurer.
The district pays 100 percent of the monthly HMO and dental benefit premiums
for retirees and their spouses. All eligible retirees and their spouses who
qualify for Medicare benefits must apply and pay premiums for Medicare
coverage as prescribed by law. Expenditures for post-retirement health care
benefits are recognized when paid. During the fiscal year ended June 30, 1996,
expenditures of $4,935,861 were recognized for post-retirement health care.
NOTE 20 - SUBSEQUENT EVENTS
Tax and Revenue Anticipation Notes
On December 12, 1996, the district issued $20,000,000 of Tax and Revenue
Anticipation Notes (TRANS) maturing on December 11, 1997, with an interest
rate at 4.25 percent. The TRANS are a general obligation of the district, and
are payable from revenues and cash receipts to be generated by the district.
There are no contractual obligations related to the issuance other than the
TRANS agreement. The funds were used to supplement cash flow.
-30-
Batchelar
The Board of Supervisors Contra ��'ot the Board
and
County Administration BuildingC O Sta C u�o)Adrninistrator
651 Pine Street, Room 106
Martinez,California 94553-1293 County
Jim Ropsn,1 at District J
Go*B.Mena,2nd District
bonne Gerber,3rd District i
Mork DsSmdnier,4th District -
4oe Cerm:iwMlls,5th District ya ba
ST'9 COUK�
June 16, 1997
Sharon Morganelli
Jones, Hall, Hull & White
4 Embarcadero, 19th Floor
San Francisco, California 94111
Dear Ms. Morganelli:
Per your request, enclosed are five copies of Resolution No.
97/298 adopted by the Contra Costa County Board of Supervisors on
June 10, 1997 , authorizing and issuance and sale of Tax and
Revenue Anticipation Notes on behalf of the West Contra Costa
Unified School District.
Yours very truly,
/Z.
Jeanne O. Maglio
Chief Clerk
jom
Enc. 5