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Agenda Item
ASR
Control 12-001802 |
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MEETING DATE: |
01/15/13 |
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legal entity taking action: |
Board of Supervisors |
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board of supervisors
district(s): |
1 |
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SUBMITTING
Agency/Department: |
Treasurer-Tax Collector (Approved) |
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Department contact
person(s): |
Shari Freidenrich (714) 834-7625 |
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Paul Cocking (714) 834-4774 |
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Subject:
Westminster School District
General Obligation Bonds
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ceo Concur |
County
Counsel Review |
Clerk of the Board |
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Concur |
Approved Resolution to Form |
Discussion |
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3 Votes Board Majority |
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Budgeted: N/A |
Current Year Cost:
N/A |
Annual Cost:
N/A |
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Staffing Impact: No |
# of Positions:
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Sole Source:
N/A |
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Current Fiscal Year Revenue: N/A |
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Funding Source: N/A |
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Prior Board Action: N/A
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RECOMMENDED ACTION(S):
Adopt Resolution of the Board of Supervisors of the County of Orange, State of California, Authorizing the Issuance and Sale of Westminster School District General Obligation Bonds, Election 2008, Series 2013, In An Aggregate Principal Amount Not To Exceed $21,000,000, By Negotiated Sale Pursuant to A Bond Purchase Agreement, Prescribing The Terms of Sale of the Bonds, Approving the Form of and Authorizing the Execution and Delivery of Said Bond Purchase Agreement and Other Matters Relating Thereto.
SUMMARY:
Issuance by the County of Orange of Westminster School District (the “District”) General Obligation Bonds, 2008 Election, Series 2013 (the “Bonds”) in the name and on behalf of the District in the aggregate principal amount not to exceed $21,000,000.
BACKGROUND INFORMATION:
Education Code Section 15140(a) provides that this Board is required to issue general obligation bonds on behalf of a school district if the school district has received a qualified or negative certification in its most recent interim report. The District received a qualified certification of their second interim financial report from fiscal year 2011-12. This has been confirmed with the County Board of Education and with the District. Education Code Section 42131 states, in relevant part, that “a qualified certification shall be assigned to any school district that, based upon current projections, may not meet its financial obligations for the current fiscal year or two subsequent fiscal years.” Since the District has received such a certification, the County may not consent to the District to issue the Bonds on their own under Education Code Section 15140(b). Accordingly, in order to complete its issuance of the Bonds, the District has requested this Board to issue the Bonds on its behalf. In addition, the bonds may be issued by the county using either a competitive sale or a negotiated sale. The District is requesting that the County consent to the issuance of the Bonds at a negotiated sale, as permitted by Government Code section 53506 and 53508.7, Education Code Sections 15350 et seq., 15140 and 15146, and the terms and conditions set forth in the District resolution. The Board’s consent and authorization will only apply to these specific bonds. The District’s proposed sources and uses of funds; bond pricing, bond structure and debt service schedules are included as attachment 5.
The attached proposed Board of Supervisors’ resolution approves the issuance of the Bonds on behalf of the District, outlines the terms of the Bonds and the form(s) of the Bonds (current interest, capital appreciation, and convertible capital appreciation bonds are being considered by the District). Also attached as part of the resolution, is a form of contract of purchase among the County, the District and the underwriter. The County will not approve the form of a preliminary official statement, official statement or other disclosure document. All disclosure documents will be approved by the District. The County will only provide disclosure with respect to the Treasurer’s investment policy and the investment pool. The District will be required to indemnify the County with respect to the District’s disclosure. The County’s exposure will be further limited by including limiting language in the preliminary and official statements and requiring the District to expressly direct the County with respect to Bond sizing, pricing, timing and method of sale, debt service timing and other matters.
Importantly, pursuant to the specific requirements of Education Code Section 15140(a), this Board must issue the Series 2012 Bonds on behalf of the District “as soon as possible, when appropriate, following the receipt of a resolution duly adopted by the governing board of the District.” Due to the mandatory nature of the issuance of the Bonds on behalf of the District, it is recommended that the Board approve the issuance without further action. Absent manifest error by the District, the failure or unreasonable delay on the part of the County to approve the bonds could result in County liability.
On November 4, 2008, in excess of 55% of the voters approved the issuance of up to $130 million of general obligation bonds (the “Bond Authorization”). A portion of said authorized bonds in the aggregate initial principal amount of $34,995,681 the Westminster School District General Obligation Bonds, Election of 2008, Series 2009 A-1, were previously issued. Based on the issuance of the Existing Bonds, $95,004,319 of the Bond Authorization currently remains authorized and unissued.
Debt service on the Bonds will be secured by the full faith and credit of the District and will be paid by adding it to the property taxes of District residents. THE OBLIGATION TO MAKE PAYMENTS OF PRINCIPAL AND INTEREST ON THE BONDS IS SOLEY THAT OF THE DISTRICT, NEITHER THE COUNTY’S CREDIT, FUNDS, MONEYS OR TAXING POWER IS PLEDGED OR OBLIGATED IN ANY RESPECT TOWARDS PAYMENT OF THE BONDS. The District is considering purchasing a municipal bond insurance policy to supplement its stand alone credit rating. The anticipated bond rating is AA-/Aa3. By law, Bond maturity may not exceed 40 years.
Following the bond sale, the proceeds will be deposited with the Orange County Treasurer and held in a statutorily designated fund by the Treasurer in her capacity as treasurer for the Improvement District. A third-party paying agent will be selected to make the actual disbursements of principal and interest on the Bonds.
FINANCIAL IMPACT:
N/A
STAFFING IMPACT:
N/A
REVIEWING AGENCIES:
County Counsel
ATTACHMENT(S):
1. County Resolution
2. District Resolution
3. Bond Purchase Agreement
4. Bond Distribution List
5. Proposed Bond Debt Details