1. ABC Unified School District Board of Education Meeting July 15, 2014 Bond Resolution Toan Nguyen, Assistant Superintendent-Business Services/Chief Financial Officer Mark Farrell, Senior Financial Advisor, Dale Scott & Company Don Field, Partner, Orrick, Herrington, Sutcliffe LLP 1

2. PROCESS AND TIMELINE DateActivities November - December 2013 Staff conducted an assessment of the schools and departments’ Facilities/Technology needs January 15, 2014 Board Special Learning Session on: Schools for 21st Century Learners and the District Facilities/Technology Needs Assessment. The Board authorized Superintendent/designee to Conduct a Feasibility Study & Complete the Facilities Master Plan February 4, 2014 Approved contract with Dale Scott & Company to provide survey research services, pre-election services, and financial advisory/bond issuance services. March 4, 2014 Results of Feasibility Study for the Possible Bond Measure was presented to the Board March 18, 2014 Approved contract with Flewelling & Moody to develop a districtwide Facilities Master Plan April 1, 2014 Approved contract with George K. Baum to provide bond underwriting services 2

3. PROCESS AND TIMELINE DateActivities April 1, 2014 Approved the contract with Orrick, Herrington & Sutcliffe LLP to provide bond counsel services March - June, 2014 Staff and Flewelling & Moody visited every school site and district department to assess and solicit input from administrators, teachers, support staff, parents, and students for the Facilities Master Plan June 24, 2014 Draft Facilities Master Plan was presented to the Board of Education for discussion, review, and feedback July 8, 2014 The Facilities Master Plan was accepted by the Board. Bond Resolution and Project List were presented to the Board as an information item for discussion July 15, 2014 Bond Resolution and Project List are presented to the Board as an action item for consideration 3

4. 1997 Election - Yes Vote: 68.2% (Approved as a “Two-Thirds” Bond) 1997 Authorization – Bond Issuances & Refinancings SeriesIssue DateAmount Issued Amount Outstanding Series ADec 17, 1997$20,000,000$0 Series BApr 1, 2000$24,999,924$8,299,924 Series CJan 10, 2001$14,000,041 2003 RefundingMay 1, 2003$18,740,000$13,835,000 2010 RefundingMay 12, 2010$10,670,000$6,025,000 Total Outstanding$42,159,965 The 1997 Bond  Authorized $59M  Including State Facilities Matching Fund and Other District funding sources, the old modernization project was approximately $135 M  $42M Outstanding, will be paid off by 2034  Approximately $28 per 100,000 Assessed Value Tax Rate  Two refundings, saving the taxpayers more than $2M. 4

5. The 1997 Bond Modernization Architectural and Structural  Replace roofing and repair canopies  Abate asbestos and lead  Upgrade restrooms, replace toilet partition and restroom hardware  Re-paint & re-carpet Mechanical Systems  Replace heating ventilation and air-conditioning units  Provide solid state energy management system 5

6. Plumbing Systems  Replace galvanized piping and exterior hose bibs  Evaluate and add hydrants per code  Replace drinking fountains and plumbing accessories  Correct drainage and replace drains  Correct irrigation with replacement of sprinkler heads, re-plumbing, timer and shut off valves Electrical Systems and Low Voltage  Provide new power distribution  Replace technology distribution system and re-cable all classrooms  Replace light fixtures with T-8 lamps  Install emergency lighting  Provide standardize Fire Alarm Systems  Replace intrusion detection system The 1997 Bond Modernization 6

7. In February, 2014, a survey of 500 registered voters was conducted over a seven day period A telephone survey of 500 likely voters (those having voted in Nov. 2012 and voted in either Nov. 2002, Nov. 2006, Nov. 2010 or June 2012) was conducted between February 21, 2014 and February 27, 2014. Surveys were conducted during the weekday in the evenings, and on the weekend both in the morning and evening. The average length of the bond survey was about 8.70 minutes. Margin of error for the bond survey is +/- 4.33%. 2014 Possible Bond Survey 7

8. Results The G.O. bond measure received 72.2% (Yes/Lean Yes) support before voters received information and remained at 72.2% after voters received additional information There was strong voter support for all of the projects tested (More/Somewhat More Likely) Bond measure size still to-be-determined, survey based on 3.5% annual assessed value growth and a $59/$100,000 tax rate Voters in the District indicate strong support for a local school improvement bond program 8

9. Estimated CostCumm. Est. Cost 1.Safety and Security $ 18,473,709$ 18,473,709 2.Basic Facilities Needs $ 71,701,635$ 90,175,344 3.STEM/Science Initiative $ 4,496,678$ 94,672,022 4.Access to Modern Technology: A. Baseline Technology $ 85,410,038$180,082,060 B. 21st Century Infrastructure$ 92,702,022$272,784,082 5.Parity (Transform)$ 73,921,894$346,705,976 6.Future Project Phase$298,428,492$645,134,468 Current Facilities/Technology Needs 9

10. From great … Stowers ESNixon ES Cerritos HS 10

11. … to Exceptional Classroom InspirationLibrary Media Inspiration 11

12. Safety and Security Cerritos ES Congestion Improved School Drop-off Area 12

13. Basic Facilities Needs Playground Surface InspirationBragg ES Current Playground 13

14. Basic Needs Continued Shaded Lunch Area InspirationBragg ES Current Pergola 14

15. Basic Needs Continued Cerritos HS Typical Classroom Configuration Inspiration Classroom 15

16. STEM and Science Initiative Cerritos HS Current Science Lab Science Lab Inspiration 16

17. Access to Modern Technology Cerritos HS Current TechnologyTechnology Center Inspiration 17

18. Access to Technology Continued Melbourne ES Current Technology Inspirational Technology Access 18

19. Parity and Transformation Aloha ES Portable Classroom Exterior Inspiration 19

20. FACILITIES FUNDING SOURCES 20

21. Proposition 39 Overview What can be financed?  Acquisition of real property  Construction, renovation or replacement of school facilities  Furnishing and equipping of school facilities Limitations and Requirements  2/3 rd approval by school board  More specific project list  Regular elections only  $60 per $100,000 of Assessed Value (not Market Value) tax rate limit for unified school districts  Annual financial and performance audits  Citizen oversight committee Constitutional amendment passed in 2000, lowering voter approval threshold for school district G.O. bonds to 55% 21

22. LA County Unified School Districts Tax Rates 2013/14 Tax Rates per $100,000 of Assessed Value 22

23. LA County Unified Districts Bond Dollars per Student Cumulative Bond Authorizations Per Student (at time of Election) ABC has the lowest bond authorization amount per Student in the County 23

24. Assessed Value History Compound Annual Growth Rates 5 year0.78% 10 Year4.05% 20 Year3.67% Total Assessed Value 4.3% 10.6% 9.1% 8.3% 6.4% 3.9% 2.4% -0.4%0.7% 1.3% 4.3% 7.8% 4.8% 4.9% 7.0% 6.5% 8.8% 8.2% 7.1% 6.6% -1.9%-1.1% 2.0% 2.1% 2.9% Fiscal Year Assessed Value (billions) Note: Annual percentage changes listed above assessed value figures 24

25. Bond Sizing Analysis Sample Bond Issuance Schedules ($ millions) Tax Rate (per $100,000 of AV) Year Total 201520182021 $50.00$69.1$62.3$63.8$195.2 $55.00$76.0$68.5$70.2$214.7 $60.00$82.9$74.7$77.4$235.0 New Bond Authorization Overview Will fully comply with AB 182 Would not require the use of Capital Appreciation Bonds Uses reasonable AV growth projections in order to not “over promise” voters Assumptions: Three financings: 2015, 2018, and 2021 30-year amortization, Current Interest Bonds Only Current interest rates: 4.5% 3.5% annual assessed value growth Bond authorization amount determined by project needs and capacity of tax base For a property with a Assessed Value (not Market) of $300,000, the additional tax will be $180 per year, or 49 cents a day. 25

26. Additional Tax per Household 26

27. Additional Tax per Household Assuming the AV will increase by 2 percent per Proposition 13 limitation 27

28. ADA & Enrollment - 10 years 28

29. Hypothetical Bond Fund Allocation by Student (Actual Bond Allocation will be determined by future Board actions) 29

30. 30 Hypothetical Bond Fund Allocation by Student (Actual Bond Allocation will be determined by future Board actions)

31. Citizen Oversight Committee Formed within 60 days of school board acknowledging election results Independent committee, no District employees or officials, vendors, contractors or consultants Minimum of seven members and include: – Member of business organization – Member of senior citizen organization – Member of bona fide taxpayers organization – Parent of a child enrolled in district – Parent of a child enrolled in district and active in parent-teacher organization – Reviews bond expenditures for compliance with Bond Project List Reviews bond expenditures for compliance with Bond Project List 31

32. Bond Audits Annual Performance Audit – Independent audit to ensure bond proceeds expended only upon projects listed in Bond Project List Annual Financial Audit – Independent audit of financial statements related to bond proceeds and expenditures Audits must be submitted to Citizen Oversight Committee and made publically available Audits must be conducted according to Government Audit Standards issued by Comptroller General of the United States 32

33. Bond Resolution The Board can not, nor have the authority to raise tax. By passing the Bond Resolution, the Board is placing a school bond measure to a vote. This will give voters a chance to approve or reject the school bond. The voters will decide on the bond measure. Must have at least 55 percent approval from voters. Bond money can not be used for salaries. 33

34. NEXT STEPS DateActivities August 8, 2014 District must deliver the Bond Resolution and Tax Rate Statement to County on or before August 8. At this time, the District can submit a form requesting a certain letter for the measure. (For example, Measure A) August 12, 2014 The tentative Bond Fund Allocation and Project Priority Order List will be presented to the Board for consideration. The District will work with each site to develop a specific, detail Project List based on the approved tentative Bond Fund Allocation and Project Priority Order. August 15, 2014 The District or Citizen Campaign Committee submits Argument for the Measure on or before August 15, 2014. September 16, 2014 The Detail Project List and estimate cost, by site, will be presented to the Board for approval August-October, 2014 Community Forums, Presentations to PTAs; Local Service Clubs; Community Organizations; Civic Groups; Employee Groups.. regarding the Bond Measure November 4, 2014Election day 34

35. ABC Unified School District 35