1. Legal Requirements for School Bonds C.A.S.H. Local Workshop Planning for 2016 Local Bond Success September 22, 2015 and September 29, 2015 Presented by: Daniel M. Maruccia And Megan E. Macy

2. Overview of Topics Bonds – Big Picture, Baby Steps Your Team Bond Election Campaigns New Developments in the Law

3. Bonds: Big Picture, Baby Steps Steps to Voter Authorization of Debt Issuance 1.Establish definitive list of projects. 2.Order election, consolidate, send notice to elections official. 3.Ballot arguments and rebuttals. 4.County Counsel’s impartial analysis of ballot measure. 5.Tax Rate Statement. 6.Public examination period. 7.Sample ballot and voter pamphlet. 8.Election. 9.Certification of election results. 3

4. Pre-Election Team Internal Team: – Superintendent – Chief Business Official – Facilities Director – District Counsel Consultants: – Bond Counsel – Financial Advisor Third Parties: – County Treasurer/Auditor 4

5. Responsibilities of Bond Counsel Primary Roles and Responsibilities Supervise Bond Proceedings and perform Due Diligence review Draft Legal Documents Examine Disclosure Documents Obtain Government Approvals Coordinate Execution of Documents Render Final Opinion 5

6. Bond Election Campaigns Prior to Prop. 39 – Required a 2/3 Vote – 40% of Measures Failed to Pass Prop. 39 Bond Elections (since 2001) – Consolidated with Statewide Election – 55% Vote Requirement – Accountability Requirement (Oversight Committee) 6

7. Prop 39 Bonds What are Prop 39 Bonds? Prop 39 Bonds are issued to finance construction, rehabilitation, or replacement of school facilities. 55% majority vote required to pass measure. Citizen’s Oversight Committee must monitor expenditure of proceeds. 7

8. Bond Election Campaigns Upcoming Deadlines for June 7, 2016, and November 8, 2016 Election No later than March 11, 2016* (for June Election) and August 12, 2016* (for November Election): – Establish Definitive List of Projects; – Consolidate Election; – Order and Specifications to County Elections Official *LAST DAY; Project List and Resolution should ideally be adopted earlier. 8

9. Establish Definitive List of Projects 9

10. Order Election, Consolidate, Send Notice to Elections Official Resolution must be received by County Elections Official at least 88 days prior to the election. 10

11. Ballot Arguments and Rebuttals 11

12. Tax Rate Statement 12

13. Election, and Certification of Results Regular, statewide elections for 2016: June 7 November 8 13

14. Reimbursement Resolution District may reimburse itself from bond proceeds for certain costs it has incurred ahead of issuance. 14

15. Education Code section 7054 The Rule: “No school district or community college district funds, services, supplies, or equipment shall be used for the purpose of urging the support or defeat of any ballot measure or candidate” (Ed. Code, § 7054.) 15

16. Bond Election Campaigns Dos and Don’ts of Bond Campaigns DON’TS No Advocacy No use of Public Funds 16

17. Bond Election Campaigns Dos Allow use under Civic Center Act Allow contributions by employees to employee organizations Allow district officers to present information and answer questions 17

18. Bond Election Campaigns Polling A school district may hire and pay for public polling and other information gathering services to help determine potential support for a measure prior to calling the election. 18

19. Bond Election Campaigns Campaign Consultants – Best Practices A school district cannot hire a campaign consultant, however, a campaign committee can hire and supervise a campaign consultant. Campaign consultant cannot be paid by school district. Underwriter, Financial Advisor, or other bond team member should not provide campaign consultant services. 19

20. Changes to State Law AB 182 – Effective January 1, 2014 Places limits on CABs: – 4:1 Debt to Repayment Ratio – Reduces Maximum Interest to 8% – Limits Maturity to 25 Years – Requires 10 year Optional Call – New Accountability Requirements 20

21. TAKE-AWAYS

22. Questions 22

23. 23 Megan MacyDaniel MarucciaPartner mmacy@lozanosmith.comdmaruccia@lozanosmith.com One Capitol Mall, Suite 640 Sacramento, CA 95814 T 916.329.7433 | F 916.329.9050 Disclaimer: These materials and all discussions of these materials are for instructional purposes only and do not constitute legal advice. If you need legal advice, you should contact your local counsel or an attorney at Lozano Smith. If you are interested in having other in-service programs presented, please contact clientservices@lozanosmith.com or call (559) 431-5600. Copyright © 2015 Lozano Smith All rights reserved. No portion of this work may be copied, or sold or used for any commercial advantage or private gain, nor any derivative work prepared there from, without the express prior written permission of Lozano Smith through its Managing Partner. The Managing Partner of Lozano Smith hereby grants permission to any client of Lozano Smith to whom Lozano Smith provides a copy to use such copy intact and solely for the internal purposes of such client.