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
Overview of Topics
Bonds – Big Picture, Baby Steps
Your Team
Bond Election Campaigns
New Developments in the Law
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
Pre-Election Team
• Internal Team:
– Superintendent
– Chief Business Official
– Facilities Director
– District Counsel
• Consultants:
– Bond Counsel
– Financial Advisor
• Third Parties:
– County Treasurer/Auditor
4
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
Bond Election Campaigns
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
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
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
Establish Definitive List of Projects
9
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
Ballot Arguments and Rebuttals
11
Tax Rate Statement
12
Election, and Certification of Results
Regular, statewide elections for 2016:
• June 7
• November 8
13
Reimbursement Resolution
District may reimburse itself from bond proceeds for
certain costs it has incurred ahead of issuance.
14
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
Bond Election Campaigns
Dos and Don’ts of Bond Campaigns
DON’TS
• No Advocacy
• No use of Public Funds
16
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
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
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
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
TAKE-AWAYS
Questions
22
Megan Macy
Partner
mmacy@lozanosmith.com
Daniel Maruccia
Partner
dmaruccia@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.
23