BACKGROUND 

An election was held in the La Cañada Unified School District (the “District”) on November 7, 2017, for the issuance and sale of general obligation bonds of the District for various purposes in the maximum amount of $149,000,000 (“Measure LCF”).  The District previously issued the one series of bonds under Measure LCF in a principal amount equal to $30,000,000.  The District now desires to issue its second series of bonds under Measure LCF in an amount not-to-exceed $30,000,000 (the “Bonds”).  The Bonds are being authorized for sale for the purpose of providing funds to finance projects approved by Measure LCF and to pay the costs of issuing the Bonds.

(a)        Bond Resolution.  This Resolution authorizes the issuance of the Bonds, specifies the basic terms, parameters and forms of the Bonds, and approves the form of Purchase Contract and form of Preliminary Official Statement described below.  In particular, Section 1 of the Resolution establishes the maximum aggregate initial principal amount of the Bonds to be issued ($30,000,000).  Section 4 of the Resolution states the maximum underwriter’s discount (0.425%) with respect to the Bonds, the maximum legal interest rate on the Bonds, and authorizes the Bonds to be sold at a negotiated sale to Stifel, Nicolaus & Company, Incorporated (the “Underwriter”).  The Resolution authorizes the issuance of current interest bonds only; capital appreciation bonds are not authorized. 

(b)        Form of Purchase Contract.  Pursuant to the Purchase Contract, the Underwriter will agree to buy the Bonds from the District.  All the conditions of closing the transaction are set forth in this document, including the documentation to be provided at the closing by various parties.  Upon the pricing of the Bonds, the final execution copy of the Purchase Contract will be prepared following this form.

(c)        Form of Preliminary Official Statement.  The Preliminary Official Statement (“POS”) is the offering document describing the Bonds which may be distributed to prospective purchasers of the Bonds.  The POS discloses information with respect to among other things (i) the proposed uses of proceeds of the Bonds, (ii) the terms of the Bonds (interest rate, redemption terms, etc.), (iii) the bond insurance policy for the Bonds, if any, (iv) the security for repayment of the Bonds (the ad valorem tax levy), (v) information with respect to the District’s tax base (upon which such ad valorem taxes may be levied), (vi) District financial and operating data, (vii) continuing disclosure with respect to the Bonds and the District, and (viii) absence of litigation and other miscellaneous matters expected to be of interest to prospective purchasers of the Bonds.  Following the pricing of the Bonds, a final Official Statement for the Bonds will be prepared, substantially in the form of the POS.

(d)        Form of the Continuing Disclosure Certificate.  The form of the Continuing Disclosure Certificate can be found in APPENDIX C to the POS.  Effective July 3, 1995, all underwriters of municipal bonds are obligated to procure from any public agency issuing debt a covenant that such public agency will annually file “material financial information and operating data” with respect to such public agency through the web-based Electronic Municipal Market Access (“EMMA”) system maintained by the Municipal Securities Rulemaking Board (a federal agency that regulates “broker-dealers,” including investment banking firms that underwrite municipal obligations).  This requirement is expected to be satisfied by the filing of the District’s audited financial statements and other operating information about the District, in the same manner the District has filed in connection with prior bond issuances. 

FISCAL IMPACT

 There is no fiscal impact to the General Fund resulting from the issuance of the Bonds. 

Staff recommends approval of Resolution #7-19-20 - A RESOLUTION OF THE BOARD OF EDUCATION OF THE LA CAÑADA UNIFIED SCHOOL DISTRICT, LOS ANGELES COUNTY, CALIFORNIA, AUTHORIZING THE ISSUANCE OF LA CAÑADA UNIFIED SCHOOL DISTRICT (LOS ANGELES COUNTY, CALIFORNIA) ELECTION OF 2017 GENERAL OBLIGATION BONDS, SERIES B, AND ACTIONS RELATED THERETO

BACKGROUND 

An Election was held in the La Cañada Unified School District (the “District”) on December 14, 1999 for the issuance and sale of general obligation bonds of the District for various purposes in the maximum principal amount of $6,000,000 (the “1999 Authorization”).  Pursuant to the 1999 Authorization, the District has previously caused the issuance of its (i) Election of 1999 General Obligation Bonds, Series A (Bank Qualified) (the “1999 Series A Bonds”), and (ii) Election of 1999 General Obligation Bonds, Series B (Bank Qualified) (the “1999 Series B Bonds”).

An Election was held in the District on March 2, 2004 for the issuance and sale of general obligation bonds of the District for various purposes in the maximum principal amount of $25,000,000 (the “2004 Authorization”).  Pursuant to the 2004 Authorization, the District has previously caused the issuance of its Election of 2004 General Obligation Bonds, Series A (the “2004 Series A Bonds”). 

On November 10, 2011, the District issued general obligation refunding bonds in the aggregate principal amount of $12,440,000 for the purpose of refunding portions of the 1999 Series A Bonds, 1999 Series B Bonds and 2004 Series A Bonds (the “Prior Bonds”).

The District now desires to refinance a portion of the outstanding Prior Bonds (so refunded, the “Refunded Bonds”) through the issuance of general obligation refunding bonds (the “Refunding Bonds”) in an aggregate principal amount not-to-exceed $8,000,000.  All benefits from the refunding will be delivered to the property owners in the District.  The final maturity of the Refunding Bonds will not be later than the maturity dates of the Refunded Bonds (August 1, 2028).

(a)        Resolution.  This Resolution authorizes the issuance of the Refunding Bonds, in one or more series of federally taxable or federally tax-exempt bonds.  The Resolution specifies the basic terms, parameters and forms of the Refunding Bonds, and approves the form of Purchase Contract, Continuing Disclosure Certificate, Escrow Agreement and Preliminary Official Statement described below.  In particular, Section 1 of the Resolution establishes the maximum aggregate principal amount of the Refunding Bonds to be issued ($8,000,000).  Section 4 of the Resolution states the maximum underwriting discount (0.650%) with respect to the Refunding Bonds, and authorizes the Refunding Bonds to be sold at a negotiated sale to Stifel, Nicolaus & Company, Incorporated (the “Underwriter”).  The Resolution authorizes the issuance of current interest bonds only; capital appreciation bonds are not authorized.

(b)        Form of Purchase Contract.  Pursuant to the Purchase Contract, the Underwriter will agree to buy the Refunding Bonds from the District.  All of the conditions of closing the transaction are set forth in this document, including the documentation to be provided at the closing by various parties.  Upon the pricing of the Refunding Bonds, the final execution copy of the Purchase Contract will be prepared following this form.

(c)        Form of Preliminary Official Statement.  The Preliminary Official Statement (the “POS”) is the offering document describing the Refunding Bonds which may be distributed to prospective purchasers of the Refunding Bonds.  The POS discloses information with respect to, among other things, (i) the proposed uses of proceeds of the Refunding Bonds, (ii) the terms of the Refunding Bonds (interest rate, transfer terms, etc.), (iii) the bond insurance policy for the Refunding Bonds, if any, (iv) the security for repayment of the Refunding Bonds (the ad valorem property tax levy), (v) information with respect to the District’s tax base (upon which such ad valorem property taxes may be levied), (vi) District financial and operating data, (vii) continuing disclosure with respect to the Refunding Bonds and the District, and (viii) absence of litigation and other miscellaneous matters expected to be of interest to prospective purchasers of the Refunding Bonds.  Following the pricing of the Refunding Bonds, a final Official Statement for the Refunding Bonds will be prepared, substantially in the form of the POS.

(d)        Form of the Continuing Disclosure Certificate.  The form of the Continuing Disclosure Certificate can be found in APPENDIX C to the POS.  Effective July 3, 1995, all underwriters of municipal bonds, are obligated to procure from a bond issuer a covenant that such public agency will annually file “material financial information and operating data with respect to the District” through the web-based Electronic Municipal Market Access (“EMMA”) system maintained by the Municipal Securities Rulemaking Board (which is the federal agency that regulates “broker-dealers,” including investment banking firms that underwrite municipal obligation issuance).  This requirement is expected to be satisfied by the filing of the District’s audited financial statements and other operating information about the District, in the same manner the District has filed in connection with prior bond issuances.  The purpose of the law is to provide investors in the Refunding Bonds with current information regarding the District.  Similar laws have governed the corporate debt market for many years.

(e)        Escrow Agreement.  Pursuant to the Escrow Agreement, proceeds from the sale of the Refunding Bonds will be deposited in an escrow fund (the “Escrow Fund”) held by U.S. Bank National Association (acting as “Escrow Agent”).  The monies in the Escrow Fund will be used by the Escrow Agent to refund each series of the Refunded Bonds on the first optional redemption date therefor (August 1, 2021).  Following the deposit of proceeds into the Escrow Fund, the Refunded will be deafeased and the obligation of Los Angeles County to levy ad valorem taxes for payment of the Refunded Bonds will cease.    

FISCAL IMPACT 

There is no fiscal impact to the General Fund resulting from the issuance of the Refunding Bonds. 

Background

Pursuant to Education Code (EC) 32280 every school in California is required to develop a comprehensive School Safety Plan to address safety concerns identified through a systematic planning process.  A School Site Council or safety planning committee shall review and update the plan. 

Current Considerations

The plans explain how each site has addressed the required key components.  All plans were approved by the School Site Councils to which community members, representatives from LCTA, CSEA, PTA, and student government were invited. We continue to follow the requirements as set forth in the categorical requirements, however, the categorical funding no longer exists under the new Local Control Funding Formula.  Components of the plans (as per Ed Code 32282) include the following:

1. Assessment of the current status of the school or school-related crimes
2. Child Abuse reporting procedures
3. Disaster procedure, routing and emergency
4. Policies related to suspension, expulsion, or mandatory expulsion and other school designated serious acts which would lead to suspension or expulsion
5. Procedures regarding teacher notification of dangerous students pursuant to EC 49079
6. Sexual harassment policy pursuant to EC 212.5
7. Provisions of any school wide dress code established pursuant to EC 35183
8. Procedures for safe ingress and egress to and from school
9. A safe and orderly environment conducive to learning
10. Rules and procedures pursuant to Chapter 1.2 of Title 15 of the Penal Code
11. Hate crime reporting procedures pursuant to Chapter 1.2 of Title 115 of the Penal Code

The plans will be in effect for the 2020-2021 school year.

Financial Implications

There is no financial impact to approving the School Safety Plans

It is recommended that the Governing Board receive this report as informational and no action be taken.

The Governing Board is requested to receive this report as informational and no action be taken.

Background 

Education Code Sections 35053(g), 42130, and 42131 require the Governing Board of each school district to certify at least twice a year (as of October 31^st and January 31^st) to the district’s ability to meet its financial obligations for the remainder of that fiscal year and for the subsequent two fiscal years.   

The certification by the Governing Board must be classified as follows: 

Positive:          A school district that, based on current projections, will meet its obligations for the current fiscal year and two subsequent fiscal years. 

Qualified:         A school district that, based on current projections, may not meet its financial obligations for the current fiscal year or subsequent two fiscal years. 

Negative:         A school district that, based on current projections, will be unable to meet its financial obligations for the current fiscal year or subsequent fiscal year. 

Introduction 

District Budget for 2019-20 and Multi-Year Projection Scenarios 

The Governing Board, at its meeting on June 25, 2019, adopted the District’s Budget for 2019-20, and they reviewed multi-year budgetary projections through 2021-22.                                     Current Considerations/Budgetary Overview

The Second Interim Report for 2019-2020 and the multi-year will have changes from the updated budget of June 2019 and the First Interim Report in December.

        Revenues:

• The LCFF revenues anticipated for 2019-2020 reflect a slight increase of about $100,000. Future LCFF funds decreased due to a reduction of the COLA from 3% to 2.29% in 2020-2021. A slight decrease in the COLA for 21-22 will also impact that year. COLA has been added to other revenue categories as applicable. Other State Revenues also show an increase from 1^st Interim. This totals about $280,000, and these are funds for Districts to offset costs from Pre-School programs. Local Revenues are reduced by $2,500,000 for fiscal year 21-22 due to the expiration date of the existing Parcel Tax. By the time of the Second Read on March 10th, this should reflect the outcome of the current Parcel Tax election.

   

  Expenditures:

   

• Salaries and benefits are being updated to reflect recent staffing changes as well as positions added to cover leaves. This will entail determining current costs of extra staffing in 2019-2020 and determining which costs will roll into the multi-year. Some of these increased costs relate to the Safety and Security initiatives – such as the staffing in the Wellness Center and extra security at LCHS. Analysis of these costs will continue between now and the second read in March. 

• Books, Supplies, and Materials have remained relatively constant for the fiscal year. There are currently funds budgeted for materials, and these expenditures may be completed this year or roll into the next fiscal year. 

• Services are funds spent on contracted work with vendors, utilities, repairs, and professional development. Increases have occurred since budget. Some are one-time for this fiscal year and others may be carried forward into the multi-year outlook. Analysis of these costs will continue between now and the second read in March. 

• Transfers Out:  Transfers out for Deferred Maintenance reflect $250,000, and the transfer of $125,000 to retirement benefits. The Deferred Maintenance transfer is a reduction from the original budget of $335,000 due to modernization projects that have been covered by Bond Expenditures. Approval of the 2^nd Interim will authorize these budgeted transfers to be processed. These transfer assumptions will be carried forward into the multi-year projections.

   

  Multi-Year Considerations: 

  Special Note: Per the budget recommendation, a cash transfer of $40,000 from the Fund 40.0 to the Cafeteria Fund (13.0) is included in the 2018-19 budget to offset expenses beyond revenues in the Cafeteria Fund. This budget transfer will also be processed with approval of the 2^nd Interim.

   

It is recommended that the Governing Board review and discuss the Second Interim Financial Report 2019-2020 - First Reading and give any direction toward final read.

Requests for variable term waivers for credentials may be submitted by employing agencies to the California Commission on Teacher Credentialing to solve a temporary certification or assignment problem.  If the employing agency finds there are an insufficient number of certificated persons who meet the specified employment criteria for a position, the variable term waiver acts as an "emergency credential" for the chosen candidate who does not hold the appropriate credential for the vacancy.   The candidate must meet certain requirements and pledge to enroll in and complete an applicable credentialing program.  Variable term waivers are granted for a specific amount of time, typically no longer than one year.

It is recommended that the Governing Board approve the Variable Term Waiver Request, so that the District may submit a waiver application to the California Commission on Teacher Credentialing for consideration.

It is recommended that the Governing Board approve the Variable Term Waiver Request, so that the District may submit a waiver application to the California Commission on Teacher Credentialing on behalf of Heather Applegate, part-time RSP teacher at Paradise Canyon Elementary School.

It is recommended that the Governing Board approve the Personnel Report as presented.

Background 

Pursuant to Board Resolution No. 14-18-19 dated May 14, 2019, the District accepted a bid from Chalmers Construction Services Inc., for Bid No. 18/19-07, La Cañada High School Bldg 600/Cafeteria Improvement.  During the course of construction of the project, the project team discovered conditions in the bldg. and some design deficiencies which had to be corrected to ensure the completed work satisfies code requirement and performance standards. The District’s project manager and architect reviewed the proposals from the contractor for the changes and negotiated the final pricing for the change order.  

Current Considerations 

This Change Order provides compensation for additional work performed pursuant to Change Order clause of the agreement to correct deficient conditions, design changes and additional scope.    

Financial Implications 

It is recommended that the Governing Board approve Change Order No 001 to Bid No. 18/19-07, La Cañada High School Bldg 600/Cafeteria Improvement.

The Governing Board is requested to approve Change Order No 001 to Bid No. 18/19-07, La Cañada High School Bldg 600/Cafeteria Improvement.

Background 

Pursuant to Board Resolution No. 14-18-19 dated May 14, 2019, the District accepted a bid from Chalmers Construction Services Inc., for Bid No. 18/19-08, La Cañada High School Band Room & Drainage Improvement.  During the course of construction of the project, the contractor delivered cabinets that were not fabricated with the correct materials as specified in the contract specifications.  The District rejected the cabinets and directed the contractor to fabricate new cabinets.  But because the new cabinets were not going to be fabricated and delivered prior to the opening of school, the District requested that the contractor installed the rejected cabinets and the contractor was required to return at later date to remove the rejected cabinets and installed new cabinets.  This change order is to pay for the 2^nd installation. The District’s project manager reviewed the proposals from the contractor for the changes and negotiated the final pricing for the change order.  

Current Considerations 

This Change Order provides compensation for additional work performed pursuant to the Change Order provision of the agreement.    

Financial Implications 

The contract amount is increased from $985,993.71 to $1,027,020.25. Funds will come from Measure LCF.

It is recommended that the Governing Board approve Change Order No 002 to Bid No. 18/19-08, La Cañada High School Band Room & Drainage Improvement.

The Governing Board is requested to approve Change Order No 002 to Bid No. 18/19-08, La Cañada High School Band Room & Drainage Improvement.

The Governing Board is requested to approve the PCR Special Activity request to attend Freedoms Foundation in Valley Forge, PA Monday, May 11 - Friday, May 15, 2020.

The Governing Board is requested to approve the LCHS request to attend Junior State of America Winter Congress in  Los Angeles, California Saturday, February 15 - Sunday, February 16, 2020.