NEW ISSUE — BOOK-ENTRY ONLY Ratings: Moody’s: “A1” S&P: “AA-” See “MISCELLANEOUS – Ratings” herein. In the opinion of Nixon Peabody LLP and Luna & Glushon (“Co-Bond Counsel”), under existing law and assuming compliance with the tax covenants described herein, and the accuracy of certain representations and certifications made by the District described herein, interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”). Co-Bond Counsel are also of the opinion that such interest is not treated as a preference item in calculating the alternative minimum tax imposed under the Code with respect to individuals and corporations. Co-Bond Counsel are further of the opinion that interest on the Bonds is exempt from personal income taxes of the State of California (the “State”) under present State law. See “TAX MATTERS” herein regarding certain other tax considerations.
Dated: Date of Delivery Due: As shown on inside cover
The Centinela Valley Union High School District (the “District”) is issuing its $50,000,000 2008 Election General Obligation Bonds, 2013 Series B (the “Bonds”). The Bonds are general obligation bonds approved by voters of the District and are payable from ad valorem property taxes levied by the County of Los Angeles (the “County”) on taxpayers within the District, which the Board of Supervisors of the County is empowered and obligated to levy without limitation of rate or amount upon all property within the District, subject to taxation by the District (except as to certain personal property which is taxable at limited rates), all as more fully described herein. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS” herein.
The proceeds of the Bonds will be used to (i) pay and defease the District’s 2010 General Obligation Bond Anticipation Notes in the aggregate principal amount of $24,999,726.20, (ii) finance certain of the Measure CV (2008) Projects, as more fully described herein, and (iii) pay the costs of issuance incurred in connection with the issuance of the Bonds. See “INTRODUCTION - Expected Use of Bond Proceeds” and “ESTIMATED SOURCES AND USES OF FUNDS” herein. The Bonds will be issued as current interest bonds. Interest on the Bonds is payable on February 1 and August 1 of each year, commencing on February 1, 2014.
The Bonds will be initially issued in book-entry form only, in denominations of $5,000 principal amount or integral multiples thereof, and will be initially issued and registered in the name of Cede & Co., as nominee for The Depository Trust Company (“DTC”). DTC will act as securities depository for the Bonds. Owners will not receive certificates representing their interests in the Bonds. Payments of principal of, premium, if any, and interest on the Bonds will be made by U.S. Bank National Association, as agent for the Treasurer and Tax Collector of the County, the initial Paying Agent for the Bonds, to DTC, which is obligated to remit such payments to its DTC participants for subsequent disbursement to the beneficial owners of the Bonds. See APPENDIX E – “BOOK-ENTRY ONLY SYSTEM” attached hereto.
The Bonds are subject to redemption prior to their stated date of maturity as described herein. See “THE BONDS – Redemption of the Bonds” herein.
THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR GENERAL REFERENCE ONLY. IT IS NOT INTENDED TO BE A SUMMARY OF THE SECURITY OR TERMS OF THIS ISSUE. INVESTORS ARE ADVISED TO READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION.
The Bonds will be offered when, as and if issued by the District and received by Cabrera Capital Markets, LLC, the Underwriter, subject to the approval of legality by Nixon Peabody LLP, Los Angeles, California, and Luna & Glushon, Los Angeles, California, as Co-Bond Counsel. Certain legal matters will also be passed upon for the District by its Co-Disclosure Counsel, Nixon Peabody LLP, Los Angeles, California, and Luna & Glushon, Los Angeles, California, and for the Underwriter by its counsel, Fulbright & Jaworski LLP, a member of Norton Rose Fulbright, Los Angeles, California. Keygent LLC, El Segundo, California, is serving as Financial Advisor to the District in connection with the issuance of the Bonds. The Bonds in book-entry form will be available for delivery through the facilities of DTC on or about October 31, 2013.
Cabrera Capital Markets, LLC
$50,000,000
CENTINELA VALLEY UNION HIGH SCHOOL DISTRICT
(County of Los Angeles, California)2008 Election General Obligation Bonds 2013 Series B
$50,000,000
CENTINELA VALLEY UNION HIGH SCHOOL DISTRICT 2008 Election General Obligation Bonds
2013 Series B
MATURITY DATES, PRINCIPAL AMOUNTS, INTEREST RATES, YIELDS AND CUSIP NUMBERS
________________________________
Base CUSIP Number†: 152339 Maturity Date
(August 1)
Principal
Amount Interest Rate Yield Price CUSIP
2016 $ 300,000 5.00% 0.82% 111.342% LZ8 2017 500,000 5.00 1.21 113.852 MA2 2018 700,000 5.00 1.62 115.390 MB0 2019 645,000 5.00 2.02 116.097 MC8 2020 920,000 5.00 2.41 116.041 MD6 2021 785,000 5.50 2.74 119.149 ME4 2022 800,000 5.50 3.04 118.770 MF1 2023 800,000 5.50 3.32 118.025 MG9 2024 1,000,000 5.75 3.60 117.540 C MH7 2025 1,000,000 5.75 3.79 115.846 C MJ3 2026 1,740,000 5.75 3.98 114.181 C MK0 2027 1,565,000 5.75 4.12 112.972 C ML8 2028 2,115,000 5.75 4.25 111.864 C MM6 2029 1,970,000 5.75 4.38 110.769 C MN4 2030 2,545,000 5.75 4.51 109.687 C MP9 2031 2,420,000 5.75 4.60 108.945 C MQ7 2032 2,925,000 5.75 4.68 108.291 C MR5 2033 3,515,000 5.75 4.74 107.804 C MS3
$23,755,000 6.00% Term Bonds due August 1, 2036 - Yield: 4.83% Price: 109.003% C CUSIP: 152339MT1
C Priced to August 1, 2023 call date at par.
† CUSIP is a registered trademark of American Bankers Association. CUSIP data herein is provided by Standard & Poor’s S&P Capital IQ
(formerly the CUSIP Service Bureau), a division of McGraw Hill Financial. CUSIP data herein is set forth for convenience of reference only. The District, the Paying Agent, the Financial Advisor and the Underwriter assume no responsibility for the selection or uses of the CUSIP numbers or for the accuracy or correctness of such data. The CUSIP number for a specific maturity is subject to being changed after the issuance of the offered Bonds as a result of various subsequent actions.
No dealer, broker, salesperson or other person has been authorized by the District or the Underwriter to give any information or to make any representations, other than those contained in this Official Statement, and if given or made, such information or representation must not be relied upon as having been authorized by any of the foregoing.
The information contained herein has been obtained from sources that are believed to be reliable. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, give rise to any implication that there has been no change in the affairs of the District since the date hereof.
The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, the Underwriter’s responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.
IN CONNECTION WITH THE OFFERING OF THE BONDS THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITER MAY OFFER AND SELL BONDS TO CERTAIN DEALERS AND BANKS AT PRICES LOWER THAN THE INITIAL PUBLIC OFFERING PRICES STATED ON THE INSIDE COVER PAGES HEREOF AND SAID INITIAL PUBLIC OFFERING PRICES MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER.
THE BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR HAS THE DISTRICT RESOLUTION (DEFINED HEREIN) BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS.
When used in this Official Statement or in any continuing disclosure by the District, in any press release by the District or in any oral statement made with the approval of an authorized officer of the District, the words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “forecast,” “expect,” “intend” and similar expressions identify “forward-looking statements.” Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. Any forecast is subject to such uncertainties. Inevitably, some assumptions used to develop the forecasts will not be realized and unanticipated events and circumstances may occur. Therefore, there are likely to be differences between forecasts and actual results, and those differences may be material.
The CUSIP data set forth on the inside cover page of and throughout this Official Statement is provided by Standard & Poor’s S&P Capital IQ (formerly the CUSIP Service Bureau), a division of McGraw Hill Financial, and is set forth herein for convenience of reference only. The District, the Paying Agent, the Financial Advisor and the Underwriter do not assume responsibility for the accuracy of such data. Further, CUSIP is a registered trademark of the American Bankers Association.
The District maintains a website at www.centinela.k12.ca.us. However, the information presented there is not part of this Official Statement, is not incorporated by reference herein and should not be relied upon in making an investment decision with respect to the Bonds.
CENTINELA VALLEY UNION HIGH SCHOOL DISTRICT BOARD OF EDUCATION
Member Term Ending
Hugo M. Rojas II, President November 2013 Maritza R. Molina, Vice-President November 2013 Rocio C. Pizano, Clerk November 2013 Gloria A. Ramos, Member November 2015 Lorena L. Gonzalez, Member November 2015
DISTRICT ADMINISTRATION
Jose A. Fernandez, Superintendent
Ron Hacker, Assistant Superintendent, Business Services
CO-BOND COUNSEL
Nixon Peabody LLP Los Angeles, California
Luna & Glushon Los Angeles, California
CO-DISCLOSURE COUNSEL
Nixon Peabody LLP Los Angeles, California
Luna & Glushon Los Angeles, California
FINANCIAL ADVISOR
Keygent LLC El Segundo, California
PAYING AGENT
U.S. Bank National Association, as agent for the Treasurer and Tax Collector of the County of Los Angeles
TABLE OF CONTENTS
Page
INTRODUCTION ... 1
General ... 1
The District ... 1
Security and Sources of Payment for the Bonds ... 2
The Bonds ... 2
The District’s General Obligation Bond Program ... 2
Expected Use of Bond Proceeds ... 3
Continuing Disclosure ... 3
Other Information ... 4
ESTIMATED SOURCES AND USES OF FUNDS ... 4
THE BONDS ... 5
General Provisions ... 5
Interest on the Bonds ... 5
Annual Debt Service ... 5
Redemption of the Bonds ... 6
Selection of Bonds for Redemption ... 7
Notice of Redemption ... 7
Partial Redemption of Bonds ... 8
Effect of Notice of Redemption ... 8
Defeasance ... 8
Application and Investment of Bond Proceeds ... 9
SECURITY AND SOURCES OF PAYMENT FOR THE BONDS ... 10
General Description ... 10
California Constitutional and Statutory Provisions Relating to Ad Valorem Property Taxes ... 10
Assessed Valuation of Property within the District ... 12
Tax Rates, Levies, Collections and Delinquencies ... 15
Largest Taxpayers in the District ... 19
General Obligation Bond Program and Bonding Capacity ... 19
Direct and Overlapping Debt ... 20
TAX MATTERS ... 22
Federal Income Taxes ... 22
State Taxes ... 22
Original Issue Premium ... 22
Ancillary Tax Matters ... 23
Changes in Law and Post-Issuance Events ... 23
LEGAL MATTERS ... 23
Continuing Disclosure ... 23
Limitation on Remedies; Amounts Held in the County Treasury Pool ... 24
Certain Legal Matters ... 24
FINANCIAL STATEMENTS ... 24 LITIGATION ... 25 MISCELLANEOUS ... 25 Ratings ... 25 Financial Advisor ... 25 Underwriting ... 26 Additional Information ... 26
APPENDIX A – ANNUAL DEBT SERVICE ... A-1 APPENDIX B – REGIONAL ECONOMIC AND DEMOGRAPHIC INFORMATION ... B-1 APPENDIX C – DISTRICT FINANCIAL INFORMATION ... C-1 APPENDIX D – AUDITED FINANCIAL STATEMENTS OF THE DISTRICT FOR
THE FISCAL YEAR ENDED JUNE 30, 2012 ... D-1 APPENDIX E – BOOK-ENTRY ONLY SYSTEM ... E-1 APPENDIX F – PROPOSED FORM OF OPINIONS OF CO-BOND COUNSEL ... F-1 APPENDIX G – FORM OF CONTINUING DISCLOSURE AGREEMENT ... G-1 APPENDIX H – THE LOS ANGELES COUNTY TREASURY POOL ... H-1
$50,000,000
CENTINELA VALLEY UNION HIGH SCHOOL DISTRICT
(County of Los Angeles, California)
2008 Election General Obligation Bonds
2013 Series B
INTRODUCTION
This Introduction is only a brief description of, and is qualified by, more complete and detailed information contained in the entire Official Statement, including the cover page through the appendices hereto, and the documents summarized or described herein. The offering of the Bonds to potential investors is made only by means of the entire Official Statement. A full review should be made of the entire Official Statement.
General
This Official Statement, which includes the cover page through the appendices hereto, is provided to furnish information in connection with the issuance of general obligation bonds of the Centinela Valley Union High School District (the “District”). The District is issuing its $50,000,000 2008 Election General Obligation Bonds, 2013 Series B (the “Bonds”).
The Bonds will be issued pursuant to provisions of Article 4.5 of Chapter 3, Part 1, Division 2, Title 5 (commencing at Section 53506) of the California Government Code, the Measure CV (2008) Authorization (defined herein), a resolution adopted by the Board of Education of the District (the “Board”) on December 11, 2012 (the “2012 Resolution”) and a resolution adopted by the Board on September 10, 2013 (together with the 2012 Resolution, the “District Resolution”).
The District
The District is located in the western section of the County of Los Angeles (the “County”) in the State of California (the “State”) and includes virtually all of the City of Lawndale, a portion of the Cities of Hawthorne and El Segundo, and an unincorporated territory in the community of Lennox, which includes residential and industrial areas. The District serves a population of approximately 168,166 residents. See APPENDIX B – “REGIONAL ECONOMIC AND DEMOGRAPHIC INFORMATION” for information regarding the County and the region encompassing the District.
The District was formed in 1905 as the Inglewood Union High School District and became the Centinela Valley Union High School District in 1944. The District’s average daily attendance for Fiscal Year 2013-14 is projected to be 6,290. In Fiscal Year 2012-13, the District estimates it will enroll approximately 6,911 K-12 and adult students. The District currently operates three comprehensive high schools, a continuation school and an adult school. In addition, as of June 30, 2013, there are zero affiliated charter schools operated by the District and five fiscally independent charter schools that are high schools within the District’s boundaries.
The District is governed by a five-member Board, each member of which is elected to a four-year term. The District conducts elections for positions on the Board every two years, such that the voters will elect a Board member for either two or three available positions. The management and policies of the District are administered by a Superintendent who is appointed by the Board and responsible for day-to-day District operations and supervision of the District’s personnel. Jose A. Fernandez is currently serving as the Superintendent of the District.
Additional information on the District is provided in Appendices C and D hereto. See APPENDIX C – “DISTRICT FINANCIAL INFORMATION” and APPENDIX D – “AUDITED FINANCIAL STATEMENTS OF THE DISTRICT FOR THE FISCAL YEAR ENDED JUNE 30, 2012” attached hereto.
Security and Sources of Payment for the Bonds
The Bonds are general obligation bonds approved by voters of the District and are payable from ad valorem property taxes levied by the County on behalf of the District on taxpayers within the District. The Board of Supervisors of the County has the power and is obligated under State law, pursuant to the authority granted by voters of the District relating to a ballot proposition approved by the requisite two-thirds of the qualified electors of the District voting on such proposition at the November 4, 2008 election (the “Measure CV (2008) Authorization”), to annually levy ad valorem taxes upon all property subject to taxation by the District, without limitation as to rate or amount (except as to certain personal property which is taxable at limited rates), for the payment of the principal and accreted value of, premium, if any, and interest on the District’s general obligation bonds, including the Bonds. Such ad valorem property taxes are deposited with the County for the account of the District and applied only to pay the principal and accreted value of, premium, if any, and interest on the District’s general obligation bonds, including the Bonds. The District does not receive such funds nor are they available to pay any of the District’s operating expenses. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS” herein.
The Bonds
The Bonds will be initially issued in book-entry form only, in denominations of $5,000 principal amount or integral multiples thereof, and will be initially issued and registered in the name of Cede & Co., as nominee for The Depository Trust Company (“DTC”). The Bonds will be issued as current interest bonds. The principal of the Bonds is payable on the maturity dates set forth on the inside cover page of this Official Statement or upon the earlier redemption thereof, as described herein. Interest on the Bonds is payable on February 1 and August 1 of each year (each, an “Interest Payment Date”), commencing on February 1, 2014. See “THE BONDS – Interest on the Bonds” herein.
The District’s General Obligation Bond Program
In March 2000, voters of the District approved a $59 million general obligation bond authorization (the “Measure C Authorization”). The proceeds of the Measure C Authorization are designated for renovation and modernization of school facilities. On November 2, 2010, voters in the District approved a $98 million general obligation bond authorization (the “Measure CV (2010) Authorization” and together with the Measure C Authorization and the Measure CV (2008) Authorization, the “Authorizations”).
Upon the issuance of the Bonds, approximately $73 million of the $98 million approved general obligation bonds will have been issued pursuant to the Measure CV (2008) Authorization, with approximately $25 million remaining to be issued thereunder for the issuance of additional general obligation bonds other than refunding bonds.
The following Table 1 sets forth the dates and amounts authorized, the amounts issued and the amounts unissued for each of the District’s Authorizations.
TABLE 1
Centinela Valley Union High School District General Obligation Bond Authorizations
Dates and Amounts Authorized, Amounts Issued, Amounts Unissued
Bond Authorization Date Authorized by Voters Amount Authorized ($ Millions) Amount Issued(1) ($ Millions) Amount Unissued ($ Million) Measure C March 7, 2000 $ 59.0 $ 59.0 $ 0.0 Measure CV (2008) November 4, 2008 98.0 73.0(2) 25.0(2) Measure CV (2010) November 2, 2010 98.0 98.0 0.0 Total $255.0 $230.0(2) $25.0(2)
(1) See APPENDIX C – “DISTRICT FINANCIAL INFORMATION – District Debt – General Obligation Bonds” attached hereto for the amount of outstanding general obligation bonds under the referenced Authorizations. Excludes general obligation refunding bonds.
(2)
Reflects estimated amounts subsequent to the issuance of the Bonds. Source: Centinela Valley Union High School District.
Expected Use of Bond Proceeds
The payment of principal of, premium, if any, and interest on the Bonds when due will be allocable in its entirety to the Measure CV (2008) Authorization.
A portion of the proceeds of the Bonds, after payment of costs of issuance therefor and certain related expenses, will fund school projects (collectively, the “Measure CV (2008) Projects”) approved by the Measure CV (2008) Authorization, which proposed: “To improve the quality of education/student safety/reduce overcrowding, shall Centinela Valley Union High School District issue $98,000,000 in bonds, at legal rates, to repair/acquire/construct/equip local schools, sites, facilities, libraries, classrooms, science/computer labs, ensure earthquake safety, remove mold/asbestos, upgrade fire safety/security systems, leaky roofs, restrooms, plumbing/electrical/heating/cooling systems, with citizens’ oversight, independent annual audits, no money for administrators’ salaries and no increase in current tax rates?”
A portion of the proceeds of the Bonds will be transferred to U.S. Bank National Association, the Board’s appointed escrow agent (the “Escrow Agent”) for deposit in the “Centinela Valley Union High School District 2013 Escrow Fund” (the “Escrow Fund”) established under the Escrow Deposit and Trust Agreement, by and between the District and Escrow Agent, on file with the clerk to the Board. The proceeds of the Bonds deposited in the Escrow Fund will be held in the Escrow Fund in an amount sufficient to pay and defease the District’s 2010 General Obligation Bond Anticipation Notes (the “2010 BANs”) in the aggregate principal amount of $24,999,726.20, which are scheduled to mature on December 1, 2013, as previously approved by the Board pursuant to the resolution authorizing the issuance of the 2010 BANs.
Continuing Disclosure
The District has covenanted for the benefit of the holders and beneficial owners of the Bonds to provide certain financial information and operating data relating to the District (the “Annual Report”) for each fiscal year by not later than 9 months following the end of the District’s fiscal year (currently ending June 30) commencing with the Annual Report for Fiscal Year 2012-13, and to provide notices of the occurrence of certain enumerated events.
The District will provide or cause to be provided the Annual Reports and such notices to the Municipal Securities Rulemaking Board in the manner prescribed by the Securities and Exchange Commission (“SEC”). These covenants have been made in order to assist the Underwriter in complying with SEC Rule 15c2-12(b)(5) (the “Rule”). Reports and notices of event filings are available at the website of the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access (“EMMA”) system located at www.emma.msrb.org. The information presented on this website is not incorporated by reference in this Official Statement and should not be relied upon in making an investment decision with respect to the Bonds. See “LEGAL MATTERS - Continuing Disclosure” herein. The information to be contained in the Annual Report and in a notice of event is set forth in APPENDIX G – “FORM OF CONTINUING DISCLOSURE AGREEMENT” attached hereto.
Other Information
This Official Statement contains brief descriptions of, among other things, the District, the District’s general obligation bond program, the District Resolution and certain matters relating to the security for the Bonds. Such descriptions and information do not purport to be comprehensive or definitive. All references herein to documents are qualified in their entirety by reference to such documents. Copies of such documents are available upon request to the Assistant Superintendent, Business Services at Centinela Valley Union High School District, 14901 South Inglewood Avenue, Lawndale, California 90260; telephone: (310) 263-3200, and, following delivery of the Bonds will be on file at the corporate trust office of U.S. Bank National Association, as agent for the Treasurer and Tax Collector of the County (the “County Treasurer”), the initial Paying Agent for the Bonds (the “Paying Agent”), in Los Angeles, California.
ESTIMATED SOURCES AND USES OF FUNDS
The estimated sources and uses of funds with respect to the Bonds are as follows:
Estimated Sources of Funds
Principal Amount $ 50,000,000.00 Net Original Issue Premium 5,272,280.75 2010 BANs Debt Service Fund 24,519.14 Total Sources $ 55,296,799.89
Estimated Uses of Funds
Building Fund $ 25,000,000.00 Escrow Fund 27,535,200.00 Interest and Sinking Fund 2,187,148.78
Costs of Issuance(1) 324,451.11
Underwriter’s Discount 250,000.00 Total Uses $ 55,296,799.89
(1)
Includes fees of Co-Bond Counsel, Co-Disclosure Counsel, the Paying Agent, the Financial Advisor, the Escrow Agent, the rating agencies, the printer, and other miscellaneous expenses.
THE BONDS General Provisions
The Bonds will be issued in book-entry form only, without coupons, in denominations of $5,000 principal amount or any integral multiple thereof, and, when issued, will be initially registered in the name of Cede & Co., as nominee of DTC. DTC will act as securities depository for the Bonds. The registered owners of the Bonds (the “Owners”) will not receive physical certificates representing their interest in the Bonds purchased, except in the event that use of the book-entry system for the Bonds is discontinued. Payments of principal of, premium, if any, and interest on the Bonds are payable by the Paying Agent to DTC, which is obligated in turn to remit such payments to its participants for subsequent disbursement to the beneficial owners of the Bonds. For information about the securities depository and DTC’s book-entry system, see APPENDIX E – “BOOK-ENTRY ONLY SYSTEM” attached hereto.
Interest on the Bonds
The Bonds mature in the years indicated on the inside cover page hereof. Interest on the Bonds is payable on each Interest Payment Date, commencing on February 1, 2014. Interest on the Bonds will be computed on the basis of a 360-day year consisting of twelve 30-day months. Each Bond will bear interest from the Interest Payment Date next preceding the date of authentication thereof, unless it is authenticated during the period after the Record Date (defined below) immediately preceding any Interest Payment Date to and including such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or unless it is authenticated on or before the Record Date preceding the first Interest Payment Date, in which event it shall bear interest from its date of issuance. “Record Date” shall mean the 15th day of the month preceding an Interest Payment Date whether or not such day is a business day.
Annual Debt Service
The following Table 2 sets forth the annual debt service requirements of the District for the Bonds for the years ending August 1, 2014 to August 1, 2036. The annual debt service obligations for the year ending August 1 for all of the District’s outstanding general obligation bonds and the Bonds is set forth in APPENDIX A - “ANNUAL DEBT SERVICE” attached hereto.
TABLE 2
Centinela Valley Union High School District Annual Debt Service
2008 Election General Obligation Bonds, 2013 Series B Year Ending
(August 1) Principal Interest
Annual Debt Service 2014 $ - $ 2,187,148.78 $ 2,187,148.78 2015 - 2,905,437.50 2,905,437.50 2016 300,000.00 2,905,437.50 3,205,437.50 2017 500,000.00 2,890,437.50 3,390,437.50 2018 700,000.00 2,865,437.50 3,565,437.50 2019 645,000.00 2,830,437.50 3,475,437.50 2020 920,000.00 2,798,187.50 3,718,187.50 2021 785,000.00 2,752,187.50 3,537,187.50 2022 800,000.00 2,709,012.50 3,509,012.50 2023 800,000.00 2,665,012.50 3,465,012.50 2024 1,000,000.00 2,621,012.50 3,621,012.50 2025 1,000,000.00 2,563,512.50 3,563,512.50 2026 1,740,000.00 2,506,012.50 4,246,012.50 2027 1,565,000.00 2,405,962.50 3,970,962.50 2028 2,115,000.00 2,315,975.00 4,430,975.00 2029 1,970,000.00 2,194,362.50 4,164,362.50 2030 2,545,000.00 2,081,087.50 4,626,087.50 2031 2,420,000.00 1,934,750.00 4,354,750.00 2032 2,925,000.00 1,795,600.00 4,720,600.00 2033 3,515,000.00 1,627,412.50 5,142,412.50 2034 10,115,000.00 1,425,300.00 11,540,300.00 2035 11,940,000.00 818,400.00 12,758,400.00 2036 1,700,000.00 102,000.00 1,802,000.00 Total $50,000,000.00 $51,900,123.78 $101,900,123.78
Redemption of the Bonds
Optional Redemption. The Bonds maturing on or before August 1, 2023, will not be subject to redemption prior to their respective stated maturity dates. The Bonds maturing on or after August 1, 2024, will be subject to redemption prior to their stated maturity dates, at the option of the District, from any source of available funds, as a whole or in part on any date on or after August 1, 2023, at a redemption price equal to 100% of the principal amount thereof, together with accrued interest, if any, to the redemption date.
Mandatory Sinking Fund Redemption. The Bonds maturing on August 1, 2036 (the “2036 Term Bonds”) are subject to mandatory sinking fund redemption prior to the stated maturity in part at a redemption price equal to 100% of the principal amount to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium, in the principal amounts and on the dates as follows:
Mandatory Redemption Date (August 1)
Mandatory Sinking Fund Payment
2034 $10,115,000 2035 11,940,000 † 2036 1,700,000 † Maturity.
In the event that a portion of the 2036 Term Bonds is optionally redeemed, the principal amount of each remaining sinking fund payment shown above will be reduced as directed by the District in the aggregate amount equal to the amount so redeemed.
Selection of Bonds for Redemption
If less than all Outstanding Bonds are to be redeemed, the Paying Agent, upon written instruction from the District given at least 60 days prior to the date designated for such redemption, shall select Bonds for redemption in such order as the District may direct, or, in the absence of such direction, in inverse order of maturity within a series. Within a maturity, the Paying Agent shall select Bonds for redemption by lot in such manner as the Paying Agent shall determine; provided, however, that the portion of any Bond that is a Bond to be redeemed in part shall be in the principal amount of $5,000 or any integral multiple thereof.
Notice of Redemption
Notice of redemption of any Bond will be given by the Paying Agent. The Paying Agent will, upon written instruction from the District given at least 60 days prior to the date designated for such redemption (or such lesser period to which the Paying Agent agrees), give notice (a “Redemption Notice”) of the redemption of the Bonds. Such Redemption Notice will specify: (a) the Bonds or designated portions thereof (in the case of redemption of the Bonds in part but not in whole) which are to be redeemed, (b) the date of redemption, (c) the place or places where the redemption will be made, including the name and address of the Paying Agent, (d) the redemption price, (e) the CUSIP numbers (if any) assigned to the Bonds to be redeemed, (f) the Bond numbers of the Bonds to be redeemed in whole or in part and, in the case of any Bond to be redeemed in part only, the principal amount of such Bond to be redeemed, and (g) the original issue date, interest rate and stated maturity date of each Bond to be redeemed in whole or in part. Such Redemption Notice will further state that on the specified date there shall become due and payable upon each Bond or portion thereof being redeemed the redemption price, together with the interest accrued to the redemption date and that from and after such date interest with respect thereto shall cease to accrue and be payable.
The Paying Agent will take the following actions with respect to such Redemption Notice:
(a) At least 20 but not more than 45 days prior to the redemption date, such Redemption Notice will be given to the respective Owners of Bonds designated for redemption by first class mail, postage prepaid, at their addresses appearing on the bond register of the Paying Agent. A Redemption Notice may be given on a conditional basis in connection with a refunding of the Bonds.
(b) In the event that the Bonds are no longer held in book-entry only form, at least two days before the date of the notice required by clause (a) of this section, such Redemption Notice will be given by (i) first class mail, postage prepaid, (ii) telephonically confirmed facsimile transmission, or (iii) overnight delivery service, to DTC and/or any other securities depository designated by the District in a notice to the Paying Agent.
(c) In the event that the Bonds are no longer held in book-entry only form, at least two days before the date of notice required by clause (a) of this section, such Redemption Notice will be given by (i) first class mail, postage prepaid or (ii) overnight delivery service, to the MSRB’s EMMA system and/or any other information service designated by the District in a notice to the Paying Agent.
Neither failure to receive any Redemption Notice nor any defect in any such Redemption Notice so given shall affect the sufficiency of the proceedings for the redemption of the affected Bonds. Each check issued or other transfer of funds made by the Paying Agent for the purpose of redeeming Bonds shall bear the CUSIP number identifying, by maturity, the Bonds being redeemed with the proceeds of such check or other transfer.
Partial Redemption of Bonds
Upon the surrender of any Bond redeemed in part only, the Paying Agent will execute and deliver to the Owner thereof a new Bond or Bonds of like tenor and maturity and of authorized denominations equal in transfer amounts to the unredeemed portion of the Bond surrendered. Such partial redemption will be valid upon payment of the amount required to be paid to such Owner, and the District will be released and discharged thereupon from all liability to the extent of such payment.
Effect of Notice of Redemption
When notice of redemption has been given as described above, and the moneys for the redemption (including the interest to the applicable date of redemption) has been set aside for the payment of their redemption price, the Bonds to be redeemed will become due and payable on such date of redemption.
If on such redemption date, money for the redemption of all the Bonds to be redeemed, together with interest to such redemption date, shall be held by the Paying Agent so as to be available therefor on such redemption date, and if notice of redemption thereof has been given as described above, then from and after such redemption date, interest with respect to the Bonds to be redeemed will cease to accrue and become payable. All money held by or on behalf of the Paying Agent for the redemption of Bonds will be held in trust for the account of the Owners of the Bonds so to be redeemed.
All Bonds paid at maturity or redeemed prior to maturity will be cancelled upon surrender thereof and delivered to or upon the order of the District. All or any portion of a Bond purchased by the District will be cancelled by the Paying Agent upon written notice by the District given to the Paying Agent.
Defeasance
If at any time the District shall pay or cause to be paid or there shall otherwise be paid to the Owners of any or all outstanding Bonds, principal of, premium, if any, and interest on such Bonds, at the times and in the manner provided in such Bonds and the District Resolution or as otherwise provided by law consistent therewith, then such Owners shall cease to be entitled to the obligation of the District described below under the caption “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS - General Description” herein and such obligation and all agreements and covenants of the District and the County to such Owners under such Bonds and the District Resolution, as applicable, will thereupon be satisfied and discharged and will terminate, except only that the District will remain liable for payment of all principal of, premium, if any, and interest on such Bonds, but only out of moneys on deposit in the Interest and Sinking Fund (defined herein) or otherwise held in trust for such payment.
Under the circumstances described below, all or any portion of the outstanding maturities of Bonds may be defeased prior to maturity in the following ways:
(1) well and truly paying or causing to be paid the principal of, premium, if any, and interest on all Bonds Outstanding, as and when the same become due and payable;
(2) by depositing with the Paying Agent, in trust, at or before maturity, cash which, together with the amounts then on deposit in the Interest and Sinking Fund plus the interest to accrue thereon without the need for further investment, is fully sufficient to pay all Bonds Outstanding on their redemption date or at maturity thereof, including any premium and all interest thereon, notwithstanding that any Bonds shall not have been surrendered for payment; or
(3) by depositing with an institution to act as escrow agent selected by the District and which meets the requirements of serving as Paying Agent pursuant to the District Resolution, in trust, lawful money or noncallable direct obligations issued by the United States Treasury (including state and local government series obligations) or obligations which are unconditionally guaranteed by the United States of America and permitted under Section 149(b) of the Internal Revenue Code of 1986, as amended (the “Code”) and Treasury Regulations which, in the opinion of nationally recognized bond counsel, will not impair the exclusion from gross income for federal income tax purposes of interest on the Bonds, in such amount as will, together with the interest to accrue thereon without the need for further investment, be fully sufficient, in the opinion of a verification agent, to pay and discharge all Bonds Outstanding at maturity thereof, including any premium and all interest thereon, notwithstanding that any Bonds shall not have been surrendered for payment;
then all obligations of the District and the Paying Agent under the District Resolution with respect to all Outstanding Bonds shall cease and terminate, except only the obligation of the Paying Agent to pay or cause to be paid to the Owners of the Bonds all sums due thereon, and the obligation of the District to pay to the Paying Agent amounts owing to the Paying Agent.
Application and Investment of Bond Proceeds
The portion of the proceeds from the sale of the Bonds, exclusive of any premium and accrued interest received, that are being applied to the Measure CV (2008) Projects will be deposited in the County Treasury to the credit of the Building Fund established pursuant to the District Resolution for the Bonds (the “Building Fund”). The District will have sole responsibility that such bond proceeds be used for the purposes for which the Bonds are being issued. Such net proceeds and interest earnings on the investment of moneys held in the Building Fund, except as required to be rebated to the U.S. Treasury Department, will be retained in the Building Fund and used only for expenditures eligible under the Measure CV (2008) Authorization. A portion of the proceeds from the sale of the Bonds will be used to pay Underwriter’s discount and costs of issuance associated with the issuance of the Bonds.
The District will deposit or cause to be deposited any accrued interest and any premium received by the District from the sale of the Bonds, net of any bond premium used to pay costs of issuance or any related expenses, into the Interest and Sinking Fund (the “Interest and Sinking Fund”). See “INTRODUCTION - Expected Use of Bond Proceeds” and “ESTIMATED SOURCES AND USES OF FUNDS” herein. Except as required to be rebated to the U.S. Treasury Department, interest earned on the investment of moneys held in the Interest and Sinking Fund will be retained in the Interest and Sinking Fund and used to pay for the principal of, premium, if any, and interest on the Bonds when due.
All funds held by the County Treasurer on behalf of the District will be invested by the County Treasurer or its agent in the County Treasury Pool (see APPENDIX H – “THE LOS ANGELES
COUNTY TREASURY POOL” attached hereto), the Local Agency Investment Fund, in the State treasury, any investment authorized pursuant to Sections 53601 and 56365 of the State Government Code, or in investment agreements, including guaranteed investment contracts, float contracts or other investment products (hereinafter collectively referred to as “Investment Agreements”); provided that such Investment Agreements comply with the requirements of Section 148 of the Code and with the requirements of each rating agency then rating the Bonds necessary in order to maintain the then-current ratings on the Bonds. The County Treasurer disclaims responsibility to report, reconcile or monitor the investment of proceeds related to the Bonds except for any proceeds related to the Bonds that have been invested in the County Treasury Pool.
SECURITY AND SOURCES OF PAYMENT FOR THE BONDS General Description
The Bonds are general obligation bonds approved by voters within the District and are payable from ad valorem property taxes levied by the County on taxpayers within the District. The Board of Supervisors of the County has the power and is obligated under State law pursuant to the authority granted by voters of the District relating to the Measure CV (2008) Authorization to annually levy ad valorem property taxes upon all property subject to taxation by the District, without limitation as to rate or amount (except as to certain personal property which is taxable at limited rates), for the payment of the principal of, premium, if any, and interest on the Bonds. Such ad valorem property taxes are deposited with the County and applied only to pay the principal of, premium, if any, and interest on the Bonds. Such taxes are in addition to other taxes levied upon property within the District. Such taxes, when collected, will be placed by the County in the Interest and Sinking Fund, which is required to be maintained by the County, and such taxes will be used solely for the payment of principal of, premium, if any, and interest on such Bonds.
California Constitutional and Statutory Provisions Relating to Ad Valorem Property Taxes
On June 6, 1978, California voters approved Proposition 13, adding Article XIIIA to the Constitution of the State (the “State Constitution”). Article XIIIA, among other things, affects the valuation of real property for the purpose of taxation in that it defines the full cash property value to mean “the county assessor’s valuation of real property as shown on the 1975/76 tax bill under ‘full cash value,’ or thereafter, the appraised value of real property newly constructed, or when a change in ownership has occurred after the 1975 assessment.” The full cash value may be adjusted annually to reflect inflation at a rate not to exceed 2% per year, or a reduction in the consumer price index or comparable local data for the area under taxing jurisdiction, or reduced in the event of declining property value caused by substantial damage, destruction or other factors including a general economic downturn. Any reduction in assessed value is temporary and may be adjusted for any given year by the assessor of such county. The assessed value increases to its pre-reduction level (escalated to the annual inflation rate of no more than two percent) following the year(s) for which the reduction is applied. The amendment further limits the amount of any ad valorem tax on real property to 1% of the full cash value except that additional taxes may be levied to pay (i) debt service on indebtedness approved by the voters prior to July 1, 1978, (ii) bonded indebtedness for the acquisition or improvement of real property approved on or after July 1, 1978 by two-thirds of the votes cast by the voters voting on the proposition, and (iii) bonded indebtedness incurred by a school district or community college district for the construction, reconstruction, rehabilitation or replacement of school facilities or the acquisition or lease of real property for school facilities, approved by 55% of the voters of the school district or community college district, but only if certain accountability measures are included in the proposition.
On June 3, 1986, State voters approved Proposition 46, which added an additional exemption to the 1% tax limitation imposed by Article XIIIA. Under this amendment to Article XIIIA, local governments and school districts may increase the property tax rate above 1% for the period necessary to retire new general obligation bonds, if two-thirds of those voting in a local election approve the issuance of such bonds and the money raised through the sale of the bonds is used exclusively to purchase or improve real property.
Legislation enacted by the Legislature of the State to implement Article XIIIA provides that all taxable property is shown at full assessed value as described above. In conformity with this procedure, all taxable property value included in this Official Statement (except as noted) is shown at 100% of assessed value and all general tax rates reflect the $1 per $100 of taxable value. Tax rates for voter approved bonded indebtedness are also applied to 100% of assessed value.
Future assessed valuation growth allowed under Article XIIIA (new construction, change of ownership, 2% annual value growth) will be allocated on the basis of “situs” among the jurisdictions that serve the tax rate area within which the growth occurs. Local agencies and school districts will share the growth of “base” revenue from the tax rate area. Each year’s growth allocation becomes part of each agency’s allocation the following year. The District is unable to predict the nature or magnitude of future revenue sources which may be provided by the State to replace lost property tax revenues. Article XIIIA effectively prohibits the levying of any other ad valorem property tax above the 1% limit except for taxes to support indebtedness approved by the voters as described above.
Separate ad valorem property taxes to pay voter approved indebtedness such as the Bonds are levied by the County on behalf of the local agencies. Article XIIIA effectively prohibits the levying of any other ad valorem property tax above the Proposition 13 limit except for taxes to support such indebtedness.
The full cash value of taxable property under Article XIIIA represents the maximum taxable value for property. Accordingly, the fair market value for a given property may not be the equivalent of the full cash value under Article XIIIA. During periods in which the real estate market within the District evidences an upward trend, the fair market value for a given property, which has not been reappraised due to a change in ownership, may exceed the full cash value of such property. During periods in which the real estate market demonstrates a downward trend, the fair market value of a given property may be less than the full cash value of such property and the property owner may apply for a “decline in value” reassessment pursuant to Proposition 8. Reassessments pursuant to Proposition 8, if approved by the Office of the County Assessor, lower valuations of properties (where no change in ownership has occurred) if the current value of such property is lower than the full cash value of record of the property. The value of a property reassessed as a result of a decline in value may change, but in no case may its full cash value exceed its fair market value. When and if the fair market value of a property which has received a downward reassessment pursuant to Proposition 8 increases above its Proposition 13 factored base year value, the Office of the County Assessor will enroll such property at its Proposition 13 factored base year value.
All taxable property is shown at full cash value on the tax rolls. The tax rate is expressed as $1 per $100 of taxable value. All taxable property value included in this Official Statement is shown at 100% of cash value (unless noted differently) and all tax rates reflect the $1 per $100 of taxable value.
Assessed Valuation of Property within the District
As required by State law, the District uses the services of the County for the assessment and collection of taxes for District purposes. District taxes are collected at the same time and on the same tax rolls as are County, City of Los Angeles, California and other local agency and special district taxes.
State law exempts $7,000 of the full cash value of an owner-occupied dwelling from property tax, but this exemption does not result in any loss of revenue to local entities because an amount equivalent to the taxes which would have been payable on such exempt values is paid by the State to the County for distribution to local agencies.
The County levies property taxes on behalf of taxing agencies in the County for each fiscal year on taxable real and personal property which is situated in the County as of the preceding January 1. However, upon a change in ownership of property or completion of new construction, State law permits an accelerated recognition and taxation of increases in real property assessed valuation (the “Supplemental Assessment”). In such instances, the property is reassessed and a supplemental tax bill is sent to the new owner based on the new value prorated for the balance of the tax year. Accordingly, each school district is to receive allocations of revenue from such Supplemental Assessments (such allocations to be from amounts remaining after allocations to each redevelopment agency in the County in connection with the 1% levy) and, in accordance with various apportionment factors, to the County, the County superintendent of schools, each community college district, each city and each special district within the County.
Under State law, a property owner can file a claim for a temporary reduction in assessed value when a property suffers a decline-in-value, which is deemed to have occurred when the current market value of the property is less than the assessed value as of January 1. The property is subject to annual review of a temporary decline-in-value reassessment granted for the prior assessment year.
Certain counties in the State operate under a statutory program entitled “Alternate Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds” (the “Teeter Plan”). For those counties operating under the Teeter Plan, local taxing entities receive 100% of their tax levies net of delinquencies, but do not receive interest or penalties on delinquent taxes collected by such counties. The County has not adopted the Teeter Plan, and consequently, the Teeter Plan is not available to local taxing entities within the County, such as the District. The District’s receipt of property taxes is therefore subject to delinquencies.
Economic and other factors beyond the District’s control, such as a general market decline in land values, reclassification of property to a class exempt from taxation, whether by ownership or use (such as exemptions for property owned by State and local agencies and property used for qualified educational, hospital, charitable or religious purposes), or the complete or partial destruction of taxable property caused by natural or manmade disaster such as earthquake, flood, toxic dumping, etc., could cause a reduction in the assessed value of taxable property within the District and necessitate a corresponding increase in the annual tax rate to be levied to pay the principal and accreted value of and interest on the District’s outstanding general obligation bonds.
In Fiscal Year 2013-14, the District’s total secured and unsecured assessed valuation was approximately $14,935,925,653. Shown in the following Table 3 are the assessed valuations of property in the District for Fiscal Years 2008-09 through 2013-14 at 100% of the “full cash value” of the property, as defined in Article XIIIA of the State Constitution.
TABLE 3
Centinela Valley Union High School District Historical Gross Assessed Valuation of Taxable Property
Fiscal Years 2008-09 through 2013-14
Fiscal Year Local Secured Utility Unsecured Total
2008-09 $12,775,995,018 $5,272,659 $1,402,223,855 $14,183,491,532 2009-10 12,919,646,140 3,064,698 1,454,107,491 14,376,818,329 2010-11 12,517,744,357 3,185,254 1,529,086,231 14,050,015,842 2011-12 12,684,279,200 3,437,577 1,375,834,891 14,063,551,668 2012-13 12,956,658,729 3,448,707 1,509,220,820 14,469,328,256 2013-14 13,383,091,245 2,149,567 1,550,684,841 14,935,925,653
The following Table 4 gives a distribution of taxable property located in the District on the Fiscal Year 2013-14 tax roll by principal purpose for which the land is used, and the assessed valuation and number of parcels for each use.
TABLE 4
Centinela Valley Union High School District Assessed Valuation and Parcels by Land Use
Fiscal Year 2013-14 Non-Residential: Fiscal Year 2013-14 Assessed Valuation(1) % of Total No. of Parcels % of Total Commercial $ 4,045,103,149 30.23% 1,639 6.30% Vacant Commercial 60,771,220 0.45 270 1.04 Industrial 1,907,197,521 14.25 533 2.05 Vacant Industrial 76,497,983 0.57 122 0.47 Recreational 43,696,158 0.33 16 0.06 Government/Social/Institutional 13,530,436 0.10 80 0.31 Miscellaneous 1,184,193 0.01 24 0.09 Subtotal Non-Residential $ 6,147,980,660 45.94% 2,684 10.32% Residential:
Single Family Residence $ 3,482,664,932 26.02% 14,064 54.06%
Condominium/Townhouse 456,289,170 3.41 1,633 6.28 2 Residential Units/Duplex 1,125,276,727 8.41 3,608 13.87 3 Residential Units 410,447,689 3.07 1,190 4.57 4 Residential Units 274,496,725 2.05 669 2.57 5+ Residential Units/Apartments 1,425,120,710 10.65 1,463 5.62 Vacant Residential 60,814,632 0.45 705 2.71 Subtotal Residential $ 7,235,110,585 54.06% 23,332 89.68% Total $13,383,091,245 100.00% 26,016 100.00%
(1) Local Secured Assessed Valuation for Fiscal Year 2013-14; excluding tax-exempt property.
The following Table 5 sets forth the assessed valuation of single family homes located in the District for Fiscal Year 2013-14.
TABLE 5
Centinela Valley Union High School District
Per Parcel 2013-14 Assessed Valuation of Single Family Homes
Single Family Residential
No. of Parcels 14,064 2013-14 Assessed Valuation $3,482,664,932 Average Assessed Valuation $247,630 Median Assessed Valuation $238,684 2013-14 Assessed Valuation No. of Parcels (1) % of Total Cumulative % of Total Total Valuation % of Total Cumulative % of Total $0 - $24,999 21 0.149% 0.149% $ 451,269 0.013% 0.013% $25,000 - $49,999 458 3.257 3.406 19,750,681 0.567 0.580 $50,000 - $74,999 1,180 8.390 11.796 72,079,137 2.070 2.650 $75,000 - $99,999 614 4.366 16.162 52,901,972 1.519 4.169 $100,000 - $124,999 437 3.107 19.269 49,155,958 1.411 5.580 $125,000 - $149,999 566 4.024 23.294 78,109,876 2.243 7.823 $150,000 - $174,999 784 5.575 28.868 128,109,044 3.678 11.501 $175,000 - $199,999 1,024 7.281 36.149 192,270,290 5.521 17.022 $200,000 - $224,999 1,270 9.030 45.179 269,777,079 7.746 24.769 $225,000 - $249,999 1,225 8.710 53.889 290,648,444 8.346 33.114 $250,000 - $274,999 1,023 7.274 61.163 268,346,996 7.705 40.819 $275,000 - $299,999 868 6.172 67.335 249,454,498 7.163 47.982 $300,000 - $324,999 856 6.086 73.422 267,203,141 7.672 55.654 $325,000 - $349,999 720 5.119 78.541 242,708,954 6.969 62.624 $350,000 - $374,999 680 4.835 83.376 245,630,621 7.053 69.676 $375,000 - $399,999 616 4.380 87.756 238,189,720 6.839 76.516 $400,000 - $424,999 507 3.605 91.361 208,483,976 5.986 82.502 $425,000 - $449,999 359 2.553 93.914 156,743,688 4.501 87.003 $450,000 - $474,999 224 1.593 95.506 103,498,378 2.972 89.975 $475,000 - $499,999 140 0.995 96.502 68,220,914 1.959 91.933 $500,000 and greater 492 3.498 100.000 280,930,296 8.067 100.000 Total 14,064 100.000% $3,482,664,932 100.000%
(1) Improved single family residential parcels. Excludes condominiums and parcels with multiple family units.
Source: California Municipal Statistics, Inc.
Tax Rates, Levies, Collections and Delinquencies
Taxes are levied for each Fiscal Year on taxable real and personal property as of the preceding January 1. Real property that changes ownership or is newly constructed is revalued at the time the change occurs or the construction is completed. The current year property tax rate is applied to the reassessed value, and the taxes are then adjusted by a proration factor that reflects the portion of the remaining tax year for which taxes are due. The annual tax rate is based on the amount necessary to pay all obligations payable from ad valorem property taxes and the assessed value of taxable property in a given year.
For assessment and collection purposes, property is classified as either “secured” or “unsecured” and is listed accordingly on separate parts of the assessment roll. The “secured roll” is that part of the
assessment roll containing property (real or personal) the taxes on which are a lien sufficient, in the opinion of the County Assessor, to secure payment of the taxes. Other property is listed on the “unsecured roll.”
Property taxes on the secured roll are due in two installments, on November 1 and February 1 of each fiscal year, and become delinquent on December 10 and April 10, respectively. A penalty of 10% attaches immediately to all delinquent payments. Properties on the secured roll with respect to which taxes are delinquent become tax defaulted on or about June 30 of the fiscal year. Such property may thereafter be redeemed by payment of a penalty of 1.5% per month to the time of redemption, plus costs and a redemption fee. If taxes are unpaid for a period of five years or more, the property is deeded to the State and then may be sold at public auction by the County Treasurer.
Property taxes on the unsecured roll are due in one payment on the January 1 lien date and become delinquent after August 31. A 10% penalty attaches to delinquent unsecured taxes. If unsecured taxes are unpaid at 5 p.m. on October 31, an additional penalty of 1.5% attaches to them on the first day of each month until paid. The County has four ways of collecting delinquent unsecured personal property taxes: (1) a civil action against the taxpayer; (2) filing a judgment in the office of the County Clerk specifying certain facts in order to obtain a lien on certain property of the taxpayer; (3) filing a certificate of delinquency for record in the County Recorder’s office in order to obtain a lien on certain property of the taxpayer; and (4) seizure and sale of personal property, improvements or possessory interests belonging or assessed to the assessee.
Proposition 13 and its implementing legislation impose the function of property tax allocation on counties in the State and prescribe how levies on countywide property values are to be shared with local taxing entities within each county. The limitations in Proposition 13, however, do not apply to ad valorem property taxes or special assessments to pay the interest and redemption charges on indebtedness, like its general obligation bonds, approved by the voters.
The County levies a 1% property tax on behalf of all taxing agencies in the County. The taxes collected are allocated on the basis of a formula established by State law enacted in 1979. Under this formula, the County and all other taxing entities receive a base year allocation plus an allocation on the basis of “situs” growth in assessed value (new construction, change of ownership, inflation) prorated among the jurisdictions that serve the tax rate areas within which the growth occurs. Tax rate areas are specifically defined geographic areas, which were developed to permit the levying of taxes for less than county-wide or less than city-wide special and school districts. In addition, the County levies and collects additional approved property taxes and assessments on behalf of any taxing agency within the County. See “ – California Constitutional and Statutory Provisions Relating to Ad Valorem Property Taxes” herein.
California Government Code Sections 29100 through 29107 provide the procedures that all counties must follow for calculating tax rates. The secured tax levy within the District consists of the District’s share of the 1% general ad valorem property and unitary taxes assessed on a County-wide basis and amounts levied that are in excess of the 1% general ad valorem property taxes. These tax receipts are part of the District’s operations. In addition, the secured tax levy also includes the amount for the District’s share of special voter-approved ad valorem property taxes assessed on a District-wide basis, such as the ad valorem property taxes assessed for the District’s general obligation bonds issued pursuant to the Measure CV (2008) Authorization and the Measure CV (2010) Authorization. Ad valorem property taxes levied for general obligation bonds are deposited with the County and applied only to pay the principal and accreted value of, premium, if any, and interest on the District’s general obligation bonds, including the Bonds. The District does not receive such funds nor are they available to pay any of the District’s operating expenses. In addition, the total secured tax levy includes special assessments,
improvement bonds, supplemental taxes or other charges which have been assessed on property within the District. Since State law allows homeowners’ exemptions (described above) and certain business exemptions from ad valorem property taxation, such exemptions are not included in the total secured tax levy. See “ - California Constitutional and Statutory Provisions Relating to Ad Valorem Property Taxes” herein.
Further, Section 15251 of the Education Code of the State (the “Education Code”) provides that all taxes levied with respect to general obligation bonds when collected will be paid into the county treasury of the county whose superintendent of schools has jurisdiction over the school district on behalf of which the tax was levied, to the credit of the debt service fund (or interest and sinking fund) of the school district, and will be used for the payment of the principal and accreted value of, premium, if any, and interest on the general obligations bonds of the school district and for no other purpose. Accordingly, the County may not borrow or spend such amounts nor can the District receive such funds and use them for operating purposes.
A representative tax rate area located within the District is Tax Rate Area 9851. Table 6 below summarizes the total ad valorem tax rates, including tax rates for the District’s general obligation bonds, levied upon property owners by all taxing entities for the last several years in Tax Rate Area 9851 from Fiscal Years 2008-09 through 2012-13.
TABLE 6
Centinela Valley Union High School District Typical Tax Rates
Per $100 of Assessed Valuation (TRA 9851) Fiscal Years 2008-09 through 2012-13
2008-09 2009-10 2010-11 2011-12 2012-13
General(1) $1.000000 $1.000000 $1.000000 $1.000000 $1.000000
Wiseburn School District .038184 .063517 .063577 .099941 .091294
Centinela Valley Union High School District(1)(2) .022776 .029180 .031606 .049850 .059061 El Camino Community College District .017026 .014868 .016140 .016884 .018486 The Metropolitan Water District
of Southern California .004300 .004300 .003700 .003700 .003500
Total Tax Rate $1.082286 $1.111865 $1.115023 $1.170375 $1.172341
(1) The District receives a portion of this District-wide tax with other overlapping agencies receiving their respective portion. (2) Reflects tax rate for general obligation bonds.
The following Table 7 shows real property tax charges and corresponding delinquencies with respect to property located in the District for the Fiscal Years 2008-09 through 2012-13.
TABLE 7
Centinela Valley Union School District Secured Tax Charges and Delinquencies
Fiscal Years 2008-09 through 2012-13
Fiscal Year Secured Tax Charge(1) Amount Delinquent as of June 30 % Delinquent as of June 30 2008-09 $14,811,156.00 $690,169.16 4.66% 2009-10 15,010,416.92 512,520.02 3.41 2010-11 14,726,704.50 351,617.34 2.39 2011-12 14,784,818.68 306,828.97 2.08 2012-13 15,316,721.99 273,986.44 1.79
(1) 1% general fund apportionment. Excludes redevelopment agency impounds.
Source: California Municipal Statistics, Inc.
Fiscal Year Secured Tax Charge(2) Amount Delinquent as of June 30 % Delinquent as of June 30 2008-09 $2,890,368.65 $119,592.04 4.14% 2009-10 3,745,503.67 85,852.86 2.29 2010-11 3,939,978.53 69,338.85 1.76 2011-12 6,271,807.28 89,559.40 1.43 2012-13 7,656,947.15 98,307.45 1.28
(2) Debt service levy only.
Largest Taxpayers in the District
The following Table 8 sets forth the twenty largest secured taxpayers in the District for Fiscal Year 2013-14.
TABLE 8
Centinela Valley Union High School District Largest Local Secured Taxpayers
Fiscal Year 2013-14
Property Owner(1) Primary Land Use Assessed Valuation Total 1. Continental Development Corp. Office Building $ 384,098,146 2.87% 2. Hughes Aircraft Co. /
Hughes Space and Communications Industrial 346,385,729 2.59 3. Aerospace Corporation Office Building 272,082,272 2.03 4. Pacific Corporate Towers LLC Office Building 168,510,003 1.26 5. Boeing Co. Industrial 155,605,900 1.16 6. PES Partners LLC Shopping Center 154,891,403 1.16 7. Hines REIT El Segundo LP Office Building 127,999,778 0.96 8. Kilroy Realty Finance Partnership Office Building 111,100,502 0.83 9. CREA Windstar Pacific LLC Apartments 102,545,462 0.77 10. Northrop Corp. Industrial 100,636,219 0.75 11. Realty Associates Funds Office Building 91,788,582 0.69 12. Mattel Realty Corp. Office Building 83,518,189 0.62 13. Digital 2260 East El Segundo LLC Office Building 79,852,364 0.60 14. 300 N. Sepulveda Owner LLC Office Building 73,868,400 0.55 15. Plaza CP LLC Office Building 73,078,939 0.55 16. Hearthstone Multi Asset Entity B LP Residential Development 68,057,546 0.51
17. LA4 LLC Industrial 61,283,900 0.46
18. Costco Wholesale Corporation Commercial 55,171,052 0.41 19. 101 Continental Partners LLC Industrial 55,048,590 0.41 20. GLL 2160 East Grand LLC Industrial 53,268,480 0.40
$2,618,791,456 19.57%
(1) 2013-14 Local Secured Assessed Valuation: $13,383,091,245.
Source: California Municipal Statistics, Inc.
General Obligation Bond Program and Bonding Capacity
Voters within the District have approved a total of $255 million of general obligation bonds in three separate bond elections since 2000. See “INTRODUCTION – The District’s General Obligation Bond Program” herein for additional information regarding the Measure C Authorization, the Measure CV (2008) Authorization, and the Measure CV (2010) Authorization. See APPENDIX C – “DISTRICT FINANCIAL INFORMATION – District Debt” for additional information regarding the District’s outstanding general obligation bonds.
Pursuant to Sections 15102 and 15268 of the Education Code, the District’s bonding capacity for general obligation bonds may not exceed 1.25% of taxable property value in the District as shown by the last equalized assessment of the County. Prior to the issuance of the Bonds, the District’s bonding capacity for general obligation bonds for Fiscal Year 2013-14 is approximately $112.8 million. The
District applied to the California Department of Education (“CDE”) for a waiver of Sections 15102 and 15268 of the Education Code and, at its May 2013 meeting, the CDE granted the waiver with the following conditions: (1) the period of the request does not exceed May 9, 2013 to August 1, 2019; (2) the total bond indebtedness limit does not exceed 1.55%; (3) the District does not exceed the statutory tax rate limits; (4) the waiver is limited to the sale of bonds approved by the voters on November 2008; and (5) capital appreciation bonds are not issued subsequent to approval of the waiver if the debt ratio goes above the statutory tax rate limit.
Direct and Overlapping Debt
Set forth on Table 9 on the following page is the debt report prepared by the California Municipal Statistics Inc. which provides information with respect to direct and overlapping debt within the District as of August 1, 2013 (the “Debt Report”). The Debt Report is included for general information purposes only. The District has not reviewed the Debt Report for completeness or accuracy and makes no representations in connection therewith. The Debt Report generally includes long-term obligations sold in the public credit markets by public agencies whose boundaries overlap the boundaries of the District. Such long-term obligations generally are not payable from revenues of the District (except as indicated) nor are they necessarily obligations secured by land within the District. In many cases, long-term obligations issued by a public agency are payable only from the general fund or other revenues of such public agency.
