San Miguel Joint Union School District

Measure I-20 Bond Measure - 55% Approval Required

Bonds are financial instruments used to borrow money. Under the California Constitution, school districts may issue bonds if approved by at least 55 percent of voters within the boundaries of the district who are voting on a measure to authorize the issuance of bonds. The bonds are sold to the public and constitute a debt of the district. The principal and interest on the bonds are repaid by an annual property tax levy on all real property within the jurisdiction of the school district, calculated on the current assessed value of each property (“an ad valorem tax”). 

The Board of Trustees of the San Miguel Joint Union School District (“the District”) has placed Measure I-20 on the ballot, proposing the sale of bonds in an amount not to exceed $6.2 million. The District’s Tax Rate Statement, included in the voter information guide, which was mailed to voters of the District, reflects an estimate of the maximum property tax levies required to service the bonds.

In accordance with the law, proceeds from the sale of the bonds (i.e., funds generated by the bonds) may only be used for the specific purposes identified in the measure, including but not limited to: acquiring and equipping modular buildings for specific educational uses; modernizing and retrofitting school kitchens and cafeterias; improvements for safety and security; upgrading of emergency preparedness systems; and expansion of access to internet and technology (all as more specifically described in the full-text of the measure).The law prohibits the use of bond proceeds to pay for teacher and administrator salaries or other operational expenses.

Approval of the measure does not guarantee that all proposed projects of the District to be improved with bond proceeds will be funded beyond the local revenues generated by the measure. The District’s proposal for the projects may assume the receipt of matching state funds, which could be subject to appropriation by the Legislature or approval of a statewide bond measure.

As required by law, the District must follow certain accountability provisions to oversee the funds collected and expended, including the establishment of an independent citizens’ oversight committee, the annual completion of performance and financial audits, and an annual report detailing proceeds received by the sale of the bonds and expenditures made, all requirements of which are reflected in the full text of measure.

The District’s Tax Rate Statement provides the District’s best estimate of the highest tax rate to be levied at approximately three cents per $100 (or $30 per $100,000) of assessed property value per year. The final fiscal year in which the tax is anticipated to be collected is 2038-39. 

A “Yes” vote on this measure is a vote in favor of the issuance of $ 6.2 million in general obligation bonds to be used for the purposes set forth in Measure I-20.

A “No” vote on this measure is a vote against the issuance of $6.2 million in general obligation bonds for the purposes set forth in Measure I-20. 

An election will be held in the San Miguel Joint Union School District (the “District”) on November 3, 2020, to authorize the sale of up to $6.2 million in bonds of the District to finance school facilities as described in the measure.  If the bonds are authorized and sold, principal and interest on the bonds will be payable only from the proceeds of ad valorem tax levies made upon the taxable property in the District. The following information is provided in compliance with Sections 9400-9404 of the Elections Code of the State of California.  Such information is based upon the best estimates and projections presently available from official sources, upon experience within the District, and other demonstrable factors.

Based upon the foregoing and projections of the District’s assessed valuation, the following information is provided:

1. The best estimate of the average annual tax rate which would be required to be levied to fund this bond issue over the entire duration of the bond debt service, based on a projection of assessed valuations available at the time of filing of this statement, is $0.029 per $100 of assessed valuation (or $29.00 per $100,000 of assessed value). The final fiscal year in which the tax is anticipated to be collected is 2038-2039.

2. The best estimate of the highest tax rate which would be required to be levied to fund this bond issue, based on a projection of assessed valuations available at the time of filing of this statement, is $0.030 per $100 of assessed valuation (or $30.00 per $100,000 of assessed value). It is estimated that such rate would be levied starting in fiscal year 2021-2022 and following.

3. The best estimate of the total debt service, including the principal and interest, that would be required to be repaid if all the bonds are issued and sold is approximately $8.1 million.

Voters should note the estimated tax rate is based on the assessed value (not market value) of taxable property on the County’s official tax rolls, not on the property’s market value.  Taxpayers eligible for a property tax exemption, such as the homeowner’s exemption, will be taxed at a lower effective tax rate than described above.  Property owners should consult their own property tax bills and tax advisors to determine their property’s assessed value and any applicable tax exemptions.

The attention of all voters is directed to the fact that the foregoing information is based upon projections and estimates only, which amounts are not maximum amounts and are not binding upon the District.  The actual tax rates, debt service, and the years in which they will apply may vary from those used to provide the estimates set forth above, due to factors such as variations in the timing of bond sales, the par amount of bonds sold and market interest rates available at the time of each sale, actual assessed valuations over the term of the bonds, and other factors. 

The date and amount of bonds sold at any given time will be determined by the District based on the need for project funds and other considerations.  The actual interest rates at which the bonds will be sold will depend on conditions in the bond market at the time of each sale. Actual future assessed valuations will depend upon the amount and value of taxable property within the District as determined by the County Assessor in the annual assessment and the equalization process.

With no increase in estimated tax rates, shall San Miguel Joint Union School District’s measure to retrofit classrooms for agricultural sciences, student safety and school security; upgrade emergency preparedness; and increase student access to internet/ technology at Lillian Larsen and Cappy Culver Schools be adopted, authorizing $6,200,000 in bonds, extending but not increasing current rates (3¢ per $100 of assessed valuation through 2039) and raising $580,000/ year for bond repayment with legal interest rates, annual audits and citizens’ oversight?

Bonds—Yes                                                                            Bonds—No

BOND AUTHORIZATION

By approval of this proposition by at least 55 percent of the registered voters voting on the measure, the San Miguel Joint Union District (the "District") will be authorized to issue and sell bonds of up to $6.2 million in aggregated principal at interest rates not in excess of the legal limit and to provide financing for the specific projects listed in the Bond Project List described below, subject to all the accountability requirements specified below.

The Bonds may be issued under the provisions of the California Education Code (starting at Section 15100), under the provisions of the California Government Code (starting at Section 53506), or under any other provision of law authorizing the issuance of general obligation bonds by school districts.  The Bonds may be issued in series by the District from time to time, and each series of Bonds shall mature within the legal limitations set forth in the applicable law under which the Bonds are issued.

FINANCING PLAN

The District intends to use the Bonds to modernize, replace, renovate, construct, equip, acquire and rebuild the District facilities on the Bond Project List.

All Bonds will be sold as current interest bonds and the use of capital appreciation bonds will not be permitted.  No series of Bonds will be issued if such issuance would cause the tax rate levied to pay debt service on all of the outstanding Bonds to exceed $30 per year per $100,000 of taxable property, based on projections made by the District at the time of issuance of such series of Bonds.

ACCOUNTABILITY REQUIREMENTS

The provisions in this section are specifically included in this proposition in order that the voters and taxpayers in the District may be assured that their money will be spent wisely.  Expenditures to address specific facility needs of the District will be in compliance with the requirements of Article XIIIA, Section 1(b)(3), of the State Constitution and the Strict Accountability in Local School Construction Bonds Act of 2000 (codified at Education Code Sections 15264 and following).

Evaluation of Needs.  The Governing Board of the District (the “Governing Board”) has identified detailed facility needs of the District and has determined which projects to finance from a local bond at this time.  The Governing Board hereby certifies that it has evaluated safety, class size reduction, enrollment growth, and information technology needs in developing the Bond Project List shown below.

Independent Citizens’ Oversight Committee.  The Governing Board shall establish an Independent Citizens’ Oversight Committee under Education Code Section 15278 and following to ensure that bond proceeds are expended only on the school facilities projects described in the Bond Project List below.  The committee will be established within 60 days of the date when the results of the election appear in the minutes of the Governing Board.

Annual Performance Audits.  The Governing Board shall conduct an annual, independent performance audit to ensure that the bond proceeds have been expended only on the school facilities projects described in the Bond Project List below.

Annual Financial Audits.  The Governing Board shall conduct an annual, independent financial audit of the bond proceeds until all of those proceeds have been spent for the school facilities projects described in the Bond Project List below.

Annual Report to the Board.  As long as any proceeds of the bonds remain unexpended, the Superintendent shall cause a report to be filed with the Governing Board no later than January 1 of each year, commencing on the first January 1 after bonds have been issued and proceeds spent, stating (1) the amount of bond proceeds received and expended in the past fiscal year, and (2) the status of any project funded or to be funded from bond proceeds.  The report may be incorporated into the annual budget, annual financial report, or other appropriate routine report to the Board.

Expenditure of Bond Proceeds.  The proceeds from the sale of the District’s bonds will be used only for the purposes specified in this measure, and not for any other purpose.  Such proceeds will be deposited into a Project Fund to be held by the San Luis Obispo County Treasurer, as required by the California Education Code.

FURTHER SPECIFICATIONS

No Administrator Salaries.  Proceeds from the sale of bonds authorized by this proposition shall be used only for the school facilities projects described in the Bond Project List below, and not for any other purpose, including teacher and administrator salaries and other school operating expenses.

Single Purpose. All of the purposes enumerated in this proposition shall be united and voted upon as one single proposition, pursuant to Section 15100 of the California Education Code, and all the enumerated purposes shall constitute the specific single purpose of the bonds and proceeds of the bonds shall be spent only for such purpose.

Other Terms of the Bonds. The bonds may be issued and sold in several series, and in accordance with a financing plan determined by the Governing Board pursuant to requirements of law. When sold, the bonds shall bear interest at an annual rate and with a term not exceeding the statutory maximum.  Furthermore, the weighted average maturity of each issue of bonds will not exceed 120 percent (120%) of the average reasonably expected economic life of the projects financed by the bonds, consistent with federal tax law. Bond funds may be used to reimburse the District for Bond Project List expenditures incurred prior to the election and bond issuance, in accordance with federal tax law.

INFORMATION ABOUT ESTIMATES AND PROJECTIONS INCLUDED IN BALLOT

This measure authorizes the issuance of general obligation bonds to finance the types of projects set forth on the Project List below, to be repaid by tax collections for the years that the bonds are outstanding.  The measure present to District voters on the ballot, as set forth above, includes information regarding the expected average amount of money to be raised annually to pay issued bonds, the estimated rate of the approved tax per $100 of assessed valuation, and the year through which it is approximated the proposed tax will be levied and collected.  In preparing this information, the District obtained reasonable and informed projections of assessed property valuations that took into consideration projections of assessed property valuations made by the County Assessor, if any, in accordance with Education Code Section 15100(c).

Attention of all voters is directed to the fact that the foregoing information is based upon the District's projections and estimates only, which are not binding upon the District, nor are the summary estimates, if any, provided in the Ballot Measure. 

Each of these estimates and approximations are provided as informational only.  Such amounts are estimates only, and are not maximum amounts or limitations on the terms of the bonds or the tax rate or duration supporting repayment of the bonds.  The approximations and estimates provided depend on numerous variables which are subject to variations and change over the term of the District’s overall facilities and bond financing plan, including but not limited to the amount of bonds issued and outstanding at any one time, the interest rates applicable to issued bonds, market conditions at the time of sale of the bonds, when bonds mature, timing of project needs, and changes in assessed valuation in the District.  As such, while such estimates and approximations have been provided based on information currently available to the District and its current expectations, such estimates and approximations are not limitations and are not binding upon the District.

BOND PROJECT LIST

The Bond Project List shown below is a part of the ballot measure and must be reproduced in any official document required to contain the full statement of the bond measure.

Bond proceeds will be expended to modernize, replace, renovate, construct, equip, acquire and rebuild the District’s facilities including but not limited to Lillian Larsen School and Cappy Culver School as described in the following list.  Whenever specific items are included in the following list, they are presented to provide an example and are not intended to limit the generality of the broader description of the types of authorized projects.

Such projects shall include but shall not be limited to:

·         Acquisition and equipping of modular buildings for classrooms, science labs, agricultural science, woodshop and robotics/high-tech labs

·         Retrofitting and modernization of school kitchens and cafeterias. Upgrading and replacement of outdated heating, ventilation, and air-conditioning (HVAC) systems

·         Improvement of student safety and school security 

·         Upgrade of school emergency preparedness systems

·         Expansion of internet access and technology

Each of the bond projects described in this Bond Project List include the costs of furnishing and equipping such facilities, and all costs which are incidental but directly related to the types of projects described above.  Examples of incidental costs include, but are not limited to: costs of design, engineering, architect and other professional services, facilities assessments, inspections, site preparation, utilities, landscaping, construction management and other planning and permitting, legal, accounting and similar costs; independent annual financial and performance audits; a customary construction contingency; demolition and disposal of existing structures; the costs of interim housing and storage during construction including relocation and construction costs incurred relating to interim facilities; rental or construction of storage facilities and other space on an interim basis for materials and other equipment and furnishings displaced during construction; costs of relocating facilities and equipment as needed in connection with the projects; interim classrooms and facilities for students, administrators, and school functions, including modular facilities; federal and state-mandated safety upgrades; addressing unforeseen conditions revealed by construction/modernization and other necessary improvements required to comply with existing building codes, including the Field Act; access requirements of the Americans with Disabilities Act; costs of the election; bond issuance costs; and project administration during the duration of such projects, as permitted by law.

The scope and nature of any of the specific projects described above may be altered by the District as required by unforeseen conditions that may arise during the course of design and construction.  In the event that a modernization or renovation project is more economical for the District to be undertaken as new construction, this bond measure authorizes land acquisition, relocation and construction and/or reconstruction, and all costs relating thereto, for said reason or, alternatively, based on other considerations deemed in the best interest of the District by the Board.  In addition, this measure authorizes the acquisition of real property, including necessary rights of ways or other real property interests, required to expand District facilities, to provide access to school or other District facilities, or to provide additional school or related facilities.  In addition, authorized projects include reimbursements for paid project costs and paying and/or prepaying interim or previously obtained financing for the types of projects included on the project list, such as bond anticipation notes, and including payment and prepayment of lease payments relating to projects and/or equipment previously financed.

The order in which school facilities projects are listed in the foregoing Bond Project List does not suggest an order of priority. Project priorities will be determined by the Board. The District is unable to anticipate all unforeseen circumstances which may prevent some of the projects listed above from being undertaken or completed.

Projects Subject to Available Funding. The foregoing list of projects is subject to the availability of adequate funding to the District.  Approval of the District’s bond measure does not guarantee that all of the identified projects within this Bond Project List will be funded beyond what can be completed with local funds generated by the bond measure.  The District's proposal for the projects may assume the receipt of matching state funds, which could be subject to appropriation by the Legislature or approval of a statewide bond measure.  The District plans to pursue funds from the State of California, if available, to complete certain of the identified facilities projects.