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Agenda Item No. 5(H) RESOLUTION 2012–XX RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EL CERRITO EXPRESSING ITS SUPPORT OF THE WCCUSD GENERAL WAIVER REQUEST OF THE STATUTORY BONDING CAPACITY WHEREAS, the West Contra Costa Unified School District (the “School District”) serves to educate the children of the City of El Cerrito; and WHEREAS, El Cerrito requires quality schools capable of serving its children and their families; and WHEREAS, the City of El Cerrito and its residents are beneficiaries of the School District’s $1.63 billion facility improvement bond program that began in June 1998. The purpose of the program is to bring all School District facilities to a common standard with regard to seismic/structural safety, upgrades to building systems, new classrooms, technology upgrades, and safety/security; and WHEREAS, the School District’s bond program has renovated and/or rebuilt schools in the City of El Cerrito including Madera and Harding Elementary Schools and El Cerrito High School with construction for a new Portola Middle School soon to be underway; and WHEREAS, the School District’s bond program has broad community support as evidenced by the six successful bond elections that the School District has held since June 1998, including the passage in 2012 of Measure E – a $360 million bond authorization approved by 64% of voters in November 2012; and WHEREAS, the California Education Code limits the amount of bonds that a unified school district can have outstanding to 2.5% of its then-current assessed valuation, but also gives the State Board of Education the authority to waive this limitation. The State Board of Education has done so many times in the past for school districts across the state; and WHEREAS, because the bonding capacity limitation is based on assessed value, school districts that are the same size as West Contra Costa Unified in more affluent areas have much larger bonding capacities. In some cases the disparity produces bonding capacities that are as much as two to five times the bonding capacity of West Contra Costa Unified; and WHEREAS, by providing for voter input and by limiting tax rate impact, Proposition 39 has provided significant taxpayer protection. In addition, the School Board has acted in good faith regarding its political and legal commitment to taxpayers even in the face of difficult economic circumstances; and WHEREAS, there have been forty-seven separate tax rates that have been established on behalf of the School District bond program over the past fifteen years in connection with five ---PAGE BREAK--- Agenda Item No. 5(H) separate bond authorizations and each of those forty-seven tax rates have been at or below targeted maximums; and WHEREAS, the School District’s financing plan indicates that, assuming that a waiver is granted and that the School District can move forward under its proposed plan, the School District will be able to issue all $360 million of 2012 Measure E bonds without causing tax rates to exceed the targeted maximums and the School District’s Board of Education will consider adjusting the pace and structure of the bond issues in order to meet these tax rate targets; and WHEREAS, residents of the City of El Cerrito will benefit from the planned rebuilding of Fairmont Elementary School and Cameron Special Needs School which will be significantly delayed if the waiver limit is not approved by the State Board of Education. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of El Cerrito does hereby support the West Contra Costa Unified School District’s application to the State Board of Education for a waiver of the statutory bonding capacity. I CERTIFY that at a regular meeting on December 18, 2012, the El Cerrito City Council passed this resolution by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: IN WITNESS of this action, I sign this document and affix the corporate seal of the City of El Cerrito on December XX, 2012. Cheryl Morse, City Clerk APPROVED: Gregory B. Lyman, Mayor ---PAGE BREAK--- Agenda Item No. 5(H) BACKGROUND INFORMATION PROVIDED BY SUPERINTENDENT HARTER: In order to complete the Bond program school renovation and reconstruction projects which are allocated under Measure E 2012, the West Contra Costa Unified School District will need to sell the bonds approved under that measure. The District does not currently have sufficient bonding capacity to issue any of the $360 million in voter-authorized Measure E 2012 Bonds. Based on the 2012-2013 assessed valuation, the District’s current bonding capacity is $591 million. The District currently has $797 million in outstanding debt, with no remaining bonding capacity for Measure E 2012. In order to keep the bond program on track and finish current projects, the District is applying for a waiver of the bonding capacity limits from the State Board of Education. Approval of the District’s request for a ten year increase in its bonding capacity from 2.5% of assessed valuation to 6.0% of assessed valuation will allow the District to issue the full $360 million of the voter authorized Measure E 2012 bonds. Because of tax rate limitations and other factors, the District plans to issue these bonds in series over time. The bond language for Measure E 2012 includes reference to the need for a potential waiver of the bonded indebtedness limit. Voters approved Measure E 2012 with 64.4% in favor of the bond measure. Bruce Harter, Superintendent West Contra Costa Unified School District Richmond, CA 94803