Mountain View Whisman School District

Agenda Item for Board Meeting of 2/4/2021

Agenda Category:  REVIEW AND ACTION

Agenda Item Title:  Adoption of Resolution No. 02 -020421 Authorizing the Issuance of Mountain View Whisman School District (Santa Clara County California) 2021 General Obligation Refunding Bonds (15 minutes)

Estimated Time: 

Person Responsible:  Rebecca Westover Ed.D., Chief Business Officer

Background: 

An Election was held in the Mountain View Whisman School District (the “District”) on June 5, 2012 for the issuance and sale of general obligation bonds of the District for various purposes in the maximum principal amount of $198,000,000 (“Measure G”).  Pursuant to Measure G, the District previously issued (i) $50,000,000 of its Election of 2012 General Obligation Bonds, Series A and (ii) $148,000,000 of its Election of 2012 General Obligation Bonds, Series B (collectively, the “Prior Bonds”). 

The District now desires to refinance certain of the outstanding Prior Bonds (so refinanced, the “Refunded Bonds”), thereby generating savings for District taxpayers, through the issuance of general obligation refunding bonds (the “Refunding Bonds”) pursuant to Government Code Section 53550 et seq.  All benefits from the refunding will be delivered to the property owners in the District.  The final maturity of the Refunding Bonds will not be later than the final maturity date of the Refunded Bonds. 

(a)        Bond Resolution.  This Resolution authorizes the issuance of the Refunding Bonds, in one or more series of federally taxable bonds.  The Resolution authorizes the issuance of the Refunding Bonds, specifies the basic terms, parameters and forms of the Refunding Bonds, and approves the forms of the Purchase Contract, Continuing Disclosure Certificate, Escrow Agreement and Preliminary Official Statement described below.  In particular, Section 1 of the Resolution establishes the maximum aggregate principal amount of the Refunding Bonds to be issued ($170,000,000).  Section 4 of the Resolution states the maximum underwriting discount (0.375%) with respect to the Refunding Bonds and authorizes the Refunding Bonds to be sold at a negotiated sale to RBC Capital Markets, LLC (the “Underwriter”).  The Resolution authorizes the issuance of current interest bonds only; capital appreciation bonds are not authorized.

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

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

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

(e)        Escrow Agreement.  Pursuant to the Escrow Agreement, proceeds from the sale of the Refunding Bonds will be deposited in an escrow fund (the “Escrow Fund”) held by U.S. Bank National Association (acting as “Escrow Agent”).  The monies in the Escrow Fund will be used by the Escrow Agent to pay the interest due on the Refunded Bonds on and prior to the first available respective redemption dates therefor and to redeem the Refunded Bonds on such dates.  Following the deposit of proceeds into the Escrow Fund, the Refunded Bonds will be defeased, and the obligation of Santa Clara County to levy a tax for the payment thereof will cease.   

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