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FIN10 - How to Use Bond Funds Creatively While Complying with Legal Requirements

APRIL 3-6, 2013, LONG BEACH, CA. FIN10 - How to Use Bond Funds Creatively While Complying with Legal Requirements Marilyn J. Cleveland, Dannis Woliver Kelley Samuel R. Santana, Dannis Woliver Kelley.

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FIN10 - How to Use Bond Funds Creatively While Complying with Legal Requirements

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  1. APRIL 3-6, 2013, LONG BEACH, CA FIN10 - How to Use Bond Funds Creatively While Complying with Legal Requirements Marilyn J. Cleveland, Dannis Woliver Kelley Samuel R. Santana, Dannis Woliver Kelley These materials have been prepared by CASBO Associate Members. They have not been reviewed by State CASBO for approval, so therefore are not an official statement of CASBO.

  2. OVERVIEW Part 1 Legal Requirements for Use of Bond Funds Part 2 Using Bond Funds

  3. Part 1: Legal Requirements Permissible uses of bond funds Restrictions on uses of bond funds Case Study

  4. Part 2: Creative Use Of Bond Funds CABs Technology Endowments Refunding Bonds Case Study

  5. Part 1: Legal Requirements

  6. Restrictions on Uses of Prop. 39 Bond Funds

  7. Permissible Uses of Bond Funds Prop. 46 (2/3rds voter approval) Prop. 39 (55% voter approval):

  8. Permissible Uses of Bond Funds Operating vs. Capital Expenses District operating expenses may not be financed with bonds. California Attorney General Opinion.

  9. Case Study Using Prop. 39 Bond Proceeds for Project Administrative Costs.

  10. Part 2: Creative Use Of Bond Funds

  11. Capital Appreciation Bonds

  12. Capital Appreciation Bonds

  13. Capital Appreciation Bonds

  14. Technology Endowments

  15. Refunding Bonds Most commonly issued to achieve interest cost savings. Market conditions are conducive to resulting in cost savings.

  16. 1General Obligation bonds maturing in 20 years are used in compiling this index. The 20-bond index has an average rating equivalent to the Aa2 from Moody’s and AA from Standard & Poor. Source: Bloomberg

  17. Case Study: Using Bond Funds to Provide General Fund Relief Existing lease obligations (“COPs”) were paid off, resulting in over $7 million in savings per year. Unrestricted rental income of approximately $4.7 million per year has been freed up for other purposes. Developer fees of approximately $2.5 million per year is available for other capital uses.

  18. Savings to District’s Taxpayers Existing bond debt service was reduced by $12.82 million. For the taxpayer, annual savings are expected to average $1.69 per $100,000 of AV. The median assessed value for a single family home is $355,120 – so the typical homeowner will pay $6.01 less per year.

  19. Please come join us at DWK's Truck Stop @ CASBO on Thursday, April 4, 2013, from 8:30 a.m. to 5:30 p.m., when we will open up DWK's Long Beach office to friends of DWK and provide a comfortable setting for you to make use of our business services (wifi, fax, telephone, copier/scanner), enjoy a light snack, and have an opportunity to chat with colleagues and our attorneys. Marilyn J. Cleveland (415) 543-4111 mcleveland@DWKesq.com Samuel R. Santana (562) 366-8500 ssantana@DWKesq.com

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