NEW ISSUE – FULL BOOK-ENTRYRATINGS: Moody’s: “A1”; Standard & Poor’s: “A+”
(See “RATINGS”)
In the opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, San Francisco, California (“Bond Counsel”), based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest (and original issue discount) on the Bonds is exempt from State of California personal income tax. Interest on the Bonds is not excluded from gross income for federal income tax purposes. See “TAX MATTERS” with respect to tax consequences relating to the Bonds.
$53,505,000
PERALTA COMMUNITY COLLEGE DISTRICT
(Alameda County, California)
2011 Taxable Refunding Bonds
Dated:Date of DeliveryDue: August1, as shown on inside cover
This cover page is not a summary of this issue; it is only a reference to the information contained in this Official Statement. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. Capitalized terms used on this cover page not otherwise defined shall have the meanings set forth herein.
The Peralta Community College District (Alameda County, California) 2011 Taxable Refunding Bonds (the “Bonds”), in an aggregate principal amount of $53,855,000 are being issued under and pursuant to Articles 10 and 11 (commencing with Section 53570 et seq.) of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, and an Indenture of Trust (the “Indenture”) dated as of October 1, 2011 by and between the Peralta Community College District (the “District”) and Deutsche Bank National Trust Company, as trustee (the “Trustee”).
The Bonds are being issued by the District for the purpose of (i) refinancing the District’s outstanding 2009 Taxable OPEB (Other Post-Employment Benefit) Refunding Bonds, and (ii) paying the costs of issuing the Bonds, all as further described herein.
Interest on the Bonds accrues from the date of delivery at the rates per annum set forth on the inside cover page hereof, and will be payable semiannually on February 1 and August 1, commencing February 1, 2012. Principal on the Bonds will be payable on August 1 in the years and in the amounts shown on the inside cover page hereof. The Bonds will be issued in denominations of $5,000 principal amount or integral multiples thereof, as shown on the inside cover page hereof.
The Bonds are being issued in book-entry form only, without coupons, and will initially be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (collectively referred to as “DTC”). DTC will act as security depository for the Bonds. Purchasers of the Bonds (the “Beneficial Owners”) will not receive physical delivery of the Bonds purchased by them. Payments of principal of and interest on the Bonds will be made by the Trustee to DTC for subsequent disbursement through DTC Participants (defined herein) to the Beneficial Owners of the Bonds. (See “APPENDIX E – DTC AND THE BOOK-ENTRY ONLY SYSTEM.”)
The Bonds are subject to optional redemption and mandatory sinking fund redemption prior to their stated maturities as described herein. (See “THE BONDS – Redemption”).
______
Maturity Schedule
(see inside front cover)
______
BASED ON THE JUDGMENT OF THE VALIDATION, THE OBLIGATIONS OF THE DISTRICT UNDER THE BONDS, INCLUDING THE OBLIGATION TO MAKE ALL PAYMENTS OF PRINCIPAL OF AND INTEREST ON THE BONDS WHEN DUE, ARE OBLIGATIONS OF THE DISTRICT IMPOSED BY LAW AND ARE ABSOLUTE AND UNCONDITIONAL, WITHOUT ANY RIGHT OF SET-OFF OR COUNTERCLAIM. THE BONDS DO NOT CONSTITUTE AN OBLIGATION OF THE DISTRICT FOR WHICH THE DISTRICT IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE DISTRICT HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. NEITHER THE BONDS NOR THE OBLIGATIONS OF THE DISTRICT TO MAKE PAYMENTS OF THE BONDS CONSTITUTE AN INDEBTEDNESS OF THE DISTRICT, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISIONS THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION.
The Bonds are offered when, as and if issued, and received by the Underwriter subject to the approval as to their legality by Stradling Yocca Carlson & Rauth, a Professional Corporation, San Francisco, California, Bond Counsel and Disclosure Counsel. Certain matters will be passed on for the Underwriter by Orrick, Herrington & Sutcliffe LLP, San FranciscoCalifornia. The Bonds, in book-entry form, will be available for delivery through the facilities of DTC in New York, New York on or about October 28, 2011.
J.P. Morgan
Dated: October 17, 2011
DOCSSF/83687v2/200142-0002
MATURITY SCHEDULE
$53,505,000
PERALTA COMMUNITY COLLEGE DISTRICT
(Alameda County, California)
2011 Taxable Refunding Bonds
Base CUSIP(1): 713575
$28,860,000 Serial Bonds
Maturity(August1) / Principal
Amount / Interest
Rate / Yield / Price / CUSIP(1)
2013 / $1,595,000 / 3.470% / 3.470% / 100.00% / ST6
2014 / 2,590,000 / 3.979 / 3.979 / 100.00 / SU3
2015 / 2,265,000 / 4.465 / 4.465 / 100.00 / SV1
2017 / 1,095,000 / 5.330 / 5.330 / 100.00 / SW9
2018 / 1,270,000 / 5.680 / 5.680 / 100.00 / SX7
2019 / 1,695,000 / 5.959 / 5.959 / 100.00 / SY5
2020 / 2,465,000 / 6.159 / 6.159 / 100.00 / SZ2
2021 / 1,570,000 / 6.309 / 6.309 / 100.00 / TA6
2022 / 2,120,000 / 6.509 / 6.509 / 100.00 / TB4
2023 / 2,400,000 / 6.709 / 6.709 / 100.00 / TC2
2024 / 2,965,000 / 6.809 / 6.809 / 100.00 / TD0
2025 / 4,005,000 / 6.909 / 6.909 / 100.00 / TE8
2026 / 2,850,000 / 6.959 / 6.959 / 100.00 / TF5
$24,645,000 7.309% Term Bonds due August 1, 2031 – Yield 7.309%; CUSIP(1): TG3
______
(1) CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by Standard & Poor’s Financial Services LLC on behalf of The American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for CUSIP Services. Neither the Underwriter nor the District is responsible for the selection or correctness of the CUSIP numbers set forth herein.
DOCSSF/83687v2/200142-0002
This Official Statement does not constitute an offering of any security other than the original offering of the Bonds of the District. 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 as contained in this Official Statement, and if given or made, such other information or representation not so authorized should not be relied upon as having been given or authorized by the District or the Underwriter.
The issuance and sale of the Bonds have not been registered under the Securities Act of 1933 or the Securities Exchange Act of 1934, both as amended, in reliance upon exemptions provided thereunder by Section 3(a)2 and 3(a)12, respectively, for the issuance and sale of municipal securities. This Official Statement does not constitute an offer to sell or a solicitation of an offer to buy in any state in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation.
The information set forth herein, other than as provided by the District, has been obtained from sources which are believed to be reliable, but is not guaranteed as to accuracy or completeness, and is not to be construed as a representation by the District. Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as a representation of facts. 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. This Official Statement is submitted in connection with the sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose.
Certain statements included or incorporated by reference in this Official Statement constitute “forward-looking statements.” Such statements are generally identifiable by the terminology used, such as “plan,” “expect,” “intend,” “estimate,” “budget,” “project,” “forecast” or other similar words. The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The District does not plan to issue any updates or revisions to such forward-looking statements if or when the expectations, events, conditions or circumstances on which such statements are based, change or fail to occur.
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, its 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 THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH 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 THE BONDS TO CERTAIN DEALERS AND DEALER BANKS AND BANKS ACTING AS AGENT AT PRICES LOWER THAN THE PUBLIC OFFERING PRICES STATED ON THE COVER PAGE HEREOF AND SAID PUBLIC OFFERING PRICES MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER.
The District maintains a website. However, the information presented on such website is not part of this Official Statement, is not incorporated herein by any reference, and should not be relied upon in making an investment decision with respect to the Bonds.
DOCSSF/83687v2/200142-0002
Peralta Community College DistrictBOARD OF TRUSTEES
Dr. William Riley
President, Area 5
Cy Gulassa
Vice President, Area 6 / Abel Guillen
Member, Area 7
Linda Handy
Member, Area 3 / Marcie Hodge
Member, Area 2
Bill Withrow
Member, Area 1 / Nicky Gonzalez Yuen Member, Area 4
DISTRICT ADMINISTRATION
Dr. Wise E. Allen
Interim Chancellor
Ronald Gerhard
Vice Chancellor, Finance & Administration
Trudy Largent
Vice Chancellor, Human Resources
Dr. Deborah Budd
Vice Chancellor, Educational Services
Thuy Thi Nguyen, Esq.
General Counsel
______
PROFESSIONAL SERVICES
Bond Counsel and Disclosure Counsel
Stradling Yocca Carlson & Rauth
A Professional Corporation
San Francisco, California
Financial Advisor
KNN Public Finance,
A Division of Zions First National Bank
Oakland, California
Trustee
Deutsche Bank National Trust Company
San Francisco, California
Verification Agent
Causey Demgen & Moore, Inc.
Denver, Colorado
Swap Advisor
Swap Financial Group
South Orange, New Jersey
DOCSSF/83687v2/200142-0002
TABLE OF CONTENTS (continued)
Page
INTRODUCTION
The District
Authority for Issuance of the Bonds
Purpose of Issue
Description of the Bonds
Sources of Payment for Bonds
Certain Risk Factors......
Tax Matters
Forward Looking Statements
Offering and Delivery of the Bonds
Continuing Disclosure
Other Information
THE BONDS
Authority for Issuance
Purpose of Issue......
Security and Sources of Payment
Description of the Bonds
Payment......
Trustee
Redemption
Registration, Transfer and Exchange of Bonds
Defeasance
POST-EMPLOYMENT BENEFIT PROGRAM OF THE DISTRICT
Benefit Plan......
Accrued Liability......
Retirement Board and OPEB Trust......
Management of OPEB Trust and Investments......
OPEB Charge......
OPEB Reserve Fund......
2005 OPEB Bonds......
2005 OPEB Bonds Modification......
2009 OPEB Refunding Bonds......
Flow of Funds Related to the Post-Employment Benefit Program......
DEBT SERVICE SCHEDULES......
THE REFUNDING PLAN
ESTIMATED SOURCES AND USES OF FUNDS
DISTRICT MANAGEMENT STATEMENT......
CERTAIN RISK FACTORS......
General Considerations......
District Indebtedness......
Limitation of Remedies......
Revenue Sources to Pay the Bonds......
Audit Findings......
Investment of OPEB Trust Assets......
Management Risk......
Accreditation Risk......
Economic Conditions in California......
Appropriation Risk......
Changes in Law......
FUNDING OF COMMUNITY COLLEGE DISTRICTS IN CALIFORNIA......
Major Revenues......
Tax Shifts and Triple Flip......
Budget Procedure......
Minimum Funding Guarantees for California Community College Districts Under Propositions 98 and 111....
State Budget......
CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING DISTRICT REVENUES AND APPROPRIATIONS
Article XIIIA of the California Constitution......
Legislation Implementing Article XIIIA......
Unitary Property......
Article XIIIB of the California Constitution......
Article XIIIC and Article XIIID of the California Constitution......
Proposition 39......
Proposition 1A and Proposition 22......
State Cash Management Legislation......
Future Initiatives......
PERALTA COMMUNITY COLLEGE DISTRICT
General
Administration......
Civil Grand Jury Investigation......
Accreditation
Recent Audit Findings
District Growth
Employment
Pension Plans
Other Post-Employment Benefits
Risk Management
DISTRICT FINANCIAL INFORMATION
Accounting Practices......
District General Fund......
Comparative Financial Statements......
Ad Valorem Property Taxation......
Assessed Valuations
Appeals and Adjustments of Assessed Valuations......
Tax Levies, Collections and Delinquencies......
Alternative Method of Tax Apportionment - Teeter Plan......
Assessed Valuation and Parcels by Land Use
Assessed Valuation of Single Family Homes......
Tax Rates......
Largest Property Owners
District Debt
Statement of Direct and Overlapping Debt......
LEGAL MATTERS......
Tax Matters
Continuing Disclosure
Legality for Investment in California
Absence of Material Litigation
Certain Legal Matters
RATINGS
UNDERWRITING
ADDITIONAL INFORMATION
APPENDIX A – 2009-10 Audited Financial Statements of the District...... A-1
APPENDIX B – economic and demographic information for the CitIES of
bERKELEY AND OAKLAND, AND the county of alameda...... B-1
APPENDIX C – Form of Opinion of Bond Counsel...... C-1
APPENDIX D – Form of Continuing Disclosure Certificate...... D-1
APPENDIX E – DTC and the book-entry only system...... E-1
APPENDIX f – county of ALAMEDA TREASURY pool...... f-1
APPENDIX G – Summary of Certain Provisions of the Indenture...... G-1
APPENDIX H – OPEB TRUST INVESTMENT POLICY...... H-1
APPENDIX I – FISCAL YEAR 2011-12 ADOPTED BUDGET OF THE DISTRICT...... I-1
1
DOCSSF/83687v2/200142-0002
$53,505,000
PERALTA COMMUNITY COLLEGE DISTRICT
(Alameda County, California)
2011 Taxable Refunding Bonds
INTRODUCTION
This Introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement, including the cover page and appendices hereto, and the documents summarized or described herein. A full review should be made of the entire Official Statement. The offering of Bonds to potential investors is made only by means of the entire Official Statement.
This Official Statement, which includes the cover page and appendices hereto, is provided to furnish information in connection with the sale of $53,505,000 aggregate principal amount of Peralta Community College District (Alameda County, California) 2011 Taxable Refunding Bonds (the “Bonds”).
This Official Statement speaks only as of its date, and the information contained herein is subject to change. The District (defined herein) has no obligation to update the information in this Official Statement, except as required by the Continuing Disclosure Certificate to be executed by the District. See “LEGAL MATTERS– Continuing Disclosure.”
This Official Statement supplies information to prospective buyers of the Bonds. Quotations from and summaries and explanations of the Bonds, the Indenture (defined herein), and the constitutional provisions, statutes and other documents described herein, do not purport to be comprehensive or definitive, and reference is hereby made to said documents, constitutional provisions and statutes for the complete provisions thereof.
Copies of documents referred to herein and information concerning the Bonds are available from the Vice Chancellor, Finance & Administration, Peralta Community College District, 333 E. Eighth Street, Oakland, California94606; Phone (510) 466-7200. The District may impose a charge for copying, mailing and handling.
The District
The Peralta Community College District (the “District”) was formed in 1964 and serves a 78-square mile area in Alameda County (the “County”), California (the “State”), including the cities of Alameda, Albany, Berkeley, Emeryville, Oakland and Piedmont. The District operates four colleges: LaneyCollege in downtown Oakland, College of Alameda in Alameda, MerrittCollege in the hills above Oakland, and BerkeleyCityCollege in downtown Berkeley. The District also operates one community education center in Oakland’s Fruitvale neighborhood. The District’s four colleges are fully accredited by the Accreditation Commission for Community and Junior Colleges (“ACCJC”).
For fiscal year 2011-12, the District has a projected enrollment of 18,500 students and an assessed valuation of $69,914,597,440. For more complete information concerning the District, including certain financial information, see “PERALTA COMMUNITY COLLEGE DISTRICT” and “DISTRICT FINANCIAL INFORMATION.” The District’s audited financial statements for the fiscal year ended June 30, 2010, and final adopted budget for fiscal year ending June 30, 2012, are included, respectively, as APPENDIX A and APPENDIX I hereto.
The District is governed by a seven-member Board of Trustees, each member of which is elected to a four-year term. Elections for positions to the Board of Trustees are held every two years, alternating between three and four available positions. The management and policies of the District are administered by a Chancellor appointed by the Board of Trustees who is responsible for day-to-day District operations as well as the supervision of the District’s other key personnel. Dr. Wise E. Allen is currently the Interim Chancellor of the District. See “PERALTA COMMUNITY COLLEGE DISTRICT.”
Over the past several years, the District has experienced significant financial challenges resulting from deficiencies in its internal fiscal controls, reduced State revenues and increased costs associated with its Post-Employment Benefit (defined herein) program. Since 2010, the District has initiated a variety of policies which have stabilized the District’s financial condition. For more information, please see “POST-EMPLOYMENT BENEFIT PROGRAM OF THE DISTRICT” and “DISTRICT MANAGEMENT STATEMENT.”
Authority for Issuance of the Bonds
The Bonds are issued under and pursuant to certain provisions of the Constitution of the State of California, the Government Code of the State of California, and other applicable law, a resolution of the Board of Trustees adopted on September 27, 2011 (the “Resolution”), and an Indenture of Trust, dated October 1, 2011 (the “Indenture”), by and between the District and Deutsche Bank National Trust Company, as Trustee (the “Trustee”). See “THE BONDS – Authority for Issuance.”