Recognizing the inherent cross-over within our existing practice areas, and coupled with the need for specialists in financial legal services, Lozano Smith's Public Finance Group was formed by experienced attorneys specializing in public finance work, providing expert and objective legal advice on the validity of bonds, the tax treatment of interest on bonds, appropriate and adequate disclosure, post-issuance tax compliance, and record-keeping requirements. Lozano Smith also assists with legal services in related contexts such as bond elections, parcel taxes, developer fees, special taxes, special assessments, and special tax and assessment lien foreclosure.

Areas of Practice

  • Bond, Disclosure, Special and Issuer's Counsel
  • Proposition 39 General Obligation Bonds
  • Refunding Bonds
  • Revenue Bonds
  • Mello-Roos and Mark-Roos Bonds
  • Bond Anticipation Notes
  • Certificates of Participation
  • Lease and Lease-Purchase Financings
  • Tax and Revenue Anticipation Notes
  • Build America Bonds
  • Qualified Zone Academy Bonds
  • Parcel Taxes and Assessments
  • Developer Fees

Real World Applications

Our public finance attorneys are mindful both of the law governing bonds and of the historic customs and practices associated with public finance. Lozano Smith attorneys are nationally recognized as municipal bond counsel, as listed in the Bond Buyers' Municipal Marketplace Guide, commonly referred to as "The Red Book." Members of the firm have successfully delivered disclosure counsel services for a multitude of financings for a wide array of projects.

Combining bond counsel expertise with in-depth experience in school and community college district land acquisition, facilities planning, and construction, Lozano Smith public finance attorneys provide clients with a holistic approach - helping to take financing projects from conception of a facilities improvement plan through financing issuance and beyond.

California Court of Appeal Clarifies "Uniformity" Requirement for School Parcel Taxes

By:Daniel Maruccia, Kenneth Pinette -

January 2024Number 2The California Court of Appeal recently upheld a parcel tax structure as approved by the voters in the Alameda Unified School District (District). In Traiman v. Alameda Unified School District (2023) 94 Cal.App.5th 89, the Appellate Court clarified the “uniformity” requirement for school district qualified special taxes.BackgroundIn March of 2020, the District’s voters approved, by the requisite two-thirds vote, a new parcel tax to fund increased salaries...

Bid Thresholds Raised For 2023

By:Kelly Rem, Junaid Halani -

December 2022Number 61According to the California Department of Education Office of Financial Accountability and Information Services, pursuant to Public Contract Code section 20111(a), the bid threshold for K-12 school district purchases of equipment, materials, supplies, and services (except construction services) has been adjusted to $109,300, effective January 1, 2023.  The notice may be viewed here.The California Community Colleges Chancellor’s Office is expected to announce a...

Piggyback Contracts for Modular Components Are Ineligible for State Funding

By:Arne Sandberg, Andrea Olivarez -

July 2022Number 33Last month, the State Allocation Board (SAB) affirmed its position that school districts and county offices of education must competitively bid contracts to acquire modular building components for installation on a permanent foundation, and that “piggybacking” may not be used.  Importantly, SAB has determined that such piggyback contracts will not qualify for funding from SAB-administered programs if submitted after August 21, 2022.  However, questions ...

Governor Newsom's Executive Order Regarding Economic Sanctions on Russia Creates Confusion for Local Agencies

By:Kelly Rem -

June 2022Number 25On March 4, 2022, Governor Gavin Newsom issued Executive Order N-6-22 in response to Russia's invasion of Ukraine. The Order instructs all agencies and departments that are subject to the Governor's authority to review their investments and contracts to ensure compliance with economic sanctions imposed on Russia by the US government or the State of California. This includes refraining from completing new investments and financial transactions with Russian institutions or c...

Attorney General Takes Hardline Position on Permissible Use of School Bond Premium

By:Daniel Maruccia -

May 2022Number 24On May 19, 2022, the California Attorney General (AG) published Opinion No. 14-202, stating that premium generated from the sale of school district general obligation bonds cannot be used for any purpose other than to pay debt service on the bonds.BackgroundSchool districts, like most public agencies in California, are required to obtain voter authorization in order to issue general obligation bonds. Such bonds are authorized by the voters up to a specific maximum principal a...

Emotional Distress Damages Unavailable in Section 504 Actions

By:Jennifer Baldassari, Amanda Cordova -

May 2022Number 20On April 28, 2022, the United States Supreme Court narrowed the scope of damages available under Section 504 of the Rehabilitation Act of 1973 (Section 504), ruling that emotional distress damages are not recoverable in private actions to enforce Section 504 and other similar Spending Clause antidiscrimination statutes, including the Affordable Care Act (ACA), Title VI, and Title IX.BackgroundPlaintiff Jane Cummings is deaf, legally blind, and communicates primarily in Americ...

Level I Developer Fee Raised, and Important New Requirements to Adopt Justification Studies and School Facilities Needs Analysis

By:Harold Freiman -

March 2022Number 14In each even calendar year, the State Allocation Board (SAB) adopts an inflationary increase to what is commonly known as the “Level 1” school impact fee.  At its meeting on February 23, 2022, the SAB increased the statutory Level 1 fees by 17.45 percent, to $4.79 per square foot for residential construction and $0.78 per square foot for commercial construction.In order to collect either Level 1 fees, or the higher Level 2 fees, school districts must first ...

Financial Obligations and Continuing Disclosure

September 2021

Securities and Exchange Commission Rule 15c2-12 (the "Rule") governs continuing disclosure obligations in connection with a public offering of securities. Among other things, the Rule requires underwriters to ensure an issuer's continuing disclosure agreement complies with the requirements.

In 2019, two new requirements were added to the Rule (see our related Client News Brief). These changes apply to continuing disclosure agreements executed on or after February 27, 2019, and trigger the 10-day notice requirement under the Rule. One such change requires notice within 10 business days of the incurrence by the issuer of a material "financial obligation," which, depending on the circumstances, may include private bank loans and other private and direct purchases, municipal leases, and capital lease financings.

Tip: If your agency has continuing disclosure undertakings dated on or after February 27, 2019, and you are considering entering into a new financial obligation, including equipment leases for copiers, vehicles, tablets, or solar equipment, for example, reach out to your dissemination agent and legal counsel in order to ensure materiality is properly analyzed, and notice is provided, as required.

Prop 39 Bond Election May Be Possible in 2021

April 2021

School district Proposition 39 (“Prop 39”) bond elections must generally be consolidated with statewide primary or general or special elections, which means they are usually held in even-numbered years. The possibility of a statewide recall special election this year, however, provides a potential opportunity for school districts to call a Prop 39 bond election in 2021 as opposed to waiting until 2022.

Initial signature verification for the recall petition has now been completed, triggering a series of statutory procedural steps particular to recall elections for state offices. Once that process is complete, the Lieutenant Governor will call an election on the question of recalling the Governor, to be held not less than 60 days nor more than 80 days from the date of final certification of sufficient signatures.

What does this mean for school districts? Although a school district Prop 39 bond election may be consolidated with the potential recall election, the precise date of the recall election is uncertain. School districts are generally required to deliver their specification of election order to the county registrar at least 88 days prior to the date of election. This brings up the question of how a school district would meet the 88-day requirement if the Lieutenant Governor calls the recall election within the 88-day window.

Tip: Based on current information, it is estimated that the potential recall election would likely take place between late November and early December. Assuming this is the case, a school district would need to submit its specification of election order between late August and early September in order to have a Prop 39 bond election in 2021. Any school district considering placing a Prop 39 bond measure on the statewide ballot at the potential recall election should consider this timeline and prepare accordingly.

March 31 is the Last Call for Many Public Agencies to File Rule 15c2-12 Annual Reports

March 2021

In connection with a public offering of municipal securities (including bonds, certificates of participation, and tax and revenue anticipation notes), issuers of those securities promise to disclose specified financial and operating information on a continuing basis. Securities and Exchange Commission Rule 15c2-12 requires annual financial information be provided to the Municipal Securities Rulemaking Board in accordance with the continuing disclosure certificate/agreement for each respective offering (also referred to as the “Annual Report”).

Although the deadline for the Annual Report may vary, it is common for public agencies to promise to provide it no later than March 31 of each year. Accordingly, the Annual Report deadline for many is looming near. To complicate the matter, Senate Bill 98 has extended the deadline for local education agencies to file Fiscal Year 2019-20 audit reports with the State to March 31, 2021. Because of this extension, the audit report for many school districts will not be available until very close to the deadline to file it as part of the Annual Report (audited financial statements are commonly included in the Annual Report, but can also be provided separately).

Tip: Review your continuing disclosure certificates/agreements or reach out to your agency’s dissemination agent to understand your continuing disclosure requirements and to ensure your required disclosures are filed in a timely manner. And consider working with your legal counsel and dissemination agent to develop and adopt a thorough and robust continuing disclosure policy that, at a minimum, identifies staff positions responsible for maintaining compliance, and outlines the process by which staff understands, reviews, tracks, and addresses continuing disclosure responsibilities.