1316 / 69.5% Yes votes ...... 577 / 30.5% No votes

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Article XIIIA, section 1(b)(3), and Article XVI, section 18(b), of the California Constitution authorize the District to incur bonded indebtedness for the purpose of financing the construction, reconstruction, rehabilitation, or replacement of school facilities, in accordance with certain accountability requirements, upon approval by 55% of the voters voting on the bond measure.

If the measure is approved, bonds shall be issued and financed by ad valorem taxes levied annually on real property within the District for the purpose of providing funding for the construction and improvement of school facilities, as specifically identified in the measure. Under Article XIIIA, the proceeds of the bonds must be expended solely for the purposes and on the projects identified in the measure, which include replacing older portable classrooms; building a new multi-purpose facility to be used for physical education, student athletics, performing arts, and other school functions; renovating three existing classrooms for a new school and community library, and other related improvements.

Article XIIIA mandates that the District comply with certain accountability requirements. Accordingly, in identifying the school facilities projects to be funded by the bond proceeds, the Board has certified that it evaluated safety, class size reduction, and information technology needs in developing the scope of the school facilities projects that are to be funded by the bond proceeds. In addition, if the measure is approved, the District must conduct an annual, independent performance audit to ensure that funds are being expended only on the projects identified in the measure and must conduct an annual, financial audit of the proceeds from the sale of the bonds until all proceeds have been expended. The District Board must also establish and appoint members to an independent citizens' oversight committee, in accordance with Education Code section 15278, for the purpose of informing the public concerning bond revenue expenditures.

If the measure is approved, the property tax rate on real property within the District will be increased above 1% of the full cash value for the period necessary to pay the principal and interest on the bonds. The District's Tax Rate Statement, which accompanies this analysis, reflects an estimate of the maximum property tax levies required to service the bonds.

A "Yes" vote on this measure is a vote in favor of the District issuing $4,950,000 in bonds for the purpose of providing funding for the replacement, renovation, acquisition, and construction of school facilities and equipment within the District.

A "No" vote on this measure is a vote against the District issuing $4,950,000 in bonds for the purpose of providing funding for the replacement, renovation, acquisition, and construction of school facilities and equipment within the District.

s/ James B. Lindholm, Jr.
County Counsel

1. The best estimate of the tax which would be required to be levied to fund this bond issue during the first fiscal year after the sale of the first series of bonds, based on estimated assessed valuations available at the time of filing of this statement, is 1.99 cents per $100 ($19.90 per $100,000) of assessed valuation in fiscal year 2005-06.
2. The best estimate of the tax rate which would be required to be levied to fund this bond issue during the first fiscal year after the sale of the last series of bonds, based on estimated assessed valuations available at the time of filing of this statement, is 1.99 cents per $100

3. The best estimate of the highest tax rate which would be required to be levied to fund this bond issue, based on estimated assessed valuations available at the time of filing of this statement, is 1.99 cents per
$100 ($19.90 per $100,000) of assessed valuation. The tax rate is expected to remain the same in each year that the bonds are outstanding.

Voters should note that the estimated tax rates are based on the ASSESSED VALUE of taxable property on the County's official tax rolls, not on the property's market value. Property owners should consult their own property tax bills to determine their property's assessed value and any applicable tax exemptions.

Attention of all voters is directed to the fact that the foregoing information is based upon the District's projections and estimates only, which are not binding upon the District. The actual tax rates and the years in which they will apply may vary from those presently estimated, due to variations from these estimates in the timing of bond sales, the amount of bonds sold and market interest rates at the time of each sale, and actual assessed valuations over the term of repayment of the bonds. The dates of sale and the amount of bonds sold at any given time will be determined by the District based on need for construction funds and other factors, including the legal limitations on bonds approved by a 55% vote. The actual interest rates at which the bonds will be sold will depend on the bond market at the time of each sale. Actual future assessed valuation will depend upon the amount and value of taxable property within the District as determined by the County Assessor in the annual assessment and the equalization process.

s/ George Erdelyi, Superintendent
Cayucos Elementary School District