RESOLUTION ESTABLISHING GUIDELINES

FOR A FACILITY REPAIR AND REPLACEMENT PROGRAM

At the Board meeting on January 15, 2002, the Board of Trustees adopted the resolution to ensure that a facility repair and replacement fund was established in order to maintain school facilities in a state of good repair once the improvements funded by the bonds are completed. Prior to adopting the resolution, the Board received input and advice from the Long-Range Facilities Committee, the elected Orange County Treasurer, and the Orange County Taxpayers Association, each of which recommended the provision of a facility repair and replacement fund.

Below is a copy of the actual resolution adopted by the Board of Trustees.

Resolution 2001/02 #46

RESOLUTION OF THE BOARD OF TRUSTEES OF THE

FULLERTON JOINT UNION HIGH SCHOOL DISTRICT

OF THE COUNTIES OF ORANGE AND LOS ANGELES, CALIFORNIA,

ESTABLISHING GUIDELINES FOR A

FACILITY REPAIR AND REPLACEMENT PROGRAM AND

A FACILITY REPAIR AND REPLACEMENT RESERVE

SUBSEQUENT TO THE ISSUANCE OF SCHOOL BONDS

January 15, 2002

WHEREAS, on October 2, 2001, the Board of Trustees (the “Board”) of the Fullerton Joint Union High School District (the “District”) adopted Resolution 2001/02 #24 (the “Resolution”) ordering a school bond election, establishing specifications of the election order, and requesting consolidation with other elections; and

WHEREAS, the Board adopted the Resolution for the purpose of submitting to the electors the question of whether the bonds of the District (“Bonds”) shall be issued and sold for specified purposes outlined in the list of school facilities projects set forth on Exhibit A-1 to the Resolution; and

WHEREAS, the Board has received input and advice from the Long‑Range Facilities Committee, the elected Orange County Treasurer and the Orange County Taxpayers’ Association, each of which has recommended the provision of a facility repair and replacement fund to ensure future repair and replacement of school facilities; and

WHEREAS, the Board has determined that it is necessary, advisable, and desirable that a facility repair and replacement fund be established in order to maintain school facilities in a state of good repair once the improvements funded by the Bonds are completed; and

WHEREAS, the Board has further determined that it is necessary, advisable, and desirable that a facility repair and replacement reserve be established in order to provide a source of funds to maintain school facilities in a state of good repair once the improvements funded by the Bonds are completed.

NOW, THEREFORE, BE IT RESOLVED, the Board of Trustees of the Fullerton Joint Union High School District does hereby determine and order as follows:

Section 1. Establishment of a Facility Repair and Replacement Fund.

(i) A District program known as the Facility Repair and Replacement Program has been established for the purpose of maintaining school facilities in a state of good repair once the bond funded improvements are completed.

(ii) The Facility Repair and Replacement Program shall continue until all Bonds issued are no longer outstanding.

(iii) To the extent permitted by law, the Facility Repair and Replacement Program shall be funded to a level equivalent to 4% of the District’s general fund (the “General Fund”) budget each year.

(iv) The 4% funding level shall be reached over a seven-year period starting at 1% of the 2002/03 General Fund budget with minimum 0.5% increases each year.

(v) In any year in which the cost of living increase as adopted in the state budget for K-12 education programs is less than 3%, that year’s minimum 0.5% increase may be reduced proportionately to the increase in the General Fund, but never below the prior year’s percentage. In any event, the 4% funding level will be in place for the tenth and subsequent years after the sale of the first series of Bonds.

(vi) If in any year the needs to maintain school facilities are below the applicable funding level, the excess funds shall be deposited in the Facility Repair and Replacement Endowment described below. At the time of such deposit, the Board shall designate whether these excess funds are an addition to endowment principal or to available interest.

Section 2. Funding for the Facility Repair and Replacement Program.

(i) Funding for the Facility Repair and Replacement Program shall be established annually as part of the adoption of the District’s All Funds Final Budget.

(ii) Funding for the Facility Repair and Replacement Program may come from a variety of sources including lease revenues, interest from the Facilities Repair and Replacement Endowment, deferred maintenance funds, redevelopment income, and the General Fund.

(iii) The Facility Repair and Replacement Program shall fund ongoing and major maintenance of school facilities. In defining ongoing and major maintenance, the Board shall rely on the general guidelines provided by the current California Education Code Section 17014(c) and 17070.75(b)(1) and the current California Department of Education’s California School Accounting Manual Procedure 701-16.

Section 3. Facility Repair and Replacement Program Reserve.

(i) A District program known as the Facility Repair and Replacement Endowment has been established in order to provide funds to maintain school facilities in a state of good repair once the bond funded improvements are completed.

(ii) An amount equal to 4% of the General Fund will be deposited when the State School Facility Program matching dollars are received by the District.

(iii) Ongoing funding for the Facility Repair and Replacement Endowment may come from a variety of sources including lease revenues, surplus property, redevelopment income, State matching funds, and the General Fund.

(iv) The Board shall designate the principal amount of the Facility Repair and Replacement Endowment and such principal amount shall not be expended as long as any Bonds are outstanding.

(v) At such time that all Bonds are no longer outstanding, the Facility Repair and Replacement Endowment may be dissolved and the funds expended for the construction of new facilities and/or renovation of existing facilities at the District’s schools.

FURTHER, the Board of Trustees of the Fullerton Joint Union High School District does hereby resolve, determine, and order as follows:

Section 4. Amendments. To the extent permitted by law, any amendment to this Resolution must meet the following criteria:

(i) The Citizens’ Oversight Committee must be consulted and its input on the proposed amendment considered by the Board at or before the time the amendment(s) are acted upon; and

(ii) The proposed amendment(s) must receive at least a two-thirds (2/3) favorable vote by both the Citizens’ Oversight Committee and the Board.

PASSED AND ADOPTED by the Board of Trustees of the Fullerton Joint Union High School District the fifteenth day of January, 2002.

Signed: _____________________________________________

Clerk/President/Secretary to the Board of Trustees

Fullerton Joint Union High School District

Counties of Orange and Los Angeles, State of California

CLERK’S CERTIFICATE

I, Barbara Kilponen, Clerk of the Board of Trustees of the FULLERTON JOINT UNION HIGH SCHOOL DISTRICT, hereby certify that the foregoing is a full, true, and correct copy of Resolution 2001/02 #46 adopted at a regular meeting place thereof on the fifteenth day of January, 2002, of which meeting all the members of said Board of Trustees had due notice and at which a majority thereof were present, and that at said meeting said resolution was adopted by the following vote:

AYES: 5

NOES: 0

ABSENT: 5

An agenda of said meeting was posted at least 72 hours before said meeting at Fullerton, California, a location freely accessible to members of the public, and a brief general description of said resolution appeared on said agenda.

I further certify that I have carefully compared the same with the original minutes of said meeting on file and of record in my office; that the foregoing resolution is a full, true and correct copy of the original resolution adopted at said board meeting and entered in said minutes; and that said resolution has not been amended, modified or rescinded since the date of its adoption, and the same is now in full force and effect.

Dated: January 15, 2002

____________________________________

BARBARA KILPONEN

Clerk of the Board of Trustees of the

FULLERTON JOINT UNION HIGH

SCHOOL DISTRICT