$9,530,000 WHITTIER CITY SCHOOL DISTRICT (Los Angeles County, California) 2006 General Obligation Refunding Bonds (Bank Qualified)

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1 REFUNDING ISSUE BOOK-ENTRY ONLY RATING: INSURED: Standard & Poor s: AAA (See BOND INSURANCE and MISCELLANEOUS Rating herein). In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however to certain qualifications described herein, under existing law, the interest on the Bonds is excluded from gross income for federal income tax purposes, such interest is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, although for the purpose of computing the alternative minimum tax imposed on certain corporations, such interest is taken into account in determining certain income and earnings, and the Bonds are qualified tax-exempt obligations within the meaning of section 265(b)(3) of the Internal Revenue Code of In the further opinion of Bond Counsel, such interest is exempt from California personal income taxes. See LEGAL MATTERS Tax Matters herein. $9,530,000 WHITTIER CITY SCHOOL DISTRICT (Los Angeles County, California) 2006 General Obligation Refunding Bonds (Bank Qualified) Dated: Date of Delivery Due: August 1, as shown below The Bonds are issued by the Whittier City School District (the District ), to advance refund certain previously issued bonds, as described herein. The Board of Supervisors of Los Angeles County is empowered and is obligated to annually levy ad valorem taxes, without limitation as to rate or amount, upon all property subject to taxation within the District (except certain personal property which is taxable at limited rates), for the payment of interest on, and principal of, the Bonds, all as more fully described herein under THE BONDS and AD VALOREM PROPERTY TAXATION. Interest on the Bonds is payable semiannually on each February 1 and August 1 commencing August 1, The Bonds, when delivered, will be registered initially in the name of Cede & Co., as nominee of The Depository Trust Company ( DTC ), New York, New York. DTC will act as securities depository for the Bonds as described herein under THE BONDS Book-Entry System. The Bonds due on or before August 1, 2016, are not subject to optional redemption; the Bonds due on and after August 1, 2017, are subject to optional redemption as described herein under THE BONDS Redemption. Payment of the principal of, and interest on, the Bonds will be insured by a municipal bond insurance policy to be issued by the MBIA Insurance Corporation simultaneously with the delivery of the Bonds. See BOND INSURANCE herein. The following firm, serving as financial advisor to the District, has structured this financing: MATURITY SCHEDULE (Base CUSIP (1) : ) Maturity Principal Interest Price Maturity Principal Interest Price (August 1) Amount Rate or Yield CUSIP (1) (August 1) Amount Rate or Yield CUSIP (1) 2006 $170, % 3.550% KU $370, % 3.950% LD , KV , LE , LF , KW , LG , KX , LH , KY , LJ , KZ , LK , LA , LL , LB , LM , LC1 $1,070, % Term Bond due August 1, 2026, priced to yield 4.32% (CUSIP (1) LN7) $1,160, % Term Bond due August 1, 2028, priced to yield 4.38% (CUSIP (1) LP2) $1,575, % Term Bond due August 1, 2031, priced to yield 4.42% (CUSIP (1) LQ0) Pursuant to the terms of a public sale on May 16, 2006, the Bonds were awarded to J.P. Morgan Securities, Inc., as Underwriter, at a true interest cost of %. The Bonds will be offered when, as and if issued by the District and received by the Underwriter, subject to the approval of legality by Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel. It is anticipated that the Bonds, in book-entry form, will be available for delivery through The Depository Trust Company in New York, New York, on or about May 30, THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THIS ISSUE. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION. Official Statement Date: May 16, (1) Copyright 2005, American Bankers Association. CUSIP data herein is provided by Standard & Poor s CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc.

2 No dealer, broker, salesperson or other person has been authorized by the Whittier City School District to give any information or to make any representations other than those contained herein and, if given or made, such other information or representation must not be relied upon as having been authorized by the District. This Official Statement does not constitute an offer to sell or the solicitation of any offer to buy nor shall there be any sale of the Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale. This Official Statement is not to be construed as a contract with the purchasers of the Bonds. 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 summaries and descriptions of documents, statutes and constitutional provisions referred to herein do not purport to be comprehensive or definitive, and are qualified in their entireties by reference to each such document, statute and constitutional provision. The information set forth herein, other than that provided by the District, has been obtained from sources which the District believes to be reliable, but is not guaranteed as to accuracy or completeness, and its inclusion herein is not to be taken as a representation of such by the District. The information and expressions of opinion herein are subject to change without notice and neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create 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. THE PRICES OF THE OFFERING AND SALE OF THE BONDS MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER AFTER SUCH BONDS ARE RELEASED FOR SALE AND SUCH BONDS MAY BE OFFERED AND SOLD AT PRICES OTHER THAN THE INITIAL OFFERING PRICES, INCLUDING SALES TO DEALERS WHO MAY SELL SUCH BONDS INTO INVESTMENT ACCOUNTS. IN CONNECTION WITH THE OFFERING OF BONDS, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES FOR SUCH BONDS AT A LEVEL ABOVE THAT WHICH MIGHT PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON THE EXEMPTION CONTAINED IN SECTION 3(a)(2) OF SUCH ACT.

3 WHITTIER CITY SCHOOL DISTRICT Board of Education J.C. Mac McFarland President Javier Gonzalez Vice President Efrain Aceves Member District Administration Jennifer De Baca Clerk Linda Small Member Carmella Franco Superintendent Rita Dixon Associate Superintendent, Business Services PROFESSIONAL SERVICES Financial Advisor Kelling, Northcross & Nobriga A Division of Zions First National Bank Oakland, California Bond Counsel Jones Hall, A Professional Law Corporation San Francisco, California Paying Agent/Escrow Agent U.S. Bank National Association Los Angeles, California Verification Agent Causey Demgen & Moore Denver, Colorado

4 TABLE OF CONTENTS INTRODUCTION...1 The District...1 Sources of Payment for the Bonds...1 Bond Insurance...1 Purpose of the Bonds...2 Authority for Issuance of the Bonds...2 Description of the Bonds...2 Tax Matters...2 Bank Qualified...3 Verification of Mathematical Accuracy...3 Professionals Involved in the Offering...3 Offering and Delivery of the Bonds...3 Other Information...3 THE BONDS...4 Authority for Issuance...4 Purpose of the Issue...4 Sources and Uses of Funds...5 Description of the Bonds...5 Security and Sources of Payment...6 Book-Entry System...6 Payment to Holders...8 Debt Service...10 Redemption...11 BOND INSURANCE...12 Bonds Insurance Policy...12 MBIA Insurance Corporation...13 Regulation...14 Financial Strength Ratings of MBIA...14 MBIA Financial Information...14 Incorporation of Certain Documents by Reference...15 AD VALOREM PROPERTY TAXATION...16 County Services...16 Assessed Valuation...16 State-Assessed Utility Property...17 Tax Levies, Collections and Delinquencies...17 Teeter Plan...18 CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING DISTRICT REVENUE AND APPROPRIATIONS...18 Article XIIIA...18 Article XIIIB...19 Propositions 98 and Proposition 1A...21 Articles XIIIC and XIIID...22 Future Initiatives...23 GENERAL SCHOOL DISTRICT FINANCIAL INFORMATION...23 State Funding of School Districts...23 Basic Aid Districts...24 State Budget...24 State Funding of Schools Without A State Budget...25

5 State Funding of School Construction...26 State Retirement Programs...26 County Office of Education...27 School District Budget Process...27 Accounting Practices...28 County Investment Pool...29 DISTRICT INFORMATION...29 General Information...29 Average Daily Attendance and Revenue Limit...30 Labor Relations...31 Retirement Programs...31 Comparative Financial Statements...31 Audit...32 District Debt...33 Availability of Documents...34 DISTRICT TAX BASE INFORMATION...35 Assessed Valuation...35 Secured Tax Charges and Delinquencies...36 Tax Rates...36 Largest Taxpayers...37 Statement of Direct and Overlapping Debt...37 ECONOMIC PROFILE...39 Introduction...39 Population...39 Employment...40 Major Private Employers...41 Construction Activity...42 Commercial Activity...43 Median Household Income...43 LEGAL MATTERS...43 Tax Matters...43 Legality for Investment in California...44 No Litigation...44 Legal Opinion...44 Bank Qualification...45 MISCELLANEOUS...45 Ratings...45 Verification of Mathematical Accuracy...45 Underwriting...46 Closing Papers...46 Continuing Disclosure...47 Financial Advisor...47 Additional Information...47 APPENDIX A BASIC FINANCIAL STATEMENTS FOR YEAR ENDED JUNE 30, 2005, WITH INDEPENDENT AUDITOR S LETTER AND MANAGEMENT S DISCUSSION AND ANALYSIS...A-1 APPENDIX B PROPOSED FORM OF LEGAL OPINION... B-1 APPENDIX C FORM OF CONTINUING DISCLOSURE CERTIFICATE... C-1 APPENDIX D EXCERPTS FROM THE LOS ANGELES COUNTY INVESTMENT PORTFOLIO REPORT...D-1 APPENDIX E SPECIMEN OF MUNICIPAL BOND INSURANCE POLICY... E-1

6 OFFICIAL STATEMENT $9,530,000 WHITTIER CITY SCHOOL DISTRICT (Los Angeles County, California) 2006 General Obligation Refunding Bonds (Bank Qualified) INTRODUCTION This introduction is not a summary of this official statement (the 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 the 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 $9,530,000 principal amount of Whittier City School District (Los Angeles County, California), 2006 General Obligation Refunding Bonds (the Bonds ), as described more fully herein. The District Whittier City School District (the District ) provides educational services to the residents of the City of Whittier (the City ), in the County of Los Angeles (the County ), in the State of California (the State ). More detailed information regarding the area served by the District and the student population of the District may be found under DISTRICT INFORMATION, DISTRICT TAX BASE INFORMATION, and ECONOMIC PROFILE herein. Sources of Payment for the Bonds The Bonds are issued by the District, and the Board of Supervisors of the County is empowered and is obligated to annually levy ad valorem taxes, without limitation as to rate or amount, upon all property subject to taxation within the District (except certain personal property which is taxable at limited rates), as necessary for payment of interest on and principal of the Bonds. See THE BONDS Security and Sources of Payment, AD VALOREM PROPERTY TAXATION and DISTRICT TAX BASE INFORMATION herein. Bond Insurance The scheduled payment of principal of and interest on the Bonds when due will be guaranteed under an insurance policy to be issued concurrently with the delivery of the Bonds by MBIA Insurance Corporation (the Insurer ). See BOND INSURANCE herein. 1

7 Purpose of the Bonds The proceeds of the Bonds are authorized to be used to advance refund the Prior Bonds, as defined herein. See THE BONDS Purpose of the Issue. Authority for Issuance of the Bonds The Bonds are issued pursuant to certain provisions of the State of California Government Code (the Government Code ) and other applicable law, and pursuant to a resolution adopted by the Board Of Education of the District. See THE BONDS Authority for Issuance herein. Description of the Bonds The Bonds will be issued as current interest bonds without coupons in denominations of $5,000 each, or any integral multiple thereof and will be registered initially in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ( DTC ). DTC will act as securities depository for the Bonds. So long as DTC, or Cede & Co., as its nominee, is the registered owner of all the Bonds, payments on the Bonds will be made directly to DTC, and disbursement of such payments to the DTC Participants (defined herein) will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners (defined herein) will be the responsibility of the DTC Participants, as more fully described hereinafter. See THE BONDS Description of the Bonds; Book-Entry System and Payment to Holders herein. The Bonds will bear interest semiannually each February 1 and August 1, commencing August 1, 2006, from the Date of Delivery calculated on the basis of a 360-day year consisting of twelve 30-day months. Principal of the Bonds will be paid, subject to any optional redemption, on the dates and in the amounts set forth on the cover page hereof. See THE BONDS herein. The Bonds maturing on and after, August 1, 2017, may be redeemed prior to maturity at the option of the District beginning on August 1, 2016, as described under THE BONDS Redemption herein. Tax Matters In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however to certain qualifications described herein, under existing law, the interest on the Bonds is excluded from gross income for federal income tax purposes, such interest is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, although for the purpose of computing the alternative minimum tax imposed on certain corporations, such interest is taken into account in determining certain income and earnings, and the Bonds are qualified tax-exempt obligations within the meaning of section 265(b)(3) of the Internal Revenue Code of In the further opinion of Bond Counsel, such interest is exempt from California personal income taxes. See LEGAL MATTERS Tax Matters herein. 2

8 Bank Qualified The Bonds are deemed by the District to be bank qualified within the meaning of Section 265(b)(3)(B) of the Internal Revenue Code of See LEGAL MATTERS Bank Qualification herein. Verification of Mathematical Accuracy Causey Demgen & Moore, Denver, Colorado, independent certified public accountants, acting as verification agent with respect to the refunding (the Verification Agent ), will deliver a report of the mathematical accuracy of certain computations relating to the sufficiency of funds to be held in escrow to refund the Refunded Bonds. See MISCELLANEOUS Verification of Mathematical Accuracy herein. Professionals Involved in the Offering With respect to the Bonds, Kelling, Northcross & Nobriga, A Division of Zions First National Bank, Oakland, California, is the District's financial advisor (the Financial Advisor ) (see MISCELLANEOUS Financial Advisor herein) and Jones Hall, A Professional Law Corporation, San Francisco, California, is the District s bond counsel (the Bond Counsel ). U.S. Bank National Association, Los Angeles, California, will act on behalf of the County as paying agent, registrar and transfer agent (the Paying Agent ) with respect to the Bonds and as escrow agent (the Escrow Agent ) with respect to the Prior Bonds. The Financial Advisor, Bond Counsel, Paying Agent, and Escrow Agent will receive compensation from the District contingent upon the sale and delivery of the Bonds. Offering and Delivery of the Bonds The Bonds will be offered when, as and if issued by the District and received by the Underwriter, subject to approval as to their legality by Bond Counsel. It is anticipated that the Bonds, in book-entry form, will be available for delivery through DTC in New York, New York on or about May 30, Other Information This Official Statement speaks only as of its date, and the information contained herein is subject to change. The District has covenanted for the benefit of the holders and beneficial owners of the Bonds to provide notices of the occurrence of certain enumerated events, if material. See MISCELLANEOUS Continuing Disclosure herein. Copies of documents referred to herein and information concerning the Bonds are available from the Business Office, 7211 South Whittier Avenue, Whittier, CA ,. The District may impose a charge for copying, mailing and handling. END OF INTRODUCTION 3

9 THE BONDS Authority for Issuance The Bonds are issued under the provisions of Articles 9 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code, commencing with Section (the Code ) and other applicable law, and pursuant to the Paying Agent Agreement, as authorized by the Board Of Education of the District by a resolution adopted on April 18, Pursuant to the Code and the State constitution, bonds issued for the purpose of refunding outstanding bonds previously authorized by the voters that reduce debt service obligation of taxpayers do not require an additional voter approval either for issuance of such refunding bonds or the levy of ad valorem property tax sufficient to pay principal and interest as due on the refunding bonds. The District received authorization to issue $30 million of bonds at an election held on March 7, 2000, by an affirmative vote of 71.48% of the votes cast (the Authorization ). A two-thirds vote in favor was required. See DISTRICT INFORMATION District Debt. Purpose of the Issue Net proceeds of the Bonds are authorized to be used to advance refund the District s Prior Bonds as described below (the Prior Bonds ). WHITTIER CITY SCHOOL DISTRICT Prior Bonds To Be Refunded Amount Final Outstanding Dated Maturity First Call Principal As of Maturities to Principal to Series Date (August 1) Date Amount Issued May 1, 2006 be Refunded be Refunded 2000 Election, Series A 6/8/ /1/08 $5,000,000 $4,675, $4,395, Election, Series B 6/7/ /1/09 $5,000,000 $4,710, $4,300,000 A portion of the proceeds from the sale of the Bonds will be deposited in an escrow fund (the Escrow Fund ) to be created and maintained by the Escrow Agent under the Escrow Agreement, dated May 30, 2006, between the District and the Escrow Agent. Monies in the Escrow Fund will be invested in direct, noncallable obligations of the U.S. Treasury, the principal and interest of which will be sufficient for the redemption of the 2000 Election, Series A Bonds on August 1, 2008, and 2000 Election, Series B Bonds on August 1, Proceeds of the Bonds will also be used to pay costs associated with the issuance of the Bonds and the refunding of the Prior Bonds. Any proceeds of the sale of the Bonds not needed to fund the Escrow Fund or to pay costs of issuance of the Bonds will be transferred to the County Treasury for deposit to the credit of the Whittier City School District 2006 General Obligation Refunding Bonds Debt Service Fund ( Debt Service Fund ). All funds held by the County in the Debt Service Fund shall be applied to the payment of principal and interest on the Bonds, and until needed for such purpose shall be invested at the discretion of the County pursuant to law and the investment policy of the County. 4

10 Monies in the Debt Service Fund may be invested in any one or more investments generally permitted to school districts under the laws of the State, consistent with County investment policy and the Resolution. The Resolution authorizes investment in the Local Agency Investment Fund in the California State Treasury and investment agreements, including guaranteed investment contracts, with a financial entity whose long-term debt is rated by Moody s Investors Service and Standard & Poor s Ratings Services in one of their two highest rating categories, and whose short-term debt is rated no lower than the corresponding level of rating category for such debt, and so long as any such guaranteed investment contract is approved in writing by any municipal bond insurer insuring the Bonds. The District has delegated to the County Treasurer, pursuant to Section of the Government Code, its authority under Section of the Education Code and Section of the Government Code to invest proceeds of the Bonds held in the Treasury of the County. See GENERAL SCHOOL DISTRICT FINANCIAL INFORMATION County Investment Pool herein and APPENDIX D EXCERPTS FROM THE LOS ANGELES COUNTY INVESTMENT PORTFOLIO REPORT. Sources and Uses of Funds The proceeds of the Bonds are expected to be applied as follows. WHITTIER CITY SCHOOL DISTRICT Sources and Uses of Funds Sources of Funds Principal Amount of Bonds $9,530, Original Issue Discount (52,857.55) Total Sources $9,477, Uses of Funds Deposit to Escrow Fund $9,264, Deposit to Costs of Issuance Fund (a) 163, Underwriter s Compensation 24, Insurance Premium 25, Total Uses $9,477, (a) Includes estimated fees for Financial Advisor, Bond Counsel, rating agency, printing and distribution of official statement, Paying Agent, Escrow Agent, and miscellaneous costs of issuance. Description of the Bonds The Bonds in the aggregate principal amount of $9,530,000 will be dated the date of delivery and will bear interest payable semiannually each February 1 and August 1 (each an Interest Payment Date ), commencing August 1, 2006, at the interest rates shown on the cover hereof. The Bonds will mature on August 1 in each of the years and in the principal amounts shown on the cover page hereof. Interest on the Bonds will be computed on the basis of a 360-day year of twelve 30-day months. Each Bond authenticated on or before July 15, 2006, shall bear interest from the date of the Bonds. Each Bond authenticated during the period between the 15th day of the month preceding any Interest Payment Date (the Record Date ) and that Interest Payment Date shall bear interest from that Interest Payment Date. Any other Bond shall bear interest from the Interest Payment Date immediately preceding the date of its authentication. The Bonds will be issued in the denomination of $5,000 principal amount each or any integral multiple thereof. The Bonds when issued will be registered in the name of Cede & Co., as registered 5

11 owner and nominee of DTC. So long as DTC, or Cede & Co., as its nominee, is the registered owner of all the Bonds, principal and interest payments on the Bonds will be made directly to DTC, and disbursement of such payments to the DTC Participants (defined below) will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners (defined below) will be the responsibility of the DTC Participants, as more fully described below under Book-Entry System. Only if the Bonds should cease to be paid through a book-entry system would the Paying Agent make payments on the Bonds directly to Beneficial Owners, as registered owners of the Bonds, as more fully described below under Payment to Holders Security and Sources of Payment The Board of Supervisors of the County is empowered and is obligated to annually levy ad valorem taxes, without limitation as to rate or amount, as necessary for payment of interest on and principal of the Bonds, upon all property within the District (except certain personal property which is taxable at limited rates). Such taxes, when collected, will be placed by the County in the Debt Service Fund. The rate of the ad valorem tax will be set annually by the County based on the assessed value of taxable property in the District and the debt service requirement on outstanding bonds of the District in each year. Variation in the annual debt service requirement and changes in assessed valuation within the District may cause the annual tax rate for the Bonds to change from year to year. For further information regarding ad valorem property taxation in general and within the District in particular, see AD VALOREM PROPERTY TAXATION and DISTRICT TAX BASE INFORMATION herein. Book-Entry System The information in this section concerning DTC and DTC s book-entry system has been furnished by DTC for use in disclosure documents, and the District takes no responsibility for the accuracy or completeness thereof. The District cannot and does not give any assurances that DTC will distribute to Direct Participants, or that Direct Participants or Indirect Participants will distribute to the Beneficial Owners, payments of principal of, interest, and premium, if any, on the Bonds paid or any redemption or other notices or that they will do so on a timely basis or will serve and act in the manner described in this Official Statement. Neither the District nor the County nor the Paying Agent are responsible or liable for the failure of DTC or any Direct or Indirect Participant to make any payments or give any notice to a Beneficial Owner or any error or delay relating thereto. Accordingly, no representations can be made concerning these matters and neither the Direct nor Indirect Participants nor the Beneficial Owners should rely on the following information with respect to such matters but should instead confirm the same with DTC or the DTC Participants, as the case may be. DTC will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Bond certificate will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC, the world s largest depository, is a limited-purpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code, and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of DTC holds and provides asset servicing for over 2.2 million 6

12 issues of U.S. and non-u.s. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC s participants ( Direct Participants ) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ( DTCC ). DTCC, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Government Securities Clearing Corporation, MBS Clearing Corporation, and Emerging Markets Clearing Corporation, (NSCC, GSCC, MBSCC, and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non- U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( Indirect Participants ). DTC has Standard & Poor s highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at and Purchases of the Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC s records. The ownership interest of each actual purchaser of each Bond ( Beneficial Owner ) is in turn to be recorded on the Direct and Indirect Participants records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the security documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. 7

13 Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC s Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC s practice is to credit Direct Participants accounts upon DTC s receipt of funds and corresponding detail information from the issuer or paying agent, on payable date in accordance with their respective holdings shown on DTC s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such Participant and not of DTC (nor its nominee), the Paying Agent, the District or the County, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the County or the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the County or the Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered. The County may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered. Payment to Holders The following provisions governing the payment, transfer and exchange of the Bonds apply to holders of the Bonds. As long as the DTC book-entry system described above is in effect, Cede & Co., or such other nominee of DTC, but not the Beneficial Owners, are holders of the Bonds. Only in the event that Bonds are printed and delivered to the Beneficial Owners do these provisions then apply directly to Beneficial Owners as holders of the Bonds. Principal of the Bonds and any premium upon the redemption thereof prior to the maturity will be payable upon presentation and surrender of the Bonds at the principal corporate trust office of the Paying Agent, or such other location as the Paying Agent may specify. Interest shall be paid by check to the owner of any Bond at the address of such owner shown on the registration books of the Paying Agent, or at such other address the owner of the Bond has filed with the Paying Agent for such purpose on or before the Record Date. Owners of not less than $1,000,000 in principal amount of Bonds may, by written request received by the Paying Agent not later than the Record Date immediately preceding any Interest Payment Date, have interest payments made on the date due by wire transfer to an account maintained in the United States of America in immediately available funds. 8

14 Any Bond may be exchanged for Bonds of any authorized denominations of the same maturity and interest rate upon presentation and surrender at the principal corporate trust office of the Paying Agent, together with a request for exchange signed by the registered owner or by a person legally empowered to do so in a form satisfactory to the Paying Agent. A Bond may be transferred only on the Bond registration books upon presentation and surrender of the Bond at the principal corporate trust office of the Paying Agent together with an assignment executed by the registered owner or by a person legally empowered to do so in a form satisfactory to the Paying Agent. Upon exchange or transfer, the designated District official shall execute, and the Paying Agent shall authenticate and deliver a new Bond or Bonds of any authorized denomination or denominations requested by the registered owner or by a person legally empowered to do so, equal in the aggregate to the unmatured principal amount of the Bond surrendered and bearing interest at the same rate and maturing on the same date. The Paying Agent will not be required to exchange or transfer any Bond during the period from the close of business on the applicable Record Date next preceding any Interest Payment Date or redemption date, to and including such Interest Payment Date or redemption date. 9

15 Debt Service Debt service obligations for the District s outstanding bonds and the Bonds, assuming that no optional redemptions are made, are as follows: WHITTIER CITY SCHOOL DISTRICT Debt Service (a) Outstanding The Bonds Aggregate Annual Payment Date Bonds (a) Principal Interest Total Debt Service 8/1/2006 $ 978, $ 170, $ 66, $ 236, $ 1,215, /1/ , , , /1/2007 1,000, , , , ,908, /1/ , , , /1/2008 1,025, , , ,825, /1/ , , , /1/ , , , , ,793, /1/ , , , /1/ , , , , ,803, /1/ , , , /1/ , , , , ,802, /1/ , , , /1/ , , , , ,798, /1/ , , , /1/ , , , , ,793, /1/ , , , /1/ , , , , ,921, /1/ , , , /1/ , , , , ,927, /1/ , , , /1/ , , , , ,931, /1/ , , , /1/ , , , , ,918, /1/ , , , /1/ , , , , ,924, // , , , /1/ , , , , ,928, /1/ , , , /1/ , , , , ,939, /1/ , , , /1/ , , , , ,943, /1/ , , , /1/2022 1,007, , , , ,944, /1/ , , , /1/2023 1,026, , , , ,947, /1/ , , , /1/2024 1,048, , , , ,947, /1/ , , , /1/2025 1,070, , , , ,949, /1/ , , , /1/2026 1,096, , , , ,963, /1/ , , , /1/2027 1,125, , , , ,964, /1/ , , , /1/2028 1,148, , , , ,971, /1/ , , , /1/2029 1,175, , , , ,974, /1/ , , , /1/2030 1,196, , , , ,969, /1/ , , , /1/2031 1,220, , , , ,605, /1/ , /1/2032 1,249, ,283, /1/2033 6, /1/ , , TOTAL $34,342, $9,530, $6,340, $15,870, $50,213, Debt Service payments reflect change to debt service caused by the refunding of the Prior Bonds. See DISTRICT INFORMATION District Debt for a description of the bonds outstanding as of June 1,

16 Redemption Optional Redemption The Bonds maturing on or before August 1, 2016, are not subject to optional redemption. Bonds maturing on and after August 1, 2017, are subject to redemption prior to their respective stated maturity dates, at the option of the District, from any source of available funds, in whole or in part, on any date on or after August 1, 2016, at the optional redemption prices set forth below. If less than all of the Bonds are called for redemption, such Bonds shall be redeemed in inverse order of maturities or as otherwise directed by the District, and if less than all of the Bonds of any given maturity are called for redemption, the portions of such Bonds of a given maturity to be redeemed shall be determined by lot. Redemption Date Redemption Price August 1, 2016, through July31, % August 1, 2017, through July 31, August 1, 2018 and thereafter 100 Mandatory Sinking Fund Redemption Term Bonds maturing on August 1, 2026, shall be subject to redemption prior to their stated maturity, in part by lot, from mandatory sinking fund payments in the following amounts and on the following dates, at the principal amount thereof on the date fixed for redemption, without premium: Redemption Date Principal Amount August 1, 2025 $ 520,000 August 1, 2026 (maturity) 550,000 Total $1,070,000 Term Bonds maturing on August 1, 2028, shall be subject to redemption prior to their stated maturity, in part by lot, from mandatory sinking fund payments in the following amounts and on the following dates, at the principal amount thereof on the date fixed for redemption, without premium: Redemption Date Principal Amount August 1, 2027 $ 565,000 August 1, 2028 (maturity) 595,000 Total $1,160,000 11

17 Term Bonds maturing on August 1, 2031, shall be subject to redemption prior to their stated maturity, in part by lot, from mandatory sinking fund payments in the following amounts and on the following dates, at the principal amount thereof on the date fixed for redemption, without premium: Redemption Date Principal Amount August 1, 2029 $ 620,000 August 1, ,000 August 1, 2031 (maturity) 310,000 Total $1,575,000 The principal amount of each mandatory sinking fund payment of any maturity shall be reduced proportionately by the amount of any Bonds of that maturity optionally redeemed prior to the mandatory sinking fund payment date. Notice of Redemption Notice of redemption will be given by the Paying Agent at the expense of the District. Such notice will specify: (a) that the Bonds or a designated portion thereof are to be redeemed, (b) the numbers and CUSIP numbers of the Bonds to be redeemed, (c) the date of notice and the date of redemption, (d) the place or places where the redemption will be made, and (e) descriptive information regarding the Bonds including the dated date, interest rate and maturity date. Such notice of redemption will also state that the Bonds, along with the interest accrued to such date and the redemption premium, if any, will become due and payable on the specified date, and that from and after such date interest with respect to the Bonds will cease to accrue. Notice of redemption will be made by registered or otherwise secured mail, postage prepaid, to (a) the registered owners of the Bonds being redeemed (or, if such owner is a syndicate, to the managing member of such syndicate), (b) a municipal registered securities depository, and (c) a national information service that disseminates securities redemption notices. Notice of redemption will be at least thirty days, but not more than sixty days, prior to the redemption date. Neither failure to receive such notice nor any defect in the content of such notice will affect the sufficiency of the proceeding for the redemption of the Bonds. BOND INSURANCE The following information has been furnished by MBIA Insurance Corporation ("MBIA") for use in this Official Statement. Reference is made to APPENDIX E for a specimen of MBIA's policy (the Policy ). Bonds Insurance Policy MBIA does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding the Policy and MBIA set forth under the heading BOND INSURANCE. Additionally, MBIA makes no representation regarding the Bonds or the advisability of investing in the Bonds. 12

18 The MBIA Policy unconditionally and irrevocably guarantees the full and complete payment required to be made by or on behalf of the Issuer to the Paying Agent or its successor of an amount equal to (i) the principal of (either at the stated maturity or by an advancement of maturity pursuant to a mandatory sinking fund payment) and interest on, the Bonds as such payments shall become due but shall not be so paid (except that in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption or acceleration resulting from default or otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund payment, the payments guaranteed by the MBIA Policy shall be made in such amounts and at such times as such payments of principal would have been due had there not been any such acceleration, unless MBIA elects in its sole discretion, to pay in whole or in part any principal due by reason of such acceleration); and (ii) the reimbursement of any such payment which is subsequently recovered from any Owner of the Bonds pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes an avoidable preference to such Owner within the meaning of any applicable bankruptcy law (a Preference ). MBIA's Policy does not insure against loss of any prepayment premium which may at any time be payable with respect to any Bonds. MBIA's Policy does not, under any circumstance, insure against loss relating to: (i) optional or mandatory redemptions (other than mandatory sinking fund redemptions); (ii) any payments to be made on an accelerated basis; (iii) payments of the purchase price of [Bonds/Securities] upon tender by an owner thereof; or (iv) any Preference relating to (i) through (iii) above. MBIA's Policy also does not insure against nonpayment of principal of or interest on the Bonds resulting from the insolvency, negligence or any other act or omission of the Paying Agent or any other paying agent for the Bonds. Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in writing by registered or certified mail, or upon receipt of written notice by registered or certified mail, by MBIA from the Paying Agent or any owner of a Bond the payment of an insured amount for which is then due, that such required payment has not been made, MBIA on the due date of such payment or within one business day after receipt of notice of such nonpayment, whichever is later, will make a deposit of funds, in an account with U.S. Bank Trust National Association, in New York, New York, or its successor, sufficient for the payment of any such insured amounts which are then due. Upon presentment and surrender of such Bonds or presentment of such other proof of ownership of the Bonds, together with any appropriate instruments of assignment to evidence the assignment of the insured amounts due on the Bonds as are paid by MBIA, and appropriate instruments to effect the appointment of MBIA as agent for such owners of the Bonds in any legal proceeding related to payment of insured amounts on the Bonds, such instruments being in a form satisfactory to U.S. Bank Trust National Association, U.S. Bank Trust National Association shall disburse to such owners or the Paying Agent payment of the insured amounts due on such Bonds, less any amount held by the Paying Agent for the payment of such insured amounts and legally available therefor. MBIA Insurance Corporation MBIA Insurance Corporation ( MBIA ) is the principal operating subsidiary of MBIA Inc., a New York Stock Exchange listed company (the Company ). The Company is not obligated to pay the debts of or claims against MBIA. MBIA is domiciled in the State of New York and licensed to do business in and subject to regulation under the laws of all 50 states, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the Virgin Islands of the United States and the Territory of Guam. MBIA, either directly or through subsidiaries, is licensed to do business in the Republic of France, the United Kingdom and the Kingdom of Spain and is subject to regulation under the laws of those jurisdictions. 13

19 The principal executive offices of MBIA are located at 113 King Street, Armonk, New York and the main telephone number at that address is (914) Regulation As a financial guaranty insurance company licensed to do business in the State of New York, MBIA is subject to the New York Insurance Law which, among other things, prescribes minimum capital requirements and contingency reserves against liabilities for MBIA, limits the classes and concentrations of investments that are made by MBIA and requires the approval of policy rates and forms that are employed by MBIA. State law also regulates the amount of both the aggregate and individual risks that may be insured by MBIA, the payment of dividends by MBIA, changes in control with respect to MBIA and transactions among MBIA and its affiliates. The Policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York Insurance Law. Financial Strength Ratings of MBIA Moody's Investors Service, Inc. rates the financial strength of MBIA Aaa. Standard & Poor's, a division of The McGraw-Hill Companies, Inc. rates the financial strength of MBIA AAA. Fitch Ratings rates the financial strength of MBIA AAA. Each rating of MBIA should be evaluated independently. The ratings reflect the respective rating agency's current assessment of the creditworthiness of MBIA and its ability to pay claims on its policies of insurance. Any further explanation as to the significance of the above ratings may be obtained only from the applicable rating agency. The above ratings are not recommendations to buy, sell or hold the Bonds, and such ratings may be subject to revision or withdrawal at any time by the rating agencies. Any downward revision or withdrawal of any of the above ratings may have an adverse effect on the market price of the Bonds. MBIA does not guaranty the market price of the Bonds nor does it guaranty that the ratings on the Bonds will not be revised or withdrawn. MBIA Financial Information As of December 31, 2004, MBIA had admitted assets of $10.3 billion (audited), total liabilities of $7.0 billion (audited), and total capital and surplus of $3.2 billion (audited) determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities. As of December 31, 2005, MBIA had admitted assets of $11.0 billion (unaudited), total liabilities of $7.2 billion (unaudited), and total capital and surplus of $3.8 billion (unaudited) determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities. For further information concerning MBIA, see the consolidated financial statements of MBIA and its subsidiaries as of December 31, 2005 and December 31, 2004 and for each of the three years in the period ended December 31, 2005, prepared in accordance with generally accepted accounting principles, included in the Annual Report on Form 10-K of the Company for the year ended December 31, 2005, 14