Opinion ID: 2635249
Heading Depth: 1
Heading Rank: 2

Heading: The Financing Agreements

Text: Each of the three financing agreements provides for the appointment of an independent trustee to receive and handle the bond proceeds. [4] Each school authorizes the trustee to disburse funds to pay for the facilities' construction, and the school then pays the principal plus interest on the bonds to the trustee, who in turn pays the private purchasers of the government bonds. Repaying the private-sector bond purchasers for the bond proceeds falls to the recipient schools and will not constitute a charge against the general credit of [the Authority] or be secured by any public property. The bond purchasers have no recourse for nonpayment against the State of California or any public agency. All costs incurred in the course of the bond issuance are reimbursed by the schools. Each agreement includes a covenant by the recipient school that no facility, place or building financed or refinanced with a portion of the proceeds of the Bonds will be used for . . . sectarian instruction or as a place for religious worship or in connection with any part of the programs of any school or department of divinity for the useful life of the Project. And each agreement grants the trustee a right of access to ensure each school's compliance with the covenant. The costs of these trustee inspections are to be paid from the trust funds (that is, from the bond proceeds). In support of the validation actions it had filed in the superior court, the Authority submitted declarations describing each of the three schools, all located in Southern California. The Authority's materials comprise the only evidence presented to the trial court. A summary follows. Oaks Christian School, in the City of Westlake Village, provides a private, comprehensive, college preparatory, Christian education for students in the sixth through the twelfth grades. The school intends to use the bond proceeds to build administrative offices, classrooms, and athletic facilities. The school seeks to foster student growth in knowledge and wisdom through God's grace, and to encourage students to dedicate [themselves] to the pursuit of academic excellence, athletic distinction and Christian values. It admits students without regard to religion, and in the 2001-2002 school year about 35 percent of those enrolled were not Christian. Students and parents must agree, however, to support the school's mission, statement of faith, and biblical goals. Faculty members must adhere to the Christian faith and must sign a statement of faith. California Baptist University, located in Riverside, is an accredited Christian liberal arts institution that grants undergraduate and graduate degrees in a wide range of disciplines. The bond proceeds will fund the acquisition, construction, and improvement of classrooms, administrative offices, a student center, residence halls, and athletic facilities. The university's undergraduate students are expected to accept and to live by biblically based Christian principles, and to attend services at a church of their choosing. In the 2000-2001 academic year, the school awarded some 450 student degrees, of which only about 5 percent were to students who had majored in Christian or ministry studies. The university requires its faculty members to adhere to a Christian faith, and it reserves 51 percent of faculty positions for members of the Baptist denomination. Faculty members must agree with the school's theological and philosophical views but need not sign any statement of faith. Azusa Pacific University, whose main campus is in Azusa, is an accredited Christian liberal arts school offering both undergraduate and graduate degrees. It intends to use the bond proceeds to improve and build campus facilities, including but not limited to a residence facility, a dining facility, [and] a mail center. The declaration of a campus administrator at Azusa Pacific University describes the school as an evangelical Christian community of disciples and scholars who seek to advance the work of God in the world through academic excellence in liberal arts and professional programs of higher education that encourage students to develop a Christian perspective of truth and life. Student applicants are expected to exhibit moral character in harmony with the University's purpose. Applicants are chosen for their academic ability as well as their church involvement and participation in school and community activities. Undergraduates must complete 120 hours of student ministry assignments. In the 2001-2002 academic year, less than 7 percent (39 of more than 600) of the undergraduate degrees awarded by Azusa Pacific University went to those who had completed majors in religious studies. All faculty members are Christian.