KALEIDOSCOPE 2026 - SUMMARY LETTER.PDF
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8687 East Via de Ventura, Suite 306 Scottsdale, Arizona 85258 www.mcida.com February 5, 2026 To: Board of Supervisors Board of Directors Maricopa County, Arizona The Industrial Development Authority of the County of Maricopa Re: Not to Exceed – $9,500,000 The Industrial Development Authority of the County of Maricopa Education Revenue Bonds (Kaleidoscope School Project), Series 2026 (the “Bonds”) Ladies and Gentlemen: At the meeting of the Board of Directors (the “Board”) of The Industrial Development Authority of the County of Maricopa (the “Authority”) on February 10, 2026, the Board will be asked to grant final approval and adopt a resolution authorizing the issuance and sale of the Bonds. This letter provides a summary of the proposed financing. AUTHORITY The Authority is an Arizona nonprofit corporation designated by law as a political subdivision of the State of Arizona. The Authority was formed with the permission of Maricopa County, Arizona (“Maricopa County”), and incorporated under and pursuant to the Arizona Industrial Development Financing Act, Title 35, Chapter 5, Arizona Revised Statutes, as amended (the “Act”). APPLICANT/BORROWER The Applicant/Borrower, Kaleidoscope School (the “Borrower”), is an Arizona nonprofit corporation and an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”). PROJECT The Authority will loan the proceeds of the Bonds to the Borrower to finance the costs of purchasing the charter school facility that the Borrower is currently leasing, located at 16850 North 16th Street, Phoenix, Arizona, and for other costs associated with the bond transaction (collectively, the “Project”). The Project is in Supervisorial District 3. Board of Supervisors Board of Directors February 5, 2026 Page 2 NOTIFICATION TO ARIZONA ATTORNEY GENERAL As required by the provisions of Arizona Revised Statutes, Section 35-721.F, the Authority will notify the Arizona Attorney General of its intention to issue the Bonds. TAX-EXEMPT FINANCING The Bonds will be issued as governmental bonds not requiring approval under Section 147(f) of the Code or an allocation of Arizona volume cap. A tax certificate will be executed by the Authority and Borrower to evidence various representations and agreements aimed at establishing and preserving the tax-exempt status of the Bonds. On or prior to closing, the Authority will receive an opinion from Bond Counsel that interest on the Bonds will be exempt from federal and State of Arizona income taxes. FINANCING PARTICIPANTS The major financing participants, in addition to the Authority, are as follows: Applicant/Borrower: Kaleidoscope School Borrower’s Counsel: Shern Richardson Finter, PLC Financial Consultant: Consilium School Finance Group, LLC Bond/Bank’s Counsel: Greenberg Traurig, LLP Lender: Columbia Bank PLAN OF FINANCING The Authority will issue the Bonds under and pursuant to the terms and provisions of a financing agreement among the Authority, Borrower and Lender (the “Financing Agreement”) in one or more series, in the aggregate principal amount not to exceed $9,500,000, and will loan the proceeds to the Borrower pursuant thereto. Pursuant to the Financing Agreement, the Borrower will be obligated to make loan repayments in amounts and at such times as required to pay principal and interest on the Bonds on their due dates. The obligations of the Borrower to make payments under the Financing Agreement will be secured by a deed of trust that will encumber the Project. The Bonds will be purchased by the Lender in a private placement. The Bonds will not receive a rating from any rating company. FINAL APPROVAL At its meeting on February 10, 2026, the Authority Board will be asked to grant final approval and adopt a resolution authorizing the issuance and sale of the Bonds and related matters. A form of the Authority Board’s resolution is attached hereto. Board of Supervisors Board of Directors February 5, 2026 Page 3 BOARD OF SUPERVISORS APPROVAL Under the provisions of A.R.S. § 35-721.B., the Bonds to be issued by the Authority require the approval of the Maricopa County Board of Supervisors. The Maricopa County Board of Supervisors is being requested, at its meeting on February 25, 2026, to act as required by law to adopt a resolution approving the issuance of the Bonds under the Act. Under the provisions of the Act, specifically A.R.S. § 35-742, Maricopa County is not in any event liable for the payment of principal or interest on any bonds, notes or other obligations issued by the Authority or for the performance of any pledge, mortgage, obligation or agreement of any kind undertaken by the Authority, and none of the bonds, notes or other obligations, or any of its obligations thereunder, shall be construed to constitute an indebtedness of Maricopa County within the meaning of any constitutional or statutory provision. TRANSACTION CLOSING If the required approvals of the Authority Board and the Maricopa County Board of Supervisors are received, it is currently anticipated that the Bonds will be issued in February, 2026. LEGAL COUNSEL RECOMMENDATION General Counsel to the Authority has reviewed drafts of the principal financing documents and, based upon her review of such and her review of the proceedings of the Authority to date relating to the proposed issuance of the Bonds, she believes the principal financing documents are now in substantially final form, adequately meet the requirements of the Act, and are in both form and substance acceptable for the Authority Board to act upon, and that the Resolution of the Authority Board authorizing the issuance and sale of the Bonds and related matters and the Resolution of the Maricopa County Board of Supervisors approving the Bonds to be issued and related matters, are in form and substance acceptable for adoption. A RESOLUTION OF THE BOARD OF DIRECTORS OF THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF MARICOPA AUTHORIZING THE ISSUANCE AND SALE OF ITS EDUCATION REVENUE BONDS (KALEIDOSCOPE SCHOOL PROJECT), SERIES 2026, IN ONE OR MORE TAX-EXEMPT AND/OR TAXABLE SERIES, IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $9,500,000; AUTHORIZING THE EXECUTION AND DELIVERY OF A FINANCING AGREEMENT; APPROVING THE TERMS OF SUCH DOCUMENT AND RELATED DOCUMENTS TO BE EXECUTED BY THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF MARICOPA; RATIFYING CERTAIN ACTIONS HERETOFORE TAKEN IN CONNECTION WITH THE BONDS; AND AUTHORIZING OTHER ACTIONS NECESSARY IN CONNECTION WITH THE ISSUANCE OF THE BONDS WHEREAS, The Industrial Development Authority of the County of Maricopa (the “Authority”), is a nonprofit corporation designated as a political subdivision of the State of Arizona (the “State”) incorporated with the approval of Maricopa County, Arizona (the “County”), pursuant to the provisions of the Constitution of the State and under the Industrial Development Financing Act, A.R.S. §§ 35-701 et seq. (the “Act”); and WHEREAS, the Authority is authorized and empowered, among other things, to issue revenue bonds and other obligations from time to time to fulfill its public purposes, which include the financing or refinancing of the acquisition, construction, improvement, equipping or operating of a “project” (as defined in the Act), whenever the Board of Directors of the Authority finds it furthers the public interest; and WHEREAS, Kaleidoscope School (the “Borrower”), an Arizona nonprofit corporation and an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”), operates a charter school known as “Kaleidoscope School” established under Arizona Revised Statutes Title 15, Chapter 1, Article 8, as amended; and WHEREAS, the Borrower has requested that the Authority issue its Education Revenue Bonds (Kaleidoscope School Project), Series 2026 (the “Bonds”), in one or more tax-exempt and/or taxable series, in an aggregate principal amount of not to exceed $9,500,000, and loan the proceeds thereof to the Borrower to (a) finance the costs of acquiring a school facility and associated real and personal property located at 16850 North 16th Street, Phoenix, Arizona (collectively, the “Facilities”) for use in connection with charter school operations, (b) fund any required reserve funds, (c) pay capitalized interest on the Bonds, if any, and (d) pay the costs incurred in connection with the authorization, issuance and sale of the Bonds (collectively, the “Project”); and WHEREAS, the Bonds will be sold directly to Columbia Bank, an Oregon state-chartered bank, or another bank, financial institution, investment trust or institutional investor, as purchaser (the “Purchaser”), and issued pursuant to a Financing Agreement, to be dated as of the first day of the month in which the Bonds are issued (the “Financing Agreement”), by and among the Authority, the Borrower and the Purchaser; and 2 WHEREAS, the Bonds will be payable from the Pledged Revenues (as defined in the Financing Agreement) and a lien on the Facilities, which will include, among other things, a deed of trust, security agreement, assignment of rents and leases, and fixture filing with respect to the Facilities (the “Deed of Trust”), to be executed by the Borrower; and WHEREAS, the Authority and the Borrower will enter into a tax certificate/agreement that will govern the Borrower’s compliance with pertinent sections of the Code; and WHEREAS, there have been prepared and presented to the Board of Directors of the Authority a substantially final form of the Financing Agreement, including the initial form of the Bonds (the “Documents”); and WHEREAS, the issuance of the Bonds by the Authority and the loan of the proceeds of the Bonds to the Borrower to finance the Project will be in the furtherance of the purposes of the Act and the Authority, and in the public interest. NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of The Industrial Development Authority of the County of Maricopa, as follows: Section 1. Ratification of Actions. All actions (not inconsistent with the provisions of this Resolution) heretofore taken by or at the direction of the Authority and its directors, officers, counsel, advisors, employees or agents directed toward the issuance and sale of the Bonds are hereby approved and ratified. Section 2. Findings. The Authority finds and determines: (a) the Facilities constitute a “project” as defined in the Act; and (b) the issuance of the Bonds and the making of a loan to the Borrower for the purpose of financing all or a portion of the cost of the Project and the costs and expenses incidental thereto are in furtherance of the purposes of the Act and the Authority and are in the public interest. Section 3. Authorization. The issuance and sale of the Bonds in the aggregate principal amount of not to exceed $9,500,000 are hereby authorized and approved, to be designated “The Industrial Development Authority of the County of Maricopa Education Revenue Bonds (Kaleidoscope School Project), Series 2026” (or as otherwise set forth in the Financing Agreement), in one or more series, as tax-exempt and/or taxable debt, to be dated, to mature (no later than 10 years after their date of issuance), to bear interest (not in any event to exceed 14 percent per year), to be subject to redemption, to be payable as to principal and interest, and with such other terms, all as provided in the executed Financing Agreement. Section 4. Conditions. The issuance of the Bonds shall be contingent upon the following conditions occurring on or prior to closing: (a) The Board of Supervisors of the County has approved the issuance of the Bonds. 3 (b) The Arizona Attorney General does not inform the Authority that the Project does not come within the purview of the Act in the manner contemplated by Arizona Revised Statutes § 35-721.F. (c) The Authority receives an opinion from bond counsel, in an acceptable form, to the effect that interest on any tax-exempt series of the Bonds will be exempt from federal and State income taxes. (d) Satisfaction of all requirements of the Code. (e) The Borrower makes arrangements satisfactory to the Authority as to the payment of the Authority’s administrative fee. (f) The Authority, its officers and directors, and the County, must be provided with full indemnification in connection with the issuance and sale of the Bonds, in form and substance satisfactory to the Authority’s counsel, from a credit-worthy source acceptable to the Authority. (g) The Authority must receive a purchaser’s certificate from the initial purchaser in form and substance satisfactory to the Authority’s counsel and any subsequent transfers of the Bonds must be limited to “accredited investors” within the meaning of Rule 501 of Regulation D or “qualified institutional buyers” within the meaning of Rule 144A, promulgated under the Securities Act. (h) The Authority must receive such consents, legal opinions, certificates, documents and other proceedings in connection with the Bonds as are necessary and advisable to evidence compliance by the Borrower and other financing participants with the Authority’s policies and procedures and applicable federal and State laws. (i) The legal opinions, certificates, agreements and other documents are in all material respects satisfactory to the Authority’s counsel. Section 5. Form of Bonds. The form of the Bonds is approved, with only such changes as are approved by the persons executing the Bonds (which approval will be conclusively established by their execution thereof). Upon satisfaction of the conditions set forth in Section 4 hereof, any director of the Authority and its Executive Director (each, an “Authorized Officer”) are each hereby authorized to execute and deliver the Bonds. Any signature of an Authorized Officer on the Bonds may be by facsimile. The Bonds shall be delivered in accordance with the Financing Agreement upon payment of the purchase price thereof. Section 6. Limited Obligations. The Bonds shall be payable solely from the property held and receipts and revenues received by or on behalf of the Authority pursuant to the Financing Agreement. Nothing contained in (a) this Resolution, (b) the Documents, or (c) any other agreement, certificate, document, or instrument executed in connection with the issuance of any of the Bonds shall be construed as obligating the Authority (except as a special, limited obligation to the extent provided in such documents or instruments) or obligating the County or the State to pay the principal of or premium, if any, or interest on the Bonds, or as incurring a charge upon the 4 general credit of the Authority, the County or the State, nor shall the breach of any agreement contemplated by this Resolution, the Documents, or any other instrument or documents executed in connection herewith or therewith impose any charge upon the general credit of the Authority, the County or the State. The Authority has no taxing power. Section 7. Approval and Authorization of Documents. The forms, terms, and provisions of each of the Documents (including the exhibits thereto) presented to this meeting, are hereby approved, with such insertions, deletions, and changes as are approved by the Authorized Officers executing the document (which approval will be conclusively established by their execution and/or delivery thereof). Upon satisfaction of the conditions set forth in Section 4 hereof, any Authorized Officer is hereby authorized to execute and deliver, for and on behalf of the Authority, the Documents. Section 8. Sale of Bonds. The sale of the Bonds to the Purchaser pursuant to the Financing Agreement is hereby authorized and approved. Section 9. Authority to Execute and Deliver Additional Documents. Upon satisfaction of the conditions set forth in Section 4 hereof, any Authorized Officer is each hereby authorized to execute and deliver, for and on behalf of the Authority, any and all additional agreements, certificates, documents, assignments, amendments and other instruments, in forms satisfactory to the Authority’s counsel, and to perform all other acts as they may deem necessary or appropriate for the issuance of the Bonds, the making of the loan to the Borrower, or to implement and carry out and comply with the purposes and intent of this Resolution or the provisions of the Documents as executed and delivered, including, without limitation, documents and certificates relating to the tax-exempt status of interest on the Bonds. Execution of any such additional agreements, certificates, documents, assignments or other instruments, or any amendments to the Documents, by an Authorized Officer, shall constitute conclusive evidence of the approval of such Authorized Officer on behalf of the Authority. Section 10. Open Meeting Laws. It is found and determined that all formal actions of the Authority and its Board of Directors concerning and relating to the adoption of this Resolution were adopted in an open meeting and that all deliberations that resulted in those formal actions were in meetings open to the public, in compliance with all legal requirements of the State and the Authority. Section 11. Irrepealability. After the Bonds are delivered by the Authority to the Purchaser upon receipt of payment therefor, this Resolution shall be and remain irrepealable until the Bonds and interest thereon shall have been fully paid, canceled, and discharged. Section 12. No Personal Liability. No director, officer, executive director, counsel, employee or agent of the Authority shall be subject to any personal liability or accountability by reason of the issuance of the Bonds. The liability of the Authority with respect to the Documents, or any other document executed in connection with the transactions contemplated hereby, shall be limited as provided in the Act and such documents. Section 13. Severability. If any section, paragraph, clause, or provision of this Resolution shall, for any reason, be held to be invalid or unenforceable, the invalidity or 5 unenforceability of such section, paragraph, clause, or provision shall not affect any of the remaining provisions of this Resolution. Section 14. Waiver. Any provisions of the Authority’s Bylaws, procedural policies, and/or prior resolutions inconsistent herewith are waived to the extent only of such inconsistency. This waiver shall not be construed as repealing any such Bylaws, procedural policies, or resolution or any part thereof. Section 15. Headings. Subject headings included in this Resolution are included for purpose of convenience only and shall not affect the construction or interpretation of any of its provisions. Section 16. Notice of A.R.S. § 38-511 – Cancellation. Notice of Arizona Revised Statutes § 38-511 is hereby given. The provisions of that statute by this reference are incorporated herein to the extent of applicability to matters contained herein under the laws of the State. Section 17. Resolution Not to be Construed as Providing Advice Concerning Municipal Securities. None of this Resolution, any of the Documents or any action taken by the Authority, any member of the Board of Directors, the Executive Director, employees or the Authority’s counsel in connection with issuance of the Bonds is intended to provide, and shall not be construed as providing, advice of any kind to the Borrower with respect to the issuance of the Bonds for purposes of 15 U.S.C. Section 78o-4(e)(4)(A)(i). The Authority is a conduit issuer and none of the Authority, the Board of Directors, the Executive Director, employees or the Authority’s counsel is acting or will act as a municipal advisor, financial advisor or fiduciary to any party involved in the issuance of the Bonds. Section 18. Effectiveness. This Resolution shall be effective immediately. [Signature page follows.]