I need help with a business and finance assignment

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Business Finance

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Please see attached Official financial statement for an educational project and make PowerPoints presentation slides descriptions, and how it was financed and payback. You need to highlight by marker were you found the info on the statement PDF copy and send  back to me with the slides. Also you need to write a paper from 2-3 page as summary of the information coved in the slides.

Again, what is required from is what I asked above. See the points and instructions below and attachments.

1)  The Project PDF that is going to be used is attached.

2)  You must do PowerPoints slides. (The piece of information in the statement should be copied and paste on the slide to show where you found the answers on the PDF statement.

3)  You need to highlight by marker were you found the info in the statement PDF copy.

4)  You need to write a paper from 2-3 page as summary of the information coved in the slides. (Professional essay or report.)

5)  90% of information can be found on the summary pages and description pages on the Official financial statement

6)  Summary of my lectures is attached for you to understand and use.

Instructions:

In-Class Presentation

CAPITAL BUDGETING AND FINANCING PUAD.705

Fall 2015

Purpose: This project will involve roughly a 20-minute PowerPoint presentation by each student on the financing of a specific capital project for a State or local government.

Project Components: This project should cover the following information that you can identify:

1)  A description of the project.

2)  When it was built.

3)  The sources of all financing (cash, debt, other levels of government);

4)  How much cash and/or debt was used.

5)  What pledges of security were provided?

6)  Was the debt rated and if so at what level?

7)  Was the debt insured?

8)  Who was the underwriter?

9)  How many tranches of debt were issued?

10)  Were any bond premiums or discounts received?

11)  What was the maturity of the debt?

12)  Other pertinent information. Point to make sure you cover it.

·  Types of capital (Operating budget, Capital budget) Is operations and capital needs?

·   Reasons

·   Facilities

·   Funding options such as by “grants, loan, debt, bonds, etc.”

·   Who will build, Who will own, and Who will operate,

·  Principle amount,

·   Term

·   Type of debt. Debt service, Maximum Debt outstanding, and Debt limit. Is it PAYGO? PAYGO vs Debt, (General Obligation and Revenue Bonds), Debt Policy, Debt Service and Coverage.

·   Interest

·   Process.

·  PAR value.

·   Amortization table.

·  Summary of Budget Cycle.

·   Finance team.

·  Bond Rating.

·   Trustee.

·  Pledge and Secondary Pledge.

·  Bond/debt

·  Is it Multi-Year Planning?

·  Time value of money, Taxable vs. Tax Exempt Debt, Fixed vs. Variable Rates.

·   The Relationship between Risk and Interest Rates.

·  Call Provisions.

·   Arbitrage.

·  State and Local Government Securities (SLGS).

·   Bond Ratings.

·  Credit Enhancements.

·   Creative Finance ,Conduit Financing ,Tax Increment Financing ,Bond Anticipation Notes/Tax Anticipation Notes/Grant Anticipation Notes, Public Private Partnerships etc. (Pleas look at the budgeting lectures summary)

MICassopolis01a-FIN.pdf 705 PPT instructions.docx Budgeting lectures summary.docx 

Unformatted Attachment Preview

NEW ISSUE Rating ¹†: Standard & Poor’s: AABook-Entry-Only TAX STATUS: In the opinion of Thrun Law Firm, P.C., Bond Counsel, assuming continued compliance by the School District with certain requirements of the Internal Revenue Code of 1986, as amended (the “Code”), interest on the Bonds is excluded from gross income for federal income tax purposes, as described in the opinion, and the Bonds and interest thereon are exempt from all taxation in the State of Michigan, except inheritance and estate taxes and taxes on gains realized from the sale, payment or other disposition thereof. The School District has designated the Bonds as “QUALIFIED TAX-EXEMPT OBLIGATIONS” within the meaning of the Code, and has covenanted to comply with those requirements of the Code necessary to continue the exclusion of interest on the Bonds from gross income for federal income tax purposes. $3,330,000 CASSOPOLIS PUBLIC SCHOOLS County of Cass State of Michigan 2015 School Building and Site Bonds (General Obligation - Unlimited Tax) PURPOSE AND SECURITY: The 2015 School Building and Site Bonds (General Obligation - Unlimited Tax) (the “Bonds”) were authorized at an election on August 4, 2015, for the purpose of remodeling, furnishing and refurnishing, equipping and re-equipping, and replacing roofs on school facilities, in part, for building security and energy conservation improvements; acquiring and installing instructional technology in school buildings; and preparing, developing, and improving outdoor athletic facilities. The Board of Education authorized the issuance of the Bonds by resolutions adopted on August 24, 2015 and expected to be adopted on October 26, 2015 (together, the “Resolutions”) . The Bonds will pledge the full faith, credit and resources of the Cassopolis Public Schools, County of Cass, State of Michigan (the “School District”)for payment of the principal and interest thereon, and will be payable from ad valorem taxes, which may be levied without limitation as to rate or amount as provided by Article IX, Section 6, of the Michigan Constitution of 1963. The rights or remedies of bondholders may be affected by bankruptcy, insolvency, fraudulent conveyance or other laws affecting creditors’ rights generally, now existing or hereafter enacted, and by the application of general principles of equity including those relating to equitable subordination. BOOK-ENTRY-ONLY: The Bonds are issuable only as fully registered bonds without coupons, and when issued, will be registered in the name of Cede & Co., as Bondholder and nominee for The Depository Trust Company (“DTC”), New York, New York. DTC will act as securities depository for the Bonds. Purchases of beneficial interests in the Bonds will be made in book-entry only form, in the denominations of $5,000 or any integral multiple thereof. Purchasers will not receive certificates representing their beneficial interest in Bonds purchased. So long as Cede & Co. is the Bondholder, as nominee of DTC, references herein to the Bondholders or registered owners shall mean Cede & Co., as aforesaid, and shall not mean the Beneficial Owners of the Bonds. See BOOK-ENTRY ONLY SYSTEM herein. PAYMENT OF BONDS: Interest on the Bonds will be payable semiannually on May 1 and November 1 of each year commencing on May 1, 2016. The The Bonds will be registered Bonds, of the denomination of $5,000 or multiples thereof not exceeding for each maturity the principal amount of such maturity. The principal and interest shall be payable at the corporate trust office of The Huntington National Bank, Grand Rapids, Michigan (the “Paying Agent”) or such other Paying Agent as the School District may hereafter designate by notice mailed to the registered owner not less than sixty (60) days prior to any interest payment date. So long as DTC or its nominee, Cede & Co., is the Bondholder, such payments will be made directly to such Bondholder. Disbursement of such payments to the Beneficial Owners is the responsibility of DTC Participants and Indirect Participants, as more fully described herein. Interest shall be paid when due by check or draft mailed to the registered owner as shown on the registration books as of the fifteenth day of the month preceding the payment date for each interest payment. Principal Due: May 1 of each year as shown below Dated: November 12, 2015 MATURITY SCHEDULE (Base CUSIP§: 148303) Year 2016 2017 2018 2019 2020 Amount $260,000 305,000 315,000 325,000 330,000 Interest Rate 1.00% 1.00 2.00 2.00 2.00 Yield 0.60% 0.85 1.05 1.25 1.50 CUSIP§ EW6 EX4 EY2 EZ9 FA3 Year 2021 2022 2023 2024 2025 Amount $340,000 350,000 360,000 370,000 375,000 Interest Rate 2.00% 2.00 2.00 3.00 3.00 Yield 1.60% 1.80 2.00 2.15 2.25 CUSIP§ FB1 FC9 FD7 FE5 FF2 J.J.B. Hilliard, W.L. Lyons, Inc. PRIOR REDEMPTION: Bonds of this issue are not subject to redemption at the option of the School District prior to maturity as described herein. See “NO PRIOR REDEMPTION - No Optional Redemption” herein. BOND COUNSEL: The Bonds will be offered when, as and if issued by the School District subject to the approving legal opinion of Thrun Law Firm, P.C., Novi, Michigan. This cover page contains information for a 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. Additional information relative to this Bond issue may be obtained from: Public Financial Management, Inc. 3989 Research Park Drive Ann Arbor, Michigan 48108 734-668-6688 Official Statement Dated: October 26, 2015 ¹ For an explanation of ratings, see “CREDIT RATING” herein. † As of the date of delivery * Preliminary, subject to change. § Copyright 2015, American Bankers Association. CUSIP data herein is provided by Standard & Poor’s CUSIP Service Bureau, a division of the McGraw-Hill Companies, Inc. The School District shall not be responsible for the selection of CUSIP numbers, nor any representation made as to their correctness on the Bonds or as indicated above. CASSOPOLIS PUBLIC SCHOOLS 725 Center Street Cassopolis, Michigan 49031 Phone: 269-445-0503 Fax: 269-445-0505 BOARD OF EDUCATION PRESIDENT Scott R. Ward Term Expires December 2016 VICE PRESIDENT Lisa A. Cutting Term Expires December 2018 SECRETARY Susan L. Horstmann Term Expires December 2018 TREASURER George M. Calvert Term Expires December 2018 TRUSTEES Deborah K. Deubner Term Expires December 2018 Jesse L. Binns Term Expires December 2018 Amanda M. Smego Term Expires December 2016 SUPERINTENDENT Tracy D. Hertsel BUSINESS MANAGER Becky Smith PROFESSIONAL SERVICES PAYING AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Huntington National Bank BOND COUNSEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thrun Law Firm, P.C. FINANCIAL CONSULTANT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Public Financial Management, Inc. ii TABLE OF CONTENTS Page INFORMATION FOR BIDDERS . . . . . . . . . . . . . . . . . PURPOSE AND SECURITY . . . . . . . . . . . . . . . . . NO PRIOR REDEMPTION . . . . . . . . . . . . . . . . . . NOTICE OF SALE . . . . . . . . . . . . . . . . . . . . . . . . . BOOK-ENTRY ONLY SYSTEM . . . . . . . . . . . . . TAX PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . LEVY AND COLLECTION OF TAXES FOR PAYMENT OF THE BONDS AND BONDHOLDERS' REMEDIES . . . . . . . . . . . TRANSFER OUTSIDE BOOK-ENTRY-ONLY SYSTEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SOURCES OF SCHOOL OPERATING REVENUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . MICHIGAN PROPERTY TAX REFORM . . . . . . . LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . State of Michigan . . . . . . . . . . . . . . . . . . . . . . . Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Original Issue Premium . . . . . . . . . . . . . . . . . . Future Developments . . . . . . . . . . . . . . . . . . . . APPROVED BY THE MICHIGAN DEPARTMENT OF TREASURY . . . . . . . . . . CONTINUING DISCLOSURE . . . . . . . . . . . . . . . BOND COUNSEL’S RESPONSIBILITY . . . . . . . FINANCIAL CONSULTANT’S OBLIGATION . . CREDIT RATING . . . . . . . . . . . . . . . . . . . . . . . . . ESTIMATED SOURCES AND USES OF FUNDS GENERAL FINANCIAL INFORMATION . . . . . . . . AREA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . POPULATION . . . . . . . . . . . . . . . . . . . . . . . . . . . PROPERTY VALUATIONS . . . . . . . . . . . . . . . . Historical Valuations . . . . . . . . . . . . . . . . . . . Per Capita Valuation . . . . . . . . . . . . . . . . . . . Industrial Facilities Tax (IFT) . . . . . . . . . . . . TAX BASE COMPOSITION . . . . . . . . . . . . . . . . MAJOR TAXPAYERS . . . . . . . . . . . . . . . . . . . . . TAX RATES - (Per $1,000 of Valuation) . . . . . . . Cassopolis Public Schools . . . . . . . . . . . . . . . Other Major Taxing Units . . . . . . . . . . . . . . . STATE AID PAYMENTS . . . . . . . . . . . . . . . . . . TAX LEVIES AND COLLECTIONS . . . . . . . . . LABOR FORCE . . . . . . . . . . . . . . . . . . . . . . . . . . PENSION FUND . . . . . . . . . . . . . . . . . . . . . . . . . OTHER POST-EMPLOYMENT BENEFITS . . . 1 1 1 1 1 3 DEBT STATEMENT . . . . . . . . . . . . . . . . . . . . . . 16 DIRECT DEBT . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 OVERLAPPING DEBT . . . . . . . . . . . . . . . . . . . . 16 DEBT RATIOS . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 DEBT HISTORY . . . . . . . . . . . . . . . . . . . . . . . . . 16 FUTURE FINANCING . . . . . . . . . . . . . . . . . . . . 16 OTHER BORROWING . . . . . . . . . . . . . . . . . . . . 17 LEGAL DEBT MARGIN . . . . . . . . . . . . . . . . . . . 17 SCHOOL BOND QUALIFICATION AND LOAN PROGRAM . . . . . . . . . . . . . . . . . . . . . . . . . . 17 4 4 4 5 6 6 6 6 7 7 7 8 8 8 9 9 10 10 10 10 10 11 11 12 12 13 13 13 13 14 14 14 15 GENERAL ECONOMIC INFORMATION . . . . . . . . LOCATION AND AREA . . . . . . . . . . . . . . . . . . . POPULATION BY AGE . . . . . . . . . . . . . . . . . . . INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EMPLOYMENT CHARACTERISTICS . . . . . . . EMPLOYMENT BREAKDOWN . . . . . . . . . . . . UNEMPLOYMENT . . . . . . . . . . . . . . . . . . . . . . . BANKING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 18 18 18 19 19 20 20 GENERAL SCHOOL INFORMATION . . . . . . . . . . . DESCRIPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . BOARD OF EDUCATION . . . . . . . . . . . . . . . . . SCHOOL ENROLLMENT . . . . . . . . . . . . . . . . . . Historical Enrollment . . . . . . . . . . . . . . . . . . . Enrollment by Grade . . . . . . . . . . . . . . . . . . . Projected Enrollment . . . . . . . . . . . . . . . . . . . EXISTING SCHOOL FACILITIES . . . . . . . . . . . OTHER SCHOOLS . . . . . . . . . . . . . . . . . . . . . . . OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . 21 21 21 21 21 21 21 22 22 22 APPENDIX A - BUDGET . . . . . . . . . . . . . . . . . . . . . A-1 APPENDIX B - AUDIT . . . . . . . . . . . . . . . . . . . . . . . B-1 APPENDIX C - FORM OF CONTINUING DISCLOSURE AGREEMENT . . . . . . . . . . . . . . C-1 APPENDIX D - DRAFT LEGAL OPINION . . . . . . . D-1 APPENDIX E - DRAFT OFFICIAL NOTICE OF SALE . . . . . . . . . . . . . . . . . . . . . . . E-1 iii [THIS PAGE INTENTIONALLY LEFT BLANK] INFORMATION FOR BIDDERS $3,330,000 CASSOPOLIS PUBLIC SCHOOLS County of Cass State of Michigan 2015 School Building and Site Bonds (General Obligation - Unlimited Tax) DATED: November 12, 2015 FIRST INTEREST: May 1, 2016 REGISTRATION: Principal and Interest PAYING AGENT: The Huntington National Bank, Grand Rapids, Michigan TAX DESIGNATION: QUALIFIED TAX - EXEMPT OBLIGATIONS PRINCIPAL DUE: May 1, annually as shown the front cover PURPOSE AND SECURITY The Bonds were authorized at an election on August 4, 2015, for the purpose of remodeling, furnishing and refurnishing, equipping and re-equipping, and replacing roofs on school facilities, in part, for building security and energy conservation improvements; acquiring and installing instructional technology in school buildings; and preparing, developing, and improving outdoor athletic facilities. The Bonds will pledge the full faith, credit and resources of the School District for payment of the principal and interest thereon, and will be payable from ad valorem taxes, which may be levied without limitation as to rate or amount as provided by Article IX, Section 6, of the Michigan Constitution of 1963. The rights or remedies of bondholders may be affected by bankruptcy, insolvency, fraudulent conveyance or other laws affecting creditors' rights generally, now existing or hereafter enacted, and by the application of general principles of equity including those relating to equitable subordination. NO PRIOR REDEMPTION Bonds of this issue are not subject to redemption at the option of the School District prior to maturity. NOTICE OF SALE See “APPENDIX E - DRAFT OFFICIAL NOTICE OF SALE,” for further information regarding this issue. BOOK-ENTRY ONLY SYSTEM The information in this section has been furnished by The Depository Trust Company, New York, New York ("DTC"). No representation is made by The Huntington National Bank, Grand Rapids, Michigan (the “Paying Agent”) as to the completeness or accuracy of such information or as to the absence of material adverse changes in such information subsequent to the date hereof. No attempt has been made by the School District or the Paying Agent to determine whether DTC is or will be financially or otherwise capable of fulfilling its obligations. Neither the School District nor the Paying Agent will have any responsibility or obligation to Direct Participants, Indirect Participants (both as defined below) or the persons for which they act as nominees with respect to the Bonds, or for any principal, premium, if any, or interest payment thereof. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the securities (the "Securities"). The Securities 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 Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue. 1 DTC, the world's largest securities 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 1934. DTC holds and provides asset servicing for over 3.5 million 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 is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. 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 a Standard & Poor's rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's records. The ownership interest of each actual purchaser of each Security ("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 Securities 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 Securities, except in the event that use of the book-entry system for the Securities is discontinued. To facilitate subsequent transfers, all Securities 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 Securities 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 Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities 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 Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities 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. Redemption notices shall be sent to DTC. If less than all of the Securities 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 Securities unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to School District 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 Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Securities 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 School District 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, Paying Agent, 2 or School District, 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 School District or 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. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to Paying Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant's interest in the Securities, on DTC's records, to Paying Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records and followed by a book-entry credit of tendered Securities to Paying Agent's DTC account. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the School District or Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered. The School District may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the School District believes to be reliable, but the School District takes no responsibility for the accuracy thereof. TAX PROCEDURES Article IX, Section 3, of the Michigan Constitution provides that the proportion of true cash value at which property shall be assessed shall not exceed 50% of true cash value. The Michigan Legislature by statute has provided that property shall be assessed at 50% of its true cash value, except as described below. The Michigan Legislature or the electorate may at some future time reduce the percentage below 50% of true cash value. On March 15, 1994, the electors of the State approved an amendment to the Michigan Constitution permitting the Legislature to authorize ad valorem taxes on a non-uniform basis. The legislation implementing this constitutional amendment added a new measure of property value known as "Taxable Value." Beginning in 1995, taxable property has two valuations -- State equalized valuation ("SEV") and Taxable Value. Property taxes are levied on Taxable Value. Generally, Taxable Value of property is the lesser of (a) the Taxable Value of the property in the immediately preceding year, adjusted for losses, and increased or reduced by the lesser of the inflation rate or 5%, plus additions, or (b) the property's current SEV. Under certain circumstances, therefore, the Taxable Value of property may be different from the same property's SEV. When property is sold or transferred, Taxable Value is adjusted to the SEV, which under existing law is 50% of the current true cash value. The Taxable Value of new construction is equal to current SEV. Taxable Value and SEV of existing property are also adjusted annually for additions and losses. Responsibility for assessing taxable property rests with the local assessing officer of each township and city. Any property owner may appeal the assessment to the local assessor, to the local board of review, to the Michigan Tax Tribunal, and ultimately to the Michigan appellate courts. The Michigan Constitution also mandates a system of equalization for assessments. Although the assessors for each local unit of government within a county are responsible for actually assessing at 50% of true cash value, adjusted for Taxable Value purposes, the final SEV and Taxable Value are arrived at through several steps. Assessments are established initially by the municipal assessor. Municipal assessments are then equalized to the 50% levels as determined by the county's department of equalization. Thereafter, the State equalizes the various counties in relation to each other. SEV is important, aside from its use in determining Taxable Value for the purpose of levying ad valorem property taxes, because of its role in the spreading of taxes between overlapping jurisdictions, the distribution of various State aid programs, State revenue sharing and in the calculation of debt limits. 3 Property that is exempt from property taxes, e.g., churches, government property, public schools, is not included in the SEV and Taxable Value data in the Official Statement. Property granted tax abatements under Act 198, Public Acts of Michigan, 1974, amended, is recorded on a separate tax roll while subject to tax abatement. The valuation of tax-abated property is based upon SEV but is not included in either the SEV or Taxable Value data in the Official Statement except as noted. Under limited circumstances, other state laws permit the partial abatement of certain taxes for other types of property for periods of up to 12 years. LEVY AND COLLECTION OF TAXES FOR PAYMENT OF THE BONDS AND BONDHOLDERS' REMEDIES The Resolutions authorizing the issuance of the Bonds and State law obligate the School District to levy a tax annually in an amount sufficient so that the estimated collections therefrom will be sufficient to pay promptly when due the principal of and interest on the Bonds becoming due prior to the time of the next tax levy. The tax levy shall not be subject to limitation as to rate or amount. Taxes for the payment of the principal of or interest on the Bonds are certified for collection each year within the school tax levies. In the event of the failure of the proper officials to certify taxes for the payment of the principal and interest requirements, a timely action in the nature of mandamus could compel certification and collection of adequate taxes and thus prevent a default. Registered owners of the Bonds may attempt to obtain a money judgment against the School District for the principal amount of the Bonds or interest not paid when due and may periodically attempt to enforce the collection of the money judgment by requiring the tax assessing officers for the School District to place the amount of such judgment on the next tax rolls of the School District. The rights of the holders of the Bonds and the enforceability thereof are subject to bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted and their enforcement also may be subject to the exercise of judicial discretion in appropriate cases. TRANSFER OUTSIDE BOOK-ENTRY-ONLY SYSTEM In the event that the book-entry-only system is discontinued, the following provisions would apply to the Bonds. The Paying Agent shall keep the registration books for the Bonds (the “Bond Register”) at its corporate trust office. Subject to the further conditions contained in the Resolutions, the Bonds may be transferred or exchanged for one or more Bonds in different authorized denominations upon surrender thereof at the corporate trust office of the Paying Agent by the registered owners or their duly authorized attorneys; upon surrender of any Bonds to be transferred or exchanged, the Paying Agent shall record the transfer or exchange in the Bond Register and shall authenticate replacement bonds in authorized denominations; during the fifteen (15) days immediately preceding the date of mailing (the “Record Date”) of any notice of redemption or any time following the mailing of any notice of redemption, the Paying Agent shall not be required to effect or register any transfer or exchange of any Bond which has been selected for such redemption, except the Bonds properly surrendered for partial redemption may be exchanged for new Bonds in authorized denominations equal in the aggregate to the unredeemed portion; the School District and Paying Agent shall be entitled to treat the registered owners of the Bonds, as their names appear in the Bond Register as of the appropriate dates, as the owners of such Bonds for all purposes under the Resolutions. No transfer or exchange made other than as described above and in the Resolutions shall be valid or effective for any purposes under the Resolutions. SOURCES OF SCHOOL OPERATING REVENUE On March 15, 1994, the electors of the State of Michigan approved a ballot proposition to amend the State Constitution of 1963, in part, to increase the State sales tax from 4% to 6% as part of a complex plan to restructure the source of funding of public education (K-12) in order to reduce reliance on local property taxes for school operating purposes and to reduce the per pupil finance resource disparities among school districts. The Legislature has appropriated funds to establish a base foundation allowance in 2015/16 ranging from $7,391 to $8,169 per pupil, depending upon the district's 1993/94 revenue. In the future, the foundation allowance may be adjusted annually by an index based upon the change in revenues to the State school aid fund and change in the total number of pupils statewide and the spread between the high and low per pupil allowance is reduced. The foundation allowance is funded by locally raised property taxes plus State aid. The revenues for the State's contribution to the foundation allowance are derived from a mix of taxing sources, including, but not limited to, a statewide property tax of 6 mills on all taxable property¹, a State sales and use tax, a real estate transfer tax and a cigarette tax. See "STATE AID PAYMENTS" in this Official Statement for further information. ¹ “Taxable property” does not include industrial personal property. 4 School districts are required to levy a local property tax of not more than 18 mills or the number of mills levied in 1993 for school operating purposes, whichever is less, on non-homestead properties² in order for the school district to receive its per pupil foundation allowance. An intermediate school district may seek voter approval for three enhancement mills for distribution to local constituent school districts on a per pupil basis. Proceeds of the enhancement mills are not counted toward the foundation allowance. Furthermore, school districts whose per pupil foundation allowance in 2015/16 calculates to an amount in excess of $8,169 are authorized to levy additional millage to obtain the foundation allowance, first by levying such amount of the 18 mills against homestead property³ as is necessary to hold themselves harmless and, if the 18 mills is insufficient, to then levy such additional mills against all property uniformly as is necessary to obtain the foundation allowance. The School District's per pupil foundation allowance does not exceed $8,169, and the School District does not levy such additional millage. State aid appropriations and the payment schedule for state aid may be changed by the Legislature at any time. See “STATE AID PAYMENTS” in this Official Statement for further information. Public Act 196 of 2014 ("Act 196") amended the State School Aid Act for the 2014/15 fiscal year and increased the School District's per pupil foundation allowance to $7,126. Act 196 included a one-time equity per pupil funding of $125 per pupil that the School District is receiving because its foundation allowance would otherwise be below $7,126. Act 196 included an additional payment to the School District to partially offset increases in the retirement plan contribution rate for the period October 1, 2014 to September 30, 2015. Act 196 also included grant funding equal to $50 per pupil (a $2 decline in the per pupil amount as compared to 2013/14) for school districts if they satisfy 7 out of 9 "best practices" relating to health and other benefits coverage, competitive bidding for certain vendor services, schools of choice, online instruction programs or blended learning opportunities, a dashboard/report card of the School District's financial management efforts, compensation methods for teachers and administrators that significantly factor performance and accomplishments, use of collective bargaining agreements that omit statutorily prohibited subjects of bargaining, implementation of a comprehensive guidance and counseling program, and opportunities for K to 8 pupils to complete coursework or other learning experiences equivalent to 1 credit in a language other than English. The Board and Administration satisfied such "best practices" requirements and the School District included such grant funding in its 2014/15 General Fund Budget. Public Act 85 of 2015 ("Act 85") amended the State School Aid Act for the 2015/16 fiscal year and increased the School District's per pupil foundation allowance to $7,391. The 2015/16 per pupil foundation allowance is calculated based upon the 2014/2015 per pupil foundation allowance, plus the 2014/15 per pupil equity payment, plus $140 for a net increase per pupil of $105 for the School District. The prior fiscal year's per pupil equity payment and "best practices" and "performance based" grants are eliminated. Act 85 also increased funding for at risk students and appropriated new funds for early literacy, career and technical education middle college, and college and career preparation programs for eligible school districts. The Board and Administration anticipate that the School District will be eligible for said additional funding and the School District included such funding in its 2015/16 General Fund Budget. ² “Non-homestead property” includes all taxable property other than principal residence, qualified agricultural property, qualified forestry property, supportive housing property, property occupied by a public school academy and industrial personal property. Commercial personal property is exempt from the first 12 mills of not more than 18 mills levied by school districts. ³ “Homestead property”, in this context, means principal residence, qualified agricultural property, qualified forestry property, supportive housing property, property occupied by a public school academy, industrial personal property and commercial personal property. THE SOURCES OF THE SCHOOL DISTRICT'S OPERATING REVENUE DO NOT IMPACT THE TAXING AUTHORITY OF THE SCHOOL DISTRICT FOR PAYMENT OF GENERAL OBLIGATION UNLIMITED TAX SCHOOL BONDS AND DO NOT AFFECT THE OBLIGATION OF THE SCHOOL DISTRICT TO LEVY TAXES FOR PAYMENT OF DEBT SERVICE ON GENERAL OBLIGATION UNLIMITED TAX BONDS OF THE SCHOOL DISTRICT, INCLUDING THE BONDS OFFERED HEREIN. MICHIGAN PROPERTY TAX REFORM On November 5, 2013, March 28, 2014, and April 1, 2014, Governor Snyder signed into law a package of bills amending and replacing legislation enacted in 2012 to phase-out most personal property taxes in Michigan. The bills were contingent on Michigan voters approving a ballot question authorizing a new municipal entity, the Local Community Stabilization Authority ("LCSA"), to levy a local component of the statewide use tax and distribute that revenue to local units of government to offset their revenue losses resulting from the personal property tax reform. On August 5, 2014, voters approved that ballot question. 5 The bill package, together with the original 2012 legislation, created two new exemptions from the personal property tax. Under the "small taxpayer exemption," the commercial and industrial personal property of each owner with a combined true cash value in a local tax collecting unit of less than $80,000 is exempt from ad valorem taxes in that collecting unit beginning in 2014. For businesses that do not qualify for the "small taxpayer exemption," all "eligible manufacturing personal property" (personal property used more than 50% of the time in industrial processing or direct integrated support) purchased and placed into service before 2006 or during or after 2013 becomes exempt beginning in 2016. Taxation on "eligible manufacturing personal property" placed into service after 2006 but before 2013 will be phased-out over time; with the exemption taking effect after the property has been in service for the immediately preceding 10 years. The legislation extends certain personal property tax exemptions and tax abatements for technology parks, industrial facilities and enterprise zones that were to expire after 2012, until the voter-approved personal property tax exemptions take effect. Pursuant to voter approval in August 2014, the legislation also includes a formula to reimburse school districts for 100% of their lost operating millage revenue and lost sinking fund millage revenue. To provide the reimbursement, the legislation reduces the state share of the use tax and authorizes the LCSA to levy a local component of the use tax and distribute that revenue to qualifying local units. However, the reimbursement for the school district's operating millage will come from the state use tax component, which is deposited into the school state aid fund.¹ While the legislation provides reimbursement for prospective school operating losses, school districts will only be reimbursed for debt losses attributable to debt obligations that voters approved before January 1, 2013 or were incurred before January 1, 2013. For the 2014-2015 and 2015-2016 fiscal years, the State of Michigan will appropriate sufficient funds to the LCSA to reimburse school districts for such debt losses. ¹ Because the reimbursement funds are deposited into the state school aid fund, the legislature may, in the future, change the funding formulas in the State School Aid Act of 1979 or appropriate funds therein for other purposes. Because the Bonds are associated with debt obligations that received voter approval after January 1, 2013, the School District will not be reimbursed for debt millage revenue it could have otherwise generated to make payments on the Bonds. LITIGATION The School District has not been served with any litigation, administrative action or proceeding, nor, to the knowledge of the School District, is there threatened any litigation restraining or enjoining the issuance or delivery of the Bonds or in any manner questioning the proceedings and authority under which the Bonds are to be issued or affecting the validity of the Bonds. TAX MATTERS State of Michigan In the opinion of Thrun Law Firm, P.C., Novi, Michigan (“Bond Counsel”), based on its examination of the documents described in its opinion, under existing State statutes, regulations and court decisions, the Bonds and the interest thereon are exempt from all taxation in the State of Michigan, except inheritance and estate taxes and taxes on gains realized from the sale, payment or other disposition thereof. Federal In the opinion of Bond Counsel based upon its examination of the documents described in its opinion, under existing statutes, regulations, rulings and court decisions, the interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. It should be noted, however, that certain corporations must take into account interest on the Bonds in determining adjusted net current earnings for the purpose of computing the alternative minimum tax imposed on such corporations. The opinions set forth in the preceding sentences are subject to the condition that the School District comply with all requirements of the Internal Revenue Code of 1986, as amended (the “Code”), that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. Bond Counsel will express no opinion regarding other federal tax consequences arising with respect to the Bonds. 6 There are additional federal tax consequences relative to the Bonds and the interest thereon. The following is a general description of some of these consequences but is not intended to be complete or exhaustive and investors should consult with their tax advisors with respect to these matters. Prospective purchasers of the Bonds should be aware that (i) interest on the Bonds is included in the effectively connected earnings and profits of certain foreign corporations for purposes of calculating the branch profits tax imposed by Section 884 of the Code, (ii) interest on the Bonds may be subject to a tax on excess net passive income of certain S Corporations imposed by Section 1375 of the Code, (iii) interest on the Bonds is included in the calculation of modified adjusted gross income for purposes of determining the taxability of social security or railroad retirement benefits, (iv) the receipt of interest on the Bonds by life insurance companies may affect the federal tax liability of such companies, (v) in the case of property and casualty insurance companies, the amount of certain loss deductions otherwise allowed is reduced by a specific percentage of, among other things, interest on the Bonds, (vi) holders of the Bonds may not deduct interest on indebtedness incurred or continued to purchase or carry the Bonds, and (vii) commercial banks, thrift institutions and other financial institutions may deduct their costs of carrying certain obligations such as the Bonds. Original Issue Premium For federal income tax purposes, the difference between the initial offering prices to the public (excluding bondhouses and brokers) at which certain Bonds, as set forth on the cover of this Official Statement, are sold and the amounts payable at maturity thereof (the “Premium Bonds”), constitutes for the original purchasers of the Premium Bonds an amortizable bond premium. Such amortizable bond premium is not deductible from gross income but is taken into account by certain corporations in determining adjusted current earnings for the purpose of computing the alternative minimum tax, which may also affect liability for the branch profits tax imposed by Section 884 of the Code. The amount of amortizable bond premium allocable to each taxable year is generally determined on the basis of a taxpayer’s yield to maturity determined by using the taxpayer’s basis (for purposes of determining loss on sale or exchange) of such Premium Bonds and compounding at the close of each six-month accrual period. The amount of amortizable bond premium allocable to each taxable year is deducted from the taxpayer’s adjusted basis of such Premium Bonds to determine taxable gain upon disposition (including sale, redemption or payment on maturity) of such Premium Bonds. Future Developments No assurance can be given that any future legislation or clarifications or amendments to the Code, if enacted into law, will not contain proposals which could cause the interest on the Bonds to be subject directly or indirectly to federal or state income taxation, adversely affect the market price or marketability of the Bonds, or otherwise prevent bondholders from realizing the full current benefit of the status of the interest thereon. It is to be understood that the rights of the holders of the Bonds and the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights heretofore or hereafter enacted to the extent constitutionally applicable and that their enforcement may also be subject to the exercise of judicial discretion in appropriate cases. INVESTORS SHOULD CONSULT WITH THEIR TAX ADVISORS AS TO THE TAX CONSEQUENCES OF THEIR ACQUISITION, HOLDING OR DISPOSITION OF THE BONDS, INCLUDING THE TREATMENT OF ORIGINAL ISSUE PREMIUM, IF ANY. APPROVED BY THE MICHIGAN DEPARTMENT OF TREASURY The School District has received a letter from the Department of Treasury of the State of Michigan authorizing the School District to issue the Bonds pursuant to the Revised Municipal Finance Act, Act No. 34, Public Acts of Michigan, 2001 (“Act 34”). 7 CONTINUING DISCLOSURE Prior to delivery of the Bonds the School District will execute a Continuing Disclosure Agreement (the “Agreement”) for the benefit of the holders of the Bonds and Beneficial Owners to send certain information annually and to provide notice of certain events to certain information repositories pursuant to the requirements of Rule 15c2-12(b)(5) (the “Rule”) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934. The information to be provided on an annual basis, the events which will be noticed on an occurrence basis, and the other terms of the Agreement are set forth in “APPENDIX C - FORM OF CONTINUING DISCLOSURE AGREEMENT.” Additionally, the School District shall provide certain annual financial information and operating data, generally consistent with the information in the tables under the headings “PROPERTY VALUATIONS - Historical Valuations” “MAJOR TAXPAYERS”, “TAX RATES - Cassopolis Public Schools”, “STATE AID PAYMENTS”, “TAX LEVIES AND COLLECTIONS”, “LABOR FORCE”, “PENSION FUND”, “DEBT STATEMENT - DIRECT DEBT”, “SCHOOL BOND QUALIFICATION AND LOAN PROGRAM”, “SCHOOL ENROLLMENT” and “GENERAL FUND BUDGET SUMMARY” herein. A failure by the School District to comply with the Agreement will not constitute an event of default under the Resolutions authorizing issuance of the Bonds and holders of the Bonds or Beneficial Owners are limited to the remedies described in the Agreement. A failure by the School District to comply with the Agreement must be reported in accordance with the Rule and must be considered by any broker, dealer or municipal securities dealer before recommending the purchase or sale of the Bonds in the secondary market. Consequently, such failure may adversely affect the transferability and liquidity of the Bonds and their market price. Except as disclosed below, the School District has not in the previous five years, failed to comply, in any material respects, with any previous continuing disclosure agreements executed by the School District pursuant to the Rule. While the School District filed its audited financial statements and annual disclosure information timely over the past five years in compliance, in all material respects, with the previous continuing disclosure agreements executed by the School District, the School District filed a late material event notice of credit rating changes affecting the bond insurer for a certain prior bond issue of the School District. To the best of the School District’s knowledge, the School District did not receive notification from the bond insurer or the rating agencies of the rating changes for the bond insurer. The School District has put systems in place to identify and file material event notices in a timely manner in the future. BOND COUNSEL’S RESPONSIBILITY The fees of Thrun Law Firm, P.C., Novi, Michigan (“Bond Counsel”) for services rendered in connection with its approving opinion are expected to be paid from Bond proceeds. Except to the extent necessary to issue its approving opinion as to the validity of the Bonds and tax matters relating to the Bonds and the interest thereon, and except as stated below, Bond Counsel has not been retained to examine or review, and has not examined or reviewed any financial documents, statements or materials that have been or may be furnished in connection with the authorization, issuance or marketing of the Bonds and accordingly will not express any opinion with respect to the accuracy or completeness of any such financial documents, statements or materials. Bond Counsel has reviewed the statements made in this Official Statement on the cover page and under the heading "Information for Bidders", insofar as such statements summarize the language and effect of the Resolutions, the Bonds, the Continuing Disclosure Agreement, the Constitution of the State of Michigan, the laws of the State of Michigan and federal income tax laws and, further, the statements under such headings are fair and accurate summaries thereof in all material respects. Except as otherwise disclosed on pages herein, Bond Counsel has not been retained to review and has not reviewed any other portion of this Official Statement for accuracy or completeness, and has not made inquiry of any official or employee of the School District or any other person and has made no independent verification of such other portions hereof, and further has not expressed and will not express an opinion as to any portions hereof. FINANCIAL CONSULTANT’S OBLIGATION Public Financial Management, Inc., Ann Arbor, Michigan (the "Financial Advisor"), has been retained by the School District to provide certain financial advisory services. The Financial Advisor assisted in the preparation of the Official Statement and in other matters relating to the planning, structuring and issuance of the Bonds. 8 The information contained in the Official Statement was prepared in part by the Financial Advisor and is based on information supplied by various officials from records, statements and reports required by various local, county or state agencies of the State of Michigan. To the best of the Financial Advisor's knowledge, all of the information contained in the Official Statement, which it assisted in preparing, while it may be summarized is complete and accurate. However, the Financial Advisor has not and will not independently verify the completeness and accuracy of the information contained in the Official Statement. The Financial Advisor is a registered municipal advisor and is not engaged in the business of underwriting, marketing or trading of municipal securities or any other negotiable instrument. The Financial Advisor's duties, responsibilities and fees arise solely as financial advisor to the School District. The Financial Advisor's fees are expected to be paid from Bond proceeds. Further information concerning the Bonds may be secured from Public Financial Management, Inc., 3989 Research Park Drive, Ann Arbor, Michigan 48108. Telephone: 734-668-6688. CREDIT RATING Standard & Poor's Ratings Services (“Standard & Poor’s”) has assigned its municipal bond rating of “AA-” to the Bonds. The aforementioned rating will reflect the sole view of the rating agency and there is no assurance that such rating will be continued for any period of time, or that it will not be revised upwards or downwards or be withdrawn; a revision, suspension, or withdrawal of the rating may have an effect on the market price of these securities and should be noted. A brief description of the Standard & Poor’s rating definitions reads as follows: Standard & Poor’s Ratings Services Bonds rated “AAA” have the highest rating assigned. Capacity to pay interest and repay principal is extremely strong. Bonds rated “AA” qualify as high quality debt obligations. Capacity to pay principal and interest is very strong, and in the majority of instances they differ from “AAA” issues only in a small degree. Bonds rated “A” have a strong capacity to pay principal and interest, although they are somewhat more susceptible to the adverse effects of change in circumstances and economic conditions. Bonds rated “BBB” are regarded as having an adequate capacity to pay interest and repay principal. Whereas it normally exhibits adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category than in higher rated categories. Plus (+) or Minus (-): To provide more detailed indications of credit quality, the ratings from “AA” to “BBB” may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories. ESTIMATED SOURCES AND USES OF FUNDS Sources of Funds Par Amount of Bonds Production Total Sources $3,330,000.00 83,215.30 $3,413,215.30 Uses of Funds Capital Projects Account Deposit to Debt Fund Underwriter's Discount Costs of Issuance Total Uses $3,287,973.69 64,615.30 18,600.00 42,026.31 $3,413,215.30 9 CASSOPOLIS PUBLIC SCHOOLS GENERAL FINANCIAL INFORMATION AREA The School District encompasses an area of approximately 129 square miles. POPULATION The estimated population totals for the School District and the U.S. Census reported for the Village of Cassopolis are as follows: School District* 8,345 8,623 12,696 Village of Cassopolis 1,774 1,740 1,822 * Estimated based on an extrapolation of the U.S. Census figures of the local units within the School District. Year 2010 2000 1990 PROPERTY VALUATIONS In accordance with Act 539, Public Acts of Michigan, 1982, as amended, and Article IX, Section 3 of the Michigan Constitution, the ad valorem State Equalized Valuation (SEV) represents 50% of true cash value. SEV does not include any value of tax exempt property (e.g. churches, governmental property) or property granted tax abatements under Act 198, Public Acts of Michigan, 1974, as amended. As a result of Proposal A, ad valorem property taxes are assessed on the basis of taxable value, which is subject to assessment caps. SEV is used in the calculation of debt margin and true cash value. See “TAX PROCEDURES” herein for more information. Taxable property in the School District is assessed by the local municipal assessor and is subject to review by the County Equalization Department. Historical Valuations* Year 2015 2014 2013 2012 2011 Principal Residence $223,284,432 216,848,528 213,547,232 214,626,759 212,127,428 Non-Principal Residence $221,514,154 199,515,707 189,043,634 172,371,477 163,845,420 Total Taxable Value $444,798,586 416,364,235 402,590,866 386,998,236 375,972,848 State Equalized Valuation $641,906,088 589,939,813 583,424,076 557,169,225 564,047,524 * See "MICHIGAN PROPERTY TAX REFORM" herein for information regarding tax changes effective in the 2014 and 2016 tax years. ¹ Information included in this Official Statement under the headings “General Financial Information, “General Economic Information,” and “General School Information” was obtained from the School District, unless otherwise noted. 10 H is t o r ic a l V a lu a t io n s M illio n s 700 600 500 400 300 200 100 0 201 1 201 2 201 3 201 4 201 5 Y e ar T a x a b le V a l u a t io n 2015 Taxable Value Plus: 2015 IFT Taxable Valuation* Total Equivalent Valuation S t a te E q u a li z e d V a lu a ti o n $444,798,586 20,523,161 $465,321,747 * Millage is levied at half rate against the amount listed. See “PROPERTY VALUATIONS - Industrial Facilities Tax (IFT)” herein. Per Capita Valuation 2015 Per Capita Taxable Value 2015 Per Capita State Equalized Valuation 2015 Per Capita Estimated True Cash Valuation $53,301.21 $76,921.04 $153,842.08 Industrial Facilities Tax (IFT) Under the provisions of Act 198 of the Public Acts of Michigan, 1974 (“Act 198"), plant rehabilitation districts and/or industrial development districts may be established. Businesses in these districts are offered certain property tax incentives to encourage restoration or replacement of obsolete facilities and to attract new facilities to the area. An industrial facilities tax (“IFT”) is paid, at a lesser effective rate and in lieu of ad valorem property taxes, on such facilities for a period of up to 12 years. Qualifying facilities are issued abatement certificates for specific periods. After expiration of the abatement certificate, the then-current SEV of the facility is returned to the ad valorem tax roll. The owner of such facility may obtain a new certificate, provided it has complied with the provisions of Act 198. The 2015 Taxable Value for the properties which have been granted IFT abatements within the School District’s boundaries is $20,523,161 which is subsequently taxed at half rate. For further information see "PROPERTY VALUATIONS - Historical Valuations" herein. As part of the phase-out of Michigan's property tax on personal property, if a facility and personal property within that facility were subject to an industrial facilities exemption on December 31, 2011, that exemption will remain intact and continue to be subject to the industrial facilities tax until the expiration of the exemption at which time the eligible personal property associated with the industrial facilities exemption becomes exempt under the new law. See "MICHIGAN PROPERTY TAX REFORM" above. 11 TAX BASE COMPOSITION† A breakdown of the School District’s 2015 Taxable Value by municipality, class and use are as follows: Municipality Calvin Township Howard Township Jefferson Township La Grange Township Newberg Township Penn Township Pokagon Township Porter Township Wayne Township TOTAL Principal¹ Residence $35,099,725 1,184,595 35,846,850 33,845,091 3,366,599 107,863,795 1,318,387 4,708,647 50,743 $223,284,432 Non-Principal¹ Residence $46,271,798 4,389,114 38,600,895 37,500,092 3,564,504 77,468,919 8,211,263 5,161,297 346,272 $221,514,154 Total Taxable Value $81,371,523 5,573,709 74,447,745 71,345,183 6,931,103 185,332,714 9,529,650 9,869,944 397,015 $444,798,586 Percent of Total 18.29% 1.25 16.74 16.04 1.56 41.67 2.14 2.22 0.09 100.00% ¹ See “SOURCES OF SCHOOL OPERATING REVENUE” in this Official Statement for further details. Class Real Property Personal Property TOTAL Taxable Value $376,273,181 68,525,405 $444,798,586 Percent of Total 84.59% 15.41 100.00% Use Agricultural Commercial Industrial Residential Personal Commercial Personal Industrial Personal Utility TOTAL $50,385,283 12,090,870 4,314,963 309,482,065 2,972,814 2,578,968 62,973,623 $444,798,586 11.33% 2.72 0.97 69.58 0.67 0.58 14.16 100.00% Taxable Valuation by Use Personal Commercial 0.67% Personal Industrial 0.58% Personal Utility 14.16% Agricultural 11.33% Commercial 2.72% Industrial 0.97% Residential 69.58% † See "MICHIGAN PROPERTY TAX REFORM" herein for information regarding tax changes effective in the 2014 and 2016 tax years Source: Cass County MAJOR TAXPAYERS The ten largest taxpayers in the School District and their 2015 Taxable Value totals and Industrial Facilities Tax Valuation totals are as follows: Taxable IFT Total Product/Service Value + Valuation = Valuation Taxpayer Enbridge Energy Utility $46,545,343 $0 $46,545,343 K & M Machine Fabricating Inc. Machinery & equip. 1,894,500 13,380,700 15,275,200 Midwest Energy Cooperative Utility 6,664,392 0 6,664,392 Vector Pipeline LP Pipeline 5,462,915 0 5,462,915 Postle Real Estate Company LLC. Real estate 0 4,547,700 4,547,700 Lowe, Darlene Trust Farm 3,866,200 0 3,866,200 Postle Operating LLC Manufacturing of steal 1,412,600 1,930,600 3,343,200 IN & MI Power Co. Utility 2,606,418 0 2,606,418 Stoler, Christopher & Susan Farm 1,859,000 0 1,859,000 0 1,428,400 Reed Family Properties-Penn Farm 1,428,400 TOTAL $71,739,768 $19,859,000 $91,598,768 The Taxable Valuations of the major taxpayers represent 16.13% of the School District's 2015 Taxable Valuation of $444,798,586 and their Total Valuations represent 19.69% of the School District's Total Equivalent Valuation of $465,321,747. Source: Cass County 12 TAX RATES - (Per $1,000 of Valuation)† Each school district, county, township, special authority and city has a geographical definition which constitutes a tax district. Since local school districts and the county overlap either a township or a city, and intermediate school districts overlap local school districts and county boundaries, the result is many different tax rate districts. Cassopolis Public Schools Operating Non-Principal Residence Debt Sinking Fund 2015 18.0000 2.3800 0.8379 2014 18.0000 2.3000 0.8379 2013 18.0000 2.3000 0.8379 2012 18.0000 2.3500 0.8379 2011 18.0000 2.3500 0.8379 TOTAL PRINCIPAL RESIDENCE TOTAL NON-PRINCIPAL RESIDENCE 3.2179 21.2179 3.1379 21.1379 3.1379 21.1379 3.1879 21.1879 3.1879 21.1879 The School District levies 18 mills for operating purposes on non-principal residence property and authorized debt millage and sinking fund millage on all principal residence and non-principal residence property located within the School District. The School District’s operating millage expires with the December 2018 levy. The School District’s sinking fund millage expires with the December 2022 levy. See “SOURCES OF SCHOOL OPERATING REVENUE” in this Official Statement. † See "MICHIGAN PROPERTY TAX REFORM" herein for information regarding tax changes effective in the 2014 and 2016 tax years Other Major Taxing Units State Education Tax¹ Cass County Cass Library Penn Township Lewis Cass I/S/D Southwestern Community College 2014 6.0000 6.2200 0.6460 0.6824 2.2317 2.4280 2013 6.0000 6.2200 0.6460 0.6824 2.2317 2.4280 ¹ The State of Michigan levies 6.00 mills for school operating purposes on all principal residence and non-principal residence property located within the School District. Source: Cass County STATE AID PAYMENTS The School District's primary source of funding for operating costs is the State School Aid per pupil foundation allowance. The base foundation allowance has been set from $7,391 to $8,169 per pupil for fiscal year 2015/2016. In future years, this allowance may be adjusted by an index based upon the change in revenues to the state school aid fund and the change in the total number of pupils statewide. The State may reduce State School Aid appropriations at any time if the State's revenues do not meet budget expectations. See "SOURCES OF SCHOOL OPERATING REVENUE" herein for additional information. The following table shows a history and current estimates of the School District's total State School Aid revenues, including categoricals and other amounts, the State Amount Received per Pupil and the Foundation Allowance per Pupil. Year 2015/16 (Estimate) 2014/15 2013/14 2012/13 2011/12 State Amount Received per Pupil $3,487 3,378 3,548 4,032 4,094 Total $4,064,029 4,346,728 4,454,457 5,216,006 5,362,564 Source: Michigan Department of Education 13 Foundation Allowance per Pupil $7,391 7,251 7,026 6,966 6,846 TAX LEVIES AND COLLECTIONS The School District’s fiscal year begins July 1 and ends June 30. School District property taxes are due December 1 of each fiscal year and are payable without interest on or before the following February 14, respectively, and without penalty on or before the following February 14. All real property taxes remaining unpaid on March 1st of the fiscal year following the levy are turned over to the County Treasurer for collection. Cass County (the “County”) annually pays from its Tax Payment Fund delinquent taxes on real property to all taxing units in the County, including the School District, shortly after the date delinquent taxes are returned to the County Treasurer for collection. A history of tax levies and collections for the School District are as follows: Levy Year 2015 2014 2013 2012 2011 Operating Tax Levy $3,980,630 3,532,925 3,341,870 3,145,473 3,033,470 Collections to March 1 of Following Year N/A $2,860,932 80.98% 3,071,735 91.92 2,875,787 91.43 2,794,165 92.11 Collections Plus Funding To June 30 of Following Year N/A $3,142,580 88.95% 3,341,869 100.00 3,145,473 100.00 3,024,795 99.71 The Tax Payment Fund is financed through the issuance of General Obligation Limited Tax Notes (GOLTNs) by the County. Although the School District anticipates the continuance of this program by the County, the ability of the County to issue such GOLTNs is subject to market conditions at the time of offering. In addition, Act 206, Public Acts of Michigan, 1893, as amended, provides in part that: “The primary obligation to pay to the county the amount of taxes and interest on the taxes shall rest with the local taxing units and the state for the state education tax under the state education tax act... If the delinquent taxes that are due and payable to the county are not received by the county for any reason, the county has full right of recourse against the taxing unit or to the state for the state education tax... to recover the amount of the delinquent taxes and interest...” On the third Tuesday in July in each year, a tax sale is held by the County at which lands delinquent for taxes assessed in the third year preceding the sale, or in a prior year, are sold for the total of the unpaid taxes of those years. Pursuant to Act 123, Public Acts of Michigan, 1999, as amended, property owners with taxes that are two years delinquent will be foreclosed and the property will be sold at public auction. For example, property owners who fail to pay their 2015 delinquent property taxes will lose their property in March 2018. LABOR FORCE A breakdown of the number of salaried employees of the School District and their affiliations with organized groups are as follows: Contract Number Bargaining Unit Expiration Employees Administrators 6 N/A N/A Teachers 52 Local MEA/NEA 06/30/2016 Aides 8 MESPA 06/30/2016 Secretaries 5 MESPA 06/30/2016 Maintenance 1 MESPA 06/30/2016 Mechanic 1 MESPA 06/30/2016 Transportation 7 MESPA 06/30/2016 Food Service 1 MESPA 06/30/2016 N/A N/A Exempt Secretaries 2 TOTALS 83 The School District has not experienced a strike by any of its bargaining units within the past ten years. PENSION FUND For the period October 1 through September 30, the School District pays an amount equal to a percentage of its employees' wages to the Michigan Public School Employees Retirement System ("MPSERS"), which is administered by the State of Michigan. These contributions are required by law and are calculated by using the contribution rates and periods provided in the table below of the employees' wages. The employer contribution rate for employees who first worked July 1, 2010 or later (Pension Plus members) for the time period July 1, 2010 to September 30, 2010 was 15.44%. For other employees, the rate was 16.94% through September 30, 2010. Effective October 1, 2010, the employer contribution rate for all employees except Pension Plus members increased to 19.41%. For Pension Plus members, the employer contribution rate was 17.91%. 14 On June 28, 2010, the Michigan Court of Claims issued an injunction in response to a challenge to the authority of the State to require employees who began working before July 1, 2010, to contribute 3% of reportable wages to the retiree health care trust at MPSERS. As a result, the State has adjusted the contribution rate due on employees wages paid between November 1, 2010 and September 30, 2011 to 20.66% for members who first worked prior to July 1, 2010 and 19.16% for Pension Plus members. In March 2011, the Court of Claims granted the plaintiffs' motions for summary disposition finding that the mandatory 3% contribution violated both the U.S. and Michigan Constitutions. The State appealed the ruling to the Michigan Court of Appeals. In August of 2012, the Court of Appeals affirmed the decision of the Court of Claims. The State of Michigan has filed an Application for Leave to Appeal with the Michigan Supreme Court. On September 4, 2012, the governor signed Public Act 300 of 2012 ("Act 300") to reform MPSERS. Act 300 made changes to employee contributions to their pensions and retiree health benefits, shifting the 3% pension contribution to retiree health benefits. Act 300 increased the amount retirees contribute to their health insurance, and employees are required to choose to increase contributions to their pension plan, maintain current contribution rates and freeze existing benefits, or freeze existing pension benefits and move into a defined contribution plan. In addition, the legislation ended retiree health benefits for new hires. On November 29, 2012, the Ingham County Circuit Court, sitting as the Court of Claims, ruled that the substantive provisions of the Act 300 were constitutional except for one particular provision relating to an "election window" for healthcare benefits. The Legislature promptly adopted legislation which was signed into law by the Governor addressing the constitutional concerns of the election window raised by the Court of Claims. Two public school employee unions appealed the Court of Claims decision to the Michigan Court of Appeals, which affirmed the Court of Claims' ruling on January 14, 2014. The unions appealed the matter to the Michigan Supreme Court. On April 8, 2015, the Michigan Supreme Court upheld Act 300 by ruling that the required employee elections to participate and contribute to retiree healthcare and defined benefit pension plans are constitutional under both the Michigan and United States Constitutions. It is unknown at this time if plaintiffs will appeal this decision to the federal court. The Michigan Supreme Court has not yet ruled on the mandatory 3% retiree health contributions made by members from July 2010 to September 2012 before Act 300 took effect. The School District's estimated contribution to MPSERS for 2015/16 the contributions for the previous four years are shown below. Contribution Period Oct. 1, 2015-Sept. 30, 2016 Oct. 1, 2014-Sept. 30, 2015 Oct. 1, 2013-Sept. 30, 2014 Feb. 1, 2013-Sept. 30, 2013 Oct. 1, 2012-Jan. 31, 2013 Oct. 1, 2011-Sept. 30, 2012 Contribution Rate 25.78 - 27.78% 25.78 - 27.27 24.79 - 26.96 24.32 - 26.96 25.36 24.46 Fiscal Year Ending June 30 2016 (estimate) 2015 2014 2013 2012 Source: Audited financial statements. Pension Plus 25.56 - 27.13% 25.70 - 27.19 25.56 - 26.63 25.13 - 26.20 24.13 23.23 Contributions to MPSERS $1,320,000 1,303,073 1,219,010 1,315,599 1,249,887 Note: Effective for fiscal years beginning after June 15, 2014, GASB Statement 68 requires all reporting units in a multi-employer cost sharing pension plan to record a balance sheet liability for their proportionate share of the net pension liability of the plan. The School District will be required to implement GASB 68 in their year ended June 30, 2015 financial statements. Preliminary unaudited estimates from the State for fiscal year 2013 indicate a potential pension liability of approximately $12,899,106. (Net pension liability 8% discount rate per ORS) OTHER POST-EMPLOYMENT BENEFITS MPSERS is a cost-sharing, multi-employer, statewide plan. Pension benefits and retiree health benefits are established by law and funded through employer contributions. The cost of retiree health benefits is funded annually on a pay-as-you-go basis, with retirees paying some of the costs. Current year liability for retiree health benefits is reflected in the figures provided above. Further information regarding MPSERS, including retiree health benefits, can be found at: www.michigan.gov/orsschools. 15 DEBT STATEMENT (As of October 26, 2015 and including the Bonds described herein) DIRECT DEBT Dated Date 05/22/2003 10/22/2009 06/29/2010 06/29/2010 11/12/2015 Purpose Type Building & Site (QZAB) LTNQ Energy Con. Bond (QZAB) LTNQ Building & Site (RZEDB) UTQ Building & Site (QSCB) UTQ Building & Site UTNQ Interest Spread 0.00 0.00 6.50% 4.30-6.25 1.00-3.00 Maturities 05/22/2018 10/22/2024 05/01/28-30 05/01/16-27 05/01/16-25 TOTAL DIRECT DEBT Amount Outstanding $2,230,000 1,640,000 2,640,000 10,705,000 3,330,000 $20,545,000 OVERLAPPING DEBT Percent 99.89% 64.30 98.08 4.51 0.55 22.44 20.49 Amount Municipality Outstanding Calvin Township $271,000 Jefferson Township 275,000 Penn Township 838,000 Porter Township 6,590,000 Wayne Township 608,000 Cass County 12,308,000 Southwestern Com. College 25,000,000 District Share $270,702 176,825 821,910 297,209 3,344 2,761,915 5,122,500 NET OVERLAPPING DEBT NET DIRECT AND OVERLAPPING DEBT $9,454,405 $29,999,405 Source: Municipal Advisory Council of Michigan. DEBT RATIOS Per Capita (8,345) Net Direct Debt Net Direct and Overlapping Debt $2,461.95 $3,594.90 Ratio to 2015 Taxable Valuation ($444,798,586) Net Direct Debt Net Direct and Overlapping Debt 4.62% 6.74% Ratio to 2015 State Equalized Valuation ($641,906,088) Net Direct Debt Net Direct and Overlapping Debt 3.20% 4.67% Ratio to 2015 Estimated True Cash Valuation ($1,283,812,176) Net Direct Debt Net Direct and Overlapping Debt 1.60% 2.34% DEBT HISTORY The School District has no record of default. FUTURE FINANCING The School District does not anticipate additional capital financing in the foreseeable future. 16 OTHER BORROWING The School District has the following borrowing outstanding: Date 08/20/2015 08/20/2015 08/25/2011 11/11/2013 Description State Aid Note State Aid Note Copiers Bus Lease Interest Rate 0.76% 0.64% – – Maturity Date 07/20/2016 07/20/2016 08/15/2016 07/15/2017 Balance $679,570 320,430 7,934 141,254 LEGAL DEBT MARGIN 2015 State Equalized Valuation Debt Limit (15% of 2015 State Equalized Valuation) Debt Outstanding, including Bonds described herein Less Bonds not subject to Debt Limit* $641,906,088 $96,285,913 $20,545,000 (13,345,000) Total Subject to Debt Limit Additional Debt Which Could Be Legally Incurred 7,200,000 $89,085,913 * Section 1351(3) of Act 451, Public Acts of Michigan, 1976, as amended, provides that the bonded indebtedness of a school district shall not exceed 15% of the total assessed valuation of the district. Bonds not included in the computation of the legal debt margin are (1) any bond qualified under Article IX, Section 16 of the Michigan Constitution of 1963, and (2) deficit budget bonds as authorized under Section 1356. In addition, Section 605 of Act 34, Public Acts of Michigan, 2001, as amended, provides, in relevant part, that debt evidenced by a refunding security shall not be deemed to be within any statutory or charter limitation of outstanding debt limit. SCHOOL BOND QUALIFICATION AND LOAN PROGRAM The School District does not currently have a School Loan Revolving Fund balance under the School Bond Qualification and Loan Program. Source: State of Michigan Department of Treasury 17 GENERAL ECONOMIC INFORMATION LOCATION AND AREA The School District is located the following distances from these commercial and industrial areas: 27 31 50 85 150 miles southwest of Kalamazoo miles east of Benton Harbor miles northeast of South Bend, Indiana miles southwest of Lansing miles west of Detroit POPULATION BY AGE The 2010 U.S. Census estimate of population by age for Cass County are as follows: Number 52,293 13,633 30,305 8,355 Total Population 0 through 19 years 20 through 64 years 65 years and over Median Age Percent 100.00% 26.07 57.95 15.98 42.6 years INCOME The 2010 U.S. Census estimate of household income for Cass County are as follows: Number 20,201 1,434 1,172 2,646 2,465 3,273 3,879 2,545 1,879 566 343 HOUSEHOLDS BY INCOME Less than $10,000 $10,000 to $14,999 $15,000 to $24,999 $25,000 to $34,999 $35,000 to $49,999 $50,000 to $74,999 $75,000 to $99,999 $100,000 to $149,999 $150,000 to $199,999 $200,000 or more Median Income Mean Income $45,177 $58,267 Source: www.census.gov 18 Percent 100.00% 7.10 5.80 13.10 12.20 16.20 19.20 12.60 9.30 2.80 1.70 EMPLOYMENT CHARACTERISTICS* The following employers located within the School District’s boundaries and surrounding communities offer employment opportunities. Employer Within the School District (30 or more employees) North American Forest Products K & M Machine & Fabrication Ameri-Kart Duo-Form Corp. Cassopolis Public Schools Brothers Bakery Hess Industries Inc. Midwest Timber, Inc. Mobility Facility Engineering Inc Cass County (100 or more employees) Cotech Division Modine Heat Transfer Berrybrook Enterprises Armstrong International Inverness Casting Corp. Borgess-Lee Memorial Hospital Dowagiac Union School District Jessup Door Co. Inc. Du-Well Products, Inc. Southwestern Michigan College National Copper Products, Inc. Lee Memorial Hospital Cass County Aluminum Casting Division IKU Inc. Ameriwood Furniture Lyons Industries, Inc. Auto Cam Corp. Creative Foam Corp. Fab Masters Company, Inc. Product/Service Approx. No. Employed Saw & planing mills Machine shop Industrial waste Plastic bathtubs, etc. Education Donut bakery Tool & die Wood preserving Modular Buildings 260 210 170 110 83 60 50 47 30 Foundries Refrigeration, AC Fruit & vegetable grower Valves & pipe fittings Aluminum die casting Health care Education Millwork Die castings Education Copper tubing Health care Government Aluminum die casting Cylinders, actuators Furniture & fixtures Shower doors Screw machine products Foam automotive products Custom aluminum 850 550 450 300 300 260 254 250 249 200 200 195 190 180 176 175 150 125 100 100 * The approximate number of employees listed above are as reported in the sources indicated below. Because of reporting time lags and other factors inherent in collecting and reporting such information, the numbers may not reflect recent changes in employment levels, if any. Source: 2015 Michigan Manufacturers Directory, 2015 Crain’s Book of Lists, Manta Company Intelligence website, the Michigan Economic Development Council (“MEDC”), and individual employers. EMPLOYMENT BREAKDOWN The 2010 U. S. Census reports the occupational breakdown of persons 16 years and over for Cass County as follows: Percent Number PERSONS BY OCCUPATION 23,405 100.00% Professional Specialty Occupations 6,119 26.14 Service Occupations 3,667 15.67 Sales & Office Occupations 5,287 22.59 Natural Resources, Construction, and Maintenance Occupations 2,627 11.22 Transportation & Material Moving Occupations 5,705 24.38 19 The breakdown by industry for persons 16 years and over in Cass County are as follows: Number 23,405 568 1,738 6,265 666 2,505 1,251 249 875 1,402 4,626 1,817 909 534 PERSONS BY INDUSTRY Agriculture, Forestry, Fishing, Hunting & Mining Construction Manufacturing Wholesale Trade Retail Trade Transportation Information Finance, Insurance, & Real Estate Professional & Management Services Educational, Health & Social Services Arts, Entertainment, Recreation and Food Services Other Professional and Related Services Public Administration Percent 100.00% 2.43 7.43 26.77 2.85 10.70 5.35 1.06 3.74 5.99 19.77 7.76 3.88 2.28 Source: www.census.gov UNEMPLOYMENT* The Michigan Department of Technology, Management & Budget Information, reports unemployment averages for Cass County as compared to the State of Michigan are as follows: County of Cass 4.5% 6.6 8.3 8.5 9.7 2015 Year to Date (August) 2014 Annual Average 2013 Annual Average 2012 Annual Average 2011 Annual Average State of Michigan 5.2% 7.3 8.8 9.1 10.4 *not seasonally adjusted BANKING The following banks have branches located within the School District’s boundaries. Deposits are as reported in the Accuity American Financial Directory, July - December 2015. Bank Fifth Third Bank GW Jones Exchange Bank Main Office Cincinnati, OH Marcellus, MI 20 Total State-Wide Deposits N/A $57,431,000 GENERAL SCHOOL INFORMATION DESCRIPTION The School District currently operates one elementary school and one junior/senior high school. The School District’s 2014/15 student enrollment is 951. A staff of 52 teachers, 6 administrators and 25 support personnel are employed by the School District. BOARD OF EDUCATION The Board of Education consists of seven members who are elected at large for four-year overlapping terms. The Board annually elects a President, Vice President, Treasurer and Secretary. The Board is responsible for the selection and appointment of the Superintendent of Schools. The Board meets as a single body to set or amend policy, develop long range educational goals and act upon recommendations of the Superintendent of Schools. The Board is also responsible for adopting and periodically amending the operating budget and evaluating school programs in accordance with governing laws. SCHOOL ENROLLMENT Historical Enrollment The School District’s historical enrollment totals (Fall Pupil Count Day) are as follows: School Year 2014/15 2013/14 2012/13 2011/12 2010/11 Enrollment 951 970 1,062 1,113 1,174 School Year 2009/10 2008/09 2007/08 2006/07 2005/06 Enrollment 1,213 1,238 1,290 1,272 1,308 Enrollment by Grade The enrollment by grade for the school year 2014/15 (Fall Pupil Count Day) are as follows: Kindergarten First Second Third Fourth Fifth Sixth Seventh Eighth 71 80 69 51 57 73 64 67 77 Ninth Tenth Eleventh Twelfth Sub Total Special Ed. Alternative Ed. 67 66 74 68 884 6 61 TOTAL 951 Projected Enrollment The projected enrollment totals for 2019/20 are as follows: K-6 7-8 9-12 436 115 252 TOTAL 803 21 EXISTING SCHOOL FACILITIES School Elementary Frank Squires Early Elem. Sam Adams Junior/High School Ross Beatty Grades Year Completed Remodeling/ Additions Type of Construction K-2 3-6 1959,1973,1996 1975,1996 2010 2010 Masonry Masonry 7 - 12 1996 2010 Masonry OTHER SCHOOLS The followings are schools are located within the School District’s boundaries. Grades Served K-8 Pre - K 9 - 12 School Calvin Center SDA School Cassopolis Head Start Cassopolis Alternative Approximate Enrollment 11 20 90 OTHER MATTERS All information contained in this Official Statement is subject, in all respects, to the complete body of information contained in the original source thereof and no guaranty, warranty or other representation is made concerning the accuracy or completeness of the information herein. In particular, no opinion or representation is rendered as to whether any projection will approximate actual results, and all opinions, estimates and assumptions, whether or not expressly identified as such, should not be considered statements of fact. The School District certifies that to its best knowledge and belief, this Official Statement, insofar as it pertains to the School District and its economic and financial condition, is true and correct as of the date of this Official Statement, and does not contain, nor omit, any material facts or information which would make the statements contained herein misleading. CASSOPOLIS PUBLIC SCHOOLS /s/Tracy D. Hertsel SUPERINTENDENT 22 APPENDIX A - BUDGET CASSOPOLIS PUBLIC SCHOOLS General Fund Budget Summaries For Fiscal Years Ending June 30, 2015 and June 30, 2016 2014/15 2015/16 Final Adopted Budget Budget Local Sources $3,757,014 $3,823,255 State Sources 4,717,840 4,077,805 Federal Sources 1,095,983 603,380 Other Sources TOTAL REVENUE 66,983 $9,637,820 25,000 $8,529,440 REVENUE EXPENDITURES INSTRUCTION: $3,775,022 $3,797,660 Added Needs Basic Programs 1,152,648 997,077 Adult/ Cont. Education 197,505 5,125,175 236,190 5,030,927 $377,883 $340,115 TOTAL INSTRUCTION SUPPORTING SERVICES: Pupil Instructional 94,950 91,555 General Administration 343,132 371,890 School Administration 396,577 498,990 Business Services 298,915 359,845 1,193,693 1,025,440 Operations/Maintenance Pupil Transportation 477,042 485,095 Support Services Central 251,144 178,175 Other/ Athleticx 269,559 258,585 Community Services TOTAL SERVICES TOTAL EXPENDITURES Outgoing Transfers & Other Transactions TOTAL EXPENDITURES REVENUE OVER (UNDER) EXPENDITURES BEGINNING FUND BALANCE, JULY 1 ESTIMATED ENDING FUND BALANCE, JUNE 30 A-1 15,782 0 3,718,677 3,609,690 $8,843,852 $8,640,617 296,468 159,712 $9,140,320 $8,800,329 $497,500 ($270,889) 945,687 1,443,187 $1,443,187 $1,172,298 [THIS PAGE INTENTIONALLY LEFT BLANK] Principals ---———--—— Dale J. Abraham, CPA Michael T. Gaffney, CPA Steven R. Kirinovic, CPA Aaron M. Stevens, CPA Eric J. Glashouwer, CPA Alan D. Panter, CPA William I. Tucker IV, CPA ABRAHAM & GAFFNEY, P.C. 3511 Coolidge Road Suite 100 East Lansing, MI 48823 (517) 351-6836 FAX: (517) 351-6837 Certified Public Accountants INDEPENDENT AUDITOR’S REPORT Change in Accounting Principles As discussed in Note O to the financial statements, the District implemented GASB Statement No. 68, Accounting and Financial Reporting for Pensions, during the year. As a result, the financial statements now recognize the District’s unfunded defined pension benefit obligation as a liability for the first time, and more comprehensively and comparably measures the annual costs of pension benefits. The statement also enhances accountability and transparency through reviewed note disclosures and required supplemental information (RSI). Our opinions are not modified with respect to this matter. Also as discussed in Note O to the financial statements, the District implemented GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - An Amendment of GASB Statement No. 68, during the year. The District recognized a beginning deferred outflow of resources for its pension contributions made subsequent to the measurement date of the beginning net pension liability. Our opinions are not modified with respect to this matter. Other Matters To the Board of Education Cassopolis Public Schools Cassopolis, Michigan Required Supplementary Information Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Cassopolis Public Schools (the District) as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements B-1 Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of Cassopolis Public Schools, as of June 30, 2015, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Auburn Hills  East Lansing  Grand Rapids  St. Johns -i- Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, budgetary comparison information, and schedules of proportionate share of net pension liability and contributions, as identified in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District’s basic financial statements. The combining nonmajor fund financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining nonmajor fund financial statements are the responsibility of management and were derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining nonmajor fund financial statements are fairly stated in all material respects in relation to the basic financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 21, 2015, on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance. ABRAHAM & GAFFNEY, P.C. Certified Public Accountants October 21, 2015 - ii - APPENDIX B - AUDIT The auditor has not examined or reviewed any financial documents, statements or materials that have been or may be furnished in connection with the authorization, issuance or marketing of the Bonds and accordingly will not express any opinion with respect to the accuracy or completeness of any such financial documents, statements or materials. Cassopolis Public Schools Cassopolis Public Schools MANAGEMENT’S DISCUSSION AND ANALYSIS MANAGEMENT’S DISCUSSION AND ANALYSIS June 30, 2015 June 30, 2015 As management of the Public Schools of Cassopolis (the “District”), a K-12 school district located in Cass County, Michigan, we offer readers of the District’s financial statements this narrative overview and analysis of the financial activities of the District for the fiscal year ended June 30, 2015. Please read it in conjunction with the District’s financial statements, which immediately follows this section. Overview of the Financial Statements: The District’s basic financial statements consist of two parts: Management’s Discussion and Analysis (this section) and the basic financial statements. This report also contains other supplementary information. The basic financial statements include two kinds of statements that present different views of the District: x The first two statements are the District-wide financial statements that provide both short-term and longterm information about the District’s overall financial status. These statements present an aggregate view of the District’s finances and a longer-term view of those finances. x The next statements are fund financial statements that focus on individual funds of the District. These statements look at the District’s operations in more detail than the District-wide financial statements by providing information about the District’s most significant funds - the General Fund, and Debt Funds, with all the other funds presented in one column as non-major funds. The statement of fiduciary assets and liabilities-agency fund presents financial information about activities for which the District acts solely as an agent for the benefit of students and others. B-2 District-wide financial statements. The District-wide financial statements report information about the District as a whole using accounting methods similar to those used by private-sector companies. The statement of net position and the statement of activities, which appear first in the District’s financial statements, include all assets and liabilities and use the accrual basis of accounting. This means that all of the current year’s revenues and expenses are taken into account regardless of when cash is received. The two District-wide financial statements report the Districts net position and how it changed. Net position - the difference between the District’s assets and liabilities - is one way to measure the District’s financial health. Over time, increases or decreases in net position may serve as useful indicator of whether the financial position of the District is improving or deteriorating. The relationship between revenues and expenses is the District’s operating results. However, it should be noted that unlike most private-sector companies where improving shareholder wealth is the goal, the District’s goal is to provide services to our students. Therefore, in order to assess the overall health of the District, one must consider many nonfinancial factors such as the quality of education provided, breadth of curriculum offered, condition of school facilities, and the safety of the schools. Fund Financial Statements Fund Financial Statements. The District’s fund financial statements provide detailed information about the most significant funds - not the District as a whole. Some funds are required to be established by the State law and by bond covenants, though the District may establish other funds to help control and manage money for the particular purposes. It may also establish other funds to show that it is meeting legal responsibilities for using certain taxes, grants and other money. The fund level financial statements are reported on a modified accrual basis, which measures only those revenues that are “measurable” and “currently available”. Expenses are recognized to the extent that they are normally expected to be paid with current financial resources. The fund financial statements are formatted to comply with the legal requirements of the Michigan Department of Education’s Bulletin 1022. The District’s major instructional and instructional support activities are reported in the General Fund. Additional activities are reported in their relevant funds including: x x x Debt Service Fund - consisting of 2003 QZAB, 2010 Series A Bonds, 2010 Series B Bonds, 2009 Energy Conservation Improvement Bonds. Special Revenue Fund - consisting of the Food Service Fund. Capital Projects Fund - consisting of the Sinking Fund. In the fund financial statements, purchased capital assets are reported as expenditures in the year of acquisition. Assets are capitalized at the fund level. The issuance of debt is recorded as a financial resource. The current year’s payments of principal and interest on long-term obligations are recorded as expenditures. Future debt obligations are not recorded at the fund level. The District is the trustee, or fiduciary, for its student activity funds. All of the District’s fiduciary activities are reported in a separate statement of assets and liabilities - agency fund. We exclude these activities from the District’s other financial statements because the District cannot use these assets to finance its operations. The District is responsible for ensuring that the assets reported in these funds are used for their intended purposes. District Wide Financial Statements: Statement of Net Position As stated earlier, the statement of net position provides the perspective of the District as a whole. The analysis below focuses on the net position (see Table 1). The District’s net position was ($987,644) at June 30, 2015. The change in net position of the District’s governmental activities is $798,299 (see Table 2). The table below provides a summary of the District’s net position as of June 30, 2015 and June 30, 2014: The statement of net position and statement of activities report the governmental activities for the District, which encompass all of the District’s services including instruction, supporting services, community services, food services, and athletics. Property taxes, unrestricted state aid, state grants and f...
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