$3,700,000 SCHOOL DISTRICT NUMBER 170 - Speer Financial SD 170 . FIRE SAFETY... · 2014. 2. 25. ·...

New Issue Investment Rating: Standard and Poor’s … AA (Stable) (BAM Insured)

Underlying Rating: Moody’s Investors Service ... A1

Final Official Statement Dated February 19, 2014

Subject to compliance by the District with certain covenants, in the opinion of Chapman and Cutler LLP, Chicago, Illinois, Bond Counsel, under present law, interest on the Bonds is excludable from gross income of the owners thereof for federal income tax purposes and is not included as an item of tax preference in computing the federal alternative minimum tax for individuals and corporations, but such interest is taken into account in computing an adjustment used in determining the federal alternative minimum tax for certain corporations. Interest on the Bonds is not exempt from present State of Illinois income taxes. See “TAX EXEMPTION” herein for a more complete discussion. The Bonds are “qualified tax-exempt obligations” under Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. See “QUALIFIED TAX-EXEMPT OBLIGATIONS” herein.

$3,700,000 SCHOOL DISTRICT NUMBER 170

Lee and Ogle Counties, Illinois General Obligation School Bonds, Series 2014

Dated Date of Delivery Book-Entry Bank Qualified Due Serially January 30, 2015-2024 The $3,700,000 General Obligation School Bonds, Series 2014 (the “Bonds”) are being issued by School District Number 170, Lee and Ogle Counties, Illinois (the “District”). Interest is payable semiannually on January 30 and July 30 of each year, commencing January 30, 2015. Interest is calculated based on a 360-day year of twelve 30-day months. The Bonds will be issued using a book-entry system. The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the Bonds. The ownership of one fully registered Bond for each maturity will be registered in the name of Cede & Co., as nominee for DTC and no physical delivery of Bonds will be made to purchasers. The Bonds will mature on January 30 in the following years and amounts:

AMOUNTS, MATURITIES, INTEREST RATES, YIELDS AND CUSIP NUMBERS

Principal Due Interest CUSIP Principal Due Interest CUSIP Amount Jan. 30 Rate Yield Number Amount Jan. 30 Rate Yield Number $445,000 ........ 2015 2.000% 0.500% 523354 FM5 $485,000 ......... 2020 3.000% 1.900% 523354 FS2 445,000 ........ 2016 2.000% 0.700% 523354 FN3 65,000 ......... 2021 3.000% 2.400% 523354 FT0 450,000 ........ 2017 2.000% 0.900% 523354 FP8 65,000 ......... 2022 3.000% 2.700% 523354 FU7 460,000 ........ 2018 2.000% 1.200% 523354 FQ6 400,000 ......... 2023 3.000% 2.800% 523354 FV5 470,000 ........ 2019 3.000% 1.500% 523354 FR4 415,000 ......... 2024 3.000% 2.900% 523354 FW3

NO OPTIONAL REDEMPTION

The Bonds are not subject to optional redemption prior to maturity.

BOND INSURANCE

The scheduled payment of principal of and interest on the Bonds when due will be guaranteed under a municipal bond insurance policy to be issued concurrently with the delivery of the Bonds by BUILD AMERICA MUTUAL ASSURANCE COMPANY.

PURPOSE, LEGALITY AND SECURITY

The Bond proceeds will be used to construct fire prevention and safety improvements to the existing school buildings of the District and to pay the costs of issuance of the Bonds. See “THE PROJECT” herein.

In the opinion of Chapman and Cutler LLP, Chicago, Illinois, Bond Counsel, the Bonds are valid and legally binding upon the District and are payable from any funds of the District legally available for such purpose and all taxable property in the District is subject to the levy of taxes to pay the same, without limitation as to rate or amount, except that the rights of the owners of the Bonds and the enforceability of the Bonds may be limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws affecting creditors’ rights and by equitable principles, whether considered at law or in equity, including the exercise of judicial discretion.

This Final Official Statement is dated February 19, 2014, and has been prepared under the authority of the District. An electronic copy of this Final Official Statement is available from the www.speerfinancial.com web site under “Debt Auction Center/Competitive Sales Calendar”. Additional copies may be obtained from Mr. David Blackburn, Business Manager, School District Number 170, 1335 Franklin Grove Drive, Dixon, Illinois 61021, or from the Independent Public Finance Consultants to the District:

Established 1954

Speer Financial, Inc. INDEPENDENT PUBLIC FINANCE CONSULTANTS

ONE NORTH LASALLE STREET, SUITE 4100 • CHICAGO, ILLINOIS 60602 Telephone: (312) 346-3700; Facsimile: (312) 346-8833

www.speerfinancial.com

No dealer, broker, salesman or other person has been authorized by the District to give any information or to

make any representations with respect to the Bonds other than as contained in the Official Statement or the Final Official Statement and, if given or made, such other information or representations must not be relied upon as having been authorized by the District. Certain information contained in the Official Statement and the Final Official Statement may have been obtained from sources other than records of the District and, while believed to be reliable, is not guaranteed as to completeness. THE INFORMATION AND EXPRESSIONS OF OPINION IN THE OFFICIAL STATEMENT AND THE FINAL OFFICIAL STATEMENT ARE SUBJECT TO CHANGE, AND NEITHER THE DELIVERY OF THE OFFICIAL STATEMENT OR THE FINAL OFFICIAL STATEMENT NOR ANY SALE MADE UNDER EITHER SUCH DOCUMENT SHALL CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE DISTRICT SINCE THE RESPECTIVE DATES THEREOF.

References herein to laws, rules, regulations, ordinances, resolutions, agreements, reports and other documents

do not purport to be comprehensive or definitive. All references to such documents are qualified in their entirety by reference to the particular document, the full text of which may contain qualifications of and exceptions to statements made herein. Where full texts have not been included as appendices to the Official Statement or the Final Official Statement, they will be furnished on request. This Official Statement does not constitute an offer to sell, or solicitation of an offer to buy, any securities to any person in any jurisdiction where such offer or solicitation of such offer would be unlawful.

Build America Mutual Assurance Company (“BAM”) makes no representation regarding the Bonds or the

advisability of investing in the Bonds. In addition, BAM has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding BAM, supplied by BAM as set forth in “APPENDIX C – BOND INSURANCE AND SPECIMEN MUNICIPAL BOND INSURANCE POLICY”.

TABLE OF CONTENTS

Page BOND ISSUE SUMMARY.................................................................................................................................................... 1 SCHOOL DISTRICT NUMBER 170 – Board of Education ................................................................................................. 2 THE DISTRICT ...................................................................................................................................................................... 2

Education ............................................................................................................................................................................ 3 Community Services ........................................................................................................................................................... 3 Economic Development ...................................................................................................................................................... 3

SOCIOECONOMIC INFORMATION .................................................................................................................................. 4 Employment ........................................................................................................................................................................ 4 Unemployment Rates .......................................................................................................................................................... 6 Housing ............................................................................................................................................................................... 6 Income ................................................................................................................................................................................. 7

THE PROJECT ....................................................................................................................................................................... 8 DEBT INFORMATION ......................................................................................................................................................... 8 PROPERTY ASSESSMENT AND TAX INFORMATION ................................................................................................ 10 REAL PROPERTY ASSESSMENT, TAX LEVY AND COLLECTION PROCEDURES ................................................ 11

Tax Levy and Collection Procedures ................................................................................................................................ 11 Exemptions ....................................................................................................................................................................... 12 Property Tax Extension Limitation Law ........................................................................................................................... 14 Truth in Taxation Law ...................................................................................................................................................... 14

FINANCIAL INFORMATION ............................................................................................................................................ 15 Financial Reports .............................................................................................................................................................. 15 No Consent or Updated Information Requested of the Auditor ........................................................................................ 16 Summary Financial Information ....................................................................................................................................... 16

EMPLOYEE RETIREMENT AND OTHER POSTEMPLOYMENT BENEFITS OBLIGATIONS ................................. 18 REGISTRATION, TRANSFER AND EXCHANGE ........................................................................................................... 18 TAX EXEMPTION .............................................................................................................................................................. 19 QUALIFIED TAX-EXEMPT OBLIGATIONS ................................................................................................................... 21 LIMITED CONTINUING DISCLOSURE .......................................................................................................................... 22 THE UNDERTAKING ......................................................................................................................................................... 22

Financial Information Disclosure ...................................................................................................................................... 22 Reportable Events Disclosure ........................................................................................................................................... 23 Consequences of Failure of the District to Provide Information ...................................................................................... 23 Amendment; Waiver ......................................................................................................................................................... 23 Termination of Undertaking .............................................................................................................................................. 24 Additional Information ..................................................................................................................................................... 24 Dissemination of Information; Dissemination Agent ....................................................................................................... 24

NO OPTIONAL REDEMPTION ......................................................................................................................................... 24 LITIGATION ........................................................................................................................................................................ 25 CERTAIN LEGAL MATTERS ............................................................................................................................................ 25 FINAL OFFICIAL STATEMENT AUTHORIZATION ..................................................................................................... 25 INVESTMENT RATINGS ................................................................................................................................................... 25 UNDERWRITING ............................................................................................................................................................... 26 FINANCIAL ADVISOR ...................................................................................................................................................... 26 CERTIFICATION ................................................................................................................................................................ 26 APPENDIX A - EXCERPTS OF FISCAL YEAR 2013 AUDITED FINANCIAL STATEMENTS APPENDIX B - DESCRIBING BOOK-ENTRY-ONLY ISSUANCE APPENDIX C – BOND INSURANCWE AND SPECIMEN MUNICIPAL BOND INSURANCE POLICY APPENDIX D - EXCERPTS OF FISCAL YEAR 2013 AUDITED FINANCIAL STATEMENTS RELATING TO THE DISTRICT’S PENSION PLANS APPENDIX E - PROPOSED FORM OF LEGAL OPINION

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School District Number 170, Lee and Ogle Counties, Illinois $3,700,000 General Obligation School Bonds, Series 2014

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BOND ISSUE SUMMARY

This Bond Issue Summary is expressly qualified by the entire Final Official Statement, which is provided for the convenience of potential investors and which should be reviewed in its entirety by potential investors. Issuer: School District Number 170, Lee and Ogle Counties, Illinois. Issue: $3,700,000 General Obligation School Bonds, Series 2014. Dated Date: Date of delivery, expected to be March 10, 2014. Interest Due: Each January 30 and July 30, commencing January 30, 2015. Principal Due: Serially each January 30, commencing January 30, 2015 through 2024, as detailed on the front

page of this Final Official Statement. No Optional Redemption: The Bonds are not subject to optional redemption prior to maturity. Authorization: The Bonds are being issued pursuant to the School Code of the State of Illinois, as amended, The

Local Government Debt Reform Act of the State of Illinois, as amended, and by a bond resolution adopted by the Board of Education of the District authorizing the sale of the Bonds.

Security: In the opinion of Chapman and Cutler LLP, Chicago, Illinois, Bond Counsel, the Bonds are

valid and legally binding upon the District and are payable from any funds of the District legally available for such purpose and all taxable property in the District is subject to the levy of taxes to pay the same, without limitation as to rate or amount, except that the rights of the owners of the Bonds and the enforceability of the Bonds may be limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws affecting creditors’ rights and by equitable principles, whether considered at law or in equity, including the exercise of judicial discretion.

Ratings/Insurance: Standard & Poor’s, a Division of the McGraw-Hill Companies, is expected to assign its

municipal bond rating of “AA” (Stable), to this issue of Bonds with the understanding that upon delivery of the Bonds, a policy guaranteeing payment when due of the principal of and interest on the Bonds will be issued by Build America Mutual Assurance Company. See APPENDIX C herein. The cost for the bond insurance premium and the related rating fee of Standard & Poor’s will be paid by the Underwriter. The District’s underlying rating is “A1” from Moody’s Investors Service.

Purpose: The Bond proceeds will be used to construct fire prevention and safety improvements to the

existing school buildings of the District and to pay the costs of issuance of the Bonds. See “THE PROJECT” herein.

Tax Exemption: Chapman and Cutler LLP, Chicago, Illinois, will provide an opinion as to the tax exemption of

the interest on the Bonds as discussed under “TAX EXEMPTION” in this Final Official Statement. Interest on the Bonds is not exempt from present State of Illinois income taxes.

Bank Qualification: The Bonds are “qualified tax-exempt obligations” under Section 265(b)(3) of the Internal

Revenue Code of 1986, as amended. See “QUALIFIED TAX-EXEMPT OBLIGATIONS” herein.

Bond Registrar/Paying Agent: The Bank of New York Mellon Trust Company, National Association, Chicago, Illinois. Delivery: The Bonds are expected to be delivered on or about March 10, 2014. Book-Entry Form: The Bonds will be registered in the name of Cede & Co. as nominee for The Depository Trust

Company (“DTC”), New York, New York. DTC will act as securities depository of the Bonds. See APPENDIX B herein.

Denominations: $5,000 or integral multiples thereof. Financial Advisor: Speer Financial, Inc., Chicago, Illinois.


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SCHOOL DISTRICT NUMBER 170 Lee and Ogle Counties, Illinois

Board of Education Pam Tourtillott President Kevin Sward Tom LeMoine Secretary Vice President Josh Arduini Jim Schielein John Jacobs Terry Shroyer ____________________________ Michael Juenger David Blackburn Superintendent Business Manager

THE DISTRICT

The District is governed by a seven-member Board of Education. Its members are elected for staggered four-year terms. Currently the District operates one high school, one junior high school, and three elementary schools. The District currently employs 304 people: 10 in administration, 162 teachers, and 132 non-certified staff. The student-teacher ratio for the 2013-2014 school year is 17 to one. The following table shows past and official projected enrollments.

Year Enrollment Year Enrollment 2002-03 ........................ 2,999 2010-11 ....................... 2,852 2003-04 ........................ 3,028 2011-12 ....................... 2,728 2004-05 ........................ 3,000 2012-13 ....................... 2,772 2005-06 ........................ 2,936 2013-14 ....................... 2,672(1) 2006-07 ........................ 2,887 2014-15 ....................... 2,647(1) 2007-08 ........................ 2,850 2015-16 ....................... 2,657(1) 2008-09 ........................ 2,759 2016-17 ....................... 2,642(1) 2009-10 ........................ 2,913 Note: (1) Projected enrollment.

The District encompasses the City of Dixon (the “City”). Named for one of its first settlers, the City operates

under the commission form of government with a Mayor and four Commissioners. City services include fire protection, full-time police protection and municipal water and sewerage treatment. The City employs some 106 persons. Northern Illinois Gas Company provides natural gas service, and Commonwealth Edison Company supplies electricity. Telephone service is provided by Gallatin Rivers Communications.

The City is known as the hometown of President Ronald Reagan, who spent some of his childhood there.

The District is located near Interstate 88 approximately 95 miles west of the City of Chicago and 60 miles east of the Quad Cities of Illinois. Various state and federal highways run through or near the District.


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Education

Sauk Valley Community College’s campus is located some 4 miles west of Dixon. This two year public Community College serves approximately 5,000 full and part-time students each semester. The College was founded in 1966 and moved to a 168 acre site in 1970.

Other higher educational opportunities are available within a 50-mile radius including Highland, Kishwaukee

and Illinois Valley Community Colleges, Rockford College (Rockford) and Northern Illinois University (DeKalb). The University of Illinois Dixon Office for Continuing Education offers courses at Sauk Valley College and in Rockford. Community Services

The City has some 20 parks covering 965 acres, approximately 175 of which are developed with the rest undeveloped. Facilities include a Nature Center, boat launching facilities, playground equipment, softball and baseball diamonds, shelters, hiking trails, basketball and tennis courts, bandshell, picnic and barbecue areas, a swimming pool and a fishing area. Located in the Dixon area are 5 golf courses. The City is located on the scenic Rock River which affords many recreational opportunities including fishing, boating, canoeing and other water sports.

Lee and Ogle Counties offer a variety of state parks and historic sites. White Pines Forest State Park’s 385

acres is 15 miles north of the City. Also located north of the City is Castle Rock State Park and Nature Preserve covering 2,036 acres. Camping and hiking are available at several locations.

Katherine Shaw Bethea Hospital (the “Hospital”) is an approximately 170 bed facility with some 963 employees. The Hospital serves Lee and southern Ogle Counties as well as surrounding areas. It has approximately 50 physicians on staff and its services include 24-hour emergency room, cardiac/intensive care, cardiac rehabilitation, obstetrics, psychiatric unit, respirator therapy and radiology department. Economic Development

The City is the county seat of Lee County and according to projections provided by the Center for Governmental Studies at Northern Illinois University has a present population approaching 16,000 growing at an annualized rate of 1.0% to 2.0% overall. The City is central to Lee County’s 16,000 plus labor force. These employees work for over 40 major companies providing a well-diversified and stable employer base.

Government is the largest “industry” in the City and Lee County with nearly 2,000 employees. Dixon

Correctional Center has 601 employees, Illinois Department of Transportation has 482 employees, Mabley Developmental Center has 176 employees, Lee County has 250 employees, Dixon Public Schools have 368 employees, and the City has 106 employees.

Private sector employers with employee numbers of 100 or more include: Raynor Garage Doors which has 800 employees, KSB Hospital with 963 employees, Kreider Services with 230 employees, Allied-Locke Industries with 330 employees, Borg Warner Automotive with 230 employees, Dixon Direct Corporation with 250 employees, IMECO with 225 employees, Donaldson Company with 200 employees, PLEWS/Edelmann with 200 employees, Medical Arts Center with 131 employees, Do It Best with 150 employees, Amboy Specialty Foods Div./Dean Foods with 121 employees, Sinnissippi Centers with 114 employees and DCP-Lojha with 102 employees. The new 576,000 square foot Spectrum Brands was a result of the new road and utilities construction with EDA/City funds. The plant employs approximately 75 employees and more job producing facilities are expected as a result of the EDA project.


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Economic development activity includes the 1998 purchase of 200 acres near the Tollway interchange for development as the Lee County Industrial Park by Lee County Industrial Development Association (“LCIDA”) of Dixon. Parcels of 50 and 21 acres have since been sold for development of Whatever Trucking, ADM Trucking, Rock River Ready Mix and AAA Galvanizing of Dixon. AAA Galvanizing has constructed a $10 million facility at the Dixon location. LCIDA received a federal EDA grant of $879,000 for a $1.465 million road, sewer and water project to serve this park. In April of 2000, LCIDA announced construction of a 640-megawatt peak generating station in the Dixon Public Schools District. This $230 million project is the largest single investment in the history of Lee County. The Duke Energy plant completed its construction in 2001. The City replaced both major bridges over the Rock River in Dixon amounting to an investment of nearly $25 million in State and City infrastructure funding. In addition, the City constructed a new $17 million waste water treatment facility to serve future needs. Recent and announced commercial development highlights include new developments in the Plaza North and ShopKo Plaza areas. Mobil Mart, Taco Bell, Burger King, First National Bank of Amboy/Dixon and an 8,000 square foot retail “spec” building are in place. Ken Nelson Auto Plaza has invested $3 million in a multi-dealership super store. Developers announced the purchase of one city block on the City’s north side for a new 17,000 square foot Snyder Drug Store which was recently completed. Comfort Inn recently opened a new hotel at the City’s Tollway interchange and since then Pizza Hut has constructed a new restaurant complex adjacent to the hotel. More recently, Quality Inn and Suites was added to the Comfort Inn complex. DND Truck Plaza was recently completed at a 30-acre site also at the Tollway interchange. Lastly, a new facility, UPM/Rafaltac, whose parent company is in Finland, has opened a pressure sensitive labeling facility which occupies 350,000 square feet and employs approximately 115 employees.

SOCIOECONOMIC INFORMATION

Demographic information is not available for the District. The following statistics principally pertain to the City which comprises approximately 50% of its 2012 equalized assessed valuation (“EAV”). Additional comparisons are made with Lee County (the “County”) and the State of Illinois (the “State”). Approximately 91% of the District’s 2012 EAV is in Lee County and 9% is in Ogle County. Employment

The following is a list of large employers located within an approximate 50 mile radius surrounding the District.

Major District Employers(1)

Approximate Company Product/Service Employment KSB Hospital ........................................................................... General Hospital ........................................................................................ 963 Raynor Garage Doors ............................................................. Doors, Sash and Trim ................................................................................ 800 Allied-Locke Industries, Inc. .................................................... Wire Products ............................................................................................ 330 Spectrum Brands, Inc. ............................................................. Battery and Lighting Device Storage ......................................................... 300 Dixon Direct Corp. ................................................................... Commercial Lithographic Printing .............................................................. 250 BorgWarner, Inc., A/FS Div. .................................................... Motor Vehicle Parts and Accessories ........................................................ 230 Kreider Services, Inc. .............................................................. Contract Assembly and Packaging ............................................................ 230 Donaldson Co., Inc. ................................................................. Industrial and Construction Equipment Filtration Systems ........................ 200 Plews, Inc. ............................................................................... Motor Vehicle Parts and Accessories ........................................................ 200 Do It Best Corp. ....................................................................... Wholesale Hardware Distribution............................................................... 150 Note: (1) Source: the City, 2014 Illinois Manufacturers Directory, 2014 Illinois Services Directory and a selective telephone survey.


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Major Area Employers(1)

Approximate Location Company Business or Product Employment Belvidere .................................. Chrysler Group, LLC .................................................... Motor Vehicles and Car Bodies ................................... 4,887 Rockford ................................... Rockford School District 205 ....................................... School District ............................................................. 4,800 DeKalb ..................................... Northern Illinois University ........................................... Public University .......................................................... 3,596 Rockford ................................... Swedish American Health System .............................. General Medical and Surgical Hospital ....................... 2,600 Rockford ................................... Rockford Memorial Hospital ........................................ General Medical and Surgical Hospital ....................... 2,500 Rockford ................................... United Technologies Aerospace Systems ................... Aerospace Products & Controlled Speed Motors ........ 2,000 Rockford ................................... OSF St. Anthony Medical Center ................................ General Medical and Surgical Hospital ....................... 2,000 Freeport .................................... FHN Memorial Hospital ............................................... General Medical and Surgical Hospital ....................... 1,490 Sterling ..................................... CGH Medical Center ................................................... General Medical and Surgical Hospital ....................... 1,400 DeKalb ..................................... Kishwaukee Community Hospital ................................ Hospital ....................................................................... 1,200 Rockford ................................... Greenlee, A Textron Co. .............................................. Electrical, Utility and Communication Tools ................ 1,000 Rochelle ................................... Rochelle Foods, Inc. .................................................... Pork Processing .......................................................... 750 Sterling ..................................... Wahl Clipper Corp. ...................................................... Electric Housewares and Fans .................................... 700 Belvidere .................................. General Mills, Inc. ........................................................ Frozen Food and Cereal ............................................. 700 Note: (1) Source: 2014 Illinois Manufacturers Directory, 2014 Illinois Services Directory and a selective telephone survey.

The following tables show employment by industry and by occupation for the City, the County and the State as reported by the U.S. Census Bureau 2008-2012 American Community Survey 5-year estimated values.

Employment By Industry(1)

The City Lee County State of Illinois Classification Number Percent Number Percent Number Percent Agriculture, Forestry, Fishing and Hunting, and Mining ............ 8 0.1% 463 2.9% 63,512 1.1% Construction .............................................................................. 269 4.4% 851 5.3% 324,722 5.4% Manufacturing ........................................................................... 1,264 20.7% 3,127 19.3% 767,822 12.7% Wholesale Trade ....................................................................... 203 3.3% 564 3.5% 189,003 3.1% Retail Trade ............................................................................... 749 12.2% 1,731 10.7% 658,236 10.9% Transportation and Warehousing, and Utilities ......................... 319 5.2% 1,074 6.6% 352,325 5.8% Information ................................................................................ 94 1.5% 220 1.4% 130,769 2.2% Finance and Insurance, and Real Estate and Rental and Leasing ..................................................................................... 208 3.4% 644 4.0% 457,654 7.6% Professional, Scientific, and Management, and Administrative and Waste Management Services .................... 375 6.1% 988 6.1% 668,506 11.1% Educational Services and Health Care and Social Assistance . 1,508 24.6% 3,975 24.5% 1,362,901 22.6% Arts, Entertainment and Recreation and Accommodation and Food Services ................................................................... 525 8.6% 1,143 7.1% 532,147 8.8% Other Services, Except Public Administration ........................... 168 2.7% 632 3.9% 292,913 4.9% Public Administration ................................................................. 429 7.0% 790 4.9% 234,916 3.9% Total ........................................................................................ 6,119 100.0% 16,202 100.0% 6,035,426 100.0% Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5-year estimates 2008 to 2012.


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Employment By Occupation(1)

The City Lee County State of Illinois Classification Number Percent Number Percent Number Percent Management, Business, Science and Arts ..................................... 1,598 26.1% 4,636 28.6% 2,181,574 36.1% Service ............................................................................................ 1,357 22.2% 3,231 19.9% 1,028,655 17.0% Sales and Office ............................................................................. 1,339 21.9% 3,451 21.3% 1,526,612 25.3% Natural Resources, Construction, and Maintenance ....................... 397 6.5% 1,461 9.0% 462,090 7.7% Production, Transportation, and Material Moving ............................ 1,428 23.3% 3,423 21.1% 836,495 13.9% Total ............................................................................................... 6,119 100.0% 16,202 100.0% 6,035,426 100.0% Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5-year estimates 2008 to 2012.

Unemployment Rates The statistical area for unemployment rates in the Dixon Labor Market Area (“LMA” – Lee County) has been re-named Lee County as of 1994. The following shows the historical trend in annual unemployment for the City, the County and the State of Illinois.

Annual Average Unemployment Rates(1)

Calendar The Lee State of Year City County Illinois

2004 ........................ 6.0% 5.8% 6.2% 2005 ........................ 5.4% 5.2% 5.8% 2006 ........................ 4.8% 4.6% 4.6% 2007 ........................ 5.5% 5.3% 5.1% 2008 ........................ 7.2% 7.0% 6.4% 2009 ........................ 10.5% 10.3% 10.0% 2010 ........................ 11.5% 11.2% 10.4% 2011 ........................ 10.1% 9.9% 9.7% 2012 ........................ 9.5% 9.3% 8.9% 2013(2) ................... N/A 9.0% 8.3% Notes: (1) Source: Illinois Department of Employment Security. (2) Preliminary rates for the month of November 2013.

Housing

The U.S. Census Bureau 5-year estimated values reported that the median value of the City’s owner-occupied homes was $93,500. This compares to $113,000 for the County and $190,800 for the State. The following table represents the five year average market value of specified owner-occupied units for the City, the County and the State at the time of the 2008-2012 American Community Survey.

Specified Owner-Occupied Units(1) The City Lee County State of Illinois Value Number Percent Number Percent Number Percent

Under $50,000 ...................................... 426 11.0% 955 9.4% 224,361 6.9% $50,000 to $99,999 ............................... 1,886 48.6% 3,426 33.6% 468,659 14.4% $100,000 to $149,999 .......................... 1,005 25.9% 2,431 23.8% 482,500 14.9% $150,000 to $199,999 ........................... 360 9.3% 1,587 15.6% 531,538 16.4% $200,000 to $299,999 ........................... 129 3.3% 1,068 10.5% 712,975 21.9% $300,000 to $499,999 ........................... 68 1.8% 520 5.1% 563,122 17.3% $500,000 to $999,999 ........................... 6 0.2% 111 1.1% 214,681 6.6% $1,000,000 or more ............................... 0 0.0% 97 1.0% 50,685 1.6% Total .................................................... 3,880 100.0% 10,195 100.0% 3,248,521 100.0% Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5-year estimates 2008 to 2012.


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Mortgage Status(1)

The City Lee County State of Illinois Number Percent Number Percent Number Percent

Housing Units with a Mortgage ............. 2,543 65.5% 6,334 62.1% 2,238,082 68.9% Housing Units without a Mortgage ........ 1,337 34.5% 3,861 37.9% 1,010,439 31.1% Total .................................................... 3,880 100.0% 10,195 100.0% 3,248,521 100.0% Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5-year estimates 2008 to 2012.

Income

The U.S. Census Bureau 5-year estimated values reported that the City had a median household income of $57,944. This compares to $63,006 for the County and $70,144 for the State. The following table represents the distribution of household incomes for the City, the County and the State at the time of the 2008-2012 American Community Survey.

Median Family Income(1)

The City Lee County State of Illinois Income Number Percent Number Percent Number Percent

Under $10,000 ...................................... 119 3.3% 295 3.2% 133,818 4.3% $10,000 to $14,999 ............................... 126 3.5% 242 2.7% 86,974 2.8% $15,000 to $24,999 ............................... 428 12.0% 683 7.5% 223,395 7.1% $25,000 to $34,999 ............................... 353 9.9% 936 10.3% 257,777 8.2% $35,000 to $49,999 ............................... 458 12.9% 1,228 13.5% 382,988 12.2% $50,000 to $74,999 ............................... 798 22.5% 2,111 23.2% 593,133 18.9% $75,000 to $99,999 ............................... 726 20.4% 1,676 18.4% 477,963 15.2% $100,000 to $149,999 ........................... 426 12.0% 1,297 14.2% 553,559 17.6% $150,000 to $199,999 ........................... 56 1.6% 262 2.9% 218,124 6.9% $200,000 or more .................................. 63 1.8% 379 4.2% 214,616 6.8% Total .................................................... 3,553 100.0% 9,109 100.0% 3,142,347 100.0% Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5-year estimates 2008 to 2012.

The U.S. Census Bureau 5-year estimated values reported that the City had a median household income of $39,924. This compares to $50,342 for the County and $56,853 for the State. The following table represents the distribution of family incomes for the City, the County and the State at the time of the 2008-2012 American Community Survey.

Median Household Income(1)

The City Lee County State of Illinois Income Number Percent Number Percent Number Percent

Under $10,000 ...................................... 429 7.3% 743 5.4% 329,319 6.9% $10,000 to $14,999 ............................... 492 8.4% 829 6.1% 223,692 4.7% $15,000 to $24,999 ............................... 796 13.5% 1,507 11.0% 481,833 10.1% $25,000 to $34,999 ............................... 763 13.0% 1,616 11.8% 460,909 9.7% $35,000 to $49,999 ............................... 983 16.7% 2,104 15.4% 622,840 13.0% $50,000 to $74,999 ............................... 1,043 17.7% 2,778 20.3% 870,399 18.2% $75,000 to $99,999 ............................... 815 13.9% 1,988 14.5% 622,617 13.0% $100,000 to $149,999 ........................... 444 7.5% 1,433 10.5% 665,711 13.9% $150,000 to $199,999 ........................... 56 1.0% 292 2.1% 250,681 5.3% $200,000 or more .................................. 63 1.1% 396 2.9% 246,274 5.2% Total .................................................... 5,884 100.0% 13,686 100.0% 4,774,275 100.0% Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5-year estimates 2008 to 2012.


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THE PROJECT

The Bond proceeds will be used to finance the District’s existing facilities that house students to the building code promulgated by the State Board of Education of the State of Illinois, by altering and reconstructing said facilities and having equipment purchased and installed therein and to pay the costs of issuance of the Bonds. Specifically, the Bond proceeds will be used for improvements to the District’s roofs, heating and air conditioning systems and asbestos removal.

DEBT INFORMATION

After issuance of the Bonds, the District will have outstanding $5,915,000 principal amount of general obligation debt.

The District does not intend to issue additional debt within the next six months.

General Obligation Debt Summary – By Issue(1)

(Principal Only)

General Obligation Bonds: Amount Series 2008 ......................................................................... $2,215,000 The Bonds ........................................................................... 3,700,000 Total .................................................................................. $5,915,000

Note: (1) Source: the District.

District General Obligation Bonded Debt(1) (Principal Only)

Total

Calendar Series Outstanding Cumulative Retirement Year 2008 The Bonds Debt Amount Percent

2015 ................... $ 240,000 $ 445,000 $ 685,000 $ 685,000 11.58% 2016 ................... 250,000 445,000 695,000 1,380,000 23.33% 2017 ................... 260,000 450,000 710,000 2,090,000 35.33% 2018 ................... 270,000 460,000 730,000 2,820,000 47.68% 2019 ................... 280,000 470,000 750,000 3,570,000 60.36% 2020 ................... 290,000 485,000 775,000 4,345,000 73.46% 2021 ................... 305,000 65,000 370,000 4,715,000 79.71% 2022 ................... 320,000 65,000 385,000 5,100,000 86.22% 2023 ................... 0 400,000 400,000 5,500,000 92.98% 2024 ................... 0 415,000 415,000 5,915,000 100.00% Total ................. $2,215,000 $3,700,000 $5,915,000

Note: (1) Source: the District.


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Detailed Overlapping Bonded Debt(1) (As of February 1, 2014)

Outstanding Applicable to District Debt Percent(2) Amount

School: Sauk Valley Community College District Number 506(3) .............. $2,385,000 21.84% $520,884 Others: Lee County .................................................................................... $ 0 49.79% $ 0 City of Dixon .................................................................................. 0 100.00% 0 Dixon Park District ......................................................................... 0 100.00% 0 Dixon Rural Fire Protection District ............................................... 0 100.00% 0 Total Others.............................................................................................................................................. $ 0 Total School and Other Overlapping Bonded Debt .................................................................................. $520,884 Notes: (1) Source: Lee County Clerk. (2) Overlapping debt percentages based on 2012 EAV, the most current available.

(3) Includes six counties: Bureau, Carroll, Henry, Lee, Ogle and Whiteside.

Statement of Bonded Indebtedness(1) (As of February 1, 2014)

Ratio To Per Capita

Amount Equalized Estimated (Population Applicable Assessed Actual Est. 21,000)

District EAV of Taxable Property, 2012 ....................................... $ 345,895,981 100.00% 33.33% $16,471.24 Estimated Actual Value, 2012 ..................................................... $1,037,687,943 300.00% 100.00% $49,413.71 Total Direct Bonded Debt(2) ....................................................... $ 5,915,000 1.71% 0.57% $ 281.67 Total Overlapping Bonded Debt .................................................. 520,884 0.15% 0.05% 24.80 Total Direct and Overlapping Bonded Debt(2) ............................ $ 6,435,884 1.86% 0.62% $ 306.47 Notes: (1) Source: Lee County Clerk. (2) Includes the Bonds.

Legal Debt Margin(1)

(As of February 1, 2014)

2012 District Equalized Assessed Valuation ............................................................................................ $345,895,981 Statutory Debt Limitation 13.8% of EAV ................................................................................................... 47,733,645 General Obligation Debt: Series 2008 ............................................................................. $ 2,215,000 The Bonds .............................................................................. 3,700,000 Total Applicable Debt .............................................................................................................................. $ 5,915,000 Legal Debt Margin .................................................................................................................................. $ 41,818,645 Note: (1) Source: the District.


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PROPERTY ASSESSMENT AND TAX INFORMATION

For the 2012 levy year, the District’s EAV was comprised of 66% residential, 10% industrial, 14% commercial, 9% farm and 1% railroad property valuations.

District Equalized Assessed Valuation(1)

Levy Years Property Class 2008 2009 2010 2011 2012 Residential ............................................ $235,861,939 $240,109,973 $242,056,428 $234,495,548 $228,590,243 Farm ...................................................... 21,386,591 27,154,741 28,521,236 29,124,578 29,766,722 Commercial ........................................... 46,679,016 49,682,842 51,734,580 51,114,127 49,477,086 Industrial ................................................ 35,329,770 35,344,405 35,164,132 34,716,794 35,635,471 Railroad ................................................. 1,339,184 1,613,523 2,018,091 2,144,608 2,426,459 Total .................................................... $340,596,500 $353,905,484 $359,494,467 $351,595,655 $345,895,981 Lee County ............................................ $301,735,686 $315,532,360 $321,226,926 $317,743,880 $314,046,659 Ogle County .......................................... 38,860,814 38,373,124 38,267,541 33,851,775 31,849,322 Total Counties ..................................... $340,596,500 $353,905,484 $359,494,467 $351,595,655 $345,895,981 Percent Change +(-) .............................. 4.39%(2) 3.91% 1.58% (2.20%) (1.62%) Notes: (1) Source: Lee and Ogle County Clerks. (2) Percentage change based on 2007 EAV of $326,282,062.

District Representative Tax Rates(1) (Per $100 EAV) Levy Years

2008 2009 2010 2011 2012 District Rates: Education ................................................................ $2.9500 $2.9500 $2.9500 $2.9500 $2.9500 Operations and Maintenance .................................. 0.5000 0.5000 0.5000 0.5000 0.5000 Transportation ........................................................ 0.2000 0.2000 0.2000 0.2000 0.2000 IMRF/ Social Security ............................................. 0.1624 0.1461 0.1519 0.1914 0.1968 Tort Immunity (Liability Insurance) .......................... 0.2131 0.2249 0.2325 0.2349 0.2430 Bonds & Interest ..................................................... 0.2787 0.2864 0.2813 0.2834 0.2022 Special Education ................................................... 0.0400 0.0400 0.0400 0.0400 0.0400 Fire Safety ............................................................... 0.0500 0.0500 0.0500 0.0500 0.0500 Working Cash ......................................................... 0.0500 0.0500 0.0500 0.0500 0.0500 Lease ...................................................................... 0.0500 0.0500 0.0500 0.0500 0.0500 Total District Rates(2) ........................................... $4.4942 $4.4974 $4.5057 $4.5497 $4.4820 Community College District Number 506 ................ 0.4446 0.4430 0.4435 0.4421 0.4418 City of Dixon ............................................................ 2.1081 2.0356 2.0921 2.1856 2.2892 Dixon Park District .................................................. 0.4592 0.4442 0.4516 0.4667 0.4767 Dixon Township ...................................................... 0.3695 0.3545 0.3640 0.3794 0.3987 Lee County .............................................................. 0.7787 0.7617 0.7733 0.7991 0.8273 Total Rates(3) ....................................................... $8.6543 $8.5364 $8.6302 $8.8226 $8.9157 Notes: (1) Source: Lee County Clerk. (2) Statutory tax rate limits for the District are as follows: Educational ($2.9500); Operations, Building and Maintenance

($0.5000); Transportation ($0.2000); Special Education ($0.0400); Fire Safety ($0.0500); and Leasing ($0.0500). (3) Representative tax rates for other entities located in the District.


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District Tax Extensions and Collections(1)

Levy Coll. Taxes Total Collections Year Year Extended(2) Amount(3) Percent 2006 .............. 2007 ............... $13,217,649 $13,214,252 99.97% 2007 .............. 2008 ............... 13,845,453 13,854,114 100.06% 2008 .............. 2009 ............... 15,306,524 15,294,269 99.92% 2009 .............. 2010 ............... 15,926,231 15,898,375 99.83% 2010 .............. 2011 ............... 16,191,058 16,189,732 99.99% 2011 .............. 2012 ............... 15,989,645 15,989,218 100.00% 2012 .............. 2013 ............... 15,537,704 15,529,001 99.94% Notes: (1) Source: Lee and Ogle County Clerks. (2) Tax extensions have been adjusted for abatements. (3) Total collections include back taxes, taxpayer refunds,

interest, etc.

Principal District Taxpayers(1) Taxpayer Name Business/Service 2012 EAV(2) Duke Energy Lee, LLC ............................................................ Real Property ........................................................................ $10,560,418 Amcore Investment Group, NA................................................ Trust ...................................................................................... 8,448,660 TRT Noip Corporate Drive-Dixon LLC(3) ................................ Real Property ........................................................................ 4,783,960 Walmart Stores, Inc. ................................................................ Retail Store ........................................................................... 3,351,912 St. Barbara Cement Inc.(4)...................................................... Cement .................................................................................. 2,235,904 Raynor Manufacturing Company ............................................. Overhead Garage Door ......................................................... 2,047,171 KSB Hospital ........................................................................... Hospital ................................................................................. 1,816,976 ComEd ..................................................................................... Electric .................................................................................. 1,555,094 Dixon Acquisition Corp ............................................................ Real Property ........................................................................ 1,328,467 Plews Inc. ................................................................................ Real Property ........................................................................ 1,315,800 Total ...................................................................................................................................................................................... $37,444,362 Ten Largest Taxpayers as Percent of District's 2012 EAV ($345,895,981) ......................................................................... 10.83% Notes: (1) Source: Lee County Clerk. (2) Every effort has been made to seek out and report the largest taxpayers. However, many of the taxpayers listed

contain multiple parcels and it is possible that some parcels and their valuations have been overlooked. The 2012 EAV is the most current available.

(3) Previously Istar Dixon, LLC. (4) Previously Cemex Central Plains Cement LLC.

REAL PROPERTY ASSESSMENT, TAX LEVY AND COLLECTION PROCEDURES Tax Levy and Collection Procedures

Local assessment officers determine the assessed valuation of taxable real property and railroad property not

held or used for railroad operations. The Illinois Department of Revenue (the “Department”) assesses certain other types of taxable property, including railroad property held or used for railroad operations. Local assessment officers’ valuation determinations are subject to review at the county level and then, in general, to equalization by the Department. Such equalization is achieved by applying to each county’s assessments a multiplier determined by the Department. The purpose of equalization is to provide a common basis of assessments among counties by adjusting assessments toward the statutory standard of 33-1/3% of fair cash value. Farmland is assessed according to a statutory formula which takes into account factors such as productivity and crop mix. Taxes are extended against the assessed values after equalization.


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Property tax levies of each taxing body are filed in the office of the county clerk of each county in which

territory of that taxing body is located. The county clerk computes the rates and amount of taxes applicable to taxable property subject to the tax levies of each taxing body and determines the dollar amount of taxes attributable to each respective parcel of taxable property. The county clerk then supplies to the appropriate collecting officials within the county the information needed to bill the taxes attributable to the various parcels therein. After the taxes have been collected, the collecting officials distribute to the various taxing bodies their respective shares of the taxes collected. Taxes levied in one calendar year are due and payable in two installments during the next calendar year. Taxes that are not paid when due, or that are not paid by mail and postmarked on or before the due date, are subject to a penalty of 1-1/2% per month until paid. Unpaid property taxes, together with penalties, interest and costs, constitute a lien against the property subject to the tax. Exemptions

An annual General Homestead Exemption (the “General Homestead Exemption”) provides that the Equalized Assessed Valuation (“EAV”) of certain property owned and used for residential purposes (“Residential Property”) may be reduced by the amount of any increase over the 1977 EAV, up to a maximum reduction of $3,500 for assessment years prior to assessment year 2004 in counties with less than 3,000,000 inhabitants, and a maximum reduction of $5,000 for assessment year 2004 through 2007 in all counties. Additionally, the maximum reduction is $5,500 for assessment year 2008 and the maximum reduction is $6,000 for assessment year 2009 and thereafter in all counties.

The Homestead Improvement Exemption applies to Residential Properties that have been improved or rebuilt in the 2 years following a catastrophic event. The exemption is limited to $45,000 through December 31, 2003, and $75,000 per year beginning January 1, 2004 and thereafter, to the extent the assessed value is attributable solely to such improvements or rebuilding.

Additional exemptions exist for senior citizens. The Senior Citizens Homestead Exemption (“Senior Citizens Homestead Exemption”) operates annually to reduce the EAV on a senior citizen’s home for assessment years prior to 2004 by $2,000 in counties with less than 3,000,000 inhabitants. For assessment years 2004 and 2005, the maximum reduction is $3,000 in all counties. For assessment years 2006 and 2007, the maximum reduction is $3,500 in all counties. In addition, for assessment year 2008 and thereafter, the maximum reduction is $4,000 for all counties. Furthermore, beginning with assessment year 2003, for taxes payable in 2004, property that is first occupied as a residence after January 1 of any assessment year by a person who is eligible for the Senior Citizens Homestead Exemption must be granted a pro rata exemption for the assessment year based on the number of days during the assessment year that the property is occupied as a residence by a person eligible for the exemption.


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A Senior Citizens Assessment Freeze Homestead Exemption (“Senior Citizens Assessment Freeze Homestead Exemption”) freezes property tax assessments for homeowners, who are 65 and older and receive a household income not in excess of the maximum income limitation. The maximum income limitation is $35,000 for years prior to 1999, $40,000 for assessment years 1999 through 2003, $45,000 for assessment years 2004 and 2005, $50,000 from assessment years 2006 and 2007 and for assessments year 2008 and after, the maximum income limitation is $55,000. In general, the Senior Citizens Assessment Freeze Homestead Exemption limits the annual real property tax bill of such property by granting to qualifying senior citizens an exemption as to a portion of the valuation of their property. In counties with a population of 3,000,000 or more, the exemption for all assessment years is equal to the EAV of the residence in the assessment year for which application is made less the base amount. Furthermore, for those counties with a population of less than 3,000,000, the Senior Citizens Assessment Freeze Homestead Exemption is as follows: through assessment year 2005 and for assessment year 2007 and later, the exempt amount is the difference between (i) the current EAV of their residence and (ii) the base amount, which is the EAV of a senior citizen’s residence for the year prior to the year in which he or she first qualifies and applies for the Exemption (plus the EAV of improvements since such year). For assessment year 2006, the amount of the Senior Citizens Assessment Freeze Homestead Exemption phases out as the amount of household income increases. The amount of the Senior Citizens Assessment Freeze Homestead Exemption is calculated by using the same formula as above, and then multiplying the resulting value by a ratio that varies according to household income.

Another exemption available to disabled veterans operates annually to exempt up to $70,000 of the Assessed Valuation of property owned and used exclusively by such veterans or their spouses for residential purposes. Also, certain property is exempt from taxation on the basis of ownership and/or use, such as public parks, not-for-profit schools and public schools, churches, and not-for-profit hospitals and public hospitals. However, individuals claiming exemption under the Disabled Persons’ Homestead Exemption (“Disabled Persons’ Homestead Exemption”) or the Disabled Veterans Standard Homestead Exemption (“Disabled Veterans Standard Homestead Exemption”) cannot claim the aforementioned exemption.

Furthermore, beginning with assessment year 2007, the Disabled Persons’ Homestead Exemption provides an annual homestead exemption in the amount of $2,000 for property that is owned and occupied by certain persons with a disability. However, individuals claiming exemption as a disabled veteran or claiming exemption under the Disabled Veterans Standard Homestead Exemption cannot claim the aforementioned exemption.

In addition, the Disabled Veterans Standard Homestead Exemption provides disabled veterans an annual homestead exemption starting with assessment year 2007 and thereafter. Specifically, (i) those veterans with a service-connected disability of 75% are granted an exemption of $5,000 and (ii) those veterans with a service-connected disability of less than 75%, but at least 50% are granted an exemption of $2,500. Furthermore, the veteran’s surviving spouse is entitled to the benefit of the exemption, provided that the spouse has legal or beneficial title of the homestead, resides permanently on the homestead and does not remarry. Moreover, if the property is sold by the surviving spouse, then an exemption amount not to exceed the amount specified by the current property tax roll may be transferred to the spouse’s new residence, provided that it is the spouse’s primary residence and the spouse does not remarry. However, individuals claiming exemption as a disabled veteran or claiming exemption under the Disabled Persons’ Homestead Exemption cannot claim the aforementioned exemption.


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Beginning with assessment year 2007, the Returning Veterans’ Homestead Exemption (“Returning Veterans’ Homestead Exemption”) is available for property owned and occupied as the principal residence of a veteran in the assessment year the veteran returns from an armed conflict while on active duty in the United States armed forces. This provision grants a homestead exemption of $5,000, which is applicable in all counties. In order to apply for the Returning Veterans’ Homestead Exemption, the individual must pay real estate taxes on the property, own the property or have either a legal or an equitable interest in the property, “or a leasehold interest of land on which a single family residence is located, which is occupied as a principle residence of a veteran returning from an armed conflict involving the armed forces of the United States who has an ownership interest therein, legal, equitable or as a lessee, and on which the veteran is liable for the payment of property taxes.” Those individuals eligible for the Returning Veterans’ Homestead Exemption may claim the Returning Veterans’ Homestead Exemption, in addition to other homestead exemptions, unless otherwise noted. Property Tax Extension Limitation Law

The Property Tax Extension Limitation Law, as amended (the “Limitation Law”), limits the annual growth in

the amount of property taxes to be extended for certain Illinois non-home-rule units, including the District. In general, the annual growth permitted under the Limitation Law is the lesser of 5% or the percentage increase in the Consumer Price Index during the calendar year preceding the levy year. Taxes can also be increased due to new construction, referendum approval of tax rate increases, mergers and consolidations.

The effect of the Limitation Law is to limit the amount of property taxes that can be extended for a taxing body.

In addition, general obligation bonds, notes and installment contracts payable from ad valorem taxes unlimited as to rate and amount cannot be issued by the affected taxing bodies unless they are approved by referendum, are alternate bonds or are for certain refunding purposes.

The District has the authority to levy taxes for many different purposes. See the table entitled Representative

Tax Rates under “PROPERTY ASSESSMENT AND TAX INFORMATION” herein. The ceiling at any particular time on the rate at which these taxes may be extended for the District is either (i) unlimited (as provided by statute), (ii) initially set by statute but permitted to be increased by referendum, (iii) capped by statute, or (iv) limited to the rate approved by referendum. Public Act 94-0976, effective June 30, 2006, provides that the only ceiling on a particular tax rate is the ceiling set by statute above, at which the rate is not permitted to be further increased by referendum or otherwise. Therefore, taxing districts (such as the District) will have increased flexibility to levy taxes for the purposes for which they most need the money. The total aggregate tax rate for the various purposes subject to the Limitation Law, however, will not be allowed to exceed the District’s limiting rate computed in accordance with the provisions of the Limitation Law.

Truth in Taxation Law Legislation known as the Truth in Taxation Law (the “Law”) limits the aggregate amount of certain taxes which

can be levied by, and extended for, a taxing district to 105% of the amount of taxes extended in the preceding year unless specified notice, hearing and certification requirements are met by the taxing body. The express purpose of the Law is to require published disclosure of, and hearing upon, an intention to adopt a levy in excess of the specified levels.


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FINANCIAL INFORMATION The accounts of the District are organized on the basis of funds and account groups, each of which is

considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund balance, revenues and expenditures. The District maintains individual funds required by the State of Illinois. The various funds are summarized by type in the financial statements. These funds are grouped as required for reports filed with the Illinois State Board of Education. District resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.

The budget for all Governmental Fund types and for the Expendable Trust Fund is prepared on the modified-

accrual basis of accounting which is the same basis that is used in financial reporting. This allows for comparability between budget and actual amounts. For each fund, total fund expenditures may not legally exceed the budgeted expenditures. The budget lapses at the end of each fiscal year.

The District follows these procedures in establishing the budgetary data reflected in the financial statements.

(a) Annually the Superintendent submits to the Board of Education a proposed operating budget for the fiscal year commencing the following July 1. The operating budget includes proposed expenditures and the means of financing them.

(b) Public hearings are conducted at a public meeting to obtain taxpayer comments after the

proposed budget had been made available to the public for a 30 day period.

(c) Prior to September 30, the budget is legally enacted through passage of a resolution.

(d) Legal spending control for District monies is at the fund level, but management control is exercised at budgetary line item levels within each fund. The Board of Education may amend the budget after it is approved using the same procedures necessary to approve the original budget. The Board also authorizes transfer between the various budgetary line items in any fund, not exceeding, in the aggregate, 10% of the total amount budgeted for such fund. The budgetary data presented in the financial statements reflects all approved budget amendments and transfers.

Financial Reports

The District’s financial statements are audited annually by certified public accountants. See APPENDIX A for more detail.


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No Consent or Updated Information Requested of the Auditor

The tables and excerpts (collectively, the “Excerpted Financial Information”) contained in this “FINANCIAL INFORMATION” section and in APPENDIX A are from the audited financial statements of the District, including the audited financial statements for the fiscal year ended June 30, 2013 (the “2013 Audit”), which was approved by formal action of the Board of Education. The District has not requested the Auditor to update information contained in the Excerpted Financial Information; nor has the District requested that the Auditor consent to the use of the Excerpted Financial Information in this Final Official Statement. Other than as expressly set forth in this Final Official Statement, the financial information contained in the Excerpted Financial Information has not been updated since the date of the 2013 Audit. The inclusion of the Excerpted Financial Information in this Final Official Statement in and of itself is not intended to demonstrate the fiscal condition of the District since the date of the 2013 Audit. Questions or inquiries relating to financial information of the District since the date of the 2013 Audit should be directed to the District.

Summary Financial Information

The following tables are summaries and do not purport to be the complete audits, copies of which are available upon request. See APPENDIX A for excerpts of the District’s 2013 fiscal year audit.

General Fund Balance Sheet

Audited as of June 30 2009 2010 2011 2012 2013

ASSETS: Cash ........................................................................ $ 2,416,170 $ 4,069,842 $ 65,640 $ 9,300,427 $ 8,578,671 Taxes Receivable, Net of Allowance for Uncollectible Taxes ........................................... 9,762,997 11,813,269 12,003,288 13,022,226 12,493,616 Due from Other Governmental Units ...................... 716,593 1,083,589 1,189,183 0 0 Investments ............................................................. 5,394,654 1,616,062 6,366,974 46,488 1,871 Other Accrued Assets ............................................. 0 0 285,000 0 0 Accounts Receivable .............................................. 536,658 294,011 928,235 0 0 Total Assets .......................................................... $18,827,072 $18,876,773 $20,838,320 $22,369,141 $21,074,158 LIABILITIES AND FUND BALANCE: Liabilities: Accounts Payable .................................................. $ 132,923 $ 209,493 $ 150,512 $ 74,353 $ 164,645 Health Care Claims Payable .................................. 387,000 0 0 0 0 Accrued Expenses ................................................. 1,978,590 2,088,724 2,228,689 2,360,186 2,142,792 Deferred Tax Revenue ............................................ 12,068,060 12,574,634 12,728,802 11,690,204 11,528,712 Total Liabilities ...................................................... $14,566,573 $14,872,851 $15,108,003 $14,124,743 $13,836,149 Fund Balance: Reserved for Self Insurance .................................. $ 181,089 $ 126,789 $ 646,812 $ 0 $ 0 Unreserved ............................................................ 4,079,410 3,877,133 5,083,505 0 0 Restricted ............................................................... 0 0 0 373,372 409,308 Assigned ................................................................ 0 0 0 4,441,439 4,349,723 Unassigned ............................................................ 0 0 0 3,429,587 2,478,978 Total Fund Balance ............................................... $ 4,260,499 $ 4,003,922 $ 5,730,317 $ 8,244,398 $ 7,238,009 Total Liabilities and Fund Balance ........................ $18,827,072 $18,876,773 $20,838,320 $22,369,141 $21,074,158


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Educational Fund Revenues and Expenditures

Audited Fiscal Year Ending June 30 2009 2010 2011 2012 2013

REVENUES: Property Tax ................................................................ $ 9,737,604 $10,338,387 $10,741,868 $11,938,889 $11,686,126 Corporate Personal Property Replacement Tax ......... 1,511,607 1,345,863 1,709,249 1,739,874 1,781,753 Earnings on Investments............................................. 0 0 0 30,716 40,510 Other Local Sources ................................................... 885,627 747,385 819,079 712,078 744,131 Flow-Through Sources ................................................ 4,000 0 0 0 0 State Sources .............................................................. 6,559,581 6,197,017 6,796,050 5,600,909 5,171,865 Federal Sources .......................................................... 2,710,858 2,936,258 2,141,716 1,303,505 1,329,531 Revenues on Behalf .................................................... 2,388,809 3,399,657 3,139,911 3,324,064 3,684,403 Total Revenues ......................................................... $23,798,086 $24,964,567 $25,347,873 $24,650,035 $24,438,319 EXPENDITURES: Instruction .................................................................... $16,079,963 $16,482,548 $15,743,197 $14,652,313 $13,840,164 Pupil Services ............................................................. 0 0 0 786,811 1,120,487 Instructional Staff ........................................................ 0 0 0 478,675 496,234 General Administration................................................ 0 0 0 1,153,816 1,318,682 School Administration ................................................. 0 0 0 1,425,576 2,403,422 Business Services ....................................................... 0 0 0 800,133 808,490 Supporting Services .................................................... 4,481,104 4,519,702 3,799,287 0 0 Community Services ................................................... 16,108 36,127 32,422 40,235 39,069 Non-Programmed Charges ......................................... 814,949 1,031,546 1,040,760 1,637,116 1,747,155 Expenditures on Behalf ............................................... 2,388,809 3,399,657 3,139,911 3,324,064 3,684,403 Capital Outlay .............................................................. 0 0 0 13,525 6,602 Debt Service ................................................................ 110 0 0 0 0 Total Expenditures .................................................... $23,781,043 $25,469,580 $23,755,577 $24,312,264 $25,464,708 Excess of Revenues Over (Under) Expenditures ....... $ 17,043 $ (505,013) $ 1,592,296 $ 337,771 $ (1,026,389) Other Financing Sources (Uses): Transfers, Net ............................................................ $ 92,385 $ 17,262 $ 11,663 $ 0 $ 20,000 Excess of Revenues Over (Under) Expenditures and Other Financing Sources .................................... $ 109,428 $ (487,751) $ 1,603,959 $ 337,771 $ (1,006,389) Beginning Fund Balance ............................................. 3,018,902 3,128,330 2,640,579 7,906,627 8,244,398 Ending Fund Balance .................................................. $ 3,128,330 $ 2,640,579 $ 4,244,538 $ 8,244,398 $ 7,238,009 Operations and Maintenance Fund Revenues and Expenditures

Audited Fiscal Year Ending June 30 2009 2010 2011 2012 2013

REVENUES: Local Sources ............................................................. $2,158,384 $1,981,867 $2,209,853 $2,029,836 $1,967,416 State Sources .............................................................. 0 1,318 0 6,120 59,032 Total Revenues ........................................................ $2,158,384 $1,983,185 $2,209,853 $2,035,956 $2,026,448 EXPENDITURES: Supporting Services .................................................... $1,929,096 $1,722,423 $1,952,901 $ 0 $ 0 Business Services ....................................................... 0 0 0 1,896,137 1,967,708 Capital Outlay .............................................................. 0 0 0 88,372 24,950 Non-Programmed Charges ......................................... 30,848 29,588 25,316 0 0 Total Expenditures ................................................... $1,959,944 $1,752,011 $1,978,217 $1,984,509 $1,992,658 Excess of Revenues Over (Under) Expenditures ....... $ 198,440 $ 231,174 $ 231,636 $ 51,447 $ 33,790 Other Financing Sources ............................................ (130,000) 0 (109,200) (150,200) (269,500) Excess of Revenues and Other Financing Sources Over (Under) Expenditures ....................................... $ 68,440 $ 231,174 $ 122,436 $ (98,753) $ (235,710) Beginning Fund Balance ............................................. 1,063,729 1,132,169 1,363,343 1,485,779 1,387,026 Ending Fund Balance .................................................. $1,132,169 $1,363,343 $1,485,779 $1,387,026 $1,151,316


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Budget Financial Information

Educational Operations and Fund Maintenance Fund Twelve Months Twelve Months Ending Ending 6/30/14 6/30/14

REVENUES: Local Sources ....................................................................... $13,111,271 $ 1,882,170 Flow-Through Sources ......................................................... 0 0 State Sources ....................................................................... 5,223,429 0 Federal Sources ................................................................... 1,213,234 0 Receipts for On-Behalf-Payments ........................................ 0 0 Other Financing Sources ...................................................... 0 0 Total Revenues ................................................................... $19,547,934 $ 1,882,170 EXPENDITURES: Instruction ............................................................................. $15,833,244 $ 0 Supporting Services .............................................................. 3,608,895 1,919,814 Community Services ............................................................. 40,001 0 Non-Programmed Charges ................................................... 1,574,149 25,472 Debt Service ......................................................................... 0 0 Expenditures for On-Behalf-Payments ................................. 0 0 Other ..................................................................................... 0 0 Total Expenditures .............................................................. $21,056,289 $ 1,945,286 Excess (Deficiency) of Revenues Over (Under) Expenditures ........................................................... $ (1,508,355) $ (63,116)

EMPLOYEE RETIREMENT AND OTHER POSTEMPLOYMENT BENEFITS OBLIGATIONS

See APPENDIX D herein for a discussion of the District’s employee retirement and other postemployment benefits obligations.

REGISTRATION, TRANSFER AND EXCHANGE

See also APPENDIX B for information on registration, transfer and exchange of book-entry bonds. The Bonds will be initially issued as book-entry bonds.

The District shall cause books (the “Bond Register”) for the registration and for the transfer of the Bonds to be kept at the principal office maintained for the purpose by the Bond Registrar in Chicago, Illinois. The District will authorize to be prepared, and the Bond Registrar shall keep custody of, multiple bond blanks executed by the District for use in the transfer and exchange of Bonds.

Any Bond may be transferred or exchanged, but only in the manner, subject to the limitations, and upon payment of the charges as set forth in the Bond Resolution. Upon surrender for transfer or exchange of any Bond at the principal office maintained for the purpose by the Bond Registrar, duly endorsed by, or accompanied by a written instrument or instruments of transfer in form satisfactory to the Bond Registrar and duly executed by the registered owner or such owner’s attorney duly authorized in writing, the District shall execute and the Bond Registrar shall authenticate, date and deliver in the name of the registered owner, transferee or transferees (as the case may be) a new fully registered Bond or Bonds of the same maturity and interest rate of authorized denominations, for a like aggregate principal amount.


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The execution by the District of any fully registered Bond shall constitute full and due authorization of such Bond, and the Bond Registrar shall thereby be authorized to authenticate, date and deliver such Bond, provided, however, the principal amount of outstanding Bonds of each maturity authenticated by the Bond Registrar shall not exceed the authorized principal amount of Bonds for such maturity less Bonds previously paid. The Bond Registrar shall not be required to transfer or exchange any Bond following the close of business on the fifteenth day of the month in which an interest payment date occurs on such Bond (known as the record date), nor to transfer or exchange any Bond after notice calling such Bond for redemption has been mailed, nor during a period of fifteen days next preceding mailing of a notice of redemption of any Bonds. The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of the principal of or interest on any Bonds shall be made only to or upon the order of the registered owner thereof or such owner’s legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid.

No service charge shall be made for any transfer or exchange of Bonds, but the District or the Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Bonds except in the case of the issuance of a Bond or Bonds for the unredeemed portion of a bond surrendered for redemption.

TAX EXEMPTION

Federal tax law contains a number of requirements and restrictions which apply to the Bonds, including investment restrictions, periodic payments of arbitrage profits to the United States, requirements regarding the proper use of bond proceeds and the facilities financed therewith, and certain other matters. The District has covenanted to comply with all requirements that must b

$3,700,000 SCHOOL DISTRICT NUMBER 170 - Speer Financial SD 170 . FIRE SAFETY... · 2014. 2. 25. ·...

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