OFFICIAL STATEMENT BOOK-ENTRY ONLY

Transcription

1 BOOK-ENTRY ONLY OFFICIAL STATEMENT $9,995,000 LANCASTER COUNTY CAREER & TECHNOLOGY CENTER AUTHORITY GUARANTEED LEASE REVENUE BONDS, SERIES OF 2013 (LANCASTER COUNTY CAREER & TECHNOLOGY CENTER) Lancaster County, Pennsylvania Rating: Underlying: A (Stable Outlook) Insured: See Ratings herein BAM Insured In the opinion of Bond Counsel, the interest on the Bonds (including any original issue discount) (a) is excludable from the gross income of the registered owners thereof for federal income tax purposes and (b) is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, it should be noted that with respect to corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on such corporations. The opinion set forth in clause (a) above is subject to the condition that the Issuer comply with all requirements of the Internal Revenue Code of 1986, as amended, 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 could cause the interest on the bonds to be so included in gross income retroactive to the date of issuance of the Bonds. The Issuer has covenanted to comply with all such requirements. Bond Counsel expresses no opinion regarding other federal tax consequences arising with respect to the Bonds. Under the laws of the Commonwealth of Pennsylvania, as enacted and construed on the date hereof, the Bonds are exempt from personal property taxes in Pennsylvania and the interest on the Bonds is exempt from Pennsylvania personal income tax. For a more complete discussion of tax exemption, see TAX MATTERS and TAX EXEMPTION herein. The Bonds are qualified tax-exempt obligations for purposes and effect contemplated by Section 265(b)(3)(B) of the Internal Revenue Code of 1986, as amended (relating to expenses and interest relating to tax-exempt income of certain financial institutions). Dated: Date of Delivery Due: February 1, as shown on the inside cover Denomination: Integral multiples of $5,000 Interest Payable: February 1 and August 1 First Interest Payment: February 1, 2014 Form: Book-Entry Only Legal Investment for Fiduciaries in Pennsylvania: The Bonds (hereinafter defined) are a legal investment for fiduciaries in the Commonwealth of Pennsylvania under the Probate, Estate and Fiduciaries Code, Act of June 30, 1972, No. 164, P.L. 508 as amended and supplemented. Payable: Principal of the Guaranteed Lease Revenue Bonds, Series of 2013 (the Bonds ), in the aggregate principal amount of $9,995,000, will be issued as fully registered bonds and, when issued, will be registered in the name of Cede & Co., as nominee for the Depository Trust Company, New York, New York ( DTC ). DTC will act as securities depository for the Bonds. Purchases of the Bonds will be made only in book-entry form, and purchasers will not receive certificates representing their interests in the Bonds. So long as DTC, or its nominee, Cede & Co., is the registered owner of the Bonds, payments of the principal of and interest on the Bonds will be made by the Trustee directly to Cede & Co. Disbursement of such payments to the DTC Participants is the responsibility of DTC, and disbursements of such payments to Beneficial Owners of the Bonds is the responsibility of the DTC Participants and the Indirect Participants. See BOOK-ENTRY ONLY SYSTEM herein. Optional Redemption: The Bonds are subject to optional redemption prior to maturity as stated herein. Purpose: Proceeds of the Bonds will be used to provide funds for (1) renovation and additions to the Mt. Joy and Willow Street Campuses of the LCCTC, and for various other ongoing and proposed capital projects of the LCCTC; and (2) paying the costs of issuing and insuring the Bonds. Security: The Bonds will be issued under a Trust Indenture (the Indenture ), dated as of June 29, 2012, between the Authority and the Trustee and will be secured under the Indenture by an assignment and pledge by the Authority to the Trustee of lease rentals payable to the Authority by Cocalico School District, Columbia Borough School District, Conestoga Valley School District, Donegal School District, Eastern Lancaster County School District, Elizabethtown Area School District, Ephrata Area School District, Hempfield School District, Lampeter-Strasburg School District, School District of Lancaster, Manheim Central School District, Manheim Township School District, Penn Manor School District, Pequea Valley School District, Solanco School District, Warwick School District (individually, a School District, and collectively, the School Districts ), and the Lancaster County Career & Technology Center Board (the LCCTC Board ) pursuant to an Agreement of Lease (the Lease ) dated as of June 29, The Lease provides that the Authority will lease to the School Districts and the LCCTC Board (collectively, the Lessees ), for a term longer than the term of the Bonds, certain school facilities owned by the Authority, located in Lancaster County, Pennsylvania and known as the Lancaster County Career & Technology Center (the School Facilities ). THE BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM THE LEASE RENTALS TO BE RECEIVED BY THE AUTHORITY FROM THE LESSEES UNDER THE LEASE. THE AUTHORITY HAS NO TAXING POWER, NEITHER THE CREDIT NOR THE TAXING POWER OF THE UNITED STATES OF AMERICA, THE COMMONWEALTH OF PENNSYLVANIA, NOR ANY AGENCY OR POLITICAL SUBDIVISION THEREOF IS PLEDGED TO PAY THE PRINCIPAL OF OR THE INTERST ON THE BONDS. HOWEVER, EACH SCHOOL DISTRICT HAS PLEDGED ITS CREDIT AND TAXING POWER TO PAY ITS SHARE OF THE RENTALS OWED THE AUTHORITY UNDER THE LEASE AND TO BE USED BY THE AUTHORITY TO PAY PRINCIPAL OF AND INTEREST ON THE BONDS. Bond Insurance: The scheduled payment of principal of and interest on the Bonds when due is guaranteed under a municipal bond insurance policy issued concurrently with the delivery of the Bonds by Build America Mutual Assurance Company ( BAM ). The Bonds are offered for delivery when, as and if issued by the Authority and received by the Underwriter, subject to the approving legal opinion of Kegel Kelin Almy & Lord LLP, Lancaster, Pennsylvania, Bond Counsel, to be furnished upon delivery of the Bonds. Certain legal matters will be passed upon by Kegel Kelin Almy & Lord LLP, Lancaster, Pennsylvania, Solicitor for the Authority and the Lancaster County Career & Technology Center. It is expected that the Bonds will be available for delivery through the facilities of DTC, on or about September 20, The date of this Official Statement is August 13, 2013.

2 $9,995,000 LANCASTER COUNTY CAREER & TECHNOLOGY CENTER AUTHORITY GUARANTEED LEASE REVENUE BONDS, SERIES OF 2013 (LANCASTER COUNTY CAREER & TECHNOLOGY CENTER) Lancaster County, Pennsylvania Dated: Date of Delivery Interest Payable: February 1 and August 1 Due: February 1, as shown below First Interest Payment: February 1, 2014 Denomination: Integral multiples of $5,000 Form: Book-Entry Only Maturity Schedule Principal Principal Year Amount Coupon Price Year Amount Coupon Price 2014 $640, % % 2022 $345, % % , , , , , , , , , , , , , , $950, % Term Bonds Due February 1, % $1,045, % Term Bonds Due February 1, % $2,425, % Term Bonds Due February 1, %

3 No dealer, broker, salesman or other person has been authorized by the Authority, the Financial Advisor or the Underwriters to give any information or to make any representation, other than that given or made in this Official Statement, and if given or made, any such other information or representation may not be relied upon as having been authorized by the Authority or the Underwriters. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. This Official Statement has been approved by the Authority and, while the information set forth in this Official Statement has been furnished by the Authority and other sources which are believed to be reliable, such information is not guaranteed as to accuracy or completeness, and is not to be construed as a representation by the Underwriters or, as to information obtained from other sources, by the Authority. The information and expressions of opinion set forth in this Official Statement are subject to change without notice and neither the delivery of this Official Statement nor any sale made under this Official Statement shall, under any circumstances, create any implication that the affairs of the Authority have remained unchanged since the date of this Official Statement. 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 and presented under the heading Bond Insurance and Appendix E - Specimen Municipal Bond Insurance Policy. The Underwriter has reviewed the information in this official statement pursuant to its responsibilities to investors under the federal securities laws, but the Underwriter does not guarantee the accuracy or completeness of such information. TABLE OF CONTENTS Board Officers... iv Joint Operating Committee... iv Summary Statement... vi Introduction... 1 The Authority... 1 Purpose of the Issue... 2 Sources and Uses of Funds... 2 Description of the Bonds... 2 Redemption Provisions... 3 Book-Entry Only System... 5 Security for the Bonds... 6 State Enforcement of Lease Rental and Debt Service Payments... 7 Bond Insurance... 8 Summary of Lease... 9 Certain Provisions of the Indenture... 9 Tax Exemption Continuing Disclosure Undertaking` Miscellaneous Appendix A - Summaries of Financial Factors of the Lancaster County Career & Technology Center and the Participating School District Appendix B - Description of the Lancaster County Career & Technology Center Appendix C - Description of the County of Lancaster Appendix D - Proposed Form of Bond Counsel Opinion Appendix E - Specimen Municipal Bond Insurance Policy Appendix F - Bond Amortization Schedule iii

4 LANCASTER COUNTY CAREER & TECHNOLOGY CENTER AUTHORITY BOARD OFFICERS M. James Smith... Chairman M. Wade Groff...Assistant Chairman James Zimmerman...Secretary Robert Enck... Assistant Secretary Jeff Swarr...Treasurer LANCASTER COUNTY CAREER & TECHNOLOGY CENTER JOINT OPERATING COMMITTEE BOARD OFFICERS Dr. Brian Troop...Superintendent of Record Jenny Miller... Chairman John Smucker...Vice Chairman James Byrnes...Secretary Kim Garner... Assistant Secretary Robert Cronin...Treasurer LANCASTER COUNTY CAREER & TECHNOLOGY CENTER JOINT OPERATING COMMITTEE Timothy Zimmerman...Cocalico Terry Doutrich... Columbia Borough John Smucker...Conestoga Valley Benjamin Kling... Donegal Melissa Readman...Eastern Lancaster County Robert Cronin... Elizabethtown Area Jenny Miller...Ephrata Area Robert Sauders...Hempfield James H. Byrnes... Lampeter-Strasburg Harvey Miller... School District of Lancaster Kim Garner... Manheim Central Thomas Winters...Manheim Township Kirk Schlotzhauer... Penn Manor Charles H. Rohrer...Pequea Valley Steven P. Risk... Solanco Millard Eppig, Jr... Warwick iv

5 ADMINISTRATIVE STAFF David Warren...Executive Director Matthew Mann...Asst. Executive Director Keith Stoltzfus...Business Manager Britney Hevner... Asst. Business Manager Bond Counsel Kegel, Kelin Almy & Lord LLP Lancaster, Pennsylvania Solicitor Kegel, Kelin Almy & Lord LLP Lancaster, Pennsylvania Underwriter RBC Capital Markets, LLC New York, New York Trustee Fulton Bank, National Association Lancaster, Pennsylvania v

6 SUMMARY STATEMENT This Summary Statement is subject in all respects to more complete information set forth in this Official Statement. No person is authorized to detach this Summary Statement from this Official Statement or to otherwise use it without the entire Official Statement. Issuer... Bonds... Redemption Provisions..... Form... Application of Proceeds... Security... Bond Insurance... Rating... Lancaster County Career & Technology Center Authority, Lancaster County, Pennsylvania. The Bonds will be issued in the aggregate principal amount of $9,995,000, will be dated as of the date of delivery and will mature in various principal amounts (as described herein) on February 1, 2014 through and including February 1, 2037, with interest payable February 1 and August 1, commencing on February 1, See DESCRIPTION OF THE BONDS herein. The Bonds stated to mature on and after February 1, 2019, are subject to redemption, at the option of the school district, in whole or, from time to time, in part, on and after August 1, 2018 at 100% of principal amount. The Bonds stated to mature on February 1, 2031, February 1, 2033 and February 1, 2037 are subject to mandatory redemption prior to maturity. See REDEMPTION PROVISIONS herein. Book-Entry Only. Proceeds of the Bonds will be used to provide funds for (1) renovation and additions to the Mt. Joy and Willow Street Campuses of the Lancaster County Career & Technology Center (the LCCTC ), and for various other ongoing and proposed capital projects of the LCCTC.; and (2) paying the costs of issuing and insuring the Bonds. The Bonds are secured under the Indenture by the assignment and pledge of lease rentals to be paid to the Authority by the Lessees pursuant to the terms of the Lease. See SECURITY FOR THE BONDS herein The Bonds carry a municipal bond insurance commitment from Build America Mutual Assurance Company ("BAM"), which assures payment of the respective principal and interest to the registered owners of the Bonds. See "BOND INSURANCE" herein. See "MISCELLANEOUS - Rating" herein. vi

7 OFFICIAL STATEMENT $9,995,000 LANCASTER COUNTY CAREER & TECHNOLOGY CENTER AUTHORITY Lancaster County, Pennsylvania Guaranteed Lease Revenue Bonds, Series of 2013 (Lancaster County Career & Technology Center Schools) INTRODUCTION This Official Statement is furnished by Lancaster County Career & Technology Center Authority, Lancaster County, Pennsylvania (the "Authority"), in connection with the offering of its Guaranteed Lease Revenue Bonds, Series of 2013 (Lancaster County Career & Technology Center) (the "Bonds"), in the aggregate principal amount of $9,995,000. The Bonds are being issued pursuant to the Pennsylvania Municipality Authorities Act of 1945, P.L. 382, as amended (the Act ), a Resolution duly adopted by the Board of the Authority on September 22, 2011 (the "Resolution"), and the Indenture and supplements thereto (collectively, the Indenture ), and will be payable from and secured by the assignment and pledge by the Authority to the Trustee of rental payments to be paid pursuant to the Lease and supplements thereto (collectively, the Lease ) made between the Authority, as lessor, and the School Districts and LCCTC Board, as lessees. The Bonds will be issued as fully registered bonds and when issued, will be registered in the name of and held by Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"). DTC will act as securities depository for the Bonds. Purchases of the Bonds will be made only in book-entry form, and purchasers will not receive certificates representing their interests in the Bonds. So long as DTC, or its nominee, Cede & Co., is the registered owner of the Bonds, payments of the principal of and interest on the Bonds will be made by Fulton Bank, National Association, Lancaster, Pennsylvania (the Trustee ) directly to Cede & Co. Disbursement of such payments to the DTC Participants is the responsibility of DTC, and disbursement of such payments to Beneficial Owners of the Bonds is the responsibility of the DTC Participants and the Indirect Participants. See DESCRIPTION OF THE BONDS and BOOK-ENTRY ONLY SYSTEM herein. The Bonds are subject to optional redemption as more fully described herein. The information which follows contains summaries of the Resolution, the Indenture, the Lease, LCCTC Financial Statements and the School Districts Financial Statements. Such summaries do not purport to be complete and reference is made to the Resolution, the Indenture, the Lease, LCCTC Financial Statements and School Districts Financial Statements, copies of which are on file and available for examination at the offices of the LCCTC and the respective School Districts. THE AUTHORITY The Authority is a municipality authority organized and existing pursuant to the Act. Under the Act, the Authority is empowered to acquire, hold, construct, improve, maintain, operate and lease public school buildings and other school projects acquired, constructed or improved for public school purposes. The Authority has no taxing power. 1

8 PURPOSE OF THE ISSUE Proceeds of the Bonds will be used to provide funds for (1) renovation and additions to the Mt. Joy and Willow Street Campuses of the LCCTC, and for various other ongoing and proposed capital projects of the LCCTC.; and (2) paying the costs of issuing and insuring the Bonds. SOURCES AND USES OF FUNDS Sources of Funds Proceeds of Series of 2013 Bonds $9,995, Net Original Issue Discount (86,699.20) Total Sources of Funds $9,908, Uses of Funds Capital Project Fund $9,725, Financing costs(1) 183, Total Uses of Funds $9,908, (1) Includes underwriter s discount, legal, printing, Trustee fee, rating, bond insurance premium and miscellaneous fees. Payment of Principal and Interest DESCRIPTION OF THE BONDS The Bonds are being issued in fully registered form, without coupons, in the aggregate principal amount of $9,995,000 and will be dated the date of delivery. The Bonds will bear interest payable on February 1 and August 1 (each an Interest Payment Date ), commencing on February 1, 2014, as set forth on the inside of the cover page hereof and are issuable in denominations of $5,000 or any whole multiple thereof. The Bonds will bear interest at the rates and mature on the dates and in the amounts shown on the cover page hereof. So long as Cede & Co., as nominee of DTC, is the registered owner of the Bonds, payments of principal of and interest on the Bonds, when due, are to be made to DTC and all such payments shall be valid and effective to satisfy fully and to discharge the obligations of the Authority with respect to, and to the extent of, principal and interest so paid. If the use of the Book-Entry Only System for the Bonds is discontinued for any reason, bond certificates will be issued to the Beneficial Owners of the Bonds and payment of principal and interest on the Bonds shall be made as described in the following paragraphs. Principal of certificated Bonds will be paid to the registered owners thereof or assigns, when due, upon surrender of the Bonds thereof at the designated corporate trust office of the Trustee. Subject to the provisions described herein, under BOOK-ENTRY ONLY SYSTEM, interest is payable to the registered owner of a Bond from the interest payment date next preceding the date of registration and authentication of the Bond, unless: (a) such Bond is registered and authenticated as of an interest payment date, in which event such Bond shall bear interest from said interest payment date, (b) such Bond is registered and authenticated on a date after a Record Date (hereinafter defined) and before the next succeeding interest payment date, in which event such Bond will bear interest from such next succeeding interest payment date, or (c) such Bond is registered and authenticated on or prior to the Record Date preceding February 1, 2014, in which event such Bond shall bear interest from the date of delivery, or (d) as shown by the records of the Trustee, interest on such Bond shall be in default, in which event such Bond shall bear interest from the date on which interest was last paid on such Bond. Interest shall be paid semiannually on February 1 and August 1 of each year, beginning February 1, 2014, until the principal sum is paid. Interest on each Bond is payable by check drawn on the Trustee, which shall be mailed to the registered owner whose name and address shall appear, at the close of business on the fifteenth (15 th ) calendar day (whether or not a day on which the Trustee is open for business) next preceding each interest payment date, 2

9 respectively (the "Record Date"), on the registration books maintained by the Trustee, irrespective of any transfer or exchange of the Bond subsequent to such Record Date and prior to such interest payment date, unless the Issuer shall be in default in payment of interest due on such interest payment date. In the event of any such default in payment of interest due on such interest payment date, such defaulted interest shall be payable to the person in whose name the Bond is registered at the close of business on a special record date for the payment of such defaulted interest established by notice mailed by the Trustee to the registered owners of Bonds not less than ten (10) days preceding such special record date. Such notice shall be mailed to the persons in whose names the Bonds are registered at the close of business on the special record date. Transfer, Exchange and Registration of Bonds Subject to the provisions described herein, under BOOK-ENTRY ONLY SYSTEM, Bonds are transferable or exchangeable by the registered owners thereof upon surrender of Bonds to the Trustee, at its designated corporate trust office, accompanied by a written instrument or instruments in form, with instructions and with guaranty of signature satisfactory to the Trustee, duly executed by the registered owner of such Bond or his attorney-in-fact or legal representative. The Trustee shall enter any transfer of ownership of Bonds in the registration books and shall authenticate and deliver at the earliest practicable time in the name of the transferee or transferees a new fully registered bond or bonds of authorized denominations of the same series, maturity and interest rate for the aggregate principal amount which the registered owner is entitled to receive. The Authority and the Trustee may deem and treat the registered owner of any Bond as the absolute owner thereof (whether or not a Bond shall be overdue) for the purpose of receiving payment of or on account of principal and interest and for all other purposes, and the Authority and the Trustee shall not be affected by any notice to the contrary. Bonds may be exchanged for a like aggregate principal amount of Bonds of other authorized denominations of the same maturity and interest rate. Optional Redemption REDEMPTION PROVISIONS The Bonds stated to mature on or after February 1, 2019, are subject to redemption prior to maturity, at the option of the Authority, in whole or, from time to time, in part (and if in part, of such maturity or maturities as the Authority shall select for redemption and within a maturity by lot) on August 1, 2018, or on any date thereafter, in either case, upon payment of a redemption price of 100% of the principal amount of the Bonds, plus accrued interest to the date fixed for redemption. Mandatory (Sinking Fund) Redemption The Bonds stated to mature on February 1, 2031, February 1, 2033 and February 1, 2037 are subject to mandatory redemption prior to maturity, by lot, at 100% of the principal amount redeemed, plus accrued interest to the redemption date, on February 1 of the following years in the following aggregate principal amounts: Bonds Stated to Mature on: February 1, 2031 Bonds Stated to Mature on: February 1, 2037 Year Amount Year Amount 2030 $465, $565, * 485, , , ,000 Bonds Stated to Mature on: February 1, 2033 Year Amount 2032 $510, * 535,000 *Principal Maturity 3

10 Such mandatory redemption shall be made upon payment of the principal amount of the Bonds being redeemed, plus accrued interest to the date fixed for redemption. In the event any optional redemption in part of the Bonds of any maturity that is subject to mandatory sinking fund redemption, the Authority shall be entitled to designate whether the principal amount redeemed shall be credited against the principal amount of such Bonds that would otherwise be due at stated maturity or credited against the principal amount of such Bonds that would otherwise be scheduled to be called for mandatory sinking fund redemption on any particular date or dates, in each case in an integral multiple of $5,000 principal amount. Notice of Redemption So long as Cede & Co., as nominee of DTC, is the registered owner of the Bonds, however, the Authority and the Trustee shall send redemption notices only to Cede & Co. See BOOK-ENTRY ONLY SYSTEM herein for further information regarding conveyance of notices and Beneficial Owners. If at a time of mailing of a notice of redemption the Authority has not deposited with the Trustee (or, in the case of a refunding, with another bank or depositary acting as refunding escrow agent) money sufficient to redeem all Bonds called for redemption, the notice of redemption may state that is it is conditional, i.e., that it is subject to the deposit of sufficient redemption money with the Trustee not later than the opening of business on the redemption date, and such notice shall be of no effect unless such money is so deposited. Notice of any redemption shall be given by depositing a copy of the redemption notice in first class mail not less than thirty (30) nor more than sixty (60) days prior to the date fixed for redemption, addressed to each of the registered owners of any certificated Bonds to be redeemed, at the addresses shown on the registration books kept by the Trustee as of the date such Bonds are selected for redemption; provided, however, that failure to give such notice by mailing, or any defect therein or in the mailing thereof, shall not affect the validity of any proceeding for redemption of other Bonds so called for redemption as to which proper notice has been given. On the date designated for redemption, notice having been provided as aforesaid, and money for payment of the principal and interest being held by the Trustee, interest on the Bonds or portions thereof so called for redemption shall cease to accrue and such Bonds or portions thereof shall cease to be entitled to any benefit or security under the Resolution, and registered owners of such Bonds or portions thereof so called for redemption shall have no rights with respect thereto, except to receive payment of the principal to be redeemed and accrued interest thereon to the date fixed for redemption. Manner of Redemption So long as Cede & Co., nominee of DTC, is the registered owner of the Bonds, however, payment of the redemption price shall be made by Cede & Co. in accordance with the existing arrangements by and among the Authority, the Trustee and DTC and, if less than all of the Bonds in a particular maturity are to be redeemed, the amount of the interest of each DTC Participant, Indirect Participant and Beneficial Owner on such Bonds to be redeemed shall be determined by the governing arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. See BOOK-ENTRY ONLY SYSTEM herein for further information regarding redemption of Bonds registered in the name of Cede & Co. If a Bond is of a denomination larger than $5,000, a portion of such Bond may be redeemed. For the purposes of redemption, a Bond shall be treated as representing the number of Bonds that is equal to the principal amount thereof divided by $5,000, each $5,000 portion of such Bond being subject to redemption. In the case of partial redemption of a certificated Bond, payment of the redemption price shall be made only upon surrender of such Bond in exchange for certificated Bonds of authorized denominations in an aggregate principal amount equal to the unredeemed portion of the principal amount thereof. If the redemption date for any Bonds shall be a Saturday, Sunday, legal holiday or on a day on which banking institutions in the Commonwealth are authorized or required by law or executive order to close, then the date for payment of such principal, premium, if any, and interest upon such redemption shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized or required to close, and payment on such date shall have the same force and effect as if made on the nominal date of redemption. 4

11 BOOK-ENTRY ONLY SYSTEM The information under this heading has been obtained from materials provided by DTC for such purpose. The Authority (herein referred to as the Issuer ) and the Underwriter do not guaranty the accuracy or completeness of such information and such information is not to be construed as a representation of the Authority or the Underwriter. DTC, New York, New York, will act as securities depository for the Bonds. The Bonds will be issued as fullyregistered bonds 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 certificate will be issued for the Bonds of each separate maturity and interest rate, in the aggregate principal amount of such maturity and interest rate, and will be deposited with DTC. DTC, the world s largest depository, is a limited-purpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code, and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of DTC holds and provides asset servicing for over 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 registered 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: 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 Purchases of the Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC s records. The ownership interest of each actual purchaser of each Series of 2011 Bond ( Beneficial Owner ) is in turn to be recorded on the Direct and Indirect Participants records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices will be sent to DTC. If less than all of the Bonds of a maturity are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. s consenting or 5

12 voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Payments of principal, premium, if any, and interest on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC s practice is to credit Direct Participants accounts upon DTC s receipt of funds and corresponding detail information from the Issuer or the Trustee, 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, the Issuer or the Trustee, subject to any statutory or regulatory requirements as may be in effect from time to time. Payments of principal, premium, if any, and interest on the Bonds to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Issuer or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the Issuer or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, bond certificates are required to be printed and delivered. The Issuer may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, bond 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 Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof. Disclaimer of Liability for Failures of DTC The Authority and the Underwriter cannot and do not give any assurances that DTC, the Direct and Indirect Participants or others will distribute payments of principal, interest or premium with respect to the Bonds paid to DTC or its nominee as the owner of Bonds, or will distribute any redemption or other notices, to the Beneficial Owners, or that they will do so on a timely basis or will serve and act in the manner described in this Official Statement. The Authority and the Underwriter are not responsible or liable for the failure of DTC or any Participant to make any payment or give any notice to a Beneficial Owner with respect to the Bonds, or any error or delay relating thereto. SECURITY FOR THE BONDS The Bonds are limited obligations of the Authority, payable solely from (a) lease rental payments from the Lessees, (b) moneys derived from the investment of a portion of such lease rental payments; and (c) other receipts, revenues and moneys otherwise available under the Indenture to the Authority. Such lease rentals are payable under the Lease between the Authority, as lessor, and the School Districts and LCCTC Board, as lessees (the Lessees ). The lease rentals are payable by the Lessees from current revenues, which presently include ad valorem taxes (unlimited as to rate or amount for payment of lease rentals), state reimbursements and other revenues. The Bonds do not pledge the credit or taxing power of the United States of America, the Commonwealth of Pennsylvania or any political subdivision thereof, other than the pledge of each of the School Districts as to their respective lease rental obligations under the Lease. Pursuant to the terms of the Lease, each School District will covenant to the budgeting of, and will pledge its full faith, credit and taxing power in connection with the allocated portion of such lease rentals due from each School District under the Lease. While the aggregate amount of the lease rentals which the School Districts will be obligated to pay to the Authority will be sufficient to pay the principal of and interest on the Bonds, no School District will be obligated to pay more than its proportionate share of such lease rentals. 6

13 Sinking Fund In the Resolution, the Authority has provided that a sinking fund, to be designated as the "Sinking Fund, Lancaster County Career & Technology Center Authority, Guaranteed Lease Revenue Bonds, Series of 2013" (the "Sinking Fund"), shall be established and maintained with the Trustee (the "Sinking Fund Depositary") segregated from all other funds of the Authority. The Authority shall deposit in the Sinking Fund, not later than the date when principal or interest is to become due on the Bonds, an amount sufficient to provide for the payment of interest and principal becoming due on the Bonds. The Sinking Fund shall be held by the Trustee in its capacity as Sinking Fund Depositary and invested by the Sinking Fund Depositary in such securities or shall be deposited in such deposit accounts as are authorized by the Act, upon direction of the Authority. Such deposits and securities shall be in the name of the Authority but subject to withdrawal or collection only by the Sinking Fund Depositary, and such deposits and securities, together with the interest thereon, shall be a part of the Sinking Fund. The Trustee is authorized and directed to pay from the Sinking Fund the principal of and interest on the Bonds when due and payable. Actions in the Event of Default In the event any of the School Districts default in the payment of the principal of or the interest on any of the Bonds after the same shall become due, whether at the stated maturity or upon call for prior redemption, and such default shall continue for thirty days, or if any of the School Districts fails to comply with any provision of the Bonds or the Resolution, the Act provides that the holders (the "Bondholders") of 25% in aggregate principal amount of the Bonds then outstanding may, upon appropriate action, appoint a trustee to represent the Bondholders. The trustee may, and upon request of the holders of 25% in principal amount of the Bonds then outstanding and upon being provided with indemnity satisfactory to it shall, take such action on behalf of the Bondholders as is more specifically set forth in the Act. Such representation by the trustee shall be exclusive. STATE ENFORCEMENT OF LEASE RENTAL AND DEBT SERVICE PAYMENTS Section 790 of the Pennsylvania Public School Code, as amended by Act No. 333, approved February 14, 1956 (P.L. 1043), provides that if any school district fails to pay any rental payment due any municipality authority in accordance with the terms of any lease entered into under the provisions of Section 790, the State Superintendent of Public Instruction shall withhold any state appropriation due such school district to any municipality authority and pay over the amount so withheld to the Authority in payment of the rental. Section 633 of the Pennsylvania Public School Code, as amended by Act 150 of 1975, provides that in all cases where the board of directors of any school district fails to pay or to provide for the payment of any indebtedness at date of maturity or date of mandatory redemption, or any interest due on such indebtedness on any interest payment date, in accordance with the schedule under which the bonds were issued, the Secretary of Education shall notify such board of school directors of its obligations and shall withhold out of any State appropriation due such school district an amount equal to the sum of the principal amount maturing or subject to mandatory redemption and interest owing by such school district, and shall pay over the amount so withhold to the bank or other person acting as sinking fund depositary for such bond issue. The withholding provisions of Sections 633 and 790 described above are not part of any contract with the registered owners of the Bonds and may be amended or repealed by future legislation. The effectiveness of Section 633 and 790 may be limited by the application of other withholding provisions contained in the Public School Code, such as provisions for withholding and paying over of appropriations for payment of unpaid teachers' salaries. Enforcement may also be limited by bankruptcy, insolvency, or other laws or equitable principles affecting the enforcement of creditors' rights generally. Nor can there by any assurance that any payments pursuant to such withholding provision will be made by the date on which such payments are due to the Bondholders. 7

14 BOND INSURANCE BOND INSURANCE POLICY Concurrently with the issuance of the Bonds, Build America Mutual Assurance Company ( BAM ) will issue its Municipal Bond Insurance Policy for the Bonds (the Policy ). The Policy guarantees the scheduled payment of principal of and interest on the Bonds when due as set forth in the form of the Policy included as an exhibit to this Official Statement. The Policy is not covered by any insurance security or guaranty fund established under New York, California, Connecticut or Florida insurance law. BUILD AMERICA MUTUAL ASSURANCE COMPANY BAM is a New York domiciled mutual insurance corporation. BAM provides credit enhancement products solely to issuers in the U.S. public finance markets. BAM will only insure obligations of states, political subdivisions, integral parts of states or political subdivisions or entities otherwise eligible for the exclusion of income under section 115 of the U.S. Internal Revenue Code of 1986, as amended. No member of BAM is liable for the obligations of BAM. The address of the principal executive offices of BAM is: 1 World Financial Center, 27 th Floor, 200 Liberty Street, New York, New York 10281, its telephone number is: , and its website is located at: BAM is licensed and subject to regulation as a financial guaranty insurance corporation under the laws of the State of New York and in particular Articles 41 and 69 of the New York Insurance Law. BAM s financial strength is rated AA/Stable by Standard and Poor s Ratings Services, a Standard & Poor s Financial Services LLC business ( S&P ). An explanation of the significance of the rating and current reports may be obtained from S&P at The rating of BAM should be evaluated independently. The rating reflects the S&P s current assessment of the creditworthiness of BAM and its ability to pay claims on its policies of insurance. The above rating is not a recommendation to buy, sell or hold the Bonds, and such rating is subject to revision or withdrawal at any time by S&P, including withdrawal initiated at the request of BAM in its sole discretion. Any downward revision or withdrawal of the above rating may have an adverse effect on the market price of the Bonds. BAM only guarantees scheduled principal and scheduled interest payments payable by the issuer of the Bonds on the date(s) when such amounts were initially scheduled to become due and payable (subject to and in accordance with the terms of the Policy), and BAM does not guarantee the market price or liquidity of the Bonds, nor does it guarantee that the rating on the Bonds will not be revised or withdrawn. Capitalization of BAM BAM s total admitted assets, total liabilities, and total capital and surplus, as of March 31, 2013 and as prepared in accordance with statutory accounting practices prescribed or permitted by the New York State Department of Financial Services were $486.0 million, $6.2 million and $479.8 million, respectively. BAM is party to a first loss reinsurance treaty that provides first loss protection up to a maximum of 15% of the par amount outstanding for each policy issued by BAM, subject to certain limitations and restrictions. BAM s most recent Statutory Annual Statement, which has been filed with the New York State Insurance Department and posted on BAM s website at is incorporated herein by reference and may be obtained, without charge, upon request to BAM at its address provided above (Attention: Finance Department). Future financial statements will similarly be made available when published. 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 and presented under the heading BOND INSURANCE. 8

15 SUMMARY OF LEASE The School Facilities shall be leased to the Lessees under the Lease. The Lease will be in effect for a period extending beyond the date of final maturity of all Bonds under the Indenture. The Lease provides that the Authority shall lease the School Facilities to the Lessees for their operation, maintenance and use. The Lease is an obligation of the Lessees, and the Lessees are required to make rental payments to the Authority in amounts equal to the principal of and interest on the Bonds due in each Lease year. In addition, the Lessees will be required to pay reasonable administrative fees to the Authority. The Lease and the rentals payable thereunder are assigned to the Trustee as collateral under the Indenture. The Lessees covenant in the Lease to pay in each lease year (i) the minimum net lease rentals due under the Lease, (ii) additional sums, if any, payable for the administration expenses of the Authority, (iii) taxes, if any, levied or assessed against the School Facilities, and (iv) all operating expenses of the School Facilities including charges for all utilities and all water and sewer fees and other lienable items. The Lessees covenant in the Lease that the rentals payable under the Lease shall continue to be payable at the times and in the amounts therein provided, without suspension or abatement, notwithstanding partial or total damage, injury or destruction of the School Facilities. The Lessees covenant in the Lease that, in addition to the payment of the rentals under the Lease, they will maintain insurance, at their sole cost and expense, on the School Facilities against loss or damage by fire and other risks and casualties, and the proceeds of such insurance shall be deposited with the Joint Operating Committee, subject to the terms of the Indenture. Bond Fund CERTAIN PROVISIONS OF THE INDENTURE All rentals paid by the Lessees pursuant to the Lease shall be paid over to the Trustee and the Trustee shall deposit the same in the Bond Fund. The Trustee shall transfer from the Bond Fund, without direction from the Authority, on the dates provided in the Indenture, (a) amounts which will be equal to the interest and principal then becoming due on all Bonds, and (b) amounts sufficient to pay the annual sinking fund payments required under the Indenture. The amounts so transferred in accordance with clause (b) shall be held in the Bond Fund in a special account and shall be applied to the mandatory redemption and retirement of the Bonds as provided in the Indenture. Rebatable Arbitrage The Authority will pay, or cause to be paid, all rebatable arbitrage, in respect of Bonds issued under the Indenture, to the United States of America, in accordance with Section 148(f) of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder. Investment of Funds Subject to the provisions of the Indenture, monies held in the various funds under the Indenture may be retained uninvested as trust funds, or may be wholly or partially deposited and redeposited in interest-bearing accounts in the banking department of the Trustee or other authorized depositories, or may be invested and reinvested by the Trustee in direct obligations of the United States of America or the Commonwealth of Pennsylvania or obligations of agencies of the United States or of the Commonwealth which are guaranteed, respectively, by the United States or the Commonwealth, or direct obligations of any political subdivision of the Commonwealth, or repurchase agreements for any of the above so long as the investment securities which are the subject thereof are delivered to the Trustee, all as provided in the Indenture. 9

16 Additional Bonds The Authority may issue additional series of bonds from time to time under and subject to the terms of the Indenture for the purpose of constructing capital additions to the School Facilities, completing construction, reimbursing expenditures for the School Facilities, making certain capital contributions or refunding part or all of any series of bonds outstanding. Certain Additional Covenants of the Authority Property Insurance The Authority shall cause the Lessees to insure the School Facilities by one or more responsible insurance companies against such risks and in such amounts as are usual with respect to similar properties. Financial Reporting- The Authority shall employ an independent Certified Public Accountant to perform the accounting and auditing functions and duties required by the Act and the Indenture. Ownership of the School Facilities, The Authority will not, nor will it permit the Lessees to, sell, pledge or otherwise dispose of or encumber the School Facilities, or any part thereof, except in compliance with the provisions of the Indenture. Use and Maintenance The Authority will cause the Lessees to provide for the continuous use of the School Facilities, and the performance of all necessary maintenance and repairs thereto. Arbitrage The Authority, the Trustee and the Lessees covenant that the proceeds of the Bonds will not be used in a manner which would cause the obligations to be arbitrage bonds within the meaning of Sections 103(b) (2) and 148 of the Internal Revenue Code of 1986, as amended. Defaults and Remedies The Act, which governs the Authority, provides remedies to the bondholders in the event of default or failure on the part of the Authority to fulfill its covenants. An Event of Default, as defined in the Indenture, includes failure to pay interest, principal or redemption price when due, or failure of the Authority to fulfill any other covenant in the Bonds of the Indenture within 30 days after receipt of notice from the Trustee. Under the Indenture, in the event of any default as therein defined, the Trustee may, and upon written request of the holders of at least 25% in principal amount of the Bonds then outstanding under the Indenture, accompanied by indemnity as provided in the Indenture, shall accelerate payment of the Bonds and enforce for the equal benefit of the holders of all the Bonds outstanding under the Indenture all rights provided under the Indenture and the Act, including the right to require the Authority to enforce the Lease. For a more complete statement of rights and remedies of the bondholders and of the limitations thereon reference is made to the Indenture and the Act. Amendments and Modifications of Indenture The Authority and the Trustee may enter into supplemental indentures in connection with the issuance of additional bonds (see "Additional Bonds') and make technical changes in the terms of and procedures established under the Indenture without the consent of bondholders. All other supplemental indentures require the consent and approval of the holders of not less than 51% in principal amount of all bonds then outstanding. 10

17 TAX EXEMPTION In the opinion of Kegel Kelin Almy & Lord LLP, Lancaster, Pennsylvania, Bond Counsel, interest on the Bonds (a) is excludible from the gross income of the registered owners thereof for federal income tax purposes and (b) is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, such interest is taken into account in determining "adjusted current earnings of corporations (as defined for federal income tax purposes) for the purpose of computing the alternative minimum tax imposed on such corporations. The opinion set forth in clause (a) above is subject to the condition that the Issuer comply with all requirements of the Internal Revenue Code of 1986, as amended, (the "Code") and any regulations thereunder, now or hereafter enacted, that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be (or continue to be) excludible from gross income for federal income tax purposes. Failure to comply with certain of such requirements could cause the interest on the Bonds to be included in the gross income of the registered owners thereof retroactive to the date of issuance of the Bonds. The Issuer has covenanted to comply with all such requirements. Except for the discussion of original issue discount below, Bond Counsel expresses no opinion regarding other federal tax consequences arising with respect to the Bonds. Bond Counsel is of the opinion, based on existing law, that the original issue discount in the selling price of the Bonds, if any, to the extent properly allocable to each holder of such Bonds, is excluded from gross income for federal income tax purposes with respect to such holder. The original issue discount is the excess of the stated redemption price at maturity of such Bonds over the initial offering price to the public, excluding underwriters and other intermediaries, at which price a substantial amount of such Bonds were sold. Original issue discount on tax-exempt bonds accrues on a compound basis. The amount of original issue discount that accrues to holders of such Bonds who acquire the Bonds in this offering during any accrual period generally equals (i) the issue price of such Bonds plus the amount of original issue discount accrued in all prior accrual periods, multiplied by (ii) the yield to maturity of such Bonds (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period), less (iii) any interest payable on such Bonds during such accrual period. The amount of original issue discount so accrued in a particular accrual period will be considered to be received ratably on each day of the accrual period, will be excluded from gross income for federal income tax purposes, and will increase the holder s tax basis in such Bonds. Any gain realized by a holder from a sale, exchange, payment or redemption of a Bond would be treated as gain from the sale or exchange of such Bond. Prospective purchasers of the Bonds should be aware that (i) Section 265 of the Code denies a deduction for interest on indebtedness incurred or continued to purchase or carry the Bonds or, in the case of a financial institution, that portion of a holder's interest expense allocated to interest on the Bonds, except with respect to certain financial institutions (within the meaning of Section 265 (b)(5) of the Code), (ii) with respect to insurance companies subject to the tax imposed by Section 831 of the Code, for taxable years beginning after December 31, 1986, Section 832 (b)(5)(b)(i) reduces the deduction for loss reserves by 15 percent of the sum of certain items, including interest on the Bonds, (iii) for taxable years beginning after December 31, 1986, interest on the Bonds earned by certain foreign corporations doing business in the United States could be subject to a branch profits tax imposed by Section 884 of the Code, (iv) passive investment income including interest on the Bonds, may be subject to federal income taxation under Section 1375 of the Code for Subchapter S corporations that have Subchapter C earnings and profits at the close of the taxable year if greater than 25% of the gross receipts of such Subchapter S corporation is passive investment income and (v) Section 86 of the Code requires recipients of certain Social Security and certain Railroad Retirement benefits to take into account in determining gross income, receipts or accruals of interest on the Bonds. In the opinion of Bond Counsel, under the existing statutes, regulations and decisions, the interest on the Bonds is exempt from taxation for state and local purposes within the Commonwealth of Pennsylvania. Such exemption, however, does not extend to profits, gains or income derived from the sale, exchange or other disposition of the Bonds, nor to gift, estate, succession or inheritance taxes or any other taxes not levied or assessed directly on the interest on the Bonds. Under the laws of the Commonwealth profits, gains, or income derived from the sale, exchange, or other disposition of certain government obligations, including the Bonds, may be subject to state and local taxation within the Commonwealth of Pennsylvania. Pennsylvania Act 68 of 1993 enacted a statutory provision allowing taxation of such profits, gains or income; although the statute is unclear as to its applicabilty to obligations of political subdivisions, the Pennsylvania Department of Revenue interprets the statute as applicable to obligations of political subdivisions. The Bonds are "qualified tax-exempt obligations" within the meaning of Section 265(b)(3)(B) of the Code, and, in the case of certain financial institutions (within the meaning of Section 265(b)(5) of the Code), a deduction is allowed for 80 percent of that portion of such financial institutions' interest expense allocable to interest on the Bonds. 11

18 The issuer of the Bonds will issue its certificate to the effect that on the basis of the facts, estimates and circumstances in existence on the date of delivery of the Bonds, it is not expected that proceeds of the Bonds will be used in a manner that would cause the Bonds to be "arbitrage bonds" under Section 103 (b)(2) and Section 148 of the Internal Revenue Code of 1986, as amended, or as contemplated by the United States Treasury regulations relating to "arbitrage bonds". Changes in Law From time to time, there are Presidential proposals, proposals of various federal committees, and legislative proposals in the Congress and in the states that, if enacted, could alter or amend the federal and state tax matters referred to herein or adversely affect the marketability or market value of the Bonds or otherwise prevent holders of the Bonds from realizing the full benefit of the tax exemption of interest on the Bonds. Further, such proposals may impact the marketability or market value of the Bonds simply by being proposed. It cannot be predicted whether or in what form any such proposal might be enacted or whether if enacted it would apply to Bonds issued prior to enactment. In addition, regulatory actions are from time to time announced or proposed and litigation is threatened or commenced which, if implemented or concluded in a particular manner, could adversely affect the market value, marketability or tax status of the Bonds. It cannot be predicted whether any such regulatory action will be implemented, how any particular litigation or judicial action will be resolved, or whether the Bonds would be impacted thereby. Purchasers of the Bonds should consult their tax advisors regarding any pending or proposed legislation, regulatory initiatives or litigation. The disclosures and opinions expressed herein are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of issuance and delivery of the Bonds, and no opinion is expressed as of any date subsequent thereto or with respect to any proposed or pending legislation, regulatory initiatives or litigation. CONTINUING DISCLOSURE UNDERTAKING Section 1. Undertaking to file current information with MSRB. The Authority agrees, in accordance with the Rule, to provide or cause to be provided, to the Municipal Securities Rulemaking Board ("MSRB") as designated by the Commission in accordance with the Rule, the following annual financial information and operating data commencing with the fiscal year ended June 30, 2013: a. A copy of its, each School District's and the LCCTC Board's audited financial statements, prepared in accordance with the guidelines adopted by the Governmental Accounting Standard Board and the American Institute of Certified Public Accountant's Audit Guide, Audits of State and Local Government, containing the: (i) (ii) Combined balance sheet of all fund types and account groups; Combined statement of revenues, expenditures and changes in fund balances - all governmental fund types and expendable trust funds. b. An update of the financial operating data provided herein. Section 2. Obligated Persons. Under the Rule, each of the School Districts and the LCCTC Board are obligated persons and as such are required to provide the annual financial information listed above. In the Lease, the School Districts and the LCCTC Board have covenanted to provide such information to the Authority within 160 days after the end of each fiscal year, commencing with the fiscal year ending June 30, The Authority agrees that in accordance with Section 1 above, it will then provide all such information to the MSRB, to the Trustee of the Bonds, and to the Bond insurer. Section 3. Modification of types of information and format of information permitted. The Authority reserves the right to modify from time to time the specific types of information provided or the format of the presentation of such information, to the extent appropriate in the judgment of bond counsel. Any such modification will be done in a manner consistent with the Rule, and will not substantially impair the interest of the holders of the Bonds. 12

19 Section 4. Time period within which annual information must be filed. The annual information and operating data described above in Section 1 must be provided within 180 days after the end of each fiscal year, commencing with the fiscal year ending June 30, Such information shall be made available, in addition to the MSRB, to the Trustee for the Bonds and to each holder of Bonds who makes request for such information. Section 5. Notice of failure to comply with annual information updates. The Authority agrees to provide or cause to be provided, in a timely manner, to the Trustee for the Bonds, and to the MSRB, notice of a failure by the Authority to provide the annual financial information described in Section 1 above on or prior to the date set forth in Section 4 above. Section 6. Event disclosure. The Authority agrees to provide or cause to be provided, in a timely manner, to the MSRB, to the Trustee and to the Bond insurer notice of the occurrence of any of the following events with respect to the Bonds, if in the judgment of the Authority, such event is material: a. Principal and interest payment delinquencies; b. Non-payment related defaults; c. Unscheduled draws on debt service reserves reflecting financial difficulties; d. Unscheduled draws on credit enhancements reflecting financial difficulties; e. Substitution of credit or liquidity providers, or their failure to perform; f. Adverse tax opinions or events affecting the tax-exempt status of the Bonds; g. Modifications to rights of holders of the Bonds; h. Bond calls; i. Defeasances; j. Release, substitution, or sale of property securing repayment of the Bonds; k. Rating changes; and l. Bankruptcy, insolvency, receivership or similar event of the Authority; m. Consummation of merger, consolidation or acquisition involving the Authority or sale of all or substantially all of the assets of the Authority; and n. Appointment of a successor or additional trustee or the change of name of a trustee, if material. The Authority may from time to time choose to provide notice of the occurrence of certain other events, in addition to those listed above, if, in the judgment of the Authority, such other event is material with respect to the Bonds, but the Authority does not commit to provide any such notice of the occurrence of any material event except those events listed above. Section 7. Termination of reporting obligation. The Authority's obligations under this Agreement shall terminate upon the redemption or payment in full of all of the Bonds. Section 8. Enforcement. The Authority agrees that its undertakings pursuant to this Agreement are intended to be for the benefit of the holders of the Bonds (including beneficial owners thereof) and shall be enforceable by the holders of the Bonds or the Trustee for the Bonds on behalf of such holders; provided that the holders of the Bonds, or in lieu thereof, the Trustee's right to enforce the provisions of this undertaking shall be limited to a right to obtain specific enforcement of the Authority's obligations hereunder, and any failure by the Authority to comply with the provisions of this undertaking shall not be an event of default, with respect to the Bonds. 13

20 Section 9. Amendment; waiver. Notwithstanding any other provision of this Agreement, the Authority may amend this Agreement, and any provision of this Agreement may be waived, if such amendment or waiver is supported by an opinion of bond counsel, to the effect that such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule. Any filing with the MSRB may be made solely by transmitting such filing to the MSRB through its Electronic Municipal Market Access (EMMA) system ( During the past five years the Authority has complied with all prior written undertakings under the Rule to provide timely ongoing disclosure of annual financial information and notice of material events affecting its securities. During the past five years the following School Districts have complied with all prior written undertakings under the Rule to provide timely ongoing disclosure of annual financial information and notice of material events affecting its securities: Cocalico School District, Columbia Borough School District, Conestoga Valley School District, Donegal School District, Eastern Lancaster County School District, Ephrata Area School District, Hempfield School District, Lancaster School District, Manheim Township School District, Penn Manor School District and Pequea Valley School District. Elizabethtown Area School District and Warwick School District were late with filings for year ending June 30, 2009 but have since been in compliance. Lampeter-Strasburg School District was late with filings for year ending June 30, 2010 but has since been in compliance. Manheim Central School District was late with filings for year ending June 30, 2011 but is currently in compliance. Solanco School District has been late with its filings for each of the years ending June 30, 2009, 2010 and 2011 but is currently in compliance. All School Districts have procedures in place to ensure prompt filings in the future. Underwriting MISCELLANEOUS RBC Capital Markets, LLC (the Underwriter ) has agreed, subject to certain conditions, to purchase the Bonds from the Authority at an aggregate price of $9,818, The Underwriter's obligations are subject to certain conditions precedent; however, the Underwriter will be obligated to purchase all Bonds if any Bonds are purchased. The Bonds may be offered and sold to certain dealers (including dealers depositing Bonds into investment trusts) at prices lower than such public offering prices, and such public offering prices may be changed, from time to time, by the Underwriter. No Litigation As of the date of this Official Statement, there is no litigation, of any nature, pending or threatened against the Authority or the Lessees to restrain or enjoin the issuance, sale, execution or delivery of the Bonds. Legal Opinion The issuance and delivery of the Bonds is subject to the unqualified approving legal opinion of Kegel, Kelin Almy & Lord LLP, Lancaster, Pennsylvania, Bond Counsel, and to the delivery at settlement of a certificate that there is no litigation pending affecting the validity of the issue. Certain legal matters will be passed upon by Kegel, Kelin Almy & Lord LLP, Lancaster, Pennsylvania, Solicitor for the Authority and the Lancaster County Career & Technology Center. 14

21 Rating Standard & Poor s Corp. ( S&P ) is expected to assign their municipal Bond rating to this issue of Bonds with the understanding that upon delivery of the Bonds, a municipal Bond Insurance policy insuring the payment when due of the principal of and interest on the Bonds will be issued by Build America Mutual Assurance Company. Currently, Build America Mutual Assurance Company financial strength is rated AA (Stable Outlook) by S&P. Standard & Poor s Corp. has assigned the Issuer an underlying rating of A (Stable Outlook). The above ratings are not recommendations to buy, sell or hold the Bonds, and such ratings may be subject to revision or withdrawal at any time by the rating agencies. Any downward revision or withdrawal of any of the above ratings may have an adverse effect on the market price of the Bonds. Bond Insurance Risk Factors In the event of default of the payment of principal or interest with respect to the Bonds when all or some becomes due, any owner of the Bonds shall have a claim under the applicable Bond Insurance Policy (the Policy) for such payments. However, in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption or acceleration resulting from default or otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund payment, the payments are to be made in such amounts and at such times as such payments would have been due had there not been any such acceleration. The Policy does not insure against redemption premium, if any. The payment of principal and interest in connection with mandatory or optional prepayment of the Bonds by the Authority which is recovered by the Authority from the bond owner as a voidable preference under applicable bankruptcy law is covered by the insurance policy, however, such payments will be made by the Insurer at such time and in such amounts as would have been due absent such prepayment by the Authority unless the Bond Insurer chooses to pay such amounts at an earlier date. Under most circumstances, default of payment of principal and interest does not obligate acceleration of the obligations of the Bond Insurer without appropriate consent. The Bond Insurer may direct and must consent to any remedies that the Trustee exercises and the Bond Insurer s consent may be required in connection with amendments to the applicable Agreements or Indenture. In the event the Bond Insurer is unable to make payment of principal and interest as such payments become due under the Policy, the Bonds are payable solely from the moneys received by the Trustee pursuant to the applicable Agreements. In the event the Bond Insurer becomes obligated to make payments with respect to the Bonds, no assurance is given that such event will not adversely affect the market price of the Bonds or the marketability (liquidity) for the Bonds. The long-term ratings on the Bonds are dependent in part on the financial strength of the Bond Insurer and its claim paying ability. The Bond Insurer s financial strength and claims paying ability are predicated upon a number of factors which could change over time. No assurance is given that the long-term ratings of the Bond Insurer and of the ratings on the Bonds insured by the Bond Insurer will not be subject to downgrade and such event could adversely affect the market price of the Bonds or the marketability (liquidity) for the Bonds. See description under Ratings above. The obligations of the Bond Insurer are general obligations of the Bond Insurer and in an event of default by the Bond Insurer, the remedies available to the Trustee may be limited by applicable bankruptcy law or other similar laws related to insolvency. Neither the Authority or Underwriter have made independent investigation into the claims paying ability of the Bond Insurer and no assurance or representation regarding the financial strength or projected financial strength of the Bond Insurer is given. 15

22 Other All references to the provisions of the Act, the Bonds and the Resolution set forth in this Official Statement are made subject to all the detailed provisions thereof, to which reference is hereby made for further information, and this Official Statement does not purport to set forth complete statements of any or all such provisions. All information, estimates and assumptions herein have been obtained from officials of the Authority, other governmental bodies, trade and statistical services, and other sources which we believe to be reliable; but no representations whatsoever are made that such estimates or assumptions are correct or will be realized. So far as any statements herein involve matters of opinion, whether or not expressly so stated, they are intended as such and not representations of fact. The Authority has authorized the distribution of this Official Statement. LANCASTER COUNTY CAREER & TECHNOLOGY CENTER AUTHORITY Lancaster County, Pennsylvania By: /s/ M. James Smith Chairman 16

23 APPENDIX A Summaries of Financial Factors of The Lancaster County Career & Technology Center and The School Districts

24 [ THIS PAGE INTENTIONALLY LEFT BLANK ]

25 FINANCIAL REVIEW The following Exhibit is a summary only and is not intended to be a complete report. For more complete information, the individual financial statements and the Budget of the Lancaster County Career & Technology Center Board and its School Districts should be reviewed at their respective Business Offices. Accounting Method The Lancaster County Career & Technology Center Board and the School Districts keep their books and prepare their financial reports according to a modified accrual basis. Major accrual items are payroll, payroll taxes and pension fund contributions payable, and revenues receivable from other governmental units. The financial statements are audited annually by a firm of independent certified public accountants, as required by State law. Budgeting Process in School Districts under the Taxpayer Relief Act In General. School districts budget and expend funds according to procedures mandated by the Pennsylvania Department of Education. An annual operating budget is prepared by school district administrative officials on a uniform form furnished by such Department and submitted to the board of school directors for approval prior to the beginning of the fiscal year on July 1. Procedures for Adoption of the Annual Budget. Under the Taxpayer Relief Act, all school districts of the first class A, second class, third class and fourth class (except as described below) must adopt a preliminary budget proposal (which must include estimated revenues and expenditures and proposed tax rates) no later than 90 days prior to the date of the election immediately preceding the fiscal year. The preliminary budget proposal must be printed and made available for public inspection at least 20 days prior to its adoption; the board of school directors may hold a public hearing on the budget; and the board must give at least 10 days public notice of its intent to adopt the final budget. If the adopted preliminary budget includes an increase in the rate of any tax levy, the preliminary budget must be submitted to the Pennsylvania Department of Education (PDE) no later than 85 days prior to the date of the election immediately preceding the fiscal year. PDE is to compare the proposed percentage increase in the rate of any tax with the school district s Index (see The Taxpayer Relief Act herein) and within 10 days, but not later than 75 days prior to the upcoming election, inform the school district whether the proposed percentage increase is less than or equal to the Index. If PDE determines that a proposed tax increase will exceed the Index, the school district must reduce the proposed tax increase, seek voter approval for the tax increase at the upcoming election, or seek approval to utilize one of the referendum exceptions authorized under The Taxpayer Relief Act. With respect to the utilization of any of the Taxpayer Relief Act referendum exceptions for which PDE approval is required (see The Taxpayer Relief Act herein), the school district must publish notice of its intent to seek PDE approval not less than one week before submitting its request for approval to PDE and, if PDE determines to schedule a public hearing on the request, a notice of the date, time and place of such hearing. PDE is required by the Taxpayer Relief Act to rule on the school district s request and inform the school district of its decision no later than 55 days prior to the upcoming election so that, if PDE denies the school district s request, the school district may submit a referendum question to the local election officials at least 50 days before the upcoming election, if it so chooses. To use any of the referendum exceptions for which court approval is required under the Taxpayer Relief Act, the school district must petition the court of common pleas no later than 75 days prior to the upcoming election, after giving one week s public notice of the intent to file such petition. The court may schedule a hearing on the petition, and the school district must prove by clear and convincing evidence that it qualifies for the exception sought. The Taxpayer Relief Act requires that the court rule on the petition and inform the school district of its decision no later than 55 days prior to the upcoming election. Such Act provides that the court in approving the petition shall determine the dollar amount for which the exception is granted, the tax rate increase required to fund the exception and the appropriate duration of the tax increase. If the court denies the school district s petition, such Act permits the school district to submit a referendum question to the local election officials at least 50 days before the upcoming election, if it so chooses. A-1

26 If a school district seeks voter approval to increase taxes at a rate higher than the applicable Index, whether or not it first seeks approval to utilize one of the referendum exceptions available under the Taxpayer Relief Act, and the referendum question is not approved by a majority of the voters voting on the question, the board of school directors may not approve an increase in the tax rate greater than the applicable Index. Simplified Procedures in Certain Cases. The above budgetary procedures will not apply to a school district if the board of school directors adopts a resolution no later than 110 days prior to the election immediately preceding the upcoming fiscal year declaring that it will not increase any tax at a rate that exceeds the Index and that a tax increase at or below the rate of the Index will be sufficient to balance its budget. In that case, the Taxpayer Relief Act requires only that the proposed annual budget be prepared at least 30 days, and made available for public inspection at least 20 days, prior to its adoption, and that at least ten (10) days public notice be given of the board s intent to adopt the annual budget. No referendum exceptions are available to a school district adopting such a resolution. A-2

27 The Lancaster County Career & Technology Center Comparative Statement of General Fund Revenues and Expenditures for Fiscal Years Ending June 30 Year Ended June 30, Estimated 2013 Budget 2014 REVENUES Local Sources $ 16,543,140 $ 17,163,217 $ 15,856,669 $ 16,102,559 $ 20,383,760 State Sources 3,245,248 3,248,539 3,019,945 2,954,293 2,629,956 Federal Sources 6,985,170 6,320,028 4,705,136 3,568,167 1,325,713 TOTAL REVENUES 26,773,558 26,731,784 23,581,750 22,625,019 24,339,429 EXPENDITURES Instruction 16,965,188 16,311,687 14,457,598 13,136,187 14,503,938 Support Services 8,209,665 8,522,307 7,824,688 8,069,294 8,475,549 Operation and Maintenance of Plant Svcs Operation of Non-instructional Svcs 41,599 24,999 28,378 33,169 33,343 Capital Outlay ,327,074 1,328,599 Debt Service 334, ,446 0 TOTAL EXPENDITURES 25,551,218 25,187,439 22,310,664 22,565,724 24,341,429 OTHER FINANCING SOURCES (USES) Interfund Transfers (1,073,172) (1,668,940) (1,462,518) Sale/Compensation for Capital Assets 79,415 16,710 13,375 4,807 2,000 Debt Proceeds 0 57,465 0 TOTAL OTHER FINANCING SOURCES (USES) (993,757) (1,594,765) (1,449,143) 4,807 2,000 Net Change in Fund Balances 228,583 (50,420) (178,057) 64,102 0 BEGINNING FUND BALANCE 635, , , , ,792 Inventory Adjustment (13,894) 24,163 (14,172) 0 0 FUND BALANCE JUNE 30 $ 850,176 $ 823,919 $ 631,690 $ 695,792 $ 695,792 Source: The Lancaster County Career & Technology Center. Reflects compensated absences and open encumbrances at June 30 only. LCCTC does not carry a fund balance in the same was as school districts. All unspent funds are returned to the school districts at the end of each school year. Full audited financial statement of the District for can be viewed at: Lancaster County Career and Technology Center: A-3

28 COCALICO SCHOOL DISTRICT Comparative Statement of General Fund Financial Condition for Fiscal Years Ending June Audited Audited Audited Estimated Budgeted REVENUES: Local Sources $32,151,448 $32,806,486 $33,753,535 $33,873,337 $33,892,386 State Sources 12,826,427 12,613,229 13,256,075 13,499,273 14,035,305 Federal Sources 1,876,361 2,076, , , ,020 Refund from Prior Year's Expenditures Other 110, , Total Funds Available $46,964,802 $47,496,459 $47,691,512 47,872,234 $48,473,711 EXPENDITURES: Instruction $24,928,303 $24,966,207 $25,426,371 $26,588,829 $31,010,129 Support Services 11,504,882 11,871,540 11,708,003 12,465,218 14,756,538 Non-Instructional Services 270, , , , ,925 Facilities Refund of Prior Year Revenues Other 8,289,047 6,978,422 6,212,890 5,195,961 5,242,907 Total Expenditures $44,993,405 $44,628,899 $44,153,749 $45,096,604 $51,958,499 EXCESS OF REVENUE OVER EXPENDITURES: $ 1,971,397 $ 2,867,560 $ 3,537,763 $2,775,630 ($3,484,788) BEGINNING GENERAL FUND BALANCE AS OF JULY 1 $ 5,652,688 $ 7,633,325 $10,555,566 $14,084,630 $16,860,260 Prior Year Adjustment Increase (decrease) in Reserve for Inventory 9, (8,699) 0 0 Change in Accounting Principle 0 54, CLOSING BALANCE AS OF JUNE 30: $7,633,325 $10,555,566 $14,084,630 $16,860,260 $13,375,472 Full audited financial statement of the District for can be viewed at: Cocalico School District: A-4

29 REVENUE: COLUMBIA BOROUGH SCHOOL DISTRICT Comparative Statement of General Fund Financial Condition for Fiscal Years Ending Fiscal Year Ended June 30, Estimates Budget 2014 Local Sources... $9,922,576 $10,032,883 $9,968,865 $10,028,602 $10,114,264 State Sources... 9,758,304 9,220,045 9,647,891 9,601,320 9,999,670 Federal Sources... 1,784,593 2,030, , , ,000 Other Sources... 2,800 2, TOTAL REVENUE... $21,468,273 $21,285,865 $20,270,206 $20,405,939 $20,763,934 EXPENDITURES: Instruction... 12,473,914 12,247,892 12,366,589 12,543,896 13,163,080 Support Services... 5,784,423 5,538,908 5,201,891 5,132,613 5,476,709 Non-instructional Services , , , , ,922 Facilities, Acquisition & Improvements Other... Debt Service Refund of Prior Year Receipts Fund Transfers... 2,174,816 2,733,289 2,603,663 2,662,788 2,666,038 Budgetary Reserve ,000 TOTAL EXPENDITURES... $20,815,637 $21,007,473 $20,614,283 $20,789,402 $22,296,749 SURPLUS (DEFICIT)OF REVENUES OVER EXPENDITURES , ,392 (344,077) (383,463) (1,532,815) FUND BALANCE, BEGINNING OF YEAR 2,728,829 3,383,035 (1) 3,661,427 3,317,350 3,277,964 FUND BALANCE, END OF YEAR... 3,381,465 3,661,427 3,317,350 3,277,964 1,745,149 Source: School District (1.) Restated Full audited financial statement of the District for can be viewed at: Columbia Borough School District: A-5

30 REVENUE: CONESTOGA VALLEY SCHOOL DISTRICT Comparative Statement of General Fund Financial Condition for Fiscal Years Ending June 30 Fiscal Year Ended June 30, Estimated Budget Local Sources... $39,860,382 $41,836,155 $43,791,643 $43,995,821 $44,033,122 State Sources... 7,994,928 8,329,929 8,943,967 9,381,297 10,252,539 Federal Sources... 2,088,776 2,514,759 1,323,892 2,162,954 2,272,830 Other Sources TOTAL REVENUE... 49,944,086 52,680,843 54,059,502 55,540,072 56,558,491 EXPENDITURES: Instruction... 28,632,123 29,690,023 30,201,900 32,255,421 34,958,671 Support Services... 12,929,672 13,016,542 13,805,449 14,847,942 15,573,024 Non-instructional Services ,319 1,118,423 1,096, ,379 1,098,316 Other Debt Service , , ,403 Refund of Prior Year Receipts ,150 36,626 50, ,000 Fund Transfers... 5,739,704 5,704,332 6,961,222 5,771,838 5,764,673 Budgetary Reserve , ,000 TOTAL EXPENDITURES... 48,456,258 49,534,470 52,101,990 54,140,483 57,858,087 SURPLUS (DEFICIT)OF REVENUES OVER EXPENDITURES... $ 1,487,828 $ 3,146,373 $ 1,957,512 1,399,589-1,299,596 FUND BALANCE, BEGINNING OF YEAR $ 5,492,050 $ 7,039,647 (1) $10,186,020 $12,143,532 $13,543,121 FUND BALANCE, END OF YEAR... $ 6,979,878 $10,186,020 $12,143,532 $13,543,121 $12,243,525 Source: School District (1.) Adjusted for GASB 54 Full audited financial statement of the District for can be viewed at: Conestoga Valley School District: A-6

31 DONEGAL SCHOOL DISTRICT Comparative Statement of General Fund Financial Condition for Fiscal Years Ending June 30 REVENUES Audited Audited Audited Estimated Budgeted Local Sources $ 24,752,544 $25,819,456 $27,144,377 $27,996,133 $28,765,953 State Sources 10,730,803 10,603,648 11,952,930 11,120,008 12,139,441 Federal Sources 1,727,125 2,613,924 1,413,938 1,547,167 1,606,836 Other 3,486 88,676 9, ,725 0 Total Funds Available 37,213,958 39,125,704 40,520,372 40,878,033 42,512,230 EXPENDITURES Instruction 21,202,627 21,754,164 20,898,618 21,721,197 25,066,207 Support Services 9,485,607 9,727,554 9,554,730 9,846,348 11,584,073 Non-Instructional Services 365, , , , ,070 Other/Transfers 5,159,334 6,675,492 8,515,039 8,005,183 6,489,028 Debt Service 69,708 69,707 17, Capital Outlay Refund of Prior Year Expenditures 1,356 1, Budgetary Reserve Total Expenditures 36,284,037 38,812,066 39,544,428 40,173,466 43,801,378 Excess of Revenue Over Expenditures 929, , , ,567 (1,289,148) Beginning General Fund Balance, July 1 6,041,806 6,971,727 7,316,243 8,292,187 8,996,754 Prior Period Adjustment Change in Accounting Principle (Note 19) 0 30, Closing Balance as of June 30 $ 6,971,727 $ 7,316,241 $ 8,292,187 8,996,754 7,707,606 Full audited financial statement of the District for can be viewed at: Donegal School District: A-7

32 EASTERN LANCASTER COUNTY SCHOOL DISTRICT Comparative Statement of General Fund Financial Condition for Fiscal Years Ending REVENUE: Fiscal Year Ended June 30, Estimated Budget Local Sources... $ 29,588,691 $ 31,121,467 32,311,581 34,600,000 33,993,218 State Sources... 9,511,457 9,282,651 9,702,756 9,867,500 10,446,927 Federal Sources... 2,765,464 3,026,944 1,836,454 1,856,255 1,580,950 Other Sources... 22,476 18,759 3,797 2,495 0 TOTAL REVENUE... 41,888,088 43,449,821 43,854,588 46,326,250 46,021,095 EXPENDITURES: Instruction... 22,959,873 24,186,065 23,292,573 24,288,867 27,175,565 Support Services... 14,326,608 14,584,281 14,302,080 14,421,792 14,975,201 Non-instructional Services ,557 1,002, ,658 1,008,409 1,045,016 Other... Capital Outlay.. 41, , ,189 1,712,683 0 Debt Service Refund of Prior Year Receipts... 1,858 7,867 8,625 2,586 10,000 Fund Transfers... 3,268,666 3,080,427 3,374,153 2,885,467 3,425,590 Budgetary Reserve TOTAL EXPENDITURES... 41,564,223 43,405,929 42,519,278 44,319,804 46,631,372 SURPLUS (DEFICIT)OF REVENUES OVER EXPENDITURES ,865 43,892 1,335,310 2,006,446 (610,277) FUND BALANCE, BEGINNING OF YEAR 5,201,656 5,477,092 5,522,613 6,712,928 8,719,374 Change in Inventory (48,429) 170 (144,995) 0 0 Change in Accounting (1) 0 1, FUND BALANCE, END OF YEAR... 5,477,092 5,522,613 6,712,928 8,719,374 8,109,097 Full audited financial statement of the District for can be viewed at: Eastern Lancaster County School District: A-8

33 REVENUE: ELIZABETHTOWN AREA SCHOOL DISTRICT Comparative Statement of General Fund Financial Condition for Fiscal Years Ending June 30 Fiscal Year Ended June 30, Estimated Budgeted Local Sources... $30,379,953 $32,178,896 $32,530,832 $33,513,500 $33,526,533 State Sources... 13,365,284 13,379,854 14,241,743 14,611,100 15,767,789 Federal Sources... 1,802,635 2,311, , , ,081 Other Sources ,680 1,025,320 1,010 TOTAL REVENUE... $45,547,872 $47,870,601 $47,381,744 $49,691,158 $49,883,412 EXPENDITURES: Instruction... 27,103,267 28,605,038 28,231,066 29,257,223 31,555,639 Support Services... 12,665,311 13,254,905 13,296,475 13,741,465 14,823,451 Non-instructional Services , , , , ,701 Facilities, Acquisition & Improvements Other Debt Service Refund of Prior Year Receipts ,717 4,380 5,000 Fund Transfers... 4,863,231 5,864,957 3,609,650 7,211,329 3,876,876 Budgetary Reserve TOTAL EXPENDITURES... $44,796,910 $48,603,519 $45,987,209 $51,116,776 $51,252,667 SURPLUS (DEFICIT)OF REVENUES OVER EXPENDITURES ,962 (732,918) 1,394,535 (1,425,618) (1,369,255) INVENTORY ADJUSTMENT (30,856) 47,647 5,046 (37,480) FUND BALANCE, BEGINNING OF YEAR $ 4,769,532 $ 5,365,157 (1) $ 4,949,886 $ 6,349,467 $ 4,923,850 FUND BALANCE, END OF YEAR... $ 5,489,638 $ 4,949,886 $ 6,349,467 $ 4,923,850 $3,498,232 Source: School District (1.) Restated Full audited financial statement of the District for can be viewed at: Elizabethtown Area School District: A-9

34 EPHRATA AREA SCHOOL DISTRICT Comparative Statement of General Fund Financial Condition for Fiscal Years Ending REVENUE: Audited Audited Fiscal Year Ended June 30, Audited Estimated Budgeted Local Sources... $38,289,946 $38,848,545 $39,255,489 $40,341,130 $41,073,851 State Sources... 14,547,444 14,226,750 14,968,623 15,261,420 16,016,391 Federal Sources... 2,012,808 2,628, , , ,286 Other Sources ,533 16,117 16,492 0 TOTAL REVENUE... $54,850,698 $55,706,331 $55,015,082 $56,369,888 $56,870,528 EXPENDITURES: Instruction... $27,168,357 $28,000,668 $29,373,733 $28,750,654 $32,009,441 Support Services... 16,234,555 16,581,846 16,220,159 18,284,309 17,686,251 Non-instructional Services ,512 1,123,763 1,232,461 1,194,129 1,261,532 Facilities, Acquisition & Improvements Other Debt Service... 6,754,270 6,805,351 6,437,850 6,169,817 6,623,001 Refund of Prior Year Receipts... 44,987 5,706 72,831 31,126 0 Fund Transfers... 3,860,017 71,684 1,305,223 1,489,756 0 Budgetary Reserve TOTAL EXPENDITURES... $54,850,698 $52,589,018 $54,642,257 $55,919,791 $57,580,225 SURPLUS (DEFICIT)OF REVENUES OVER EXPENDITURES ,117, , ,097 (709,697) FUND BALANCE, BEGINNING OF YEAR $11,989,754 $12,035,710 (1) $15,153,023 $15,525,848 $15,975,945 INCREASE (DECREASE) IN RESERVE FOR INVENTORY FUND BALANCE, END OF YEAR... $11,989,754 $15,153,023 $15,525,848 $15,975,945 $15,266,248 (1.) As Restated Full audited financial statement of the District for can be viewed at: Ephrata Area School District: A-10

35 REVENUE: HEMPFIELD SCHOOL DISTRICT Comparative Statement of General Fund Financial Condition for Fiscal Years Ending June 30 Fiscal Year Ended June 30, Estimated Budget Local Sources... $69,984,516 $72,822,475 $73,444,837 $75,594,605 $77,358,220 State Sources... 22,464,339 22,402,437 23,839,272 24,733,957 26,490,456 Federal Sources... 2,618,604 3,549,173 1,076,182 1,868,806 1,750,000 Other Sources... 1,884 17,475 3,938 2,915 2,000 TOTAL REVENUE... 95,069,343 98,791,560 98,364, ,200, ,600,676 EXPENDITURES: Instruction... 57,901,677 59,454,753 57,493,548 62,938,703 65,424,670 Support Services... 25,364,261 27,227,066 26,245,779 28,251,629 28,587,899 Non-instructional Services ,249,459 1,231,583 1,537,361 1,593,730 Facilities, Acquisition & Improvements Other Debt Service Refund of Prior Year Receipts ,291 25,030 24,449 0 Fund Transfers... 11,034,448 10,633,366 11,458,993 8,885,369 9,989,821 Budgetary Reserve ,000,000 TOTAL EXPENDITURES... 94,300,406 98,667,935 96,454, ,637, ,596,120 SURPLUS (DEFICIT)OF REVENUES OVER EXPENDITURES , ,625 1,909, ,773 (995,444) FUND BALANCE, BEGINNING OF YEAR $ 7,539,653 $ 8,308,590 $ 8,439,902 10,349,198 10,254,198 CHANGE IN ACCOUNTING PRINCIPLE (NOTE 20) 0 7, FUND BALANCE, END OF YEAR... $ 8,308,590 $ 8,439,902 $10,349,198 $10,911,971 $ 9,258,754 Source: School District Full audited financial statement of the District for can be viewed at: Hempfield School District: A-11

36 LAMPETER-STRASBURG SCHOOL DISTRICT Comparative Statement of General Fund Financial Condition for Fiscal Years Ending June Audited Audited Audited Estimated Budgeted REVENUES Local Sources $31,744,666 $33,458,641 $34,439,992 34,600,000 35,238,670 State Sources 7,984,386 7,990,701 8,344,759 9,069,110 9,498,010 Federal Sources 995,717 1,297, , , ,940 Other Total Funds 40,724,769 42,746,414 43,232,275 44,157,035 45,193,620 Available EXPENDITURES Instruction 23,316,897 24,643,664 24,413,591 24,281,358 26,508,200 Support 11,085,160 11,584,230 11,271,678 10,880,365 12,081,050 Services Non-Instructional 165, , , , ,960 Services Debt Service 0 916,819 1,026,636 1,007,108 1,054,560 Other 6,303,969 4,386,285 4,812,409 6,220,463 5,135,180 Total 40,871,365 42,331,014 42,299,621 43,142,356 45,652,950 Expenditures EXCESS OF REVENUE OVER EXPENDITURES (146,596) 415, ,654 1,014,679 (459,330) BEGINNING GENERAL FUND BALANCE, JULY 1 4,642,230 4,485,604 4,893,477 5,838,022 6,851,483 Change in Inventory/ Prior Period Adjustment (10,030) (7,900) 11,891 (1,218) 0 Change in Accounting Principle CLOSING BALANCE AS OF JUNE 30 $ 4,485,604 $ 4,893,477 $ 5,838,022 $ 6,851,483 $ 6,392,153 Full audited financial statement of the District for can be viewed at: Lampeter-Strasburg School District: A-12

37 SCHOOL DISTRICT OF LANCASTER Comparative Statement of General Fund Financial Condition for Fiscal Years Ending June 30 Audited Audited For the Year Ending June 30, Audited Estimates Budget REVENUES & OTHER FINANCING SOURCES: Revenues Local Sources $ 66,640,805 $ 65,823,318 $ 71,026,274 $ 70,033,113 $ 72,377,455 State Sources 70,549,540 70,351,980 75,299,530 79,691,242 83,694,558 Federal Sources 19,676,786 28,672,132 21,079,366 18,167,790 15,443,655 Other 0 5,247, Total Revenues 156,867, ,095, ,405, ,892, ,515,668 EXPENDITURES & OTHER FINANCING USES: Expenditures Instruction 100,013, ,936, ,686, ,846, ,703,326 Support Services 43,473,576 43,809,989 43,294,644 46,694,938 49,428,223 Non Instructional Services 1,089,062 2,397,220 2,197,210 2,347,797 2,462,627 Debt Service 11,214,141 13,155,152 17,280,692 15,902,604 15,377,677 Other 366, Total Expenditures 156,157, ,546, ,458, ,792, ,971,853 Other Financing Sources (Uses) (1,233,995) 247,348 3,299,645 2,900,000 2,900,000 Revenues & Other Financing Sources Over (Under) Expenditures and Other Financing Uses (523,959) 6,548,718 6,246,032 0 (5,556,185) FUND BALANCE, BEGINNING OF YEAR 7,697,437 7,846,182 (1) 14,394,900 20,640,932 20,640,932 PRIOR PERIOD ADJUSTMENT FUND BALANCE, END OF YEAR $ 7,173,478 $ 14,394,900 $ 20,640,932 $ 20,640,932 $ 15,084,747 Full audited financial statement of the District for can be viewed at: Lancaster School District: A-13

38 MANHEIM CENTRAL SCHOOL DISTRICT Comparative Statement of General Fund Financial Condition for Fiscal Years Ending June Audited Audited Audited Estimates Budget REVENUES Local Sources $28,354,775 $29,345,940 $30,114,054 $30,661,521 $31,133,160 State Sources 11,993,358 11,016,054 11,824,039 11,623,351 11,978,681 Federal Sources 1,584,130 1,430, ,808 1,382, ,339 Other Total Funds $41,932,763 $41,792,966 $42,553,901 $43,667,206 $43,681,180 Available EXPENDITURES Instruction $22,856,795 $23,777,032 $23,267,791 $25,210,776 $25,464,296 Support Services 11,354,692 11,168,500 11,247,342 11,343,686 12,329,130 Non-Instructional Services 781, , ,101 1,093, ,818 Budgetary Reserve ,000 Other 5,699,464 4,622,628 4,632,904 5,816,964 4,729,621 Total Expenditures $40,692,235 $40,539,432 $40,043,138 $43,464,791 $43,734,865 EXCESS OF REVENUE OVER EXPENDITURES 1,240,528 1,253,534 2,510, ,415 (53,685) BEGINNING GENERAL FUND BALANCE, JULY 1 $3,844,283 $4,207,186* $5,459,851 $7,970,614 6,770,614* Change in Inventory/ Prior Period Adjustment 12,328 (866) 0 CLOSING BALANCE AS OF JUNE 30 $ 5,097,139 $5,459,851 $7,970,614 $8,173,029 $6,716,929 *Beginning GF balance in shown as submitted in PDE Any variance from will be likely be transferred to the capital reserve to be applied toward funding of potential building project. Full audited financial statement of the District for can be viewed at: Manheim Central School District: A-14

39 MANHEIM TOWNSHIP SCHOOL DISTRICT Comparative Statement of General Fund Revenues and Expenditures for Fiscal Years Ending June Audited Audited Audited Budgeted** Budgeted REVENUE Local Sources $58,115,208 $59,759,424 $61,149,066 $62,303,124 $63,837,423 State Sources 11,833,768 12,092,540 12,660,932 13,399,509 14,079,607 Federal Sources 1,347,838 1,598, , , ,000 Other Financing Sources 15,295 23,313 1,347,141 14,673 10,000 Total Revenues $71,312,109 $73,473,870 $75,824,964 $76,402,306 $78,608,030 EXPENDITURES Instruction $38,404,045 $39,282,673 $39,545,325 40,454,559 $42,686,608 Support Services 21,820,246 22,438,425 19,719,465 21,315,736 23,231,712 Non-Instruction Services 1,270,020 1,456,988 1,044,516 1,133,540 1,119,895 Capital Outlay 11, ,591 69, Other 10,976,364 10,622,416 12,364,296 13,498,471 12,995,997 Total Expenditures $72,482,651 $74,054,093 $72,743,358 76,402,306 $80,034,212 Excess of Revenue Over(under) Expenditures $(1,170,542) $(580,223) $3,081,606 0 $(1,426,182) Beginning General Fund Balance, July 1 $7,522,309 $6,389,003* $5,808,780 $8,890,386 $10,809,476 Closing Balance as of June 30 $6,351,767 $5,808,780 $8,890,386 $8,890,386 $9,383,294 *As restated. ** While budgeted numbers are reflected, the District has projected an excess of revenue over expenditures of $1,919,090 as reflected in the Budgeted General Fund Balance for July 1, Full audited financial statement of the District for can be viewed at: Manheim Township School District: A-15

40 PENN MANOR SCHOOL DISTRICT Comparative Statement of General Fund Revenues and Expenditures for Fiscal Years 2010 through 2014 REVENUES Audited Audited Audited Estimated Budgeted Local Sources $41,678,281 $43,317,518 $44,526,471 $44,171,940 $45,405,076 State Sources 19,165,999 18,713,497 19,522,639 20,529,756 20,375,635 Federal Sources 2,833,002 3,896, , , ,601 Other 39,055 9,896 20, Total Funds Available $63,716,337 $65,937,664 $65,064,492 $65,655,297 $66,734,312 EXPENDITURES Instruction $36,332,711 $37,962,102 $36,654,245 $39,119,742 $41,708,071 Support Services 16,343,553 16,547,440 15,986,201 17,575,762 18,398,514 Non-Instructional Services 1,016,507 1,049,780 1,065,772 1,037,416 1,082,291 Other 11,394,532 8,283,379 11,010,351 8,397,229 6,159,493 Total Expenditures $65,087,302 $63,842,701 $64,716,620 $66,130,149 $67,348,369 Excess of Revenue Over Expenditures (1,370,965) 2,094, ,872 (474,852) (614,057) Beginning General Fund Balance, July 1 $13,058,699 $11,687,734 $13,782,697 $14,130,569 $13,655,717 Prior Period Adjustment Closing Balance as of June 30 $11,687,734 $13,782,697 $14,130,569 $13,655,717 $13,041,660 (1.) Adjusted for GASB 54 Full audited financial statement of the District for can be viewed at: Penn Manor School District: A-16

41 PEQUEA VALLEY SCHOOL DISTRICT Comparative Statement of General Fund Financial Condition for Fiscal Years Ending REVENUE: Fiscal Year Ended June 30, Budget Budget Local Sources... $20,802,076 $21,441,636 $21,965,130 $22,656,536 $23,022,578 State Sources... 6,063,750 6,014,331 6,204,047 5,393,225 6,658,953 Federal Sources... 2,836,878 2,465,114 1,697,518 1,117,323 1,574,785 TOTAL REVENUE... 29,702,704 29,921,081 29,866,695 29,167,084 31,256,316 EXPENDITURES: Instruction... 14,566,621 14,136,953 14,951,611 14,416,261 16,392,074 Support Services... 8,902,408 9,424,446 10,192,720 9,937,663 10,324,126 Non-instructional Services , , , , ,825 Other... Capital Outlay Debt Service Refund of Prior Year Expenditures... 2,098 5, TOTAL EXPENDITURES... 23,841,828 24,139,914 25,764,966 25,036,004 27,354,025 ESCESS (DEFICIENCY)OF REVENUES OVER EXPENDITURES... 5,860,876 5,781,167 4,101,729 4,131,080 3,902,291 OTHER FINANCING SOURCES(USES) Debt Service Fund Transfer... (3,914,492) (3,961,894) (4,129,591) (4,138,498) (4,146,423) Other Fund Transfers... (117,220) 0 (4,000) 0 0 Proceeds from Sale of Capital Assets... 3,733 15,683 11, Budgetary Reserve (2,541) (400,000) Net Other Financing Sources(Uses) (4,027,979) (3,946,211) (4,122,444) (4,141,039) (4,546,423) NET CHANGES IN FUND BALANCES 1,832,897 1,834,956 (20,715) (9,959) (644,132) FUND BALANCE, BEGINNING OF YEAR 3,895,720 5,728,617 7,591,142 7,573,427 7,563,468 Change in Inventory Change in Accounting (1) 0 65, Prior Period Adjustment 0 (34,601) 0 0 FUND BALANCE, END OF YEAR... $ 5,728,617 $ 7,594,142 $ 7,573,427 $ 7,563,468 $ 6,916,336 Source: School District (1) Adjusted for GASB 54 Full audited financial statement of the District for can be viewed at: Pequea Valley School District: A-17

42 SOLANCO SCHOOL DISTRICT Comparative Statement of General Fund Financial Condition for Fiscal Years Ending June Audited Audited Audited Estimated Budgeted REVENUES: Local Sources $23,756,198 $24,827,528 $26,268,507 $27,215,273 $27,387,154 State Sources 15,409,991 15,242,907 16,129,851 16,843,128 17,269,079 Federal Sources 3,823,625 4,281,215 2,005,945 2,261,683 2,556,319 Other Total Funds Available $42,989,814 $44,351,650 $44,404,303 $46,320,084 $47,212,552 EXPENDITURES: Instruction $25,880,789 $27,091,066 $25,962,949 $28,683,181 $30,442,341 Support Services 12,657,950 12,938,333 12,816,451 13,266,964 14,077,637 Non-Instructional Services 781, , , , ,384 Facilities Debt Service & Other ,000 8,000 Refund of Prior Year s Expenditures 7, ,515 0 Total Expenditures $39,327,465 $40,957,576 $39,650,689 $42,870,455 $45,439,362 EXCESS OF REVENUE OVER EXPENDITURES: 3,662,349 3,394,074 4,753,614 3,449,629 1,773,190 OTHER FINANCING SOURCES/(USES) Proceeds from Sale of Capital assets 1,527 16,925 3,053 5,000 5,000 Insurance Recoveries 1,182 28,557 13, Budgetary Reserves (200,000) (250,000) Operating Transfers Out/In To Other Funds (4,049,169) (3,750,902) (4,846,598) (3,712,975) (3,293,000) Net Other Sources (Uses) (4,046,460) (3,705,420) (4,830,222) (3,907,975) (3,538,000) BEGINNING GENERAL FUND BALANCE AS OF JULY 1 $6,105,457 $5,608,556 $5,354,407 $5,337,721 $4,879,375 Increase (decrease) in Reserve for Inventory (112,790) 41,319 59, Change in Accounting Principle 15, CLOSING BALANCE AS OF JUNE 30: $5,608,556 $5,354,407 $5,337,721 $4,879,375 $3,114,565 Full audited financial statement of the District for can be viewed at: Solanco School District: A-18

43 WARWICK SCHOOL DISTRICT Comparative Statement of General Fund Revenues and Expenditures Condition for Fiscal Years Ending June Audited Audited Audited Estimated Budgeted REVENUES Local Sources $37,399,195 $38,112,821 $39,527,542 $41,114,751 $42,346,800 State Sources 16,188,550 16,273,477 16,887,382 17,471,499 17,926,353 Federal Sources 2,642,938 3,232, , , ,467 Other ,349 Total Funds Available $56,230,683 $57,618,835 $57,310,197 $59,415,658 $60,922,620 EXPENDITURES Instruction $31,617,047 $31,832,290 $31,922,907 $33,101,673 $35,992,731 Support Services 14,380,566 14,197,341 14,197,722 15,422,134 16,329,709 Non-Instructional Services 1,016,860 1,192,387 1,294,616 1,556,840 1,620,345 Facilities 2,467 1,825 5,885 4,385 5,105 Debt Service 126,269 89,303 84,575 94, ,600 Other 0 0 6,712 1,450 Total Expenditures $47,143,209 $47,313,146 $47,512,417 $50,180,487 $54,053,490 Excess of Revenue Over Expenditures $ 9,087,474 $10,305,689 $ 9,797,780 $ 9,235,171 $ 6,869,130 Other Financing Sources (Uses) (9,482,595) (9,747,437) (9,749,086) (9,760,282) (9,768,000) Net Change in Fund Balance 581,169 (395,120) 612,696 (525,111) (2,898,870) Beginning General Fund Balance, July 1 $ 7,615,352 $ 8,196,521 $ 7,801,401 $ 8,414,097 $ 7,888,986 Prior Period Adjustment Closing Balance as of June 30 $ 8,196,521 $ 7,801,401 $ 8,414,097 $ 7,888,986 $ 4,990,116 Full audited financial statement of the District for can be viewed at: Warwick School District: A-19

44 REVENUE FROM STATE SOURCES Pennsylvania school districts receive financial assistance from the Commonwealth in a number of forms, all subject to statutory provisions and annual appropriation by the Pennsylvania General Assembly. A basic instructional subsidy is allocated to all school districts based on (1) the per pupil market value of assessable real property in the school district; (2) the per pupil earned income in the school district; and (3) the school district's tax effort, as compared with the tax effort of other school districts in the State. School districts also receive state aid for special education, pupil transportation, vocational education, and health services, among other things. State law presently provides that the School District will receive reimbursement from the State for a portion of the debt service on the Bonds after said Bonds have received final approval of the Department of Education. State reimbursement is based on the "Reimbursable Percentage" assigned to the Bonds and the School District's Aid Ratio. In future years, this percentage may change as the School District's Aid Ratio changes, or by future legislation. Aid Ratio is a function of the market value per weighted average daily membership of the School District relative to that of the State. A-20

45 APPENDIX B Description of the Lancaster County Career & Technology Center

46 [ THIS PAGE INTENTIONALLY LEFT BLANK ]

47 LANCASTER COUNTY CAREER & TECHNOLOGY CENTER The Lancaster County Career & Technology Center (the LCCTC ) is a Board consisting of sixteen (16) members appointed to service for a term of three years. The LCCTC Joint Operating Committee (the Joint Operating Committee ) shall be composed of one member from each of the School Districts, to be elected by each Board of School Directors (the School Board ), at their annual December meeting and to service for terms of three years each. The terms of each of the members from a Joint Operating Committee shall be staggered. Officers of the Joint Operating Committee are appointed by the members. The members of the Joint Operating Committee, their offices, the School Districts they represent.... Name...Participating School District Timothy Zimmerman... Cocalico Terry Doutrich...Columbia Borough John Smucker...Conestoga Valley Benjamin Kling...Donegal Melissa Readman... Eastern Lancaster County Robert Cronin...Elizabethtown Area Jenny Miller... Ephrata Area Robert Sauders... Hempfield James H. Byrnes...Lampeter-Strasburg Harvey Miller...School District of Lancaster Kim Garner... Manheim Central Thomas Winters... Manheim Township Kirk Schlotzhauer...Penn Manor Charles H. Rohrer... Pequea Valley Steven P. Risk...Solanco Millard Eppig, Jr....Warwick B-1

48 The following State-approved program and related education services exist at the Technical School: Local Title CIP Code State Title Special Part-day Senior Program: Introduction to Health Careers Health/Medical Assisting Services, Other Full-day Programs: Architectural CAD-Design Architectural Drafting and Architectural CAD/CADD Automotive Mechanics Automobile/Automotive Mechanics Technology/Technician Automotive Technology Automobile/Automotive Mechanics Technology/Technician Baking and Pastry Arts Baking and Pastry Arts/Baker/Pastry Chef Cabinet Making & Millwork Cabinetmaking and Millwork Clinical Care Assistant Health/Medical Assisting Services, Other Collision Repair Autobody/Collision and Repair Technology/Technician Commercial Art Commercial and Advertising Art Commercial Construction/Management Carpentry/Carpenter Computer Systems Technology Computer Technology/Computer Systems Technology Cosmetology Cosmetology/Cosmetologist, General Culinary Arts/Chef Institutional Food Workers Dental Assistant Dental Assisting/Assistant Diesel Equipment Technology Medium/Heavy Vehicle and Truck Technology/Technician Digital Design/Print Media Graphic Communications, Other Early Childhood Education Child Care and Support Services Management Electrical Construction Technology Electrical and Power Transmission Installers, Other Electro-Mechanical Engineering Technology Electromechanical Technology/Electromechanical Engineering Technology Environmental Horticulture Applied Horticulture/Horticultural Operations, General Event Planning & Tourism Services Tourism and Travel Services Marketing Operations Management Heavy Equipment Operation and Basic Maintenance Construction/Heavy Equipment/Earthmoving Equipment Operation HVAC/R Heating, Air Conditioning, Ventilation and Refrigeration Maintenance Technology/Technician Large Animal Sciences Veterinary/Animal Health Technology/Technician and Veterinary Assistant Masonry Mason/Masonry Medical Administrative Assistant Health Information/Medical Records Technology/Technician Medical Assistant Medical/Clinical Assistant Nursing Assistant/Home Health Aide Health/Medical Assisting Services, Other Painting, Ceramic Tile & Vinyl Painting/Painter and Wall Coverer Photography and Digital Imaging Commercial Photography Plumbing Plumbing Technology/Plumber Protective Services -Emergency Medical Services Homeland Security, Law Enforcement, Firefighting and Related Protective Services, Other -Fire Protection Fire Science/Fire-fighting -Law Enforcement, Corrections & Security Criminal Justice/Police Science B-2

49 Residential Carpentry Carpentry/Carpenter RV & Outdoor Power Equipment Vehicle Maintenance and Repair Technologies, Other Sheet Metal Technology Sheet Metal Technology/Sheetworking Veterinary Assistant Veterinary/Animal Health Technology/Technician AND Veterinary Assistant Web Design Web Page, Digital/Multimedia and Information Resources Design Welding Technology Welding Technology/Welder Half-day Programs: Construction Cluster Carpentry/Carpenter Mason/Masonry Culinary Cluster Baking and Pastry Arts/Baker/Pastry Chef Institutional Food Workers Health Care Cluster Health/Medical Assisting Services, Other Manufacturing Cluster Industrial Mechanics and Maintenance Technology Sheet Metal Technology/Sheetworking Welding Technology/Welder Transportation Cluster Automobile/Automotive Mechanics Technology/Technician Medium/Heavy Vehicle and Truck Technology/Technician Vehicle Maintenance and Repair Technologies, Other Visual Communications Cluster Commercial Photography Commercial and Advertising Art Graphic Communications, Other Sending Districts High school students apply for admission through their sending high school and receive their diploma from their sending high school. There are a limited number of students accepted into a program to allow for individualized, high-skilled instruction. To be considered for enrollment, students should have their application on file at an LCCTC campus by the end of January. Late applications will be considered only if space is still available in a program. In the months preceding enrollment, students are presented with course information by LCCTC personnel and are invited to visit the career and technology centers during the day or attend open houses with their families in the evening. Students should check with their sending school guidance counselors for the scheduled visitation dates. Students who live in Lancaster County and attend parochial or private schools may also attend an LCCTC campus. Service fee students from outside the Lancaster County area are accepted into the programs if space is available and their school district agrees to pay the necessary costs of attendance. Home schooled students must contact the superintendent's office of the school district in which they reside to obtain enrollment procedures. Tuition-free public education is provided to high school students through the tax support of citizens and businesses from each of the sixteen Lancaster County school districts. The programs offered at LCCTC are elective and require that students purchase uniforms. For some programs, there are fees for items that the student will keep, such as a tool kit or books. B-3

50 PENSION PROGRAM School Districts in Pennsylvania are required to participate in a statewide pension program administered by the Public School Employees Retirement System (PSERS). All of the School District s full-time employees, part-time employees who work more than 80 days in a school year, and hourly employees who work over 500 hours a year participate in the program. However, please note a Pennsylvania Supreme Court decision has removed the hourly de minimis requirement for current members of PSERS regarding the purchase of credit for their part-time school service rendered prior to their being members of PSERS, for purposes of increasing their pension benefits. Beginning July 1, 1976, certain revisions were made in the pension program. The Retirement Board, previously under the Department of Education of the Commonwealth, became an independent agency. However, the program is still guaranteed by the Commonwealth. Currently, each party to the program contributes a fixed percentage of the employee s salary. Employees belonging to the Public School Employees Retirement System ( PSERS ) prior to July 22, 1983 contribute 5.25% of their salary, and employees who joined the PSERS on or after July 22, 1983 contribute 6.25% of their salary. On February 17, 2002, Governor Ridge signed Act 9 which created a new membership class that sets the employee contribution rate at 7.50% of the employee s salary for those employees hired on or after July 1, Act 9 also provides an option for those employees hired prior to July 1, 2001 to elect a contribution rate of 6.50%, if they were hired before July 22, 1983, or 7.50% if they were hired on or after July 22, Act 120 of 2010 was passed by the General Assembly on November 15 and signed by Governor Rendell on November 23, The benefit reductions contained in this legislation will only impact individuals who become new members of PSERS on or after July 1, New members will have the option of selecting one of 2 new classes. The members selecting class T-E will contribute a base rate of 7.5% with shared risk contribution levels between 7.5% and 9.5% and a pension multiplier of 2.0%. Members selecting class T-F will contribute a base rate of 10.3% with shared risk contribution levels between 10.3% and 12.3% and a pension multiplier of 2.5%. The PSERS Board certified the employer rate, to be paid by the School District, of 8.65% for the fiscal year. The PSERS Board certified a new employer rate, to be paid by the School District, of 12.36% for the fiscal year. According to Act 120 of 2010 the employer contribution rate is suppressed for future years by using rate caps to keep the rate from rising too high, too fast. Both the School District and the Commonwealth are responsible for paying a portion of the employer s share. School entities are responsible for paying 100% of the employer share of contributions to PSERS. The Commonwealth reimburses the employer for not less than 50% of the payment for employees. The LCCTC s contributions are made on a quarterly basis and employee contributions are deducted bi-weekly for each paycheck and remitted quarterly. Recent LCCTC payments, net of reimbursement, have been as follows: The LCCTC is current in all payments. School Year Contribution $ 245, , , , (Estimated) 540, (Budgeted) 602,896 PSERS is the 17 th largest state-sponsored defined benefit pension fund in the nation. PSERS is primarily responsible for administering a defined benefit pension plan for public school employees in the Commonwealth of Pennsylvania. In the fall of 2012, the PSERS completed its process of publishing financial statements for the year ended June 30, 2012, in compliance with reporting standards established by the Government Accounting Standards Board s Statement No. 25 and Statement No. 26. PSERS total plan net assets decreased by $2.6 billion from $51.4 billion at June 30, 2011 to $48.8 billion at June 30, This decrease was due in large part to deductions for benefits and administrative expenses exceeding net investment income and member and employer contributions. The change in total plan net assets from June 30, 2010 to June 30, 2011 was an increase of $5.6 billion from $4.8 billion at June 30, 2010 to $51.4 billion at June 30, This increase was due in large part to net investment income plus member and employer contributions exceeding the deductions for benefits and administrative services. The Fund s complete report is available on the PSERS website on the Internet: Source: PSERS Website. B-4

51 LABOR RELATIONS The professional employees of the LCCTC are represented in collective bargaining by the Vocational-Technical Teachers Association of Lancaster County. The present contract with the Association expires on June 30, The supervisors and administrators employed by the LCCTC Board are not represented by a union. There has never been a work stoppage or a strike. OTHER POST-EMPLOYMENT BENEFITS During the year ended June 30, 2009, the District implemented Governmental Accounting Standards Board (GASB) Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. This Statement establishes standards for the measurement, recognition and display of expenditures for postemployment benefits (OPEB) other than pensions and the related liabilities (assets) in the financial reports of state and local governmental employers. As a result of the implementation of the standard, OPEB costs are recognized in the government-wide statements and in the proprietary funds when the employee-related services are received by the employer rather than when the benefits are paid. Plan Description - The Center s post-employment healthcare plan is a single-employer defined benefit healthcare plan. The plan permits any professional employee with 25 years of service with the Center or reached Public School Employees Retirement System (PSERS) superannuation (age 60 with 30 years PSERS service, age 62 with 1 year PSERS service or 35 years of PSERS service) to continue group insurance coverage until eligible for Medicare by remitting all of the monthly premium, based on group (Administrators/Teachers, Early Retired, and Support Staff, respectively) to the Center. Spousal coverage is available at the premium rate. Coverage does not include dental insurance and for the Teachers, Early Retired, and Staff Support Groups does not cover life insurance. The retiree s cost of group insurance is calculated by the plan administrator and is based on projected expenditures for the year. The retiree s premium for the group insurance is payable in advance on a quarterly basis. The Joint Operating committee has the authority to establish and amend benefit provisions through the collective bargaining process with members of the professional staff, an agreement with administrative employees, and support staff contracts. The plan does not issue any financial report and is not included in the report of any public employee retirement system or any other entity. Funding Policy - The contribution requirements of plan members are established and may be amended by the Joint Operating Committee. The required contribution is based on projected pay-as-you-go financing requirements. The additional required financial note disclosures detailed in the Audit Report in Note 10, page 38, includes information about actuarial accrued obligations (prepayments) for these promised benefits associated with past employee services, and whether and to what extent those benefits have been funded as well as more detailed information regarding the plan description and funding policy. FINANCIAL HISTORY The Authority and its predecessors have never defaulted on the payment of lease rentals or debt service. The status of the Authority s present indebtedness is shown in the table entitled "Current Long-Term School Financing," in Appendix B. FUTURE FINANCING The LCCTC has authorized the issuance of additional long-term debt over the course of the next two years totaling approximately $4,500,000 for the purposes of providing funds for renovation and additions to the Brownstown, Mt. Joy and Willow Street Campuses of the LCCTC. B-5

52 FINANCING SUMMARY Issue Gross Series Outstanding Guaranteed Lease Revenue Bonds 2013 $ 9,995,000 Guaranteed Lease Revenue Bonds ,840,000 Guaranteed Lease Revenue Bonds (1) 23,010,000 (1) Maximum principal amount of $23,010,000 remaining from the LCCTC $43,000,000 authorized but not yet issued. Financial Factors and Ratios STEB Market Valuation of Real Estate (2012)... $ 38,786,591,811 STEB Assessed Valuation of Real Estate (2012)... $ 31,261,993,000 Common Level Ratio % Population: 2010 Census ,445 Market Valuation of Real Estate Per Capita... $74,659, Assessed Valuation of Real Estate Per Capita... $60,183 Indebtedness Obligations of the Residents of the County of Lancaster LCCTC Obligation (1)... $ 41,845,000 School District General Obligation (2)... 1,115,228,632 Municipalities(2) ,708,599 Lancaster County (3) ,301,500 Total Obligations... $1,932,083,731 Ratio of Total Obligations to: Market Valuation of Real Estate % Assessed Valuation of Real Estate % Population (2010)... $3,720 (1) Excludes the Lease Rental Debt of the School Districts for the Bonds. (2) Overlapping debt information is derived from information reported or otherwise available to the Pennsylvania Department of Community and Economic Development ( DCED ) and may not be complete. (3) The outstanding general obligation debt of the County of Lancaster as reported by DCED as of July B-6

53 APPENDIX C DESCRIPTION OF THE COUNTY OF LANCASTER

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55 DESCRIPTION OF THE COUNTY General The County totals 946 square miles in area and is located in Southeastern Pennsylvania, approximately 60 miles west of Philadelphia and 240 miles east of Pittsburgh. There are 60 municipal divisions in the County, including the City of Lancaster, 18 boroughs and 41 townships. The County is one of the most fertile agricultural regions in the nation, ranking first in agricultural production among counties east of the Mississippi River and first among non-irrigated counties nationwide. The County's farm yields are consistently high and ranked first in Pennsylvania in six categories of crops and livestock in The County has enjoyed excellent growth of well-diversified industries during the past twenty years and this growth is expected to continue. History Named for Lancaster, England, the County was settled in 1709 by a group of Mennonites from the German Palatinate who accepted William Penn's invitation to seek religious freedom in his domain. Other settlers that followed included the Swiss, French, Scotch-Irish, Welsh, English and German religious sects known as the Amish, Dunkards, Mennonites, and Moravians. These latter groups formed the cultural basis known as the Pennsylvania Dutch, whose language, customs, dress and cooking still are important elements of the County environment. Illustrious residents of the County have included: George Ross, a signer of the Declaration of Independence; General Edward Hand, who settled in the County and practiced medicine after the Revolutionary War; Thaddeus Stevens, whose opposition to slavery influenced Congress; Robert Fulton; and President James Buchanan. Artisans here developed the important Pennsylvania rifle. William ("Baron") Stiegel produced his Stiegel glass in Manheim. Cannon and ammunition were produced for the Revolution at Windsor Forge and Martic Forge. At Lititz, pretzels became a distinctive major product, and throughout the County, silk production was an important industry during the eighteenth century. Over the past decade, much has been done to preserve the historic beauty of the County. With the help of the Historic Preservation Trust of Lancaster County, a large part of the City of Lancaster, the county seat of Lancaster County, has been restored to its original colonial setting. Many of the County's oldest buildings and homes are on the National Register of Historic Places and are featured in the "Lancaster Candlelight Walking Tours." County Government The County is a Third Class county existing under the laws of the Commonwealth of Pennsylvania. The governing body of the County is a board of three County Commissioners who are each elected at large for a four year term. The Board of Commissioners, being the executive and legislative officers of the County, are empowered to enact and enforce ordinances and resolutions, adopt budgets, make appropriations, levy taxes, incur debt and direct the administration of county government. The County is served by other elected officers including the Controller, District Attorney, Treasurer, Clerk of Courts, Prothonotary, Sheriff, Record of Deeds, Register of Wills, Coroner, and Jury Commissioner. The following Board and Commissions are currently an active part of county government: The Lancaster County Youth Intervention Center; Board of Assessment Appeals; Prison Board; County Salary Board; Registration Commission; County Board of Election; and the Retirement Board. In addition, the following advisory boards are also active: Mental Health/Mental Retardation; Children and Youth Services; the Agency on Aging; and the Drug and Alcohol Advisory Board. B-2 C-1

56 Demographic Characteristics The following tables provide population trends, age wealth and housing indices for Lancaster County and the Commonwealth of Pennsylvania. Population and Density Lancaster County 519, , ,822 Commonwealth 12,702,379 12,281,054 11,881,643 Age Composition (2010) Under or Over Lancaster County 24.8% 15.0% Commonwealth Family Income ( Year Estimates) Families Below Median Family Income Poverty Level Lancaster County $64, % Commonwealth 61, Occupied Housing (2010) Total Occupied Owner-Occupied Housing Housing Housing Units Units (%) Units (%) Lancaster County 179, , , Commonwealth 5,249,750 4,777, ,403, C-2

57 Tourism Travel and tourism is among the Commonwealth s and the County s leading industries employing, both directly and indirectly, nearly 40,000 people in Lancaster County. The Pennsylvania Dutch Convention and Visitors Bureau estimates 11 million visitors traveled to the County in 2007, spending $1.8 billion in direct economic impact and nearly $460 million in indirect economic impact. Additionally, travel and tourism generates about $460 million in tax revenues. Source: Pennsylvania Dutch Convention and Visitors Bureau Medical Facilities There are 4 general acute care hospitals and one rehabilitation hospital that serve Lancaster County. These hospitals, their licensed bed capacities and number of employees (full-time and part-time) are as follows: Institution Location Licensed Beds Staff Lancaster County Full-Time Part-Time Ephrata Community Hospital Ephrata 130 1, Heart of Lancaster Regional Medical Center Lititz Lancaster General Hospital Lancaster 640 4,545 1,358 Lancaster Regional Medical Center Lancaster Lancaster Rehabilitation Hospital Lancaster Source: Pennsylvania Department of Health, Bureau of Health Statistics; 2011 reporting period. Transportation All of the County's major highways converge on the City of Lancaster with the exception of the Pennsylvania Turnpike which traverses the County in an east-west direction, 15 miles to the north of the City. U.S. Route 30 crosses the Susquehanna River at Columbia, Pennsylvania, and meets Interstate Route 83 at York, Pennsylvania, 23 miles west of Lancaster. Interstate Route 83 provides a route to Washington and Baltimore. U.S. Route 222 runs in a north-south direction and connects with Reading, Allentown and Easton, and intersects the Pennsylvania Turnpike approximately 15 miles north of the City of Lancaster. Other major highways include U.S. Route 283 connecting Lancaster to Harrisburg, and State Route 501 which intersects the area providing access to Allentown, Bethlehem and Easton via the northeast extension of the Pennsylvania Turnpike to the east, and Wilkes-Barre, Scranton and Binghamton, New York, via U.S. Route 81 to the north. C-3

58 Utilities The County has been furnished with electric energy and related services by PPL since PPL, the second largest electric utility in the state, services approximately 900,000 customers throughout 10,000 square miles of central eastern Pennsylvania. PPL and eleven neighboring electric utilities have formed the Pennsylvania-New Jersey-Maryland interconnection which serves as a high capacity power pool fully integrating the generation and transmission systems of the participating utilities. Natural gas is delivered to the County by UGI Corporation. UGI has been in operation for more than eighty years and has over 356 miles of distribution mains in the County. Higher Education Lancaster County has a number of institutions of higher learning including: Elizabethtown College, a privately owned institution in Elizabethtown, which offers an undergraduate liberal arts education; Franklin and Marshall College, a coeducational liberal arts college in Lancaster; Millersville University, a State-owned institution in Millersville; the Lancaster campus of Harrisburg Area Community College; the Lancaster Campus of Penn State; Pennsylvania College of Art and Design, a member of the National Association of Schools of Art & Design; Lancaster Bible College, a four-year Christian career college unaffiliated with any denomination; Thaddeus Stevens College of Technology and the Lancaster General College of Nursing and Health Sciences. In addition, the Lancaster Theological Seminary, and three vocational-technical schools are located within the County. C-4

59 ECONOMY Classification of Employment by Industry Lancaster County, Pennsylvania The following is a breakdown of employment in Lancaster County for 2011 from the Pennsylvania Department of Labor & Industry. Average annual earnings for workers are included. Industry Average Average Monthly Quarterly Units Employment Total Wages (1000s) Average Annual Wage Lancaster County 12, ,012 $8,509,359 $39,393 AGRICULTURE, FORESTRY, FISHING AND HUNTING 176 2,209 74,084 33,537 MINING ,026 47,273 UTILITIES ,556 82,656 CONSTRUCTION 1,521 13, ,661 48,986 MANUFACTURING ,682 1,815,179 50,871 WHOLESALE TRADE , ,597 45,943 RETAIL TRADE 1,826 29, ,475 23,449 TRANSPORTATION AND WAREHOUSING 383 9, ,372 39,724 INFORMATION 114 3, ,211 41,825 FINANCE AND INSURANCE 632 6, ,302 59,316 REAL ESTATE AND RENTAL AND LEASING 344 1,772 65,575 37,006 PROFESSIONAL AND TECHNICAL SERVICES 933 7, ,798 56,409 MANAGEMENT OF COMPANIES AND ENTERPRISES 71 3, ,826 83,566 ADMINISTRATIVE AND WASTE SERVICES 554 8, ,515 27,839 EDUCATIONAL SERVICES 102 3, ,581 39,721 HEALTH CARE AND SOCIAL ASSISTANCE 1,496 33,797 1,378,572 40,790 ARTS, ENTERTAINMENT, AND RECREATION 170 3,577 62,897 17,584 ACCOMMODATION AND FOOD SERVICES , ,511 14,619 OTHER SERVICES (EXCEPT PUBLIC ADMINISTRATION) 1,149 6, ,529 26,740 UNCLASSIFIED * * * * FEDERAL GOVERNMENT 73 1,302 75,094 57,676 LOCAL GOVERNMENT , ,266 42,938 STATE GOVERNMENT 30 2, ,829 56,502 Source: Pennsylvania Department of Labor & Industry, report completed Spring * Data that might be identified with an individual employer and/or data involving fewer than twenty-five employees are not published. C-5

60 Trends in Lancaster Labor Market Area Employment and Unemployment Civilian Total Percentage Unemployed Year Labor Force Employment County Pennsylvania U.S , , , , , , , , , , , , , , , , , , , , , , , , , , (May) 268, , Source: Pennsylvania Department of Labor and Industry Top Employers in Lancaster County Name Description Lancaster General Hospital Health Care Services Mutual Assistance Group Insurance County of Lancaster Government Ephrata Community Hospital Health Care Services THLP CO Inc. Dairy Products RR Donnelley & Sons Company Printing Dart Container Corporation Foodservice Products School District of Lancaster Education Manheim Remarketing Inc. Auto Auction Armstrong World Industries Inc. Manufacturing Source: Pennsylvania Center for Workforce Information & Analysis 2 nd Quarter 2012 Real Estate Values Market values of real property in the County, as reported by the Pennsylvania State Tax Equalization Board. Current Year Assessed Valuation Market Value Common Level Ratio 2006 $28,879,867,500 $37,702,176, % ,660,954,700 40,300,210, ,146,887,800 40,794,164, ,470,568,000 40,519,372, ,854,293,300 40,332,409, ,874,017,000 39,180,224, ,261,993,000 38,786,591, Source: Pennsylvania State Tax Equalization Board C-6

61 APPENDIX D Form of Bond Counsel Opinion

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63 DRAFT LANCASTER COUNTY CAREER AND TECHNOLOGY CENTER AUTHORITY GUARANTEED LEASE REVENUE BONDS, SERIES OF 2013 (Lancaster County Career and Technology Center) OPINION We have acted as Bond Counsel in connection with the issuance by Lancaster County Career and Technology Center Authority, Lancaster County, Pennsylvania (the "Issuer"), of $9,995,000 Guaranteed Lease Revenue Bonds, Series of 2013 dated September 20, 2013 (the "Bonds") pursuant to Pennsylvania Municipality Authorities Act of 1945, Act of May 2, 1945, P.L. 382 as amended (the "Act") and a trust indenture (the "Indenture") dated June 29, 2012 and a supplemental trust indenture (the First Supplemental Indenture ) dated September 20, 2013 between the Issuer and Fulton Bank, National Association, Lancaster, Pennsylvania as trustee (the "Trustee"). We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion. We have not been engaged or undertaken to review the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds (except to the extent, if any, stated in the Official Statement) and we express no opinion relating thereto (excepting only the matters set forth as our opinion in the Official Statement). As to questions of fact material to our opinion, we have relied upon the representations of the Issuer contained in the Indenture and the First Supplemental Indenture, and in the certified proceedings and certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. Based upon the foregoing, we are of the opinion that, under existing law: 1. The Issuer is duly created and validly existing as a municipality authority under the Act, with the power to execute and deliver the Indenture and the First Supplemental Indenture and a lease agreement, and any supplements thereto, to issue the Bonds, and to undertake the financing of the project. 2. The Indenture and the First Supplemental Indenture have been duly authorized and executed by the Issuer and the Trustee, constitute valid and binding obligations of the Issuer and the Trustee, and are enforceable in accordance with their terms. 3. The principal of and interest on the Bonds are secured under the Indenture and the First Supplemental Indenture by the assignment and pledge of the Lease Agreement, dated June 29, 2012 (the "Lease") and a supplemental lease agreement, dated September 20, 2013 (the First Supplemental Lease ), between the Issuer, the 16 Lancaster County school districts (individually, the "School District" and collectively, the "School Districts"), and the Lancaster County Career and

64 Technology Center Board, and of all rentals payable under the Lease and the First Supplemental Lease sufficient to pay the principal of and interest on the Bonds. 4. The Lease and the First Supplemental Lease have been duly authorized and executed by the parties thereto, and constitute valid and binding obligations of each of the parties, and are enforceable in accordance with their terms. 5. The Bonds have been duly authorized, executed and delivered by the Issuer and are valid and binding obligations of the Issuer, payable solely from the rentals and other amounts payable under the Lease and the First Supplemental Lease from the School Districts. 6. The lease rental debt of each School District, evidenced by the Lease and the First Supplemental Lease, has been validly incurred and is binding upon each School District. 7. Each School District has pledged its credit and taxing power to pay its share of the rentals owed the Issuer under the Lease and the First Supplemental Lease and to be used by the Issuer to pay principal of and interest on the Bonds. Except as provided in the preceding sentence, the Bonds do not pledge the credit or taxing power of the County of Lancaster, Pennsylvania (the "County"), the Commonwealth of Pennsylvania (the "Commonwealth"), or any political subdivision thereof; nor will the Bonds be deemed an obligation of the County, the Commonwealth, or any political subdivision thereof; nor will the County, the Commonwealth, or any political subdivision thereof be liable for payment of the principal of or interest on the Bonds. 8. The Issuer has designated the Bonds as qualified tax-exempt obligations as defined in Section 265(b)(3)(B) of the Internal Revenue Code of 1986, as amended (the Code ), and the Bonds meets all of the requirements of, and therefore are, qualified tax-exempt obligations under Section 265(b)(3)(B) of the Code, and, in the case of certain financial institutions (within the meaning of Section 265(b)(5) of the Code), a deduction is allowed for 80 percent of the portion of such financial institutions interest expense allocable to interest on the Bonds. The opinions set forth in the preceding sentence are subject to the condition that the Issuer comply with all requirements of the Code, and any regulations promulgated thereunder, that must be satisfied subsequent to the issuance of the Bonds, in order that the Bonds continue to constitute qualified tax exempt obligations for purposes of Section 265(b)(3) of the Code. Failure to comply with such requirements may cause the Bonds to cease to constitute qualified tax exempt obligations, with the result that the Bonds would have to be taken into account by financial institutions (as defined in Section 265(b)(5) of the Code) for purposes of determining the allocation of interest expense to taxexempt interest under Sections 265(b)(1) and (2) of the Code retroactive to the date of issuance of the Bonds. 9. 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 for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings. The opinions set forth in the preceding sentence are subject to the condition that the Issuer comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order

65 that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The Issuer has covenanted to comply with each such requirement. 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. We express no opinion regarding other federal tax consequences arising with respect to the Bonds. 10. Under the laws of the Commonwealth as presently enacted and construed, the Bonds and the interest thereon shall be free from taxation for state and local purposes within the Commonwealth, but this exemption does not extend to gift, estate, succession or inheritance taxes or any other taxes not levied or assessed directly on the Bonds or the interest thereon. Under the laws of the Commonwealth, profits, gains or income derived from the sale, exchange or other disposition of certain government obligations, including the Bonds, may be subject to state and local taxation within the Commonwealth. 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. Very truly yours, KEGEL KELIN ALMY & LORD LLP September 20,

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67 APPENDIX E Specimen Municipal Bond Insurance Policy

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69 MUNICIPAL BOND INSURANCE POLICY ISSUER: [NAME OF ISSUER] Policy No: MEMBER: [NAME OF MEMBER] BONDS: $ in aggregate principal amount of [NAME OF TRANSACTION] [and maturing on] Effective Date: Risk Premium: $ Member Surplus Contribution: $ Total Insurance Payment: $ BUILD AMERICA MUTUAL ASSURANCE COMPANY ( BAM ), for consideration received, hereby UNCONDITIONALLY AND IRREVOCABLY agrees to pay to the trustee (the Trustee ) or paying agent (the Paying Agent ) for the Bonds named above (as set forth in the documentation providing for the issuance and securing of the Bonds), for the benefit of the Owners or, at the election of BAM, directly to each Owner, subject only to the terms of this Policy (which includes each endorsement hereto), that portion of the principal of and interest on the Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer. On the later of the day on which such principal and interest becomes Due for Payment or the first Business Day following the Business Day on which BAM shall have received Notice of Nonpayment, BAM will disburse (but without duplication in the case of duplicate claims for the same Nonpayment) to or for the benefit of each Owner of the Bonds, the face amount of principal of and interest on the Bonds that is then Due for Payment but is then unpaid by reason of Nonpayment by the Issuer, but only upon receipt by BAM, in a form reasonably satisfactory to it, of (a) evidence of the Owner s right to receive payment of such principal or interest then Due for Payment and (b) evidence, including any appropriate instruments of assignment, that all of the Owner s rights with respect to payment of such principal or interest that is Due for Payment shall thereupon vest in BAM. A Notice of Nonpayment will be deemed received on a given Business Day if it is received prior to 1:00 p.m. (New York time) on such Business Day; otherwise, it will be deemed received on the next Business Day. If any Notice of Nonpayment received by BAM is incomplete, it shall be deemed not to have been received by BAM for purposes of the preceding sentence, and BAM shall promptly so advise the Trustee, Paying Agent or Owner, as appropriate, any of whom may submit an amended Notice of Nonpayment. Upon disbursement under this Policy in respect of a Bond and to the extent of such payment, BAM shall become the owner of such Bond, any appurtenant coupon to such Bond and right to receipt of payment of principal of or interest on such Bond and shall be fully subrogated to the rights of the Owner, including the Owner s right to receive payments under such Bond. Payment by BAM either to the Trustee or Paying Agent for the benefit of the Owners, or directly to the Owners, on account of any Nonpayment shall discharge the obligation of BAM under this Policy with respect to said Nonpayment. Except to the extent expressly modified by an endorsement hereto, the following terms shall have the meanings specified for all purposes of this Policy. Business Day means any day other than (a) a Saturday or Sunday or (b) a day on which banking institutions in the State of New York or the Insurer s Fiscal Agent (as defined herein) are authorized or required by law or executive order to remain closed. Due for Payment means (a) when referring to the principal of a Bond, payable on the stated maturity date thereof or the date on which the same shall have been duly called for mandatory sinking fund redemption and does not refer to any earlier date on which payment is due by reason of call for redemption (other than by mandatory sinking fund redemption), acceleration or other advancement of maturity (unless BAM shall elect, in its sole discretion, to pay such principal due upon such acceleration together with any accrued interest to the date of acceleration) and (b) when referring to interest on a Bond, payable on the stated date for payment of interest. Nonpayment means, in respect of a Bond, the failure of the Issuer to have provided sufficient funds to the Trustee or, if there is no Trustee, to the Paying Agent for payment in full of all principal and interest that is Due for Payment on such Bond. Nonpayment shall also include, in respect of a Bond, any payment made to an Owner by or on behalf of the Issuer of principal or interest that is Due for Payment, which payment has been recovered from such Owner pursuant to the United States Bankruptcy Code in accordance with a final, nonappealable order of a court having competent jurisdiction. Notice means delivery to BAM of a notice of claim and certificate, by certified mail, or telecopy as set forth on the attached Schedule or other acceptable electronic delivery, in a form satisfactory to BAM, from and signed by an Owner, the Trustee or the Paying Agent, which notice shall specify (a) the person or entity making the claim, (b) the Policy Number, (c) the claimed amount, (d) payment instructions and (e) the date such claimed amount becomes or became Due for Payment. Owner means, in respect of a Bond, the person or entity who, at the time of Nonpayment, is entitled under the terms of such Bond to payment thereof, except that Owner shall not include the Issuer, the Member or any other person or entity whose direct or indirect obligation constitutes the underlying security for the Bonds.