$8,880,000 Parkland School District (Lehigh County, Pennsylvania) General Obligation Bonds, Series of 2015

Transcription

1 NEW ISSUE BOOK-ENTRY ONLY RATING: S&P: AA (Stable Outlook)(Underlying) (See RATING herein) In the opinion of Bond Counsel, under existing statutes, regulations and judicial decisions, interest on the Bonds is excluded from gross income for purposes of federal income taxation and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, although in the case of corporations (as defined for federal income tax purposes) such interest is taken into account in determining adjusted current earnings for purposes of such alternative minimum tax. This opinion of Bond Counsel is subject to continuing compliance by the School District with its covenants in the Resolution and other documents to comply with requirements of the Internal Revenue Code of 1986, as amended, and applicable regulations thereunder. Bond Counsel is also of the opinion that under the laws of the Commonwealth of Pennsylvania (the Commonwealth ), as presently enacted and construed, the Bonds are exempt from personal property taxes in the Commonwealth and the interest on the Bonds is exempt from the Commonwealth s Personal Income Tax and the Commonwealth s Corporate Net Income Tax. The Bonds are qualified tax-exempt obligations, for purposes and effect contemplated by Section 265 of the Internal Revenue Code of 1986, as amended (relating to expenses and interest relating to tax-exempt income of certain financial institutions). For further information concerning federal and state tax matters relating to the Bonds, see Tax Exemption and Other Tax Matters herein. $8,880,000 Parkland School District (Lehigh County, Pennsylvania) General Obligation Bonds, Series of 2015 Bonds Dated: Date of Delivery Principal Due: February 1, see inside front cover Interest Due: February 1 and August 1 First Interest Payment: August 1, 2015 The General Obligation Bonds, Series of 2015 (the Bonds ) in the aggregate principal amount of $8,880,000 will be issued in book-entry form, registered in the name of Cede & Co., as partnership nominee of The Depository Trust Company ( DTC ), New York, New York. Beneficial ownership of the Bonds may be acquired in denominations of $5,000 principal amount and integral multiples thereof only under the book-entry system maintained by DTC through its brokers and dealers who are, or act through, DTC Participants. The purchasers of the Bonds will not receive physical delivery of the Bonds. Purchasers and owners of the Bonds must maintain an account with a broker or a dealer who is, or acts through, a DTC Participant to receive payment of principal of and interest on the Bonds. See BOOK-ENTRY ONLY SYSTEM herein. If the Bonds are ever issued in certificated form, they will be subject to registration, transfer, exchange and payment as described herein. The Bonds are general obligations of the Parkland School District, a public school district located in Lehigh County, Pennsylvania (the School District ), payable from its tax and other general revenues. The School District has covenanted in a Resolution adopted by the Board of School Directors of the School District on December 16, 2014 (the Resolution ) which secures the Bonds, that it will provide in its budget in each year, and will appropriate from its general revenues in each such year, the amount of the debt service due on the Bonds for such year and will duly and punctually pay or cause to be paid from the sinking fund established under the Resolution or any other of its legally available revenues or funds the principal of every Bond and the interest thereon on the dates, at the place and in the manner stated in the Bonds. For such budgeting, appropriation, and payment the School District has irrevocably pledged its full faith, credit and available taxing power, which taxing power includes the power to levy an annual ad valorem tax on all taxable real property within the School District, within the limits provided by law (See Security for the Bonds and Taxing Powers and Limits of the School District infra). Interest on each of the Bonds is payable initially on August 1, 2015, and thereafter semiannually on February 1 and August 1 of each year until the maturity date of such Bond or, if such Bond is subject to redemption prior to maturity, until the date fixed for its redemption, if payment of the redemption price has been duly made or provided for. The School District has appointed U.S. Bank National Association (the Paying Agent ), to serve as the paying agent and sinking fund depositary for the Bonds. So long as Cede & Co., as nominee for DTC, is the registered owner of the Bonds, payments of the principal of, redemption premium, if any, and interest on the Bonds, when due for payment, will be made directly to DTC by the Paying Agent, and DTC will in turn remit such payments to DTC Participants for subsequent disbursement to the Beneficial Owners of the Bonds. If the use of the book-entry only system for the Bonds is ever discontinued, the principal of and redemption premium, if any, on each of the Bonds will be payable, when due, upon surrender of such Bond to the Paying Agent at its designated corporate trust office (or any successor paying agent at its designated office(s)) and interest on such Bond will be payable by check and mailed to the person(s) in whose name(s) such Bond is registered as of the Record Date with respect to the particular interest payment date (See THE BONDS, herein). The Bonds are subject to optional redemption prior to maturity. Proceeds of the Bonds will be used to undertake the following: (1) a feasibility study for all buildings and facilities of the School District, (2) planning, designing, acquiring, construction and/or furnishing alterations and/or renovations to the Kratzer Elementary School, the Orefield Middle School and other public school buildings and facilities, (3) purchasing computer, security and other technology equipment and school busses; and (4) paying issuance costs and expenses (collectively, the Capital Projects ). The Bonds are an authorized investment for fiduciaries in the Commonwealth pursuant to the Pennsylvania Probate, Estate and Fiduciaries Code, Act of June 30, 1972, No. 164, P.L. 508, as amended and supplemented. PRINCIPAL MATURITY DATES AND AMOUNTS, INTEREST RATES, INITIAL OFFERING YIELDS AND CUSIP NUMBERS See Inside Front Cover The Bonds are offered when, as and if issued, subject to withdrawal or modification of the offer without notice, and subject to the approving legal opinion of Rhoads & Sinon LLP, of Harrisburg, Pennsylvania, as Bond Counsel to the School District, to be furnished upon delivery of the Bonds. Certain other legal matters will be passed upon for the School District by C. Steven Miller, Esquire, of Allentown, Pennsylvania, as School District Solicitor and by McNees Wallace & Nurick LLC, of Harrisburg, Pennsylvania, Underwriter s Counsel. Public Financial Management, Inc., Harrisburg, Pennsylvania, serves as Financial Advisor to the School District in connection with the Bonds. It is expected that the Bonds will be available for delivery to DTC or its agent on or about February 26, Official Statement Dated: February 2, 2015

2 $8,880,000 Parkland School District (Lehigh County, Pennsylvania) General Obligation Bonds, Series of 2015 Bonds Dated: Date of Delivery Principal Due: February 1, see below Interest Due: February 1 and August 1 First Interest Payment: August 1, 2015 PRINCIPAL MATURITY DATES AND AMOUNTS, INTEREST RATES, INITIAL OFFERING YIELDS AND CUSIP NUMBERS Maturity Date (February 1) Principal Interest Initial Offering CUSIP Year Amounts Rates Yields Numbers (1) 2016 $5, % 0.450% SA , SB , SC , SD , SE , SF , * SG ,005, * SH ,030, * SJ ,045, SK ,070, SL ,110, * SM ,150, * SN ,190, * SP7 (1) The above CUSIP (Committee on Uniform Securities Identification Procedures) numbers have been assigned by an organization not affiliated with the School District or the Underwriter, and such parties are not responsible for the selection or use of the CUSIP numbers. The CUSIP numbers are included solely for the convenience of bondholders and no representation is made as to the correctness of such CUSIP numbers. CUSIP numbers assigned to securities may be changed during the term of such securities based on a number of factors including, but not limited to, the refunding or defeasance of such issue or the use of secondary market financial products. Neither the School District nor the Underwriter has agreed to, and there is no duty or obligation to, update this Official Statement to reflect any change or correction in the CUSIP numbers set forth above. *Yield to Optional Redemption Date of August 1, 2020

3 Parkland School District (Lehigh County, Pennsylvania) BOARD OF SCHOOL DIRECTORS Roberta M. Marcus... David M. Kennedy... Lisa A. Adams... Robert E. Bold... Robert M. Cohen... Mark A. Hanichak... David J. Hein... Barry D. Long... Jef Reyburn... President Vice-President Member Member Member Member Member Member Member SUPERINTENDENT RICHARD T. SNISCAK DIRECTOR OF BUSINESS ADMINISTRATION/BOARD SECRETARY JOHN A. VIGNONE SCHOOL DISTRICT SOLICITOR C. STEVEN MILLER, ESQUIRE Allentown, Pennsylvania BOND COUNSEL RHOADS & SINON LLP Harrisburg, Pennsylvania FINANCIAL ADVISOR PUBLIC FINANCIAL MANAGEMENT, INC. Harrisburg, Pennsylvania UNDERWRITER RBC CAPITAL MARKETS, LLC Lancaster, Pennsylvania UNDERWRITER S COUNSEL McNEES WALLACE & NURICK LLC Harrisburg, Pennsylvania PAYING AGENT U.S. BANK NATIONAL ASSOCIATION Philadelphia, Pennsylvania SCHOOL DISTRICT ADDRESS 1210 Springhouse Road Allentown, Pennsylvania 18104

4 No dealer, broker, salesman or other person has been authorized by the School District to give information or to make any representations, other than those contained in this Official Statement, and if given or made, such other information or representations must not be relied upon. 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 in any jurisdiction in which it is unlawful to make such offer, solicitation or sale. The information set forth herein has been obtained from the School District and from other sources which are believed to be reliable but the School District does not guarantee the accuracy or completeness of information from sources other than the School District. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in any of the information set forth herein since the date hereof. 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. INTRODUCTION... 1 PURPOSE OF THE ISSUE... 1 Sources and Uses of Bond Proceeds... 1 THE BONDS... 2 TABLE OF CONTENTS Page Description... 2 Payment of Principal and Interest... 2 Transfer, Exchange and Registration of Bonds... 2 REDEMPTION OF BONDS... 3 Optional Redemption... 3 Notice of Redemption... 3 Manner of Redemption... 3 BOOK-ENTRY ONLY SYSTEM... 4 SECURITY FOR THE BONDS... 6 Pledge of the School District s Full Faith, Credit and Taxing Power... 6 Defaults and Remedies... 6 Bonds Sinking Fund... 6 Commonwealth Enforcement of Debt Service Payments... 6 THE SCHOOL DISTRICT... 7 Introduction... 7 School Facilities... 7 Enrollment Trends... 7 SCHOOL DISTRICT FINANCES... 8 Financial Reporting... 8 Budgeting Process as modified by Act 1 of the Special Session of 2006 (Taxpayer Relief Act)... 8 Summary and Discussion of Financial Results... 9 Revenues Expenditures SCHOOL DISTRICT TAXING POWERS AND LIMITS The Taxpayer Relief Act (Act 1) Act 48 of 2003 Limitation on School District Fund Balances Tax Levy Trends Real Property Tax Page The Local Tax Enabling Act taxes collected by the School District DEBT AND DEBT LIMITS State Aid to School Districts Debt Statement Debt Limit and Remaining Borrowing Capacity Debt Service Requirements Future Financing LABOR RELATIONS School District Employees Pension Plan Other Post-Employment Benefits LITIGATION TAX EXEMPTION AND OTHER TAX MATTERS Bond Counsel Opinion Federal Income Tax Matters Proposed or Future Legislation Pennsylvania Tax Matters Federal Income Tax Interest Expense Deductions for Financial Institutions CONTINUING DISCLOSURE UNDERTAKING RATING UNDERWRITING LEGAL OPINIONS FINANCIAL ADVISOR MISCELLANEOUS APPENDIX A - DEMOGRAPHIC AND ECONOMIC INFORMATION RELATING TO THE PARKLAND SCHOOL DISTRICT Population... A-1 Employment... A-3 Income... A-4 Industry... A-4 Medical Facilities... A-5 Utilities and Communications... A-6 APPENDIX B - FORM OF OPINION OF BOND COUNSEL APPENDIX C - CONTINUING DISCLOSURE CERTIFICATE APPENDIX D - AUDITED FINANCIAL STATEMENTS i

5 OFFICIAL STATEMENT $8,880,000 Parkland School District (Lehigh County, Pennsylvania) General Obligation Bonds, Series of 2015 INTRODUCTION This Official Statement, including the cover page, the inside cover page and appendices, is presented by Parkland School District, a public school district located in Lehigh County, Pennsylvania (the "School District") in connection with the offering of $8,880,000 aggregate principal amount of its General Obligation Bonds, Series of 2015, dated as of the date of their delivery by the School District (the Date of Delivery ), which is expected to be on or about February 26, 2015 (the "Bonds" or 2015 Bonds ). The Bonds are being issued pursuant to, and are secured by, a Resolution of the Board of School Directors of the School District adopted on December 16, 2014 (the Resolution ), and pursuant to the Local Government Unit Debt Act of the Commonwealth of Pennsylvania (the Commonwealth or State ), as codified by the Act of August 19, 1996 (53 Pa. C. S et. seq.), as amended and supplemented (the Debt Act ). PURPOSE OF THE ISSUE Proceeds of the Bonds will be used to undertake the following: (1) a feasibility study for all buildings and facilities of the School District, (2) planning, designing, acquiring, construction and/or furnishing alterations and/or renovations to the Kratzer Elementary School, the Orefield Middle School and other public school buildings and facilities, (3) purchasing computer, security and other technology equipment and school busses; and (4) paying issuance costs and expenses (collectively, the Capital Projects ). Sources and Uses of Bond Proceeds The following is a summary of the sources and uses of the proceeds from the issuance of the Bonds. Total Source of Funds Bond Proceeds... $8,880, Original Issue Premium , Total Source of Funds... $8,999, Use of Funds Capital Projects Fund Deposit... $8,846, Costs of Issuance (1) , Total Use of Funds... $8,999, (1) Includes legal, financial advisor, printing, rating, underwriting discount, CUSIP, paying agent, and miscellaneous costs and fees. 1

6 THE BONDS Description The Bonds will be issued in book-entry only form, in denominations of $5,000 principal amount and integral multiples thereof, will be in the aggregate principal amount of $8,880,000, and will be dated the Date of Delivery, when interest begins to accrue. The Bonds will bear interest at the rates and mature in the amounts and on the dates set forth on the inside front cover of this Official Statement. Interest on the Bonds will be payable initially on August 1, 2015, and thereafter, semiannually on February 1 and August 1 of each year until the maturity date of such Bond or, if such Bond is subject to redemption prior to maturity, until the date fixed for redemption thereof, if payment of the redemption price has been duly made or provided for. When issued, the Bonds will be registered in the name of Cede & Co., as the partnership nominee of The Depository Trust Company ( DTC ), New York, New York. Purchasers of the Bonds (the Beneficial Owners ) will not receive any physical delivery of paper bond certificates, and beneficial ownership of the Bonds will be evidenced only by electronic book entries. See BOOK ENTRY ONLY SYSTEM herein. Payment of Principal and Interest So long as Cede & Co. (DTC's partnership nominee), is the registered owner of the Bonds, payments of principal of, redemption premium, if any, 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 School District with respect to, and to the extent of, principal, redemption premium, if any, 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 and payment of principal, redemption premium, if any, and interest on the Bonds shall be made as described in the following paragraphs: The principal of any certificated Bonds, when due upon maturity or upon any earlier redemption, will be paid to the registered owners of such Bonds, or any assigns, determined from registration records maintained by U.S. Bank National Association (the Paying Agent ), acting as paying agent and sinking fund depositary for the Bonds, upon the surrender of such Bonds at its specified corporate trust office (or to any successor paying agent or alternate designated office(s)). Interest on any certificated Bonds will be payable to the registered owner of a Bond from the interest payment date next preceding the date of registration and authentication of such Bond, unless: (a) such Bond is registered and authenticated as of an interest payment date, in which event such Bond shall bear interest from such interest payment date, or (b) such Bond is registered and authenticated after a Record Date (hereinafter defined) and before the next succeeding interest payment date, in which event such Bond shall bear interest from such interest payment date, or (c) such Bond is registered and authenticated on or prior to the Record Date preceding the first interest payment date, in which event such Bond shall bear interest from the Date of Delivery of the Bonds, or (d) as shown by the records of the Paying Agent, interest on such Bond shall be in default, in which event such Bond shall bear interest from the date to which interest was last paid on such Bond. Interest on each certificated Bond will be payable by check drawn on the Paying Agent, which shall be mailed to the registered owner whose name and address shall appear, at the close of business on the fifteenth (15 th ) day (whether or not a day on which the Paying Agent is open for business) next preceding each interest payment date (the Record Date ), on the registration books maintained by the Paying Agent, irrespective of any transfer or exchange of such Bond subsequent to such Record Date and prior to such interest payment date, unless the School District shall be in default in payment of interest due on such interest payment date. In the event of any such default, such defaulted interest shall be payable to the person in whose name such certificated 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 Paying Agent to the registered owners of such Bonds not less than fifteen (15) days preceding such special record date. Such notice shall be mailed to the persons in whose names such Bonds are registered at the close of business on the fifth (5 th ) day preceding the date of mailing. If the date for payment of the principal of or interest on any Bonds shall be a Saturday, Sunday, legal holiday or 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 or interest 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 established for such payment. Transfer, Exchange and Registration of Bonds Subject to the provisions described below under Book-Entry Only System, certificated Bonds are transferable or exchangeable by the registered owners thereof upon surrender of such Bonds to the Paying Agent, accompanied by a written instrument or instruments in form, with instructions, and with guaranty of signature satisfactory to the Paying Agent, duly executed by the registered owner of such Bond or his attorney-in-fact or legal representative. The Paying Agent shall enter any transfer of ownership of certificated 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 certificated 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 School District and the Paying Agent may deem and treat the registered owner of any certificated Bond as the absolute owner thereof (whether or not such 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 School District and the Paying Agent shall not be affected by any notice to the contrary. 2

7 The School District and the Paying Agent shall not be required (a) to register the transfer of or exchange any certificated Bonds then considered for redemption during a period beginning at the close of business on the fifteenth (15 th ) day next preceding any date of selection of such Bonds to be redeemed and ending at the close of business on the day on which the applicable notice of redemption is mailed or (b) to register the transfer of or exchange any portion of any Bond selected for redemption until after the redemption date. Bonds may be exchanged for a like aggregate principal amount of Bonds of other authorized denominations of the same series, maturity, and interest rate. Optional Redemption REDEMPTION OF BONDS The Bonds stated to mature on or after February 1, 2021 shall be subject to redemption prior to maturity, at the option of the School District, as a whole, on August 1, 2020 or on any date thereafter, or from time to time, in part on August 1, 2020 (and if in part, if any order of maturity as selected by the School District and within a maturity by lot), in either case upon payment of a redemption price of 100% of the principal amount of such Bonds, together with accrued interest to the redemption date. Notice of Redemption So long as Cede & Co., as nominee of DTC, is the registered owner of the Bonds, however, the School District and the Paying Agent shall send redemption notices only to Cede & Co. See BOOK-ENTRY ONLY SYSTEM herein for further information regarding conveyance of notices to Beneficial Owners. Notice of any redemption shall be given by depositing a copy of the redemption notice in first class mail not less than thirty (30) days prior to the date fixed for redemption addressed to each of the registered owners of Bonds to be redeemed, in whole or in part, at the addresses shown on the registration books; 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 accrued interest being held by the Paying Agent, 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 to such Bonds, except to receive payment of the principal of and accrued interest on such Bonds to the date fixed for redemption. The notice of redemption may state that it is conditional, that it is subject to the deposit of sufficient redemption money with the Paying Agent no later than a time satisfactory to the Paying Agent on the redemption date and the School District has timely deposited with the Paying Agent money sufficient to redeem all the Bonds called for redemption. Such notice shall be of no effect unless and until such money is so deposited. Manner of Redemption So long as Cede & Co., as nominee of DTC, is the registered owner of the Bonds, however, payment of the redemption price shall be made to Cede & Co. in accordance with the existing arrangements by and among the School District, the Paying Agent and DTC and, if less than all Bonds of any particular maturity are to be redeemed, the amount of the interest of each DTC Participant, Indirect Participant and Beneficial Owner in 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 Bond, payment of the redemption price shall be made only upon surrender of a certificated Bond in exchange for a Bond or Bonds of authorized denominations in 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 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 the 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. 3

8 BOOK-ENTRY ONLY SYSTEM The information in this section has been obtained from materials provided by DTC for such purpose. The School District (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 School District or the Underwriter. The Depository Trust Company ( DTC ), New York, NY, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered 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 Bond certificate will be issued for each maturity and series of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC, the world s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code, and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of DTC holds and provides asset servicing for over 3.6 million issues of U.S. and non-u.s. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC s participants ( Direct Participants ) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ( DTCC ). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at Purchases of 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 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 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 affect 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. [Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.] Redemption notices shall be sent to DTC. If less than all of the Bonds within a series and maturity are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such series and maturity to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). 4

9 Principal, interest and redemption payments 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 Issuer or Agent, on payable date in accordance with their respective holdings shown on DTC s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such Participant and not of DTC, Agent, or Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, interest and redemption payments on the Bonds to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of Issuer or Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to Issuer or Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered. 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. NEITHER THE ISSUER NOR THE PAYING AGENT WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO ANY DTC PARTICIPANT, INDIRECT PARTICIPANT OR BENEFICIAL OWNER OR ANY OTHER PERSON WITH RESPECT TO: (1) THE BONDS; (2) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT; (3) THE PAYMENT BY DTC OR ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL OR REDEMPTION PRICE OF OR INTEREST ON THE BONDS; (4) THE DELIVERY TO ANY BENEFICIAL OWNER BY DTC OR ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT OF ANY NOTICE WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE RESOLUTION TO BE GIVEN THEREUNDER; (5) THE SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE BONDS; OR (6) ANY OTHER ACTION TAKEN BY DTC AS BONDHOLDER. The Issuer and the Paying Agent cannot give any assurances that DTC or the Participants will distribute payments of the principal or redemption price of and interest on the Bonds paid to DTC or its nominee, as the registered owner of the Bonds, or any redemption or other notices, to the Beneficial Owners or that they will do so on a timely basis, or that DTC will serve and act in the manner described in this Official Statement. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 5

10 SECURITY FOR THE BONDS Pledge of the School District s Full Faith, Credit and Taxing Power The Bonds will be general obligations of the School District, payable from its tax and other general revenues. The School District has covenanted that it will provide in its budget for each year, and will appropriate from its general revenues in each such year, the amount of the debt service on the Bonds for such year, and will duly and punctually pay or cause to be paid from its Sinking Fund, as hereinafter defined, or any other of its revenues or funds, the principal of each of the Bonds and the interest thereon at the dates and place and in the manner stated on the Bonds, and for such budgeting, appropriation and payment the School District irrevocably has pledged its full faith, credit and taxing power, which taxing power presently includes the power to levy an annual ad valorem tax on all taxable real property within the School District, within the limits provided by law. (See SCHOOL DISTRICT FINANCES and SCHOOL DISTRICT TAXING POWERS AND LIMITS herein). The Debt Act presently provides for enforcement of debt service payments as hereinafter described (see "Defaults and Remedies" below), and the Pennsylvania Public School Code (the Public School Code ) presently provides for the withholding and application of subsidies in the event of failure to pay debt service (see "Commonwealth Enforcement of Debt Service Payments " herein). Defaults and Remedies In the event of failure of the School District to pay or cause to be paid the interest on or principal of the Bonds, as the same becomes due and payable, the holders of the Bonds shall be entitled to certain remedies provided by the Debt Act. Among the remedies, if the failure to pay shall continue for 30 days, holders of the Bonds shall have the right to recover the amount due by bringing an action in assumpsit in the Court of Common Pleas of Lehigh County, Pennsylvania. The Debt Act provides any judgment shall have an appropriate priority upon the funds next coming into the treasury of the School District. The Debt Act also provides that upon a default of at least 30 days, holders of at least 25%of the Bonds may appoint a trustee to represent them. The Debt Act provides certain other remedies in the event of default, and further qualifies the remedies hereinbefore described. Bond Sinking Fund As required by the Debt Act, a sinking fund for the payment of the debt service due on the Bonds, designated Sinking Fund, General Obligation Bonds, Series of 2015 (the Sinking Fund ), has been created as authorized by the Resolution and shall be maintained by the Paying Agent, as sinking fund depositary. The School District shall deposit in the Sinking Fund a sufficient sum not later than the date when interest and/or principal is to become due on the Bonds so that on each payment date the Sinking Fund will contain an amount which, together with any other funds previously available therein, is sufficient to pay, in full, interest and/or principal then due on the Bonds. The Sinking Fund shall be held by the Paying Agent, as sinking fund depositary, and invested by the Paying Agent in such securities or shall be deposited in such funds or accounts as are authorized by the Debt Act, upon direction of the School District. Such deposits and securities shall be in the name of the School District, but subject to withdrawal or collection only by the Paying Agent, as sinking fund depositary, and such deposits and securities, together with the interest thereon, shall be a part of the Sinking Fund. The Paying Agent, as sinking fund depositary, is authorized without further order from the School District to pay from the Sinking Fund the principal of and interest on the Bonds, as and when due and payable. Commonwealth Enforcement of Debt Service Payments Section 633 of the Pennsylvania Public School Code of 1949 (24 P.S ), as amended (the Public School Code ), presently provides that in all cases where the board of school 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 on any sinking fund deposit date, or any interest due on such indebtedness on any interest payment date or on any sinking fund deposit 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 obligation and shall withhold out of any Commonwealth 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, or sinking fund deposit due by such school district, and shall pay over the amount so withheld to the bank or other person acting as sinking fund depositary for such bond issue. These withholding provisions are not part of any contract with the holders of the Bonds, and may be amended or repealed by future legislation. There can be no assurance, however, that any payments pursuant to this withholding provision will be made by the date on which such payments are due to the Bondholders. The effectiveness of Section 633 of the Public School Code 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 conflicting laws or equitable principles affecting the enforcement of creditors rights generally. 6

11 THE SCHOOL DISTRICT Introduction The School District is located in Lehigh County, Pennsylvania and is part of a metropolitan region known as the Lehigh Valley. The School District encompasses North Whitehall Township, South Whitehall Township, Upper Macungie Township and a small portion of the City of Allentown. The City of Allentown is the county seat of Lehigh County. The School District contains approximately 72 square miles. Section 202 of the Public School Code (24 P.S ) of the Commonwealth of Pennsylvania (the Commonwealth ) classifies school districts based on population; the School District is classified as a second class school district. The governing body of the School District is its board of nine school directors who are each elected at large for a four-year term on a staggered basis. The daily operation and management of the School District is carried out by the administrative staff of the School District, headed by the Superintendent of Schools who is elected by the Board of School Directors. The Board of School Directors also employs a Director of Business Administration who performs duties assigned by the Board of School Directors including but not limited to the business responsibilities specified in Section 433 of the Public School Code (24 P.S ). School Facilities The School District presently owns and operates eight (8) elementary schools, two (2) middle schools and one (1) high school, all as described in the following table. TABLE 1 PARKLAND SCHOOL DISTRICT SCHOOL FACILITIES PDE Building Grades Capacity (1) Enrollment (2) Elementary: Cetronia Elementary... K Fogelsville Elementary... K Ironton Elementary... K Fred J. Jaindl Elementary... K Kernsville Elementary... K Kratzer Elementary... K Parkway Manor Elementary... K Schnecksville Elementary... K Secondary: Orefield Middle School ,418 1,012 Springhouse Middle School ,570 1,234 Parkland High School ,713 3,194 (1) Feasibility Study of the School District dated October 5, 2012 performed by USA Architect Planners & Interior Designers PA. (2) Provided by School District Officials as of September 4, Enrollment Trends The following table presents trends in school enrollment and projections of enrollment, as prepared by School District officials. The table shows relatively stable enrollments. TABLE 2 PARKLAND SCHOOL DISTRICT ENROLLMENT TRENDS Actual Enrollments Projected Enrollments School K School K Year Elementary Secondary Total Year Elementary Secondary Total ,712 4,621 9, ,549 4,717 9, ,581 4,732 9, ,572 4,741 9, ,558 4,637 9, ,595 4,765 9, ,503 4,671 9, ,618 4,789 9, ,458 4,718 9,176 Source: School District Officials. 7

12 SCHOOL DISTRICT FINANCES Financial Reporting The School District keeps its books and prepares its financial reports according to a modified accrual basis. Major accrual items are payroll taxes and pension fund contributions payable, loans receivable from other funds, and revenues receivable from other governmental units. The School District s financial statements are audited annually by a firm of independent certified public accountants, as required by Commonwealth law. The firm of Buckno Lisicky & Company, P.C., Allentown, Pennsylvania, serves as School District Auditor. The School District's auditor has not been engaged to perform, and has not performed, since the date of its report included in an Appendix to this Official Statement, any procedure on the financial statements addressed in that report. Such auditor also has not performed any procedures relating to this Official Statement. Budgeting Process as modified by Act 1 of the Special Session of 2006 (Taxpayer Relief Act) In General. School districts budget and expend funds according to procedures mandated by the Pennsylvania Department of Education ( PDE ). An annual operating budget is prepared by school district administrative officials on a uniform form furnished by PDE and submitted to the board of school directors for approval prior to the beginning of each fiscal year which commences July 1. Procedures for Adoption of the Annual Budget. Unless the Simplified Procedures described below are utilized, under Pennsylvania Act No. 1 of the Special Session of 2006, as amended by Act 25 of 2011 (together the Taxpayer Relief Act or Act 1 ) all school districts of the first class A, second class, third class and fourth class must adopt a preliminary budget (which must include estimated revenues and expenditures and proposed tax rates) no later than 90 days prior to the date of the election preceding the fiscal year in which the preliminary budget will take effect. This preliminary budget 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 preliminary budget prior to its adoption. The board of school directors shall print the final budget and make it available for public inspection at least 20 days prior to its adoption and shall give public notice of its intent to adopt the final budget at least 10 days prior to adoption, and may hold a public hearing prior to adoption. Guidance from PDE suggests that the preliminary budget be converted to a proposed budget adopted by the board of school directors at least 30 days prior to the adoption of the final budget as required by the Public School Code. The School District follows the requirements of Act 1 and the guidance of PDE pursuant to the requirements of the Public School Code. If the adopted preliminary budget includes an increase in the rate of any tax levied, the school district must submit information on the increase to PDE on a uniform form prepared by PDE. Such information must be submitted no later than 85 days prior to the date of the election immediately preceding the beginning of the school district s fiscal year. PDE compares the proposed percentage increase in the rate of any tax with the index (see The Taxpayer Relief Act (Act 1) herein) and within ten days of the receipt of the information but no later than 75 days prior to the date of the election immediately preceding the beginning of the school district's fiscal year, PDE informs the school district whether the proposed tax rate increase is less than or equal to the index. If PDE determines that the proposed percentage increase in the rate of the tax exceeds the index, PDE notifies the school district that: (1) the proposed tax increase must be reduced to an amount less than or equal to the index; or (2) the proposed tax increase must be approved by the electorate at the election immediately preceding the beginning of the school district s fiscal year; or (3) seek approval to utilize one or more 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 (Act 1) 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. 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 that the school district comply with the procedures in Section 687 of the School Code for the adoption of its proposed and final budgets. Section 687 of the School Code requires that the school district adopt a proposed final budget at least 30 days prior to the adoption of the final budget; that the final budget be made available for public inspection at least 20 days prior to adoption; and the school district give public notice of its intent to adopt the final budget at least 10 days prior to adoption. No referendum exceptions are available to a school district adopting such a resolution. 8

13 Summary and Discussion of Financial Results Table 3 presents a Summary of General Fund Balance Sheets. TABLE 3 PARKLAND SCHOOL DISTRICT SUMMARY OF COMPARATIVE GENERAL FUND BALANCE SHEETS (Fiscal Years ending June 30) ASSETS Cash and Cash Equivalents... $29,906,174 $28,485,578 $25,557,222 $27,749,524 $32,634,764 Investments ,000 1,984,000 2,000,000 5,000,000 5,000,000 Taxes Receivable... 4,849,817 4,793,446 3,912,042 4,436,584 4,609,192 Interfund Receivable... 1,766, ,666 (67,595) 1,358,037 1,747,890 Intergovernmental Receivable... 4,358,676 1,729,772 1,193,187 1,363,644 1,221,801 State Revenue Receivable ,926,671 2,169,576 2,958,775 Federal Revenue Receivable , , ,402 Other Receivables ,979 1,414, , ,531 Prepaid Expenses... 27, Other Current Assets , TOTAL ASSETS... $42,023,584 $38,958,520 $34,779,766 $42,707,999 $48,723,355 LIABILITIES Interfund Payable... $0 $0 $603,416 $567,160 $0 Intergovernmental Payables... 1,274,278 2,547, Accounts Payables... 2,163,948 1,738, ,260 2,012,500 2,550,340 Accrued Salaries and Benefits... 7,776,910 7,128,193 8,345,664 9,754,053 11,320,411 Payroll Deductions and Withholdings ,108 17,220 27, , ,499 Other... 38,037 34,405 19,803 30,998 39,624 TOTAL LIABILITIES... $11,575,281 $11,465,561 $9,935,640 $13,267,242 $14,771,874 DEFERRED INFLOWS OF RESOURCES Deferred Property Taxes... $3,405,456 $3,095,022 $2,700,334 $1,721,012 $2,125,190 FUND EQUITIES (1) Committed Fund Balance... $27,024 $15,397,937 $18,309,095 $23,200,000 $25,800,000 Assigned Fund Balance... 26,600,000 8,500,000 3,334,697 4,000,000 5,500,000 Unassigned Fund Balance , , , , ,291 TOTAL FUND EQUITIES... $27,042,847 $24,397,937 $22,143,792 $27,719,745 $31,826,291 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND EQUITIES... $42,023,584 $38,958,520 $34,779,766 $42,707,999 $48,723,355 (1) Effective June 30, 2011, GASB 54 fund balance designations renamed. Source: School District Annual Financial Reports. Table 4 presents a Summary of Changes in Fund Balances. TABLE 4 PARKLAND SCHOOL DISTRICT GENERAL FUND SUMMARY OF CHANGES IN FUND BALANCE* (Fiscal Years ending June 30) Actual Budgeted (1) Beginning Fund Balance... $25,021,331 $27,042,847 $24,397,938 $22,143,795 $27,719,747 $31,826,291 Revenues over (under) Expenditure... 2,021,516 (2,610,322) (2,254,143) 5,575,953 4,106,544 (5,500,000) Changes in Inv/RS Equity Trans./Prior Year Adj.. 0 (34,587) Ending Fund Balance... $27,042,847 $24,397,938 $22,143,795 $27,719,748 $31,826,291 $26,326,291 *Totals may not add due to rounding. (1) Budgeted, as adopted June 24, Source: School District Annual Financial Reports and Budget. 9

14 Revenues The School District had revenue of $144,119,865 in its fiscal year and budgeted revenue of $146,682,566 in its fiscal year. Local sources have increased as a share of total revenue in the past four years, from 81.3% in fiscal year to 82.1% in fiscal year Revenue from Commonwealth sources have increased as a share of total revenue from 14.9% to 16.3% during this period. Federal and other sources decreased as a share of total revenue from 3.7% to 1.7% during this period. Table 5 presents revenues and expenditures for the past four years and budgeted TABLE 5 PARKLAND SCHOOL DISTRICT SUMMARY OF SCHOOL DISTRICT GENERAL FUND REVENUES* (Fiscal Years ending June 30) REVENUE: Actual Budgeted Local Sources (1) Current Real Estate Taxes... $85,972,301 $92,122,296 $96,732,641 $100,132,717 $102,144,819 Interim Real Estate Taxes... 2,824, , , , ,739 Payments in Lieu of Taxes... 4,000 4,000 4,000 4,000 4,000 Public Utility Realty Tax , , , , ,000 Act 511 Taxes... 10,971,746 12,933,990 11,668,440 13,076,837 11,770,000 Delinquencies on Taxes Levied/Assessed... 2,489,878 2,064,759 2,157,400 1,779,453 1,750,000 Interest Earnings... 81,245 42,439 35,316 53,135 63,041 Receipts from Other LEAS in PA - Education , , , , Federal Revenue from Other PA Public Schools IDEA 1,619,035 1,629,347 1,589,430 1,474,232 1,500,000 Rentals... 36,388 19,796 31,750 40,325 50,000 Contributions and Donations from Priv. Sources... 34,304 21,421 38,097 42,725 0 Tuition from Patrons , , , , ,136 Refunds of Prior Years' Expenditures... 46,156 96,067 81,399 13,839 0 Federal ARRA IDEA Pass Through Revenue , , , ,616 0 Energy Incentives & Rebates , ,874 24, ,614 0 Other... 33,634 46,963 30,673 86,591 85,150 Total Revenue from Local Sources... $105,570,792 $110,974,176 $113,651,238 $118,311,995 $119,084,885 State Sources Basic Instructional Subsidy... $5,739,981 $6,407,490 $6,407,744 $6,674,650 $6,656,135 Tuition for Orphans & Children ,370 77, , , ,676 Charter Schools , Homebound Instruction Special Education... 3,339,560 3,343,938 3,420,811 3,323,846 3,276,903 Transportation... 1,529,543 1,457,612 1,487,461 1,482,816 1,408,759 Driver Education... 19,835 21, Rental and Sinking Fund Reimbursement... 2,079,932 1,271, ,158 1,242,105 1,158,254 Health Services , , , , ,958 Safe Schools ,153 0 PA Accountability Grant , , , , ,815 Extra Grants... 7,240 6, Revenue for Social Security Payments... 2,517,981 2,594,070 2,432,685 2,505,713 2,710,580 Revenue of Retirement... 2,104,620 3,060,573 4,257,035 5,917,822 7,582,537 State Property Tax Reduction... 1,728,780 1,737,104 1,740,978 1,735,452 1,742,002 Total Revenue from State Sources... $19,983,143 $20,305,412 $20,955,321 $23,418,139 $25,625,619 Federal Sources Total Revenue from Federal Sources... $3,164,519 $2,825,439 $3,007,090 $2,389,732 $1,972,062 Other Sources Total Revenue from Other Sources/ Fund Balance Appropriation... $322,117 $307,160 $63,394 $0 $0 Total Revenue... $129,040,571 $134,412,188 $137,677,043 $144,119,865 $146,682,566 *Totals may not add due to rounding. (1) Budgeted, as adopted June 24, Source: School District Annual Financial Reports and Budget. 10

15 Expenditures TABLE 5 PARKLAND SCHOOL DISTRICT SUMMARY OF SCHOOL DISTRICT GENERAL FUND EXPENDITURES* (Fiscal Years ending June 30) Actual Budgeted EXPENDITURES: (1) Instruction... $78,858,582 $82,217,604 $80,004,924 $84,158,126 $92,068,438 Pupil Personnel... 4,295,430 4,644,168 4,628,148 4,922,705 5,156,769 Instructional Staff... 3,622,127 3,790,511 3,704,288 4,023,018 4,314,877 Administration... 5,631,393 6,051,430 5,970,818 6,387,392 6,702,770 Pupil Health... 1,495,051 1,625,493 1,586,331 1,638,387 1,800,054 Business... 1,209,892 1,296,747 1,415,303 1,452,527 1,502,605 Operation and Maintenance of Plant Services... 11,720,844 11,785,761 11,347,137 12,061,310 12,152,110 Student Transportation Services... 7,527,419 7,344,129 7,351,294 7,634,220 7,987,670 Central... 1,594,325 1,771,383 1,856,703 1,958,311 2,457,950 Other Support Services , , , , ,588 Operation of Non-instructional Services... 1,724,344 1,684,976 1,599,547 1,738,074 1,347,317 Debt Service... 34, ,350 50,000 Fund Transfers and Other Financing Sources... 13,679,251 14,242,043 12,396,807 13,775,036 15,940,418 Refund of Prior Years' Receipts... 52,753 11,942 39,348 37,287 0 Budgetary Reserve ,000 Total Expenditures... $131,650,893 $136,666,331 $132,101,090 $140,013,321 $152,182,566 SURPLUS (DEFICIT) OF REVENUES OVER EXPENDITURES... ($2,610,322) ($2,254,143) $5,575,953 $4,106,544 ($5,500,000) *Totals may not add due to rounding. (1) Budgeted, as adopted June 24, Source: School District Annual Financial Reports and Budget. In General SCHOOL DISTRICT TAXING POWERS AND LIMITS Subject to certain limitations imposed by the Taxpayer Relief Act (more specifically described below), the School District is empowered by the Public School Code and other statutes to levy the following taxes: 1. A basic annual tax on all real property taxable for school purposes, not to exceed 25 mills on each dollar of assessed valuation, to be used for general school purposes. 2. An unlimited ad valorem tax on the property taxable for school purposes to provide funds: a. for minimum salaries and increments of the teaching and supervisory staff; b. to pay rentals due any municipality authority or non-profit corporation or due the State Public School Building Authority; c. to pay interest and principal on any indebtedness incurred pursuant to the Local Government Unit Debt Act, or any prior or subsequent act governing the incurrence of indebtedness of the school district; and d. to pay for the amortization of a bond or note issue which provided a school building prior to the first Monday of July, An annual per capita tax on each resident or inhabitant over 18 years of age of not more than $ Additional taxes subject to division with other political subdivisions authorized to levy similar taxes on the same person, subject, business, transaction or privilege, under Act No. 511, enacted December 31, 1965, as amended by Act 32 of 2008, enacted July 2, 2008 (53 P.S ) the ( The Local Tax Enabling Act ). These taxes, which may include, among others, an additional per capita tax, a wage and other earned income tax, a real estate transfer tax, a gross receipts tax, a local services tax and an occupation tax, shall not exceed, in the aggregate, an amount equal to the product of the market valuation of real estate in the School District (as certified by the State Tax Equalization Board of the Commonwealth STEB ) multiplied by twelve mills. All local taxing authorities are required by the Local Tax Enabling Act to exempt disabled veterans and members of the armed forces reserve who are called to active duty at any time during the tax year from any local services tax and to exempt from any local services tax levied at a rate in excess of $10 those persons whose total income and net profits from all sources within the political subdivision is less than $12,000 for the tax year. The Local Tax Enabling Act also authorizes, but does not require, taxing authorities to exempt from per capita, occupation, and earned income taxes and any local services tax levied at a rate of $10 or less per year, any person whose total income from all sources is less than $12,000 per year. 11

16 The Taxpayer Relief Act (Act 1) Under The Taxpayer Relief Act (Act 1), a school district may not levy any tax for the support of the public schools which was not levied in the previous fiscal year, raise the rate of any earned income and net profits tax if already imposed under the authority of the Local Tax Enabling Act, or increase the rate of any tax for school purposes by more than the Index (defined below), unless in each case either (a) such increase is approved by the voters in the school district at a public referendum or (b) one or more of the exceptions summarized below is applicable and the use of such exception is approved by PDE: 1. (a) to pay interest and principal on indebtedness incurred (i) prior to September 4, 2004, in the case of a school district which had elected to become subject to the provisions of the prior Homeowner Tax Relief Act, Act 72 of 2004 ( Act 72 ), or (ii) prior to June 27, 2006, in the case of a school district which had not elected to become subject to Act 72 (as in the case of the School District); (b) to pay interest and principal on any indebtedness approved by the voters at referendum (electoral debt); and (c) to pay interest and principal on debt refunding or refinancing debt for which one of the above exceptions is permitted, as long as the refunding or refinancing incurs no additional debt other than for costs and expenses related to the refunding or refinancing and the funding of appropriate debt service reserves; 2. to pay costs incurred in providing special education programs and services to students with disabilities, under specified circumstances; and 3. to make payments into the State Public School Employees Retirement System when the increase in the estimated payments between the current year and the upcoming year is greater than the Index, as determined by PDE in accordance with the provisions of Act 1. Any revenue derived from an increase in the rate of any tax allowed under the exception numbered 1 above may not exceed the anticipated dollar amount of the expenditure, and any revenue derived from an increase in the rate of any tax allowed pursuant to any other exception enumerated above may not exceed the rate increase required, as determined by PDE. If a school district s petition or request to increase taxes by more than the Index pursuant to one or more of the allowable exceptions is not approved, the school district may submit the proposed tax increase to a referendum. Index is defined in Act 1 as follows: INDEX (1) Except as set forth in paragraph (2), the average of the percentage increase in the Statewide average weekly wage and the Employment cost index. (2) For a school district with a market value/income aid ratio greater than for the school year prior to the school year for which the index is calculated, the value under paragraph (1) multiplied by the sum of: (i) 0.75; and (ii) the school district's market value/income aid ratio for the school year prior to the school year for which the index is calculated. Statewide Average Weekly Wage is defined in Act 1 as follows: STATEWIDE AVERAGE WEEKLY WAGE That amount determined by the Department of Labor and Industry in the same manner that it determines the average weekly wage under section 404(e)(2) of the act of December 5, 1936 (2nd Sp. Sess., 1937 P.L. 2897, No. 1), known as the Unemployment Compensation Law, except that it shall be calculated for the preceding calendar year. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 12

17 The Act 1 Index applicable to the School District for the next fiscal year, the current fiscal year and prior fiscal years are as follows: Fiscal Year Index % % % % % Source: Pennsylvania Department of Education website. In accordance with Act 1, the School District put a referendum question on the ballot for the May 15, 2007, primary election seeking voter approval to increase the rate of its earned income and net profits tax ( EIT ) and use the proceeds to reduce local real estate taxes by a homestead and farmstead exclusion. That referendum question was not approved by the voters. A board of school directors may submit, but is not required to submit, a referendum question to the voters in any future municipal election seeking approval to levy or increase the rate of a earned income tax ( EIT ) or impose a personal income tax ( PIT ) for the purpose of funding homestead and farmstead exclusions, but the proposed rate of the EIT or PIT shall not exceed the rate that is required to provide the maximum homestead and farmstead exclusions allowable under law. The Bonds are Not Eligible for Act 1 Exception(s) The Bonds constitute indebtedness incurred after the effective date of Act 1 and, therefore, no exception to the referendum requirement is expected for any new taxes required to pay the debt service on the Bonds, if a tax increase greater than the Index is required. The School District will include sufficient new tax millage in its 2015/16 budget to cover the full amount of the debt service on the 2015 Bonds without exceeding the 2015/16 Index (although the actual tax increase may exceed the 2015/16 Index as a result of the other available and approved (non-debt related) exceptions to the Index). The information set forth above is a summary of Act 1 and its impact. This summary is not intended to be an exhaustive discussion of the provisions of Act 1 nor a legal interpretation of any provision of Act 1, and a prospective purchaser of the Bonds should review the full text of Act 1 as a part of any decision to purchase the Bonds. Act 48 of 2003 Limitation on School District Fund Balance Pennsylvania Act No (enacted December 23, 2003) prohibits a school district from increasing real property taxes unless the school district has adopted a budget for such school year that includes an estimated ending unreserved and undesignated fund balance which is not more than a specified percentage of the total budgeted expenditures, as set forth below: Estimated Ending Unreserved Undesignated Fund Balance Total Budgeted Expenditures as a Percentage of Total Budgeted Expenditures Less than or equal to $11,999, % Between $12,000,000 and $12,999, % Between $13,000,000 and $13,999, % Between $14,000,000 and $14,999, % Between $15,000,000 and $15,999, % Between $16,000,000 and $16,999, % Between $17,000,000 and $17,999, % Between $18,000,000 and $18,999, % Greater than or equal to $19,000, %* Estimated ending unreserved fund balance is defined in Act as that portion of the fund balance which is appropriable for expenditure or not legally or otherwise segregated for a specific or tentative future use, projected for the close of the school year for which a school district s budget was adopted and held in the general fund accounts of the school district. Set forth above is a summary of portions of Act 48. This summary is not intended to be an exhaustive discussion of the provisions of Act 48 nor a legal interpretation of any provisions of Act 48. A prospective purchaser of the bonds should review the full text of Act 48 as a part of any decision to purchase the Bonds. *Applicable to the School District. 13

18 Tax Levy Trends Table 6 shows the trend of tax rates levied by the School District. TABLE 6 PARKLAND SCHOOL DISTRICT TAX RATES Real Local Services Real Earned Estate Tax Estate Income Tax (1) Transfer Tax (1) (LST) Fiscal Year (mills) (%) (%) ($) (2) (1) Subject to sharing 50% with the municipalities within the School District. (2) Effective July 1, 2013 the millage was adjusted downward to account for a county-wide reassessment and a change in the predetermined ratio from 50% to 100%. Source: School District officials. Table 7 shows the comparative trend of real property tax rates for the School District, County and the Municipalities within the School District. TABLE 7 PARKLAND SCHOOL DISTRICT COMPARATIVE REAL PROPERTY TAX RATES (Mills on Assessed Value) (1) School District (2) Lehigh County (3) North Whitehall Township (3) South Whitehall Township (3) Upper Macungie Township (3) Parkland Community Library (1) Reflects county-wide reassessment. (2) The School District year is a fiscal year beginning July 1 and ending June 30. (3) Mills in place upon commencement of the School District s fiscal year. County and Municipalities fiscal years are a calendar year. Source: Local Government officials. Real Property Tax The School District s real property tax (excluding delinquent collections) produced $100,132,717 in , approximately 69.5% of total revenue. The School District fiscal year is from July 1 through June 30 and tax bills are issued on July 1 of each year. Taxpayers who remit within 60 days of July 1 receive a 2% discount, and those who remit subsequent to 120 days after July 1 are assessed a 10% penalty. The School District adopted a Resolution on June 19, 2012 that allows all property owners to pay school real estate taxes in installments. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 14

19 The following tables summarize recent trends of assessed and market valuations of real property and real property tax collection data. The last county-wide reassessment in Lehigh County was completed in 2012 and became effective for the School District taxes due and payable on and after July 1, School Real Estate taxes paid for were based on assessed values established in 1991 (unless changed through tax assessment appeals or interim assessments) when the County previously conducted a county-wide reassessment. The County has also changed its pre-determined ratio from 50% to 100% effective for the School District on July 1, TABLE 8 PARKLAND SCHOOL DISTRICT REAL PROPERTY ASSESSMENT DATA Fiscal Year Market Value Assessed Value (1) Ratio $6,197,939,900 $2,446,021, % ,744,132,715 2,463,564, % ,733,084,717 2,462,192, % ,037,890,888 2,468,634, % (2)... 7,237,139,794 7,659,242, % (3)... 7,037,890,889 7,601,122, % (1) through , based on 1991 county-wide reassessment. (2) Based on 2013 county-wide reassessment. (3) Budget, as per the PDE 2028 Budget Report. Source: Pennsylvania State Tax Equalization Board. TABLE 9 PARKLAND SCHOOL DISTRICT REAL PROPERTY ASSESSMENT DATA BY MUNICIPALITY Market Value Assessed Value (3) Market Value Assessed Value (4) School District (1)... $ 7,037,890,888 $2,468,634,900 $7,237,139,794 $7,659,242,000 North Whitehall Township (2)... 1,317,389, ,052,250 1,323,637,538 1,455,307,500 South Whitehall Township (2)... 2,374,236, ,631,850 2,399,384,228 2,531,656,900 Upper Macungie Township (2)... 3,346,265,439 1,155,950,800 3,514,118,028 3,672,277,600 Lehigh County (2)... 24,101,081,633 8,813,781,950 25,603,564,488 23,585,594,900 (1) The School District year is a fiscal year beginning July 1 and ending June 30. (2) The assessment data for the townships and county are for calendar year 2012 and (3) Based on 1991 county-wide reassessment. (4) Based on 2013 county-wide reassessment. Source: Pennsylvania State Tax Equalization Board. TABLE 10 PARKLAND SCHOOL DISTRICT ASSESSMENT BY LAND USE (1) (1) (1) (1) (2) Residential... $1,468,720,250 $1,495,704,150 $1,520,451,500 $1,481,789,550 $4,452,386,500 Lots... 40,720,950 35,406,950 33,145,000 27,415,100 54,219,600 Industrial ,704, ,801, ,478, ,368,050 1,161,558,200 Commercial ,663, ,736, ,424, ,208,150 1,943,018,500 Agriculture... 32,211,150 32,915,450 33,039,600 57,035,200 0 Land ,250 10,959,250 16,444,200 Trailers ,950 20,810,350 31,615,000 Oil/Gas/Minerals ,250 0 Total... $2,446,021,050 $2,463,564,250 $2,462,192,500 $2,468,634,900 $7,659,242,000 (1) Based on 1991 county-wide reassessment. (2) Based on 2013 county-wide reassessment. Source: Pennsylvania State Tax Equalization Board. 15

20 TABLE 11 PARKLAND SCHOOL DISTRICT REAL PROPERTY TAX COLLECTION DATA Total Current Total Adjusted Current Year Total Total Flat Flat Collections Collections Collections Collections Year Billing Billing (1) Amount as Percent Amount (2) as Percent $ 93,962,992 $ 89,299,586 $ 87,272, % $ 89,782, % ,340,073 91,712,483 88,836, % 91,342, % ,157,400 95,369,929 92,912, % 94,992, % ,904,996 99,360,486 97,298, % 99,228, % ,452, ,826, ,939, % 102,910, % (1) Flat billing plus penalties, less discounts rebates and exonerations. (2) Includes delinquent real estate tax collections. Source: School District officials. Table 12 represents the ten largest real property taxpayers within the School District; the aggregate assessed value of these ten largest real property taxpayers represents approximately 13.2% of the School District s total assessed value of $7,601,122,200 as provided in the School District s Budget report. Owner TABLE 12 PARKLAND SCHOOL DISTRICT TEN LARGEST REAL PROPERTY TAXPAYERS Product or Service Assessed Values as of January 2015 Liberty Property LP Investor Development $526,491,100 Air Products and Chemical Inc. Chemical Manufacturing 81,000,000 IIT Lehigh Valley DC LLC Investor Development 58,123,600 Cedar Fair LP Amusement Park 55,620,800 Lutheran Home of Topton Life Care Community 54,271,600 Integrated Health Campus LP Medical Facility 53,725,800 Hamilton 9999 Associates LP Investor Development 52,000,000 CLF Breinigsville Business Trust Nestle Food Co. 41,748,300 Atlantic American Land Development Investor Development 40,223,500 S/K Cetronia Associates LP Property Management 40,134,200 Totals $1,003,338,900 Source: Lehigh County Assessment Office. The Local Tax Enabling Act taxes collected by the School District Under The Local Tax Enabling Act, the School District received $13,076,837 in taxes in The School District pursuant to the Local Tax Enabling Act collects the following taxes: the Earned Income Tax, the Real Estate Transfer Tax and the Local Services Tax. The Local Tax Enabling Act limit, equal to 12 mills on the market value of real property, was approximately $86,845,678 in Earned Income Tax. The School District levies a tax of 1.0% (subject to sharing 0.5% with the municipalities within the School District) on earned income of residents. In the collected portion of this tax yielded $10,761,298 or 7.5% of total revenue. Real Estate Transfer Tax. The School District levies a tax of 1.0% (subject to sharing 0.5% with the municipalities within the School District) of the value of real estate transfers. In the collected portion of this tax yielded approximately $1,716,023 or 1.2% of total revenue. Local Services Tax. A tax of $5.00 is levied on each person working within school district boundaries. In the collected portion of this tax yielded $599,516, or less than 1.0% of total revenue. 16

21 DEBT AND DEBT LIMITS State Aid to School Districts 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. Subsidies for special education, pupil transportation, vocational education, health service and debt service are also received by the school district. Debt Statement Table 13 shows the debt of the School District as of February 2, 2015, giving effect to the issuance and purpose of the Bonds. TABLE 13 PARKLAND SCHOOL DISTRICT DEBT STATEMENT (As of February 2, 2015) Gross NONELECTORAL DEBT Outstanding General Obligation Bonds (1)... $ 32,220,000 General Obligation Bonds, Series of 2015 (last maturity 2029)... 8,880,000 General Obligation Bonds, Series A of 2014 (last maturity 2018)... 14,860,000 General Obligation Bonds, Series of 2014 (last maturity 2029)... 9,390,000 General Obligation Bonds, Series of 2013 (last maturity 2029)... 9,110,000 General Obligation Bonds, Series A of 2012 (last maturity 2029)... 8,070,000 General Obligation Bonds, Series of 2012 (last maturity 2020)... 8,290,000 General Obligation Bonds, Series of 2011 (last maturity 2016)... 5,690,000 General Obligation Bonds, Series of 2009 (last maturity 2022)... 25,670,000 General Obligation Bonds, Capital Projects Series (last maturity 2029) (2)... 13,215,000 General Obligation Bonds, Series of 1998 (last maturity 2016)(remaining portion)... 8,830,000 TOTAL NONELECTORAL DEBT... $144,225,000 LEASE RENTAL DEBT TOTAL LEASE RENTAL DEBT... $ 0 TOTAL PRINCIPAL OF DIRECT DEBT... $144,225,000 (1) Bonds authorized and incurred (as defined by the Debt Act) on December 16, 2014, but not yet issued. Assumes refunding of $10,345,000 outstanding General Obligation Bonds, Series of 2008 and $15,705,000 outstanding General Obligation Bonds, Series of (2) Bonds authorized and incurred (as defined in the Debt Act) for various capital projects on June 26, 2006, but not yet issued. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 17

22 Table 14 presents the overlapping indebtedness and debt ratios of the School District. After issuance of the Bonds, the principal of direct debt of the School District will total $144,225,000. After adjustment for available funds and State aid, the local effort of direct debt will total $137,930,262. TABLE 14 PARKLAND SCHOOL DISTRICT BONDED INDEBTEDNESS AND DEBT RATIOS* (As of February 2, 2015) Gross Local Effort or Net of Available Funds and Estimated DIRECT DEBT Outstanding State Aid (1) Nonelectoral Obligation Debt... $144,225,000 $137,930,262 Lease Rental Debt TOTAL DIRECT DEBT... $144,225,000 $137,930,262 OVERLAPPING DEBT Lehigh County, General Obligation Debt (2)... $40,085,116 $40,085,116 Municipal, General Obligation Debt (3)... 8,730,658 8,730,658 TOTAL OVERLAPPING DEBT... $48,815,774 $48,815,774 TOTAL DIRECT AND OVERLAPPING DEBT... $193,040,774 $186,746,036 DEBT RATIOS Per Capita (2010)... $3, $3, Percent Assessed Value % 2.44% Percent Market Value % 2.65% *Includes the Bonds being offered through this Official Statement. (1) Gives effect to current appropriations for payment of debt service and expected future State Reimbursement of School District sinking fund payments based on current Aid Ratio. See State Aid to School Districts. (2) Outstanding principal debt of Lehigh County that represents the share attributable to School District taxpayers (28.27% of the total Lehigh County assessed value of real estate multiplied by Lehigh County s total principal debt outstanding of $141,813,186). (3) Outstanding principal debt of local governments (excluding Lehigh County) located within the School District. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 18

23 Debt Limit and Remaining Borrowing Capacity Electoral debt, i.e., debt approved by the voters at a general or special election may be incurred without limit. Non-electoral debt and lease rental debt combined are subject to a statutory borrowing limit. The statutory borrowing limit of the School District under the Debt Act is computed as a percentage of the School District s Borrowing Base. The Borrowing Base is defined as the annual arithmetic average of Total Revenues (as defined by the Debt Act) for the three full fiscal years ended next preceding the date of incurring debt. The School District calculates its present borrowing base and borrowing capacity as follows: Total Revenues for $132,833,114 Total Revenues for ,893,491 Total Revenues for ,877,761 Totals... $412,604,366 Annual Arithmetic Average (Borrowing Base)... $137,534,789 Under the Debt Act, no school district shall incur any additional nonelectoral debt or lease rental debt if the aggregate net principal amount of net nonelectoral debt and net lease rental debt outstanding will then exceed 225% of the Borrowing Base. The application of this percentage to the School District s current Borrowing Base produces the following product: Remaining Legal Net Debt Borrowing Limit Outstanding* Capacity Net Nonelectoral Debt and Lease Rental Debt Limit: 225% of Borrowing Base $309,453,274 $144,225,000 $165,228,274 *Includes the Bonds as described and assumed to be refunded by such debt. It does not reflect credits against gross indebtedness that may be claimed for a portion of principal of debt to be reimbursed by Commonwealth Aid. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 19

24 Debt Service Requirements Table 15 presents the debt service requirements on the School District s outstanding general obligation and lease rental indebtedness, including debt service on the Bonds. The School District has never defaulted on the payment of debt service. TABLE 15 PARKLAND SCHOOL DISTRICT DEBT SERVICE REQUIREMENTS* Other General Series Obligation of 2015 Total Year Debt Principal Interest Subtotal Requirements ,569,201 $0 $0 $0 $15,569, ,854,997 5, , ,223 16,053, ,853,598 5, , ,620 16,066, ,321, , , ,583 16,083, ,980,597 5, , ,033 16,187, ,284,513 5, , ,978 16,491, ,283,563 5, , ,913 16,490, ,716, , , ,838 11,618, ,169,718 1,005, ,838 1,192,838 8,362, ,168,161 1,030, ,738 1,197,738 8,365, ,170,630 1,045, ,138 1,192,138 8,362, ,168,199 1,070, ,238 1,196,238 8,364, ,014,393 1,110, ,500 1,213,500 8,227, ,951,913 1,150,000 70,200 1,220,200 8,172, ,951,250 1,190,000 35,700 1,225,700 8,176,950 Total $171,458,703 $8,880,000 $2,254,535 $11,134,535 $182,593,239 *Totals may not add due to rounding. Table 16 presents data on the extent to which Commonwealth Aid provides coverage for debt service and lease rental requirements. TABLE 16 PARKLAND SCHOOL DISTRICT COVERAGE OF DEBT SERVICE AND LEASE RENTAL REQUIREMENTS BY STATE AID* State Aid Received... $23,418, Debt Service Requirements... 13,800,386 Maximum Future Debt Service Requirements after Issuance of Bonds... 16,491,490 Coverage of Debt Service Requirements times Coverage of Maximum Future Debt Service Requirements after Issuance of Bonds times *Assumes current State Aid Ratio. See State Aid to School Districts. 20

25 Future Financing The School District is in the planning stages of a feasibility study to review the capital improvement project needs of the School District within the next couple of years. School District Employees LABOR RELATIONS The teachers of the School District are represented in collective bargaining by the Parkland Education Association. The School District s present contract with the Association expires on August 31, The School District s support personnel are organized as an Association for collective bargaining known as the Parkland Education Support Professionals Association. The present support personnel collective bargaining contract expires on June 30, There are presently 1,406 employees of the School District, including 670 teachers and administrators, and 260 full-time support personnel including secretaries, maintenance staff, and teacher aides, and 476 part-time and substitute personnel. Pension Plan 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 (1) 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. The Public School Employees Retirement System (PSERS) Board of Trustees certified an annual employer contribution rate of 25.84% for fiscal year , which begins on July 1, This marks the fifth year of planned increases in the employer contribution rate under Act 120 of 2010 which are needed to raise the rate to the actuarially required level. The 25.84% employer contribution rate is composed of 0.84% for health insurance premium assistance and a pension rate of 25.00%. The pension component of the rate was capped at a 4.50% increase from the previous year. The rate maximums established under Act 120 of 2010 remain in effect for the next fiscal year and continue to suppress the pension rate and underfund the System. Based on current projections, fiscal year would be the last fiscal year rate minimums and maximums will be in place. Total employer contributions of $3.45 billion are estimated in The commonwealth reimburses school employers for not less than 50% of the total employer contribution rate. Contributions for the School District are as follows: $ 3,039, ,946, ,260, ,650, ,878, (budgeted) 15,465,857 PSERS is also funded through investment earnings and mandatory member contributions. Investment earnings are the largest source of funding for PSERS. For the most recent fiscal year ended June 30, 2014, PSERS investments added over $7.1 billion in net investment income to the fund. PSERS members contribute from 5.25% to 10.30% of pay depending on their membership class and when they joined PSERS. Members will contribute an average of 7.49% or approximately $1 billion in (1) Pennsylvania Sch. Boards Ass'n, Inc. v. Com., Pub. Sch. Employees' Ret. Bd., 580 Pa. 610, 612, 863 A.2d 432, 434 (2004). Source: Pennsylvania School Board Association at and PSERS at Other Post-Employment Benefits The School District is obligated under collective bargaining agreements to provide in the future health insurance coverage for current and future retired employees, and to provide retirement severance pay for existing employees. The School District became subject to the requirements of GASB Statements No. 43 and 45 commencing with the School District s annual financial statements for the fiscal year ending June 30, For a full description of the plan, please refer to Appendix D - Audit Report - Fiscal year Ended June 30,

26 LITIGATION At the time of settlement on the Bonds, an officer of the School District will deliver a certificate, and the Solicitor will deliver an opinion, stating that there is no litigation pending, or to their knowledge threatened, which challenges, the validity of the Bonds or the Resolution, or the security for the Bonds. Bond Counsel Opinion TAX EXEMPTION AND OTHER TAX MATTERS The information which follows is a summary of Bond Counsel s opinion. This summary does not purport and should not be construed to be a complete recitation of Bond Counsel s opinion. A draft of the full text of Bond Counsel s opinion is appended hereto in Appendix B and reference is made thereto. Federal Income Tax Matters On the date of delivery of the Bonds, Rhoads & Sinon LLP, Harrisburg, Pennsylvania as Bond Counsel to the School District, will issue an opinion to the effect that under existing statutes, regulations and judicial decisions, interest on the Bonds is excluded from gross income for purposes of federal income taxation and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, but that in the case of corporations (as defined for federal income tax purposes) such interest is taken into account in determining adjusted current earnings for purposes of such alternative minimum tax. This opinion of Bond Counsel will assume the accuracy of certifications made by the School District and will be subject to the condition that the School District will comply with all requirements of the Internal Revenue Code of 1986, as amended (the Code ), that must be satisfied subsequent to the issuance of the Bonds in order that the interest thereon be, and continue to be, excluded from gross income for federal income tax purposes. The School District has covenanted to comply with all such requirements, which include, among others, restrictions upon the yield at which proceeds of the Bonds and other money held for the payment of the Bonds and deemed to be "proceeds" thereof may be invested and the requirement to calculate and rebate any arbitrage that may be generated with respect to investments allocable to the Bonds. Failure to comply with such requirements could cause the interest on the Bonds to be included in gross income retroactive to the date of issuance of the Bonds. Certain maturities of the Bonds may be sold to the public in the initial offering at a price less than the stated redemption price of such Bonds at maturity (that is, at less than par or the stated principal amount), the difference being "original issue discount". Generally, original issue discount accruing on a tax-exempt obligation is treated as interest excludable from gross income for federal income tax purposes. In addition, original issue discount that has accrued on a tax-exempt obligation is treated as an adjustment to the issue price of the obligation for the purpose of determining taxable gain upon sale or other disposition of such obligation prior to maturity. The Internal Revenue Code of 1986, as amended, provides specific rules for the accrual of original issue discount on taxexempt obligations for federal income tax purposes. Prospective purchasers of Bonds being sold with original issue discount should consult their tax advisors for further information. Ownership of the Bonds may result in other collateral Federal income tax consequences to certain taxpayers, including, but not limited to, financial institutions, property and casualty insurance companies, certain subchapter S corporations with substantial passive income and subchapter C earnings and profits, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry the Bonds. No opinion or representation concerning these matters is being given or made by the School District, Bond Counsel or any other party associated with the issuance, offering or sale of the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors concerning these matters. No representation is made or can be made by the School District or any other party associated with the issuance of the Bonds as to whether or not any legislation now or hereafter introduced and enacted will be applied retroactively so as to subject interest on the Bonds to inclusion in gross income for Federal income tax purposes or so as to otherwise affect the marketability or market value of the Bonds. Enactment of any legislation that subjects the interest on the Bonds to inclusion in gross income for federal income tax purposes or otherwise imposes taxation on the Bonds or the interest paid thereon may have an adverse effect on the market value or marketability of the Bonds. Proposed or Future Legislation 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. 22

27 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. Pennsylvania Tax Matters On the date of delivery of the Bonds, Bond Counsel will issue an opinion to the effect that under the laws of the Commonwealth of Pennsylvania (the Commonwealth ) as presently enacted and construed, the Bonds are exempt from personal property taxes within the Commonwealth and the interest on the bonds is exempt from the Commonwealth s Personal Income Tax and the Commonwealth s Corporate Net Income Tax. Profits, gains, or income derived from the sale, exchange or other disposition of the Bonds are subject to state and local taxation by the Commonwealth, in accordance with Pennsylvania Act No Certain maturities of the Bonds may be sold to the public in the initial offering at a price less than their stated redemption price at maturity (that is, at an original issue discount ). For Pennsylvania Personal Income tax purposes original issue discount on publicly offered obligations is treated under current regulations of the Pennsylvania Department of Revenue as interest and, for purposes of determining taxable gain upon sale or other distribution of an obligation the interest on which is exempt from income taxation by the Commonwealth, as an adjustment to basis. For Pennsylvania Corporate Net Income Tax purposes, original issue discount is to be accorded similar treatment, according to a Private Letter Ruling issued by the Office of the Chief Counsel of the Pennsylvania Department of Revenue dated December 2, 1993, but such Private Letter Ruling may be relied upon only by the taxpayer to whom it was addressed. Prospective purchasers of the Bonds issued with original issue discount should consult their tax advisors for further information and advice concerning the reporting of profits, gains or other income related to a sale, exchange or other disposition of such Bonds for Pennsylvania tax purposes, including information with respect to any revision of the referenced Statement of Policy and Proposed Regulations or the adoption of final regulations by the Department of Revenue subsequent to the preparation of this Official Statement. No representation is made or can be made by the School District, or any other party associated with the issuance of the Bonds, as to whether or not any legislation now or hereafter introduced and enacted in the Commonwealth will be applied, either prospectively or retroactively, so as to subject interest on the Bonds to taxation in the Commonwealth or so as to otherwise affect the marketability or market value of the Bonds. Enactment of any legislation that subjects the interest on the Bonds to state or local taxes in the Commonwealth or otherwise imposes taxation on the Bonds may have an adverse effect on the market value or marketability of the Bonds. Federal Income Tax Interest Expense Deductions for Financial Institutions Under the Code, financial institutions are disallowed 100% of their interest expense deductions that are allocable, by a formula, to tax-exempt obligations acquired after August 7, An exception, which reduces the amount of the disallowance, is provided for certain tax-exempt obligations that are designated or "deemed designated" by the issuer as "qualified tax-exempt obligations" under Section 265 of the Code. Each of the Bonds has been designated, or is deemed designated, as a qualified tax-exempt obligation for purposes and effect contemplated by Section 265 of the Code (relating to expenses and interest relating to tax-exempt income of certain financial institutions). Financial institutions intending to purchase Bonds should consult with their professional tax advisors to determine the effect of the interest expense disallowance on their federal income tax liability. 23

28 CONTINUING DISCLOSURE UNDERTAKING In accordance with the requirements of Rule 15c2-12 (the Rule ) promulgated by the Securities and Exchange Commission (the SEC ), the School District (being an obligated person with respect to the Bonds, within the meaning of the Rule), will execute a Continuing Disclosure Certificate. See Appendix C for the proposed form of Continuing Disclosure Certificate. With respect to the filing of annual financial and operating information, the School District 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 necessary or appropriate as a result of a change in legal requirements or a change in the nature of the School District or its operations or financial reporting, but the School District will agree that any such modification will be done in a manner consistent with the Rule. The School District acknowledges that its undertaking pursuant to the Rule described herein is intended to be for the benefit of the holders and beneficial owners of the Bonds and shall be enforceable by the holders and beneficial owners of the Bonds, but the right of the holders and beneficial owners of the Bonds to enforce the provisions of the School District s continuing disclosure undertaking shall be limited to a right to obtain specific enforcement, and any failure by the School District to comply with the provisions of the undertaking shall not be an event of default with respect to the Bonds. The School District s obligations with respect to continuing disclosure described herein shall terminate upon the prior redemption or payment in full of all of the Bonds or if and when the School District is no longer an obligated person with respect to the Bonds, within the meaning of the Rule. The MSRB has been designated by the SEC to be the central and sole repository for continuing disclosure information filed by issuers of municipal securities since July 1, Information and notices filed by municipal issuers (and other obligated persons with respect to municipal securities issues) are made available through the MSRB s Electronic Municipal Market Access ( EMMA ) System, which may be accessed on the internet at Some operating data of the School District may be inherently included in the annual filings of audited financial statements, the summary of the budget, contents of official statements prepared by the School District for bond issues as well as other publically available information. In connection with the Continuing Disclosure Certificate associated with the Bonds, the School District may not be filing this information separately, but it may be available in the other annual filings of the School District or publically available elsewhere. Existing Continuing Disclosure Filing History For fiscal year ending June 30, 2014, the School District filed its State Form PDE 2057 Annual Financial Report on December 15, 2014 which served as an interim filing until completion of its audited financial statements for this fiscal year, which became available and was filed to EMMA on January 13, Underlying Rating Upgrade The School District received an underlying rating upgrade from AA- to AA from Standard & Poor s Rating Service on February 24, An Event Notice relating to this rating upgrade was not filed by the School District in a timely manner. Bond Insurance Rating Downgrades and Upgrades by S&P and/or Moody s Further, the School District failed to file in a timely manner a Notice of Rating Change as a result of the Insured Rating Downgrades/Upgrades by Moody s and/or S&P*. *This information was widely disseminated at the time of the rating change and was publicly available from other public information sources. The School District has procedures in place to ensure that future filings of the required annual information and event notices will be accomplished within all required time periods. 24

29 RATING Standard & Poor s Rating Services has assigned an underlying rating of AA (stable outlook) on the Bonds. Such rating reflects only the view of such organization and any desired explanation of the significance of such rating should be obtained from the rating agency furnishing the same, at the following address: 55 Water Street, New York, New York Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance that any such rating will continue for any given period of time or that it will not be revised downward or withdrawn entirely by the rating agency, if circumstances so warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the Bonds. The above rating is not a recommendation to buy, sell or hold the Bonds, and such rating may be subject to revision or withdrawal at any time by the rating agency. Any downward revision or withdrawal of any of the above ratings may have an adverse effect on the market price of the Bonds. UNDERWRITING RBC Capital Markets, LLC (the Underwriter ) has agreed, subject to certain conditions, to purchase the Bonds from the School District and will purchase all of the Bonds if any of such Bonds are purchased. The purchase price of the Bonds is $8,932, equal to the par value of the Bonds less the underwriters discount of $66,600.00, plus a net original issue premium of $119, plus accrued interest from the dated date to the date of delivery of the Bonds. LEGAL OPINIONS The Bonds are offered with the approving legal opinion of Rhoads & Sinon LLP, of Harrisburg, Pennsylvania, as Bond Counsel to the School District. Certain legal matters will be passed upon for the School District in an opinion to be issued by C. Steven Miller, Esquire, of Allentown, Pennsylvania, as School District Solicitor. FINANCIAL ADVISOR The School District has retained Public Financial Management, Inc. (the Financial Advisor ), of Harrisburg, Pennsylvania, as financial advisor in connection with the preparation, authorization and issuance of the Bonds. The Financial Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume responsibility for the accuracy, completeness, or fairness of the information contained in the Official Statement. Public Financial Management, Inc. is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities. MISCELLANEOUS This Official Statement has been prepared under the direction of the School District by the Financial Advisor to the School District. The information set forth in this Official Statement has been obtained from the School District and from other sources believed to be reliable. Insofar as any statement herein includes matters of opinion or estimates about future conditions, it is not intended as representation of fact, and there is no guarantee that it is, or will be, realized. Summaries or descriptions of provisions of the Bonds, the Resolution, the Debt Act, Act 1 and all references to other materials or legislation not purporting to be quoted in full are only brief outlines of some of the provisions thereof. Copies of complete documents will be furnished by the School District or the Financial Advisor upon request. The information assembled in this Official Statement is not to be construed as a contract with bondholders of the Bonds. Use of the words shall, will, must, or other words of similar import or meaning in summaries of documents or law in this Official Statement to describe future events or continuing obligations is not intended as a representation that such event will occur or such obligations will be fulfilled, but only that the document or law requires or contemplates such event to occur or such obligation to be fulfilled. The School District has authorized the distribution of this Official Statement. PARKLAND SCHOOL DISTRICT Lehigh County, Pennsylvania By: /s/roberta M. Marcus President, Board of School Directors 25

30 [THIS PAGE INTENTIONALLY LEFT BLANK]

31 APPENDIX A Demographic and Economic Information Relating to the Parkland School District

32 [THIS PAGE INTENTIONALLY LEFT BLANK]

33 Population Table A-1 shows recent population trends for the School District and its included municipalities, Lehigh County and the Commonwealth. Table A-2 shows 2000 age composition and average number of persons per household in Lehigh County and for the Commonwealth. TABLE A-1 RECENT POPULATION TRENDS Census: April 2000 Census: April 2010 Change: 2000 to 2010 Geographic Area Number Number Number Percent North Whitehall Township... 14,731 15, % South Whitehall Township... 18,028 19,180 1, % Upper Macungie Township... 13,895 20,063 6, % School District... 46,654 54,946 8, % Lehigh County , ,497 37, % Pennsylvania... 12,281,054 12,702, , % Source: U.S. Census Bureau, Census TABLE A-2 AGE COMPOSITION Persons Per Years Years Years Household Lehigh County % 61.9% 15.4% 2.51 Pennsylvania % 61.1% 15.4% 2.57 Source: Pennsylvania State Data Center, 2000 General Population and Housing Characteristics: Pennsylvania. A-1

34 Employment Overall Nonfarm Jobs, Industry Employment data for the Allentown-Bethlehem-Easton Labor Metropolitan Statistical Area ( MSA ) an area which includes the School District. TABLE A-3 DISTRIBUTION OF EMPLOYMENT BY INDUSTRY Allentown-Bethlehem-Easton Metropolitan Statistical Area NONFARM JOBS (November 2014) Establishment Data Nov Oct Sept Nov Oct Nov TOTAL NONFARM , , , ,600 (1,200) 3,000 TOTAL PRIVATE , , , ,600 (1,600) 3,900 GOODS PRODUCING... 47,900 48,300 48,400 47,400 (400) 500 Mining, Logging, and Construction... 12,900 13,300 13,300 12,800 (400) 100 Manufacturing... 35,000 35,000 35,100 34, Durable Goods... 21,900 21,900 21,800 21, Non-Durable Goods... 13,100 13,100 13,300 13,400 - (300) SERVICE-PROVIDING , , , ,200 (800) 2,500 PRIVATE SERVICE-PROVIDING , , , ,200 (1,200) 3,400 Trade, Transportation, and Utilities... 76,500 75,500 74,500 75,000 1,000 1,500 Wholesale Trade... 13,500 13,600 13,600 13,400 (100) 100 Retail Trade... 41,700 40,700 39,900 41,500 1, Food and beverage stores... 9,800 9,800 9,700 9,900 - (100) General merchandise stores... 7,100 6,600 6,500 7, (300) Department stores... 4,500 4,000 4,000 4, (200) Transportation, Warehousing, and Utilities... 21,300 21,200 21,000 20, ,200 Transportation and Warehousing... 20,100 20,000 19,700 19, ,100 Information... 6,200 6,100 6,100 6, (100) Financial Activities... 15,000 15,000 15,000 15, Finance and insurance... 12,200 12,200 12,100 12, Insurance carriers and related activities... 6,700 6,700 6,600 6, Professional and Business Services... 47,600 48,900 48,600 47,400 (1,300) 200 Professional and technical services... 13,000 13,200 13,000 12,500 (200) 500 Management of companies and enterprises... 11,500 11,800 11,800 11,700 (300) (200) Administrative and waste services... 23,100 23,900 23,800 23,200 (800) (100) Employment services... 9,400 10,000 9,700 9,500 (600) (100) Education and Health Services... 70,700 70,500 69,700 72, (1,700) Educational services... 12,800 12,600 11,900 12, Health care and social assistance... 57,900 57,900 57,800 59,600 - (1,700) Hospitals... 19,100 19,100 19,100 19,300 - (200) Leisure and Hospitality... 33,900 35,100 35,300 30,500 (1,200) 3,400 Accommodation and food services... 28,800 29,000 29,200 28,300 (200) 500 Food services and drinking places... 24,200 24,300 24,400 24,000 (100) 200 Other Services... 13,700 13,700 13,600 13, Government... 40,100 39,700 39,100 41, (900) Federal Government... 2,200 2,200 2,200 2, State Government... 2,800 2,800 2,800 2, Local Government... 35,100 34,700 34,100 36, (900) Local government educational services... 22,000 21,500 20,800 22, (700) Other Local Government... 13,100 13,200 13,300 13,300 (100) (200) Data benchmarked to March 2013 Source: Pennsylvania Department of Labor and Industry A-2

35 Table A-4 shows recent trends in labor force, employment and unemployment for Lehigh County and the Commonwealth. TABLE A-4 TRENDS IN LABOR FORCE, EMPLOYMENT AND UNEMPLOYMENT (Lehigh County) Percent Lehigh County (1) Change Civilian Labor Force (000) % Employment (000) % Unemployment (000) % Unemployment Rate % 9.4% 8.7% 8.5% 7.8% 5.3% Pennsylvania Civilian Labor Force (000). 6, , , , , , % Employment (000)... 5, , , , , , % Unemployment (000) % Unemployment Rate % 8.7% 7.9% 7.9% 7.4% 5.1% (1) As of November Source: Pennsylvania State Employment Service. Employment Following are the Lehigh Valley s top employers (some of which are located near or within the School District). Company Air Products and Chemicals PPL Corporation Lehigh Valley Health Network B. Braun of America Lehigh University Receivable Management Services International St. Luke s University Health Network Olympus Corporation of the Americas Sands Bethworks Gaming Mack Trucks Crayola Lutron Electronics Victaulic Source: A-3

36 Income The data on Table A-5 shows recent trends in per capita income for the School District, the County and Pennsylvania over the period. TABLE A-5 RECENT TRENDS IN PER CAPITA INCOME* Geographic Area 2000 Number 2010 Number Annual Percent Change School District... $27,087 $35, % Lehigh County... 21,897 27, % Pennsylvania... 20,880 27, % *Income is defined by the Bureau of the Census as the sum of wage and salary income, non-farm self-employment income, net self-employment income, Social Security and Railroad retirement income, public assistance income, interest, dividends, pensions, etc. before deductions for personal income taxes, Social Security, etc. School District income is the populationweighted average for political subdivisions. Source: U.S. Census Bureau: 2000 & 2010 American FactFinder2/American Community Survey websites. Industry The great diversity of industrial activity can be seen in even a partial list of products manufactured in this area: steel products, trucks, industrial equipment, food products, pet foods, electrical and mechanical equipment, electronic components, modular storage cabinets, storage systems, musical instruments, clothing and textiles, and chemical and mineral processing equipment. Also, an increasingly important service sector has been characterized by the rapid growth in computer service, software companies, and other firms which deal in information processing. The stable industrial base, combined with the area s existing educational, research, and development facilities, has created an ideal environment for the development of advanced technology in all sectors of the local economy. Table A-6 shows retail sales over a five year period for the County, the Metropolitan Statistical Area (the MSA ) and the Commonwealth. TABLE A-6 TOTAL RETAIL SALES (Millions of Dollars) Lehigh County... $ 5,640,398 $ 5,638,511 $ 4,997,708 $ 5,132,289 MSA... 11,972,180 11,968,586 12,275,398 14,104,992 Pennsylvania ,193, ,149, ,412, ,975,257 Source: The Nielsen Company. A-4

37 Medical Facilities In the Lehigh Valley and immediate surrounding areas, there are multiple medical facilities available to the population. Many of the facilities are top rated and nationally recognized for high quality services. Blue Mountain Health System Gnaden Huetten Campus - Lehighton Palmerton Campus - Palmerton The hospitals of the Blue Mountain Health System provide a wide array of inpatient and outpatient services at both the Gnaden Huetten and Palmerton campuses. Blue Mountain Health System also offers many educational and community services. Easton Hospital Easton Hospital is a 254-bed, acute care teaching hospital serving more than 300,000 residents in Northampton County and the five surrounding counties in Pennsylvania and New Jersey. Founded in 1890, the hospital has a wide offering of medical, surgical, diagnostic and emergency services, including a cardiac care program; a Chest Pain Center accredited by the Society for Chest Pain Centers; a newly renovated Center for Orthopedics, Joint and Spine; a bariatric weight loss program designated as a Center of Excellence in Bariatric Surgery; the Easton Regional Cancer Center, a Fox Chase Cancer Center partner just to name a few. The hospital also maintains free-standing, fully-accredited residency training programs. Good Shepherd Rehabilitation Good Shepherd Rehabilitation Network, based in Allentown, Pennsylvania, is a nationally recognized rehabilitation leader, offering a continuum of care for people with physical and cognitive disabilities and specializing in assistive and rehabilitation technology. More than 60,000 people come to Good Shepherd each year for specialized programs in stroke, orthopedics, brain injury, spinal cord injury, pediatrics, amputation and more. Good Shepherd is affiliated with the Evangelical Lutheran Church in America and provides rehabilitation services at more than 30 locations in 8 eastern Pennsylvania counties. Lehigh Valley Health Network Lehigh Valley Health Network continues to add new facilities, services and programs to a regional campus that now includes: Two full-service hospitals: Lehigh Valley Hospital-Cedar Crest in Salisbury Township, which includes an additional clinical campus at Lehigh Valley Hospital-17th Street in Allentown; and Lehigh Valley Hospital-Muhlenberg in Bethlehem Children's Hospital at Lehigh Valley Hospital, the only Children s Hospital in the Lehigh Valley, including inpatient and ambulatory care, a Children s ER, more than 25 pediatric specialists and numerous child-specific services such as rehab and burn care. Community health centers offering doctors' offices and lab and imaging services at convenient locations in Bath, Bethlehem Township, Emmaus, Hamburg, Kutztown, Macungie, Moselem Springs, Trexlertown and Upper Bucks (in partnership with Grand View Hospital) More than 1,100 primary care and specialty physicians -- including more than 550 employed by the health network Pharmacy services at all three hospital campuses Imaging services to obtain accurate diagnoses with the latest high-tech diagnostic equipment Home health and hospice services CareWorks retail health clinics in Allentown and Schnecksville. Community clinics, including 40 primary and specialty clinics to care for people who are uninsured or underinsured Health Network Laboratories, providing laboratory tests from the most critical medical applications to simple preemployment drug screenings Valley Preferred, linking employers and individuals with quality health coverage Sacred Heart HealthCare System Sacred Heart Hospital is a 215-bed Catholic medical center located in Allentown, PA. Founded in 1912, Sacred Heart Hospital offers a wide range of advanced medical services ranging from obstetrics to bariatric surgery, vascular surgery, cardiology, rehabilitation and behavioral health services. A network of physician practices throughout Lehigh and Northampton counties provide complete primary and pediatric medical care to the region's residents. Sacred Heart Hospital is nationally recognized in case management, as a Center of Excellence in Bariatric Surgery, and its Transitional Care Facility was granted a Five-Star rating by the U.S. Centers for Medicare and Medicaid Services. A-5

38 St. Luke's University Health Network St. Luke's University Health Network is a regional network of hospitals, physicians and other related organizations providing care primarily in Lehigh, Northampton, Monroe, Carbon, Schuykill, Bucks, Montgomery and Berks counties in Pennsylvania and Warren County in New Jersey. The Network provides services at more than 150 sites. St. Luke's University Health Network is comprised of six hospital sites. The Network includes: More than 80 owned physician-practice sites 300 employed primary care/specialist physicians Various outpatient testing and service facilities Home Health Hospice Services (inpatient and outpatient) Largest ambulance provider in Bucks County and second largest in Lehigh County Other related organizations Source: Lehigh Valley Association of Realtors - Transportation School District residents have major highways located in or close to the School District. U.S. Route 22 connects to U.S. Interstate 78, connecting the area to New Jersey and New York. In addition, the Pennsylvania Turnpike Northeast Extension (Rt. 476) connects the School District to Philadelphia to the south and Scranton to the north. The School District is provided with air service by the Lehigh Valley International Airport. In addition to air freight and air express service, air passenger transportation services are provided by major airlines. Bus service is provided by national and regional companies. Because of the vast network of transportation available to the School District residents, this area is becoming increasingly popular for those individuals wishing to commute to major East Coast business centers including the New York and Philadelphia metropolitan areas. In addition, the transportation systems available are well suited for receiving and distributing goods and services throughout the United States. Utilities and Communications There are multiple utilities for electric, gas and telephone available to the School District. Educational Institutions Area residents are provided with higher education facilities in addition to many business and technical schools which complement the colleges and universities in the area. The colleges and universities are listed below: Cedar Crest College DeSales University Lafayette College Lehigh Carbon Community College Lehigh University Moravian College Muhlenberg College Northampton Community College Penn State University (Lehigh Valley Campus) Kutztown University (Berks County) Allentown Center Valley Easton Schnecksville Bethlehem Bethlehem Allentown Bethlehem Center Valley Kutztown Source: Eastern Pennsylvania Business Journal. A-6

39 APPENDIX B Form of Opinion of Bond Counsel

40 [THIS PAGE INTENTIONALLY LEFT BLANK]

41 [LETTERHEAD OF BOND COUNSEL] (Date of Closing) Re: PARKLAND SCHOOL DISTRICT, Lehigh County, Pennsylvania $8,880,000 Aggregate Principal Amount of General Obligation Bonds, Series of 2015 Dated the Date of Delivery OPINION We have acted as Bond Counsel to the Parkland School District, in Lehigh County, Pennsylvania (the School District ), a public school district of the Commonwealth of Pennsylvania (the Commonwealth ), in connection with the issuance this date of its General Obligation Bonds, Series of 2015, in the aggregate principal amount of Eight Million Eight Hundred Eighty Thousand Dollars ($8,880,000) (the Bonds ). The Board of School Directors of the School District, by a resolution duly adopted (the Resolution ), has authorized the issuance of and secures the Bonds. The Resolution provides that the proceeds of the Bonds are to be used to complete and undertake various capital projects including: (1) a feasibility study for all buildings and facilities of the School District, (2) planning, designing, acquiring, constructing and/or furnishing alterations and/or renovations to the Kratzer Elementary School, the Orefield Middle School, and other public school buildings and facilities, (3) purchasing computer, security and other technology equipment and school busses, and (4) to pay issuance costs and expenses, all in accordance with the Local Government Unit Debt Act, 53 Pa.C.S. Chs (the Act ), of the Commonwealth. The Resolution contains covenants of the School District to comply with the Internal Revenue Code of 1986, as amended (the Code ), and regulations promulgated thereunder to preserve the Federal income tax exemption of the interest on the Bonds. The School District has taken appropriate action to qualify the Bonds as qualified tax-exempt obligations, as defined in Section 265(b)(3)(B) of the Code. As Bond Counsel, we have examined, among other things: the approval of proceedings related to the issuance and delivery of the Bonds, as issued by the Department of Community and Economic Development of the Commonwealth, a certified copy of the Resolution,

42 (Date of Closing) Page 2 a certificate of no litigation, a non-arbitrage and rebate compliance certificate of the School District, and usual closing certificates and documents. We have also examined a specimen of an executed Bond and assume that all the Bonds have been similarly executed and that all Bonds will be issued in registered form as required by the Resolution. As to questions of fact material to our opinion, we have relied upon the certified proceedings and other representations of public officials furnished to us without undertaking to verify such facts by independent investigation. Based on the foregoing, we are of the opinion that: 1. The Bonds are valid and binding general obligations of the School District enforceable in accordance with their terms. 2. The School District has covenanted in the Resolution, to and with the registered owners, from time to time, of the Bonds that shall be outstanding, from time to time, pursuant to the Resolution, that the School District: (i) shall include the amount of the debt service for the Bonds, for each fiscal year of the School District in which such sums are payable, in its budget for that fiscal year, (ii) shall appropriate such amounts from its general revenues for the payment of such debt service, and (iii) shall duly and punctually pay or cause to be paid from the sinking fund established under the Resolution or any other of its revenues or funds the principal of each of the Bonds and the interest thereon at the dates and place and in the manner stated in the Bonds, according to the true intent and meaning thereof; and, for such budgeting, appropriation and payment, the School District has pledged, irrevocably, its full faith, credit and taxing power. 3. Under the laws of the Commonwealth as presently enacted and construed, the Bonds are exempt from personal property taxes in the Commonwealth and the interest on the Bonds is exempt from the Commonwealth s Personal Income Tax and the Commonwealth s Corporate Net Income Tax. 4. Assuming investment and application of the proceeds of the Bonds as set forth in the Resolution and the aforementioned non-arbitrage and rebate compliance certificate, the Bonds are not presently arbitrage bonds as described in Section 103(b)(2) and Section 148 of the Code and applicable regulations promulgated thereunder. 5. Under present statutes, regulations and judicial decisions, interest on the Bonds is excluded from gross income for purposes of federal income taxation and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, although it should be noted that in the case of corporations (as defined for federal income tax purposes) such interest is taken into account in determining adjusted current earnings for purposes of such alternative minimum tax. The opinions expressed in this paragraph are subject to the condition that the School District comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order that the interest thereon be, or continue to be, excluded from gross income for federal income tax purposes, as the School District has covenanted to do in the Resolution and other aforementioned documents. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income retroactive to the date of issuance of the Bonds.

43 (Date of Closing) Page 3 6. Each of the Bonds is a qualified tax-exempt obligation for purposes and effect contemplated by Section 265 of the Code (relating to expenses and interest relating to taxexempt income of certain financial institutions). The opinion expressed in the preceding sentence is subject to the condition that interest on the Bonds is, and continues to be, excluded from gross income for federal income tax purposes under the Code. We express no opinion regarding other federal tax consequences arising with respect to the Bonds. It is to be understood that rights of 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 and that their enforcement may be subject to the exercise of judicial discretion in accordance with general principles of equity. Very truly yours,

44 [THIS PAGE INTENTIONALLY LEFT BLANK]

45 APPENDIX C Continuing Disclosure Certificate

46 [THIS PAGE INTENTIONALLY LEFT BLANK]

47 CONTINUING DISCLOSURE CERTIFICATE Re: PARKLAND SCHOOL DISTRICT, Lehigh County, Pennsylvania $8,880,000 General Obligation Bonds, Series of 2015 Dated (Date of Closing) (Date of Closing) This Continuing Disclosure Certificate (the Disclosure Certificate ) is executed and delivered by Parkland School District, Lehigh County, Pennsylvania (the School District ), in connection with the issuance of its General Obligation Bonds, Series of 2015 (the Bonds ), dated the date of delivery of the Bonds. The Bonds are being issued pursuant to a resolution duly adopted by the Board of School Directors of the School District on December 16, 2014 (the Resolution ). The School District makes the following certifications and representations as an inducement to the Participating Underwriters and others to purchase the Bonds: SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the School District for the benefit of the holders of the Bonds and in order to assist the Participating Underwriters in complying with Securities and Exchange Commission Rule 15c2-12(b)(5). SECTION 2. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: Annual Report shall mean any Annual Report filed by the School District pursuant to, and as described in, Section 3 of this Disclosure Certificate. Bondholder shall mean any registered owner of the Bonds or any person who (i) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any of the Bonds (including persons holding through any nominee, securities depository or other intermediary) or (ii) is treated as the holder of any Bonds for federal income tax purposes. Business Day shall mean a day other than a Saturday, a Sunday, or a day on which the New York Stock Exchange is closed or a day on which banks located in the Commonwealth are authorized or required by law or executive order to close. Commonwealth shall mean the Commonwealth of Pennsylvania. Listed Events shall mean any of the events listed in Section 5 of this Disclosure Certificate. MSRB shall mean the Municipal Securities Rulemaking Board. Official Statement shall mean the final official statement relating to the Bonds prepared by or on behalf of the School District and distributed in connection with the offering and sale of the Bonds by the Participating Underwriters

48 Participating Underwriters shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with the primary offering of the Bonds. Rule shall mean Rule 15c2-12(b)(5) adopted by the SEC under the Securities Exchange Act of 1934, as the same may be amended from time to time. SEC shall mean the United States Securities and Exchange Commission. SECTION 3. Filing of Annual Reports. The School District shall file with the MSRB within 210 days following the close of each of the School District s fiscal years, beginning with its fiscal year ending June 30, 2015, an Annual Report that is consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided, however, that if the audited financial statements of the School District for the most recent completed fiscal year are not available to be included in the Annual Report when filed, such audited financial statements may be filed separately from the balance of the Annual Report, as provided in the following paragraph. If the audited financial statements of the School District for the most recent fiscal year are not available as of the date on which the Annual Report is to be filed, the audited financial statements shall be filed with the MSRB as soon as they are available, and the Annual Report, when filed, shall contain (i) a statement to that effect, (ii) a copy of unaudited, interim or draft financial information, and (iii) a statement of the date by which the School District reasonably expects the audited financial statements to become available and to be filed with the MSRB. SECTION 4. Content of Annual Reports. The School District s Annual Report shall contain or incorporate by reference the following financial information and operating data with respect to the School District: (1) financial statements for the most recent fiscal year, prepared in accordance with generally accepted accounting principles for Pennsylvania school districts, and audited in accordance with generally accepted auditing standards; (2) the total assessed value of all taxable real estate for the then current fiscal year; (3) the taxes and millage rates imposed for the then current fiscal year; (4) the real property tax collection results for the most recent fiscal year, including (a) the real estate levy imposed (expressed both as a millage rate and an aggregate dollar amount), (b) the dollar amount of real estate taxes collected that represented current collections, (c) the dollar amount of delinquent real estate taxes collected that represent taxes levied in prior years, and (d) the total dollar amount of real estate taxes collected; and (5) owners of the top 10 parcels of real estate taxed by the School District and, for each, its total assessed value in the current fiscal year

49 Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues of the School District or related public entities, which have been made available to the public on the MSRB s internet website or filed with the SEC. The School District shall clearly identify each other document so incorporated by reference. The School District 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 necessary or appropriate as a result of a change in legal requirements or a change in the nature of the School District or its operations or financial reporting, but the School District will agree that any such modification will be done in a manner consistent with the Rule. SECTION 5. Notices of Late Filing of Annual Information. If the School District has failed to file, or is unable to file, an Annual Report with the MSRB within the time set forth in Section 3 above, the School District will file, in a timely manner, a notice with the MSRB stating such fact and, if appropriate, the date by which the School District expects to file the Annual Report. SECTION 6. Reporting of Listed Events. In a timely manner not in excess of ten (10) Business Days after the occurrence of the event, the School District will file with the MSRB notice of the occurrence of any of the following events with respect to the Bonds: (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax-exempt status of the Bonds, or other material events affecting the tax-exempt status of the Bonds; (7) modifications to rights of holders of the Bonds, if material; (8) bond calls, if material, and tender offers; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the School District; (13) the consummation of a merger, consolidation, or acquisition involving the School District or the sale of all or substantially all of the assets of the School District, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination - 3 -

50 of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (14) appointment of a successor or additional trustee, or the change of name of a trustee, if material. The School District may from time to time choose to provide notice of the occurrence of certain other events affecting the Bonds or the School District, in addition to those listed above, if, in the judgment of the School District, such other event is material with respect to the Bonds, but the School District does not undertake to commit to provide any such notice of the occurrence of any material event except those events listed above. SECTION 7. Manner of Filing. All filings to be made with the MSRB in accordance with this Disclosure Certificate are to be filed in such electronic format as is prescribed by the MSRB and accompanied by such identifying information as is prescribed by the MSRB. As of the date of this Disclosure Certificate, the rules of the MSRB require all such filings to be made using the MSRB s Electronic Municipal Market Access System ( EMMA ) at SECTION 8. Dissemination Agent. The School District may, at any time and from time to time, appoint or engage another person (the Dissemination Agent ) to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge such Dissemination Agent, with or without appointing a successor and without notice to Bondholders. SECTION 9. Termination of Disclosure Obligation. The School District s obligations under this Disclosure Certificate shall terminate upon the prior redemption or payment in full of all of the Bonds or if and when the School District no longer remains an obligated person with respect to the Bonds, within the meaning of the Rule. SECTION 10. Default. In the event of a failure of the School District to comply with any provision of this Disclosure Certificate, any Bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the School District to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an event of default with respect to the Bonds, and the sole remedy under this Disclosure Certificate in the event of any failure of the School District to comply with this Disclosure Certificate shall be an action to compel performance. SECTION 11. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the School District, the Participating Underwriters and Bondholders, and shall create no rights in any other person or entity

51 IN WITNESS WHEREOF, The School District causes this Continuing Disclosure Certificate to be executed on its behalf by the President of the Board of School Directors all as of the date set forth above. PARKLAND SCHOOL DISTRICT, Lehigh County, Pennsylvania By: President of the Board of School Directors - 5 -

52 [THIS PAGE INTENTIONALLY LEFT BLANK]

53 APPENDIX D Audited Financial Statements

54 [THIS PAGE INTENTIONALLY LEFT BLANK]

55

56 [THIS PAGE INTENTIONALLY LEFT BLANK]

57

58

59

60

61

62

63

64

65

66

67

68

69

70

71

72

73

74

75

76

77

78

79

80

81

82

83

84

85

86

87

88

89

90

91

92

93

94

95

96

97

98

99

100

101

102

103

104

105

106

107

108

109

110

111

112

113

114

115

116

117

118

119

120

121