For further information concerning federal and state tax matters relating to the Bonds, see Tax Exemption herein. $6,120,000

Transcription

1 NEW ISSUE BOOK-ENTRY ONLY RATINGS: S&P: AA- (Insred) S&P: A+ (Stable Otlook) (Underlying) (See Ratings herein) In the opinion of Bond Consel, based pon an analysis of existing las, reglations, rlings and cort decisions, interest on the Bonds (inclding, in the case of Bonds sold at an original isse discont, the difference beteen the initial offering price and par) is exclded from gross income for federal income tax prposes. Bond Consel is also of the opinion that interest on the Bonds is not a specific item of tax preference nder 57 of the Internal Revene Code of 1986, as amended (the Code ) for prposes of Federal individal or corporate alternative minimm taxes. The Bonds and interest income therefrom, are free from taxation for prposes of personal income, corporate net income and personal property taxes ithin the Commonealth of Pennsylvani The Bonds have been designated qalified tax exempt obligations, for prposes and effect contemplated by Section 265 of the Internal Revene Code of 1986, as amended (concerning expenses and interest relating to tax-exempt income of certain financial instittions). For frther information concerning federal and state tax matters relating to the Bonds, see Tax Exemption herein. $6,12, Ellood City Area School District Larence and Beaver Conties, Pennsylvania General Obligation Bonds, Series of 214 Dated: Febrary 2, 214 Principal De: November 15 Interest De: May 15 and November 15 First Interest Payment: November 15, 214 The General Obligation Bonds, Series of 214 (the Bonds ) in the aggregate principal amont of $6,12, ill be issed in registered form, ithot copons, in denominations of $5, or any integral mltiple thereof. The Bonds ill be registered in the name of Cede & Co., as the registered oner and nominee of The Depository Trst Company ( DTC ), Ne York, Ne York. Beneficial onership of the Bonds may be acqired in denominations of $5, or any integral mltiple thereof only nder the book-entry only system maintained by DTC throgh its brokers and dealers ho are, or act throgh, DTC Participants. The prchasers of the Bonds ill not receive physical delivery of the Bonds. For so long as any prchaser is the beneficial oner of a Bond, that prchaser mst maintain an accont ith a broker or a dealer ho is, or acts throgh, a DTC Participant to receive payment of principal of and interest on the Bonds. See BOOK-ENTRY ONLY SYSTEM herein. If, nder the circmstances described herein, Bonds are ever issed in certificated form, the Bonds ill be sbject to registration of transfer, exchange and payment as described herein. The Bonds are general obligations of the Ellood City Area School District, Larence and Beaver Conties, Pennsylvania (the School District ), payable from its tax and other general revenes. The School District has covenanted that it ill provide in its bdget in each year, and ill appropriate from its general revenes in each sch year, the amont of the debt service on the Bonds for sch year and ill dly and pnctally pay or case to be paid from the related sinking fnd or any other of its revenes or fnds the principal of every Bond and the interest thereon on the dates, at the place and in the manner stated in the Bonds, and for sch bdgeting, appropriation and payment the School District irrevocably has pledged its fll faith, credit and available taxing poer, hich taxing poer presently incldes the poer to levy an annal ad valorem tax on all taxable property ithin the School District, ithin the limits provided by l (See Secrity, Taxing Poers of the School District and The Taxpayer Relief Act infra). Interest on each of the Bonds is payable initially on November 15, 214, and thereafter semi-annally on May 15 and November 15 of each year ntil the matrity date of sch Bond or, if sch Bond is sbject to redemption prior to matrity, ntil the date fixed for redemption thereof, if payment of the redemption price has been dly made or provided for. The School District has appointed Manfactrers and Traders Trst Company (the Paying Agent ), as paying agent, registrar and sinking fnd depository for the Bonds. So long as Cede & Co., as nominee for DTC, is the registered oner of the Bonds, payments of the principal of, redemption premim, if any, and interest on the Bonds, hen de for payment, ill be made directly to DTC by the Paying Agent, and DTC ill in trn remit sch payments to DTC Participants for sbseqent disbrsement to the Beneficial Oners of the Bonds. If the se of the Book-Entry Only System for the Bonds is ever discontined, the principal of and redemption premim, if any, on each of the Bonds ill be payable, hen de, pon srrender of sch Bond to the Paying Agent at its designated corporate trst office located in Harrisbrg, Pennsylvania and Bffalo, Ne York or sch other office designated by the Paying Agent (or any sccessor paying agent at its designated office(s)) and interest on sch Bond ill be payable by check and mailed to the person(s) in hose name(s) sch Bond is registered as of the Record Date ith respect to the particlar interest payment date (See THE BONDS, infra). The Bonds are sbject to redemption prior to matrity. Proceeds of the Bonds ill be sed toards payment of the costs of crrently refnding all of the School District s General Obligation Bonds, Series of 29 and issing the Bonds. The Bonds are an athoried investment for fidciaries in the Commonealth of Pennsylvania prsant to the Pennsylvania Probate, Estate and Fidciaries Code, Act of Jne 3, 1972, No. 164, P.L. 58, as amended and spplemented. The schedled payment of principal of and interest on the Bonds hen de ill be garanteed nder an insrance policy to be issed concrrently ith the delivery of the Bonds by ASSURED GUARANTY MUNICIPAL CORP ( AGM ). MATURITIES, AMOUNTS, RATES AND YIELDS See Inside Front Cover The Bonds are offered hen, as and if issed, sbject to ithdraal or modification of offer ithot notice, and sbject to the approving legal opinion of Clark Hill Thorp Reed, of Pittsbrgh, Pennsylvania, Bond Consel, to be frnished pon delivery of the Bonds. Certain other matters ill be passed pon for the School District by John J. DeCaro, Jr., Esqire, of Ellood City, Pennsylvania, School District Solicitor. Pblic Financial Management, Inc., Harrisbrg, Pennsylvania, ill act as Financial Advisor to the School District in connection ith the Bonds. It is expected that the Bonds ill be available for delivery in Ne York, Ne York, on or abot Febrary 2, 214. Official Statement Dated: Janary 16, 214

2 $6,12, Ellood City Area School District Larence and Beaver Conties, Pennsylvania General Obligation Bonds, Series of 214 Dated: Febrary 2, 214 Principal De: November 15 Interest De: May 15 and November 15 First Interest Payment: November 15, 214 November 15 Amont Rate Yields 215 $35, 2.%.4% , , , , * 22 95, * 221 1,1, ,45, , *Yield to Optional Redemption Date of May 15, 219

3 Larence and Beaver Conties, Pennsylvania BOARD OF SCHOOL DIRECTORS Mr. Anthony Belli... Mr. Michael Nepaer... Mrs. Kathy Pansera... Mr. Leroy Corte... Mr. George Garda... Mrs. Jennifer Grossman... Mr. Matthe Morella... Ms. Renee Pitrelli... Mr. Robert Stevenson... President Vice President Treasrer Member Member Member Member Member Member SUPERINTENDENT FRANK P. ALOI BUSINESS MANAGER/BOARD SECRETARY RICHARD A. ZARONE SOLICITOR TO THE SCHOOL DISTRICT JOHN J. DECARO, JR., ESQUIRE BOND COUNSEL CLARK HILL THORP REED Pittsbrgh, Pennsylvania FINANCIAL ADVISOR PUBLIC FINANCIAL MANAGEMENT, INC. Harrisbrg, Pennsylvania PAYING AGENT MANUFACTURERS AND TRADERS TRUST COMPANY Harrisbrg, Pennsylvania UNDERWRITER JANNEY MONTGOMERY SCOTT LLC Philadelphia, Pennsylvania SCHOOL DISTRICT ADDRESS 51 Crescent Avene Ellood City, Pennsylvania 16117

4 No dealer, broker, salesman or other person has been athoried 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, sch other information or representations mst not be relied pon. This Official Statement does not constitte an offer to sell or the solicitation of an offer to by, nor shall there be any sale of the Bonds in any jrisdiction in hich it is nlafl to make sch offer, solicitation or sale. The information set forth herein has been obtained from the School District and from other sorces hich are believed to be reliable bt the School District does not garantee the accracy or completeness of information from sorces other than the School District. The information and expressions of opinion herein are sbject to change ithot notice and neither the delivery of this Official Statement nor any sale made herender shall, nder any circmstances, create any implication that there has been no change in any of the information set forth herein since the date hereof. Assred Garanty Mnicipal Corp. ( AGM ) makes no representation regarding the Bonds or the advisability of investing in the Bonds. In addition, AGM has not independently verified, makes no representation regarding, and does not accept any responsibility for the accracy or completeness of this Official Statement or any information or disclosre contained herein, or omitted herefrom, other than ith respect to the accracy of the information regarding AGM spplied by AGM and presented nder the heading Bond Insrance and Appendix C - Specimen Mnicipal Bond Insrance Policy. TABLE OF CONTENTS INTRODUCTION... 1 PURPOSE OF THE ISSUE... 1 Sorces and Uses of Bond Proceeds... 1 THE BONDS... 2 Page Description... 2 Payment of Principal and Interest... 2 Transfer, Exchange and Registration of Bonds... 3 SECURITY FOR THE BONDS... 3 General Obligation Pledge... 3 Sinking Fnd... 3 State Enforcement of Debt Service Payments... 3 Actions in the Event of Defalt on the Bonds... 4 BOOK-ENTRY ONLY SYSTEM... 4 BOND INSURANCE... 5 Bond Insrance Policy... 5 Assred Garanty Mnicipal Corp REDEMPTION OF BONDS... 7 Optional Redemption... 7 Notice of Redemption... 7 Manner of Redemption... 7 THE SCHOOL DISTRICT... 8 Introdction... 8 Administration... 8 School Facilities... 8 Enrollment Trends... 9 SCHOOL DISTRICT FINANCES... 9 Introdction... 9 Financial Reporting... 9 BUDGETING PROCESS IN SCHOOL DISTRICTS UNDER THE TAXPAYER RELIEF ACT... 9 Smmary and Discssion of Financial Reslts... 1 Revene TAXING POWERS OF THE SCHOOL DISTRICT The Taxpayer Relief Act The Bonds are not Grandfathered nder the Taxpayer Relief Act The School District has not placed a referendm qestion on the ballot as it relates to Act 24 of Page Limitation on Estimated Ending Unassigned Fnd Balances 16 Tax Levy Trends Real Property Tax Other Taxes State Aid to School Districts... 2 DEBT AND DEBT LIMITS... 2 Debt Statement... 2 Debt Limit and Remaining Borroing Capacity Debt Service Reqirements Ftre Financing LABOR RELATIONS School District Employees Pension Program Other Post-Employment Benefits LITIGATION TAX EXEMPTION CONTINUING DISCLOSURE UNDERTAKING RATINGS UNDERWRITING LEGAL OPINION FINANCIAL ADVISOR MISCELLANEOUS APPENDIX A - DEMOGRAPHIC AND ECONOMIC INFORMATION RELATING TO THE Poplation... A-1 Employment... A-2 Income... A-4 Commercial Activity... A-4 Edcational Instittions... A-4 Medical Facilities... A-4 Transportation... A-5 Utilities... A-5 APPENDIX B - FORM OF OPINION OF BOND COUNSEL APPENDIX C - SPECIMEN MUNICIPAL BOND INSURANCE POLICY APPENDIX D - AUDITED FINANCIAL STATEMENTS i

5 OFFICIAL STATEMENT $6,12, Ellood City Area School District Larence and Beaver Conties, Pennsylvania General Obligation Bonds, Series of 214 INTRODUCTION This Official Statement, inclding the cover and inside cover pages hereof and Appendices hereto, is frnished by Ellood City Area School District, Larence and Beaver Conties, Pennsylvania (the "School District"), in connection ith the offering of $6,12, aggregate principal amont, General Obligation Bonds, Series of 214 (the "Bonds"). The Bonds are dated Febrary 2, 214 and are being issed prsant to a Resoltion of the Board of School Directors of the School District adopted on Janary 16, 214 (the Resoltion ), and prsant to the Local Government Unit Debt Act of the Commonealth of Pennsylvania (the Commonealth ), 53 P C.S. Chs (the Debt Act ). PURPOSE OF THE ISSUE Proceeds of the Bonds ill be sed toards payment of the costs of crrently refnding all of the School District s General Obligation Bonds, Series of 29 crrently otstanding in the principal amont of $6,11, (the 29 Bonds ) and issing the Bonds. Upon issance of the Bonds, a portion of the proceeds ill be deposited into the 29 Bonds Sinking Fnd held by Manfactrers and Traders Trst Company, as Paying Agent for the 29 Bonds in an amont sfficient to redeem the 29 Bonds on May 15, 214, at a redemption price of 1% of principal amont pls accred interest, prsant to the optional redemption provisions applicable to the 29 Bonds. Sorces and Uses of Bond Proceeds The folloing is a smmary of the sorces and ses of the proceeds from the issance of the Bonds. Sorces of Fnds Bond Proceeds $6,12,. Original Isse Premim 234,742.9 Total Sorces $6,354,742.9 Uses of Fnds Amont Reqired to Call the 29 Bonds $6,221, Costs of Issance (1) 133, Total Uses $6,354,742.9 (1) Incldes bond discont, legal, financial advisor, mnicipal bond insrance, printing, rating, CUSIP, paying agent and miscellaneos fees (estimated). 1

6 THE BONDS Description The aggregate principal amont of the Bonds is $6,12,. The Bonds ill be issed in flly registered form (ithot copons) in denominations of $5, and integral mltiples thereof. The Bonds ill be dated as of Febrary 2, 214, and ill bear interest at the rates and matre in the amonts and on the dates set forth on the inside cover page of this Official Statement. Interest on the Bonds ill be payable initially on November 15, 214 and semiannally on May 15 and November 15 of each year thereafter ntil the principal sm thereof is paid. When issed, the Bonds ill be registered in the name of Cede & Co., as nominee for The Depository Trst Company ( DTC ), Ne York, Ne York. Prchasers of the Bonds (the Beneficial Oners ) ill not receive any physical delivery of bond certificates, and beneficial onership of the Bonds ill be evidenced only by book entries. See BOOK ENTRY ONLY SYSTEM herein. Payment of Principal and Interest So long as Cede & Co., as nominee of DTC, is the registered oner of the Bonds, payments of principal of, redemption premim, if any, and interest on the Bonds, hen de, are to be made to DTC, and all sch payments shall be valid and effective to satisfy flly and to discharge the obligations of the School District ith respect to, and to the extent of, principal, redemption premim, if any, and interest so paid. If the se of the Book-Entry Only System for the Bonds is discontined for any reason, bond certificates ill be issed to the Beneficial Oners of the Bonds and payment of principal, redemption premim, if any, and interest on the Bonds shall be made as described in the folloing paragraphs: The principal of the Bonds, hen de pon matrity or pon any earlier redemption, ill be paid to the registered oners of the Bonds, or registered assigns, pon srrender of the Bonds to Manfactrers and Traders Trst Company (the Paying Agent ), acting as paying agent and sinking fnd depositary for the Bonds, at its designated corporate trst office (or to any sccessor paying agent at its designated office). Interest is payable to the registered oner of a Bond from the interest payment date next preceding the date of registration and athentication of the Bond, nless: (a) sch Bond is registered and athenticated as of an interest payment date, in hich event sch Bond shall bear interest from said interest payment date, or (b) sch Bond is registered and athenticated after a Record Date (hereinafter defined) and before the next scceeding interest payment date, in hich event sch Bond shall bear interest from sch interest payment date, or (c) sch Bond is registered and athenticated on or prior to the Record Date preceding November 15, 214, in hich event sch Bond shall bear interest from Febrary 2, 214, or (d) as shon by the records of the Paying Agent, interest on sch Bond shall be in defalt, in hich event sch Bond shall bear interest from the date to hich interest as last paid on sch Bond. Interest shall be paid initially on November 15, 214, and thereafter, semiannally on May 15 and November 15 of each year, ntil the principal sm is paid. Interest on each Bond is payable by check dran on the Paying Agent, hich shall be mailed to the registered oner hose name and address shall appear, at the close of bsiness on the last calendar day (hether or not a day on hich the Paying Agent is open for bsiness) of the month immediately preceding each interest payment date (the "Record Date"), on the registration books maintained by the Paying Agent, irrespective of any transfer or exchange of the Bond sbseqent to sch Record Date and prior to sch interest payment date, nless the School District shall be in defalt in payment of interest de on sch interest payment date. In the event of any sch defalt, sch defalted interest shall be payable to the person in hose name the Bond is registered at the close of bsiness on a special record date for the payment of sch defalted interest established by notice mailed by the Paying Agent to the registered oners of sch Bonds not less than ten (1) days preceding sch special record date. If the date for payment of the principal of or interest on any Bonds shall be a Satrday, Snday, legal holiday or a day on hich banking instittions in the Commonealth are athoried by la or exective order to close, then the date for payment of sch principal or interest shall be the next scceeding day hich is not a Satrday, Snday, legal holiday or a day on hich sch banking instittions are athoried to close, and payment on sch date shall have the same force and effect as if made on the nominal date established for sch payment. 2

7 Transfer, Exchange and Registration of Bonds Sbject to the provisions described belo nder Book-Entry Only System, certificated Bonds are transferable or exchangeable pon srrender of sch Bonds to the Paying Agent, accompanied by a ritten instrment or instrments in form, ith instrctions, and ith garanty of signatre satisfactory to the Paying Agent, dly exected by the registered oner of sch Bond or his attorney-in-fact or legal representative. The Paying Agent shall enter any transfer of onership of certificated Bonds in the registration books and shall athenticate and deliver at the earliest practicable time in the name of the transferee or transferees a ne flly registered Bond or Bonds of athoried denominations of the same series, matrity date and interest rate for the aggregate principal amont hich the registered oner is entitled to receive. The School District and the Paying Agent may deem and treat the registered oner of sch Bond as the absolte oner thereof (hether or not a Bond shall be overde) for the prpose of receiving payment of or on accont of principal and interest and for all other prposes, and the School District and the Paying Agent shall not be affected by any notice to the contrary. Bonds may be exchanged for a like aggregate principal amont of Bonds of other athoried denominations of the same series, matrity date and interest rate. Neither the School District, nor the Sinking Fnd Depository, shall be reqired to: (a) isse, or register the transfer or exchange of, any Bond dring a period of fifteen (15) bsiness days before any date of selection of Bonds to be redeemed; or (b) register the transfer or exchange of any Bond after it has been selected for redemption. General Obligation Pledge SECURITY FOR THE BONDS The Bonds are general obligations of the School District and are payable from its local taxes, state sbsidies and other general revenes. The School District has covenanted in the Resoltion that it ill provide in its bdget for each year, and ill appropriate from its general revenes in each sch year, the amont of the debt service de on the Bonds for sch year, and ill dly and pnctally pay or case to be paid from its Sinking Fnd, as hereinafter defined, or any other of its revenes or fnds, 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 sch bdgeting, appropriation and payment the School District irrevocably has pledged its fll faith, credit and all available taxing poer, hich taxing poer presently incldes ad valorem taxes on all taxable property ithin the School District, ithin the limits provided by l (See, TAXING POWERS OF THE SCHOOL DISTRICT Limitations on Local Taxes and Stats of the Bonds Under the Taxpayer Relief Act herein). The Debt Act presently provides for enforcement of debt service payments as hereinafter described (see DEFAULTS AND REMEDIES herein), and the Pblic School Code of 1949, as amended (the "Pblic School Code") presently provides for the ithholding and application of sbsidies in the event of failre to pay debt service (see State Enforcement of Debt Service Payments herein). Sinking Fnd A sinking fnd for the payment of debt service on the Bonds, designated Sinking Fnd, General Obligation Bonds, Series of 214 (the Sinking Fnd ), has been created in accordance ith the Resoltion and ill be maintained by the Paying Agent, as sinking fnd depositary. The School District shall deposit in the Sinking Fnd a sfficient sm not later than the date hen interest and/or principal is to become de on the Bonds so that on each payment date the Sinking Fnd ill contain an amont hich, together ith any other fnds available therein, is sfficient to pay, in fll, interest and principal then de on the Bonds. The Sinking Fnd shall be held by the Paying Agent, as sinking fnd depositary, and invested by the Paying Agent as athoried by the Debt Act and pon direction of the School District. Sch deposits and secrities shall be in the name of the School District, bt sbject to ithdraal or collection only by the Paying Agent, as sinking fnd depositary, and sch deposits and secrities, together ith the interest thereon, shall be a part of the Sinking Fnd. The Paying Agent, as sinking fnd depositary, is athoried ithot frther order from the School District to pay from the Sinking Fnd the principal of and interest on the Bonds, as and hen de and payable. State Enforcement of Debt Service Payments Section 633 of the Pblic School Code, presently provides that in all cases here the board of school directors of any school district fails to pay or to provide for the payment of any indebtedness on the date of matrity or date of mandatory redemption or on any sinking fnd deposit date, or any interest de on sch indebtedness on any interest payment date or on any sinking fnd deposit date, in accordance ith the schedle nder hich the Bonds ere issed, the Secretary of Edcation shall notify sch board of school directors of its obligation and shall ithhold ot of any state appropriation de sch school district an amont eqal to the sm of the principal amont matring or sbject to mandatory redemption and interest oing by sch school district, or sinking fnd deposit de by sch school district, and shall pay over the amont so ithheld to the bank or other person acting as sinking fnd depository for sch bond isse. These ithholding provisions are not part of any contract ith the holders of the Bonds, and may be amended or repealed by ftre legislation. 3

8 There can be no assrance, hoever, that any payments prsant to this ithholding provision ill be made by the date on hich sch payments are de to the Bondholders. The effectiveness of Section 633 of the Pblic School Code may be limited by the application of other ithholding provisions contained in the Pblic School Code, sch as provisions for ithholding and paying over of appropriations for payment of npaid teachers salaries. Enforcement may also be limited by bankrptcy, insolvency, or other las or eqitable principles affecting the enforcement of creditors rights generally. Actions in the Event of Defalt on the Bonds In the event of failre of the School District to pay or case to be paid the interest on or principal of the Bonds, as the same becomes de and payable, the holders of the Bonds shall be entitled to certain remedies provided by the Debt Act. Among the remedies, if the failre to pay shall contine for 3 days, holders of the Bonds shall have the right to recover the amont de by bringing an action in assmpsit in the Cort of Common Pleas of the conty in hich the School District is located. The Debt Act provides any jdgment shall have an appropriate priority pon the fnds next coming into the treasry of the School District. The Debt Act also provides that pon a defalt of at least 3 days, holders of at least 25% of the Bonds may appoint a trstee to represent them. The Debt Act provides certain other remedies in the event of defalt, and frther qalifies the remedies hereinbefore described. BOOK-ENTRY ONLY SYSTEM The information in this section has been obtained from materials provided by DTC for sch prpose. The School District (herein referred to as the Isser ) and the Underriter do not garanty the accracy or completeness of sch information, and sch information is not to be constred as a representation of the School District or the Underriter. The Depository Trst Company ("DTC"), Ne York, NY, ill act as secrities depository for the Bonds (the "Secrities"). The Secrities ill be issed as flly-registered secrities registered in the name of Cede & Co. (DTC's partnership nominee) or sch other name as may be reqested by an athoried representative of DTC. One flly-registered Secrity certificate ill be issed for the Secrities, in the aggregate principal amont of sch isse, and ill be deposited ith DTC. DTC the orld's largest secrities depository, is a limited-prpose trst company organied nder the Ne York Banking La, a "banking organiation" ithin the meaning of the Ne York Banking La, a member of the Federal Reserve System. a "clearing corporation" ithin the meaning of the Ne York Uniform Commercial Code, and a "clearing agency'' registered prsant to the provisions of Section 17A of the Secrities Exchange Act of DTC holds and provides asset servicing for over 3.6 million isses of U.S. and non- U.S. eqity isses, corporate and mnicipal debt isses, and money market instrments (from over 1 contries) that DTC's participants ("Direct Participants'') deposit ith DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other secrities transactions in deposited secrities, throgh electronic compteried book-entry transfers and pledges beteen Direct Participants' acconts. This eliminates the need for physical movement of secrities certificates. Direct Participants inclde both U.S. and non-u.s. secrities brokers and dealers, banks, trst companies, clearing corporations, and certain other organiations. DTC is a holly-oned sbsidiary of The Depository Trst & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Secrities Clearing Corporation and Fixed Income Clearing Corporation, all of hich are registered clearing agencies. DTCC is oned by the sers of its reglated sbsidiaries. Access to the DTC system is also available to others sch as both U.S. and non-u.s. secrities brokers and dealers, banks, trst companies, and clearing corporations that clear throgh or maintain a cstodial relationship ith a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of AA+. The DTC Rles applicable to its Participants are on file ith the Secrities and Exchange Commission. More information abot DTC can be fond at.dtcc.com. Prchases of Secrities nder the DTC system mst be made by or throgh Direct Participants, hich ill receive a credit for the Secrities on DTC's records. The onership interest of each actal prchaser of each Secrity ("Beneficial Oner'') is in trn to be recorded on the Direct and Indirect Participants' records. Beneficial Oners ill not receive ritten confirmation from DTC of their prchase. Beneficial Oners are, hoever, expected to receive ritten confirmations providing details of the transaction, as ell as periodic statements of their holdings, from the Direct or Indirect Participant throgh hich the Beneficial Oner entered into the transaction. Transfers of onership interests in the Secrities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Oners. Beneficial Oners ill not receive certificates representing their onership interests in Secrities, except in the event that se of the book-entry system for the Secrities is discontined. To facilitate sbseqent transfers, all Secrities deposited by Direct Participants ith DTC are registered in the name of DTC's partnership nominee, Cede & Co., or sch other name as may be reqested by an athoried representative of DTC. The deposit of Secrities ith DTC and their registration in the name of Cede & Co. or sch other DTC nominee do not affect any change in beneficial onership. DTC has no knoledge of the actal Beneficial Oners of the Secrities: DTC's records reflect only the identity of the Direct Participants to hose acconts sch Secrities are credited, hich may or may not be the Beneficial Oners. The Direct and Indirect Participants ill remain responsible for keeping accont of their holdings on behalf of their cstomers. 4

9 Conveyance of notices and other commnications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Oners ill be governed by arrangements among them, sbject to any stattory or reglatory reqirements as may be in effect from time to time. Beneficial Oners of Secrities may ish to take certain steps to agment the transmission to them of notices of significant events ith respect to the Secrities, sch as redemptions, tenders, defalts, and proposed amendments to the Secrity docments. For example, Beneficial Oners of Secrities may ish to ascertain that the nominee holding the Secrities for their benefit has agreed to obtain and transmit notices to Beneficial Oners. In the alternative, Beneficial Oners may ish to provide their names and addresses to the registrar and reqest that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Secrities ithin an isse are being redeemed, DTC's practice is to determine by lot the amont of the interest of each Direct Participant in sch isse to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) ill consent or vote ith respect to Secrities nless athoried by a Direct Participant in accordance ith DTC's MMI Procedres. Under its sal procedres, DTC mails an Omnibs Proxy to the School District (the Isser ) as soon as possible after the record date. The Omnibs Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to hose acconts Secrities are credited on the record date (identified in a listing attached to the Omnibs Proxy). Redemption proceeds, distribtions, and dividend payments on the Secrities ill be made to Cede & Co., or sch other nominee as may be reqested by an athoried representative of DTC. DTC's practice is to credit Direct Participants' acconts pon DTC's receipt of fnds and corresponding detail information from Isser or Paying Agent, on payable date in accordance ith their respective holdings shon on DTC's records. Payments by Participants to Beneficial Oners ill be governed by standing instrctions and cstomary practices, as is the case ith secrities held for the acconts of cstomers in bearer form or registered in "street name," and ill be the responsibility of sch Participant and not of DTC, Paying Agent, or Isser, sbject to any stattory or reglatory reqirements as may be in effect from time to time. Payment of redemption proceeds, distribtions, and dividend payments to Cede & Co. (or sch other nominee as may be reqested by an athoried representative of DTC) is the responsibility of Isser or Paying Agent, disbrsement of sch payments to Direct Participants ill be the responsibility of DTC, and disbrsement of sch payments to the Beneficial Oners ill be the responsibility of Direct and Indirect Participants. DTC may discontine providing its services as depository ith respect to the Secrities at any time by giving reasonable notice to Isser or Paying Agent. Under sch circmstances, in the event that a sccessor depository is not obtained, Secrity certificates are reqired to be printed and delivered. Isser may decide to discontine se of the system of book-entry-only transfers throgh DTC (or a sccessor secrities depository). In that event, Secrity certificates ill be printed and delivered to DTC. The information in this section concerning DTC and DTC's book-entry system has been obtained from sorces that Isser believes to be reliable, bt Isser takes no responsibility for the accracy 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 TO BONDHOLDERS; (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 Isser and the Paying Agent cannot give any assrances that DTC or the Participants ill distribte payments of the principal or redemption price of and interest on the Bonds paid to DTC or its nominee, as the registered oner of the Bonds, or any redemption or other notices, to the Beneficial Oners or that they ill do so on a timely basis, or that DTC ill serve and act in the manner described in this Official Statement. Bond Insrance Policy BOND INSURANCE Concrrently ith the issance of the Bonds, Assred Garanty Mnicipal Corp. ("AGM") ill isse its mnicipal bond insrance policy for the Bonds (the "Policy"). The Policy garantees the schedled payment of principal of and interest on the Bonds hen de as set forth in the form of the Policy inclded as an appendix to this Official Statement. The Policy is not covered by any insrance secrity or garanty fnd established nder Ne York, California, Connectict or Florida insrance l 5

10 Assred Garanty Mnicipal Corp. AGM is a Ne York domiciled financial garanty insrance company and an indirect sbsidiary of Assred Garanty Ltd. ( AGL ), a Bermda-based holding company hose shares are pblicly traded and are listed on the Ne York Stock Exchange nder the symbol AGO. AGL, throgh its operating sbsidiaries, provides credit enhancement prodcts to the U.S. and global pblic finance, infrastrctre and strctred finance markets. Neither AGL nor any of its shareholders or affiliates, other than AGM, is obligated to pay any debts of AGM or any claims nder any insrance policy issed by AGM. AGM s financial strength is rated AA- (stable otlook) by Standard and Poor s Ratings Services, a Standard & Poor s Financial Services LLC bsiness ( S&P ) and A2 (stable otlook) by Moody s Investors Service, Inc. ( Moody s ). Each rating of AGM shold be evalated independently. An explanation of the significance of the above ratings may be obtained from the applicable rating agency. The above ratings are not recommendations to by, sell or hold any secrity, and sch ratings are sbject to revision or ithdraal at any time by the rating agencies, inclding ithdraal initiated at the reqest of AGM in its sole discretion. In addition, the rating agencies may at any time change AGM s long-term rating otlooks or place sch ratings on a atch list for possible dongrade in the near term. Any donard revision or ithdraal of any of the above ratings, the assignment of a negative otlook to sch ratings or the placement of sch ratings on a negative atch list may have an adverse effect on the market price of any secrity garanteed by AGM. AGM only garantees schedled principal and schedled interest payments payable by the isser of bonds insred by AGM on the date(s) hen sch amonts ere initially schedled to become de and payable (sbject to and in accordance ith the terms of the relevant insrance policy), and does not garantee the market price or liqidity of the secrities it insres, nor does it garantee that the ratings on sch secrities ill not be revised or ithdran. Crrent Financial Strength Ratings On Jne 12, 213, S&P pblished a report in hich it affirmed AGM s AA- (stable otlook) financial strength rating. AGM can give no assrance as to any frther ratings action that S&P may take. On Janary 17, 213, Moody s issed a press release stating that it had dongraded AGM s insrance financial strength rating to A2 (stable otlook) from Aa3. AGM can give no assrance as to any frther ratings action that Moody s may take. For more information regarding AGM s financial strength ratings and the risks relating thereto, see AGL s Annal Report on Form 1- K for the fiscal year ended December 31, 212. Capitaliation of AGM At September 3, 213, AGM s consolidated policyholders srpls and contingency reserves ere $3,458,464,281 and its total net nearned premim reserve as $1,92,38,53, in each case, in accordance ith stattory acconting principles. Incorporation of Certain Docments by Reference Portions of the folloing docments filed by AGL ith the Secrities and Exchange Commission (the SEC ) that relate to AGM are incorporated by reference into this Official Statement and shall be deemed to be a part hereof: (i) the Annal Report on Form 1-K for the fiscal year ended December 31, 212 (filed by AGL ith the SEC on March 1, 213); (ii) (iii) (iv) the Qarterly Report on Form 1-Q for the qarterly period ended March 31, 213 (filed by AGL ith the SEC on May 1, 213); the Qarterly Report on Form 1-Q for the qarterly period ended Jne 3, 213 (filed by AGL ith the SEC on Agst 9, 213); and the Qarterly Report on Form 1-Q for the qarterly period ended September 3, 213 (filed by AGL ith the SEC on November 12, 213). All consolidated financial statements of AGM and all other information relating to AGM inclded in, or as exhibits to, docments filed by AGL ith the SEC prsant to Section 13(a) or 15(d) of the Secrities Exchange Act of 1934, as amended, exclding Crrent Reports or portions thereof frnished nder Item 2.2 or Item 7.1 of Form 8-K, after the filing of the last docment referred to above and before the termination of the offering of the Bonds shall be deemed incorporated by reference into this Official Statement and to be a part hereof from the respective dates of filing sch docments. Copies of materials incorporated by reference are available over the internet at the SEC s ebsite at at AGL s ebsite at or ill be provided pon reqest to Assred Garanty 6

11 Mnicipal Corp.: 31 West 52nd Street, Ne York, Ne York 119, Attention: Commnications Department (telephone (212) 974-1). Except for the information referred to above, no information available on or throgh AGL s ebsite shall be deemed to be part of or incorporated in this Official Statement. Any information regarding AGM inclded herein nder the caption BOND INSURANCE Assred Garanty Mnicipal Corp. or inclded in a docment incorporated by reference herein (collectively, the AGM Information ) shall be modified or sperseded to the extent that any sbseqently inclded AGM Information (either directly or throgh incorporation by reference) modifies or spersedes sch previosly inclded AGM Information. Any AGM Information so modified or sperseded shall not constitte a part of this Official Statement, except as so modified or sperseded. Miscellaneos Matters AGM or one of its affiliates may prchase a portion of the Bonds or any ninsred bonds offered nder this Official Statement and sch prchases may constitte a significant proportion of the bonds offered. AGM or sch affiliate may hold sch Bonds or ninsred bonds for investment or may sell or otherise dispose of sch Bonds or ninsred bonds at any time or from time to time. AGM makes no representation regarding the Bonds or the advisability of investing in the Bonds. In addition, AGM has not independently verified, makes no representation regarding, and does not accept any responsibility for the accracy or completeness of this Official Statement or any information or disclosre contained herein, or omitted herefrom, other than ith respect to the accracy of the information regarding AGM spplied by AGM and presented nder the heading BOND INSURANCE. Optional Redemption REDEMPTION OF BONDS The Bonds matring on or after November 15, 219, shall be sbject to redemption prior to matrity, at the option of the School District, as a hole, or from time to time, in part, by lot, on May 15, 219 or on any date thereafter, in any order of matrity selected by the School District, in either case pon payment of a redemption price of 1% of the principal amont pls interest accred to the redemption date. In the event that less than all Bonds of any particlar matrity are to be redeemed, the Bonds of sch matrity to be redeemed shall be dran by lot by the Paying Agent. In the case of any optional redemption of any term Bond in part, the School District shall be entitled to designate hether the principal amont of sch term Bond to be redeemed shall be credited against the principal amont of sch term Bond de at stated matrity or credited against the principal amont of sch term Bond schedled to be called for mandatory sinking fnd redemption on any particlar date or dates, in each case in an integral mltiple of $5, principal amont. Notice of Redemption So long as Cede & Co., as nominee of DTC, is the registered oner of the Bonds, hoever, the School District and the Paying Agent shall send redemption notices only to Cede & Co. See BOOK-ENTRY ONLY SYSTEM herein for frther information regarding conveyance of notices to Beneficial Oners. If at time of mailing of a notice of redemption the School District shall not have deposited ith the Paying Agent (or, in the case of a refnding, ith another bank or depository acting as refnding escro agent) money sfficient to redeem all Bonds called for redemption, the notice of redemption may state that it is conditional, i.e., that it is sbject to the deposit of sfficient redemption money ith the Paying Agent not later than the redemption date, and sch notice shall be of no effect nless sch money is so deposited. Notice of any redemption shall be given by depositing a copy of the redemption notice in first class mail not less than thirty (3) nor more than sixty (6) days prior to the date fixed for redemption addressed to each of the registered oners of Bonds to be redeemed, in hole or in part, at the addresses shon on the registration books; provided, hoever, that failre to give sch 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 hich 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 accred interest being held by the Paying Agent, interest on the Bonds or portions thereof so called for redemption shall cease to accre and sch Bonds or portions thereof shall cease to be entitled to any benefit or secrity nder the Resoltion, and registered oners of sch Bonds or portions thereof so called for redemption shall have no rights ith respect to sch Bonds, except to receive payment of the principal of and accred interest on sch Bonds to the date fixed for redemption. Manner of Redemption So long as Cede & Co., as nominee of DTC, is the registered oner of the Bonds, hoever, payment of the redemption price shall be made to Cede & Co. in accordance ith the existing arrangements by and among the School District, the Paying Agent and DTC and, if less than all Bonds of any particlar matrity are to be redeemed, the amont of the interest of each DTC Participant, Indirect Participant and Beneficial Oner in sch Bonds to be redeemed shall be determined by the governing arrangements among them, sbject to any stattory or 7

12 reglatory reqirements as may be in effect from time to time. See BOOK-ENTRY ONLY SYSTEM herein for frther information regarding redemption of Bonds registered in the name of Cede & Co. If a Bond is of a denomination larger than $5,, a portion of sch Bond may be redeemed. For the prposes of redemption, a Bond shall be treated as representing the nmber of Bonds that is eqal to the principal amont thereof divided by $5,, each $5, portion of sch Bond being sbject to redemption. In the case of partial redemption of a Bond, payment of the redemption price shall be made only pon srrender of sch Bond in exchange for a Bond or Bonds of athoried denominations of the same series, matrity and interest rate in an aggregate principal amont eqal to the nredeemed portion of the principal amont thereof. If the redemption date for any Bonds shall be a Satrday, Snday, legal holiday or a day on hich banking instittions in the Commonealth of Pennsylvania are athoried or reqired by la or exective order to close, then the date for payment of the principal, premim, if any, and interest pon sch redemption shall be the next scceeding day hich is not a Satrday, Snday, legal holiday or a day on hich sch banking instittions are athoried or reqired to close, and payment on sch date shall have the same force and effect as if made on the nominal date of redemption. Introdction THE SCHOOL DISTRICT The School District is located mainly in Larence Conty, ith a portion in Beaver Conty. The School District is comprised of the Boroghs of Ellood City, Ellport and Wampm and the Tonships of Perry and Wayne, all in Larence Conty. A portion of the Borogh of Ellood City lies in Beaver Conty. The School District is sitated approximately 33 miles north of Pittsbrgh. Administration The School District is governed by a nine member Board of School Directors (the "School Board") elected for for-year terms. The Sperintendent is the chief administrative officer of the School District, ith overall responsibility for all aspects of operations, inclding edcation and finance. The Bsiness Manager, ho also serves as Board Secretary, is responsible for bdget, financial and non-instrctional aspects of operations. Both officials are appointed by the Board of School Directors. School Facilities The School District presently operates three elementary schools and one Jnior/Senior High School, as described on the folloing table. TABLE 1 FACILITIES Original Addition/ Rated Constrction Renovation Grades Ppil Bilding Date Date(s) Hosed Capacity Enrollment Elementary: Hartman Intermediate North Side Primary K Perry Loer Intermediate , Secondary: Lincoln Jnior-Senior High , 1961, , Sorce: School District Officials 8

13 Enrollment Trends Table 2 presents recent trends in school enrollment and projections of enrollment for the next 4 years, as prepared by School District officials. TABLE 2 ENROLLMENT TRENDS Actal Enrollments Projected Enrollments School School Year Elementary Secondary Total Year Elementary Secondary Total , , , , , , , , , , ,824 Sorce: School District Officials and the Pennsylvania Department of Edcation. Introdction SCHOOL DISTRICT FINANCES The School District bdgets and expends fnds according to procedres mandated by the Pennsylvania Department of Edcation. An annal operating bdget is prepared by the Sperintendent and Bsiness Manager and sbmitted to the School Board for approval prior to the beginning of the fiscal year hich begins on Jly 1. Financial Reporting The School District keeps its books and prepares its financial reports according to a modified accral basis of acconting. Major accral items are payroll taxes and pension fnd contribtions payable, delinqent taxes receivable, loans receivable from other fnds, and revenes receivable from other governmental nits. Its financial statements are adited annally by a firm of independent certified pblic accontants, as reqired by state l Philip Weiner and Company LTD, C.P.A., Ne Castle, Pennsylvania, serves as the School District aditor. Bdgeting Process in School Districts nder the Taxpayer Relief Act In General. School districts bdget and expend fnds according to procedres mandated by the Pennsylvania Department of Edcation ( PDE ). An annal operating bdget is prepared by school district administrative officials on a niform form frnished by PDE and sbmitted to the board of school directors for approval prior to the beginning of the fiscal year on Jly 1. Procedres for Adoption of the Annal Bdget. Under the Taxpayer Relief Act, all school districts of the first class A, second class, third class and forth class (except as described belo) mst adopt a preliminary bdget proposal (hich mst inclde estimated revenes and expenditres and proposed tax rates) no later than 9 days prior to the date of the election immediately preceding the fiscal year. The preliminary bdget proposal mst be printed and made available for pblic inspection at least 2 days prior to its adoption; the board of school directors may hold a pblic hearing on the bdget; and the board mst give at least 1 days pblic notice of its intent to adopt the final bdget. If the adopted preliminary bdget incldes an increase in the rate of any tax levy, the preliminary bdget mst be sbmitted to the PDE no later than 85 days prior to the date of the election immediately preceding the fiscal year. PDE is to compare the proposed percentage increase in the rate of any tax ith the school district s Index (see The Taxpayer Relief Act herein) and ithin 1 days, bt not later than 75 days prior to the pcoming election, inform the school district hether the proposed percentage increase is less than or eqal to the Index. If PDE determines that a proposed tax increase ill exceed the Index, the school district mst redce the proposed tax increase, seek voter approval for the tax increase at the pcoming election, or seek approval to tilie one of the referendm exceptions athoried nder the Taxpayer Relief Act. With respect to the tiliation of any of the Taxpayer Relief Act referendm exceptions for hich PDE approval is reqired (see Limitations on Local Taxes herein), the school district mst pblish notice of its intent to seek PDE approval not less than one eek before sbmitting its reqest for approval to PDE and, if PDE determines to schedle a pblic hearing on the reqest, a notice of the date, time and place of sch hearing. PDE is reqired by the Taxpayer Relief Act to rle on the school district s reqest and inform the school district of its decision no later than 55 days prior to the pcoming election so that, if PDE denies the school district s reqest, the school district may sbmit a referendm qestion to the local election officials at least 5 days before the pcoming election, if it so chooses. If a school district seeks voter approval to increase taxes at a rate higher than the applicable Index, hether or not it first seeks approval to tilie one of the referendm exceptions available nder the Taxpayer Relief Act, and the referendm qestion is not approved by 9