NEW ISSUE BOOK-ENTRY FORM ONLY. Rating: Moody s: Aa2 See RATING herein.

Transcription

1 NEW ISSUE BOOK-ENTRY FORM ONLY Rating: Moody s: Aa2 See RATING herein. In the opinion of Bricker & Eckler LLP, Bond Counsel, under existing law, (i) assuming continuing compliance with certain covenants and the accuracy of certain representations, interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations under the Internal Revenue Code of 1986, as amended (the Code ) and (ii) interest on and any profit made on the sale, exchange or other disposition of the Bonds is exempt from certain taxes levied by the State of Ohio and its political subdivisions. The School District has not designated the Bonds as qualified tax-exempt obligations within the meaning of Section 265(b)(3) of the Code. Interest on the Bonds may be subject to certain federal income taxes imposed on certain corporations, and certain taxpayers may have certain other adverse federal income tax consequences as a result of owning the Bonds. For a more complete discussion of the tax aspects, see TAX MATTERS herein. OFFICIAL STATEMENT $23,615,000 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT Licking County, Ohio Refunding Bonds, Series 2015 (General Obligation Unlimited Tax) Voted November 2, 2000 and November 2, 2004 Dated: Date of Delivery Due: December 1, as shown on the inside cover The Refunding Bonds, Series 2015 (the Bonds ) are voted general obligation debt of the Granville Exempted Village School District, Licking County, Ohio (the School District ), and the full faith, credit and revenue of the School District are irrevocably pledged for the prompt payment of the principal of and interest on the Bonds. (See SECURITY AND SOURCE OF PAYMENT FOR THE SCHOOL DISTRICT S GENERAL OBLIGATION DEBT herein.) Terms used herein with initial capitalization where the rules of grammar would not otherwise so require and not defined have the meanings given to them under DEFINITIONS herein. Interest on the Bonds will be payable at the respective rates shown on the inside cover herein on June 1 and December 1 of each year beginning December 1, 2015, to the Bondholders of record as of the record dates described in the Bond Resolution (as defined herein). Principal of the Bonds will be payable at the designated corporate trust office of The Huntington National Bank, as registrar, paying agent and transfer agent for the Bonds. The Bonds will be issuable as fully registered bonds without coupons in the denominations set forth herein. The Bonds will be issuable under a book-entry only method and registered in the name of The Depository Trust Company ( DTC ) or its nominee. There will be no physical delivery of the Bonds to the ultimate purchasers. Fifth Third Securities, Inc. (the Underwriter ) has satisfied the requirements of DTC for the Bonds to be eligible for its book-entry services. See BOOK-ENTRY ONLY SYSTEM herein. Bonds maturing on or after December 1, 2026 will be subject to optional redemption prior to stated maturity, as set forth herein. (See THE BONDS Redemption Provisions herein.) The Bonds are offered when, as and if issued and received by the Underwriter, subject to prior sale and to withdrawal or modification of the offer without notice. Certain legal matters relating to the issuance of the Bonds are subject to the approving opinion of Bricker & Eckler LLP, Bond Counsel, Columbus, Ohio. (See LEGAL MATTERS and TAX MATTERS herein.) This cover page contains certain information for general reference only. It is not a summary of the provisions of the Bonds. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. This Official Statement has been prepared by the School District in connection with the original offering for sale by it of the Bonds. It is expected that delivery of the Bonds in definitive form will be made through DTC on or about September 3, The date of this Official Statement is April 28, 2015, and the information herein speaks only as of that date.

2 $23,615,000 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT Licking County, Ohio Refunding Bonds, Series 2015 (General Obligation Unlimited Tax) Year (December 1) Principal Maturing SERIAL BONDS Interest Rate Price CUSIP 2018 $1,000, % % HS ,005, HT ,655, HU ,740, HV ,825, HW ,915, HX ,015, HY ,110, HZ ,220, JA ,330, JB ,400, JC ,080, JD ,130, JE ,190, JF5

3 $23,615,000 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT Licking County, Ohio Refunding Bonds, Series 2015 (General Obligation Unlimited Tax) BOARD OF EDUCATION Jennifer Cornman President Russell Ginise Vice President Thomas Miller Member Amy Deeds Member Katie Rentel Member DISTRICT ADMINISTRATION Jeff Brown Superintendent Mike Sobul Treasurer PROFESSIONAL SERVICES Fifth Third Securities, Inc. Underwriter Bricker & Eckler LLP Bond Counsel The Huntington National Bank Paying Agent/Bond Registrar/Escrow Trustee ii

4 THIS PAGE INTENTIONALLY LEFT BLANK iii

5 REGARDING THIS OFFICIAL STATEMENT This Official Statement does not constitute an offering of any security other than the original offering of the Refunding Bonds, Series 2015 (the Bonds ) of the Granville Exempted Village School District, Licking County, Ohio (the School District ) identified on the cover hereof. No person has been authorized by the School District to give any information or to make any representations other than those contained in this Official Statement, and if given or made, such other information or representation must not be relied upon as having been given or authorized by the School District. Statements contained in this Official Statement that involve estimates, forecasts, or matters of opinion, whether or not expressly described herein, are intended solely as such and are not to be construed as representations of facts. The information set forth herein has been obtained from the School District and other sources that are believed to be reliable for purposes of this Official Statement. This Official Statement contains, in part, estimates and matters of opinion that are not intended as statements of fact, and no representation is made as to the correctness of such estimates and opinions or that they will be realized. The information and expressions of opinions 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 the affairs of the School District since the date hereof. Certain information located at websites referred to herein has been prepared by the respective entities responsible for maintaining such websites. The School District takes no responsibility for the continued accuracy of any internet address or the accuracy, completeness, or timeliness of any information posted at any such address. In the absence of an express statement to the contrary, none of such information is incorporated herein by reference. Certain information in this Official Statement is attributed to the Ohio Municipal Advisory Council ( OMAC ). OMAC compiles information from official and other sources. OMAC believes the information it compiles is accurate and reliable, but OMAC does not independently confirm or verify the information and does not guarantee its accuracy. OMAC has not reviewed this Official Statement to confirm that the information attributed to it is information provided by OMAC or for any other purpose. Fifth Third Securities, Inc. (the Underwriter ) has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. UPON ISSUANCE, THE BONDS WILL NOT BE REGISTERED BY THE SCHOOL DISTRICT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY STATE, AND WILL NOT BE LISTED ON ANY STOCK OR OTHER SECURITIES EXCHANGE. THE BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS ANY OTHER FEDERAL, STATE, MUNICIPAL OR OTHER GOVERNMENTAL ENTITY OR AGENCY, EXCEPT THE BOARD OF EDUCATION OF THE SCHOOL DISTRICT, PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT OR APPROVED THE BONDS FOR SALE. THIS OFFICIAL STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY, AND THERE SHALL NOT BE ANY SALE OF, THE BONDS BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER, SOLICITATION OR SALE. iv

6 IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITER MAY OFFER AND SELL THE BONDS TO CERTAIN DEALERS, DEALER BANKS AND BANKS ACTING AS AGENT AT PRICES LOWER THAN THE PUBLIC OFFERING PRICE STATED ON THE COVER HEREOF AND SAID PUBLIC OFFERING PRICE MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER. General INVESTMENT CONSIDERATIONS The Bonds, like all obligations of state and local governments, are subject to changes in value due to changes in the condition of the market for tax-exempt obligations or changes in the financial position of the School District. It is possible under certain market conditions, or if the financial condition of the School District should change, that the market price of the Bonds could be adversely affected. With regard to the risk involved in a downward revision or withdrawal of one or more of the ratings on the Bonds shown on the Cover, see RATING herein. With regard to the risk involved in a loss of the exclusion from gross income for purposes of federal income taxation of interest payable on the Bonds, see TAX MATTERS herein. Prospective purchasers of the Bonds should consult their own tax advisors prior to any purchase of the Bonds as to the impact of the Code upon their acquisition, holding or disposition of the Bonds. Prepayments of Principal The Bonds allow the School District to prepay certain maturities of the principal of the Bonds without penalty. (See THE BONDS Redemption Provisions Optional Redemption herein.) If such Bonds were to be prepaid before scheduled maturity, the investor would not receive the anticipated yield through the scheduled maturity date. In such a prepayment situation there is no guarantee that the investor could reinvest the proceeds and receive a comparable yield for the period remaining until the scheduled maturity of such Bonds. The investor, therefore, may receive a lower total return for the period beginning on the date of purchase through the scheduled date of maturity than anticipated. Investment Suitability of Tax-Exempt Bonds A primary test of the suitability of a tax-exempt obligation for an individual investor is a comparison of the yield the investor would have to earn on a taxable obligation to equal a tax-exempt yield in his or her income tax bracket. Individuals should consult with brokers or qualified financial or tax advisors to determine the taxable equivalent yield they could expect given their particular tax circumstances. v

7 BOND ISSUE SUMMARY The information contained in this Bond Issue Summary is qualified in its entirety by the entire Official Statement, which should be reviewed in its entirety by potential investors. Issuer: Issue: Dated Date: Interest Payment Dates: Principal Payment Dates: Redemption: Purpose: Security: Credit Rating: Tax Matters: Bank Qualification: Granville Exempted Village School District, Licking County, Ohio $23,615,000 Refunding Bonds, Series 2015 (the Bonds ) Date of Delivery Interest on Bonds will be paid each June 1 and December 1, beginning December 1, December 1, 2018 through December 1, 2031, inclusive. The Bonds maturing on or after December 1, 2026 are subject to redemption at the option of the School District, either in whole, or in part, in such order of maturity as the School District shall determine, on any date on or after December 1, 2025, at a redemption price equal to 100% of the principal amount redeemed plus, in each case, accrued interest to the date fixed for redemption. (See THE BONDS Redemption Provisions Optional Redemption herein.) The Bonds are being issued for the purpose of current refunding a portion of the School District s $29,464, Advance Refunding Bonds, Series 2007, dated January 30, (See THE BONDS Authorization and Purpose herein.) The Bonds will be voted general obligations of the School District and will contain a pledge of the full faith and credit of the School District for the payment of the principal of and interest on the Bonds when due. (See SECURITY AND SOURCE OF PAYMENT FOR THE SCHOOL DISTRICT S GENERAL OBLIGATION DEBT herein.) The School District has applied for a rating on the Bonds from Moody s Investors Service, Inc., which have rated the Bonds Aa2. (See RATING herein.) In the opinion of Bond Counsel, under existing law and assuming compliance with certain covenants, interest on the Bonds is excluded from gross income for federal income tax purposes, is not treated as an item of tax preference for purposes of the alternative minimum income tax imposed on individuals and corporations under the Internal Revenue Code of 1986, as amended (the Code ), and is exempt from certain taxes imposed by the State of Ohio and its political subdivisions. Interest on the Bonds may be subject to certain federal income taxes imposed on certain corporations, and certain taxpayers may have certain other adverse federal income tax consequences as a result of owning the Bonds. (See TAX MATTERS herein.) The School District has not designated the Bonds as qualified tax exempt obligations within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. vi

8 Legal Opinion: Underwriter: Bond Registrar/Paying Agent and Escrow Trustee: Book-Entry Only System: Delivery and Payment: School District Official: Bricker & Eckler LLP, Columbus, Ohio Fifth Third Securities, Inc., Columbus Ohio The Huntington National Bank, Columbus, Ohio The Bonds are being issued as fully registered Bonds in book-entry form only and book-entry interests therein will be available for purchase in amounts of $5,000 and integral multiples thereof. Owners of book-entry interests will not receive physical delivery of bond certificates. DTC or its nominee will receive all payments with respect to the Bonds from the Bond Registrar. DTC is required by its rules and procedures to remit such payments to its participants for subsequent disbursement to owners of the book-entry interests. It is expected that delivery of the Bonds in definitive form will be made through DTC on or about September 3, The Bonds will be released to the Underwriter against payment in federal funds. Questions concerning the Official Statement should be directed to Mike Sobul, Treasurer, Granville Exempted Village School District, 130 North Granger Street, Granville, Ohio Telephone: (740) vii

9 TABLE OF CONTENTS REGARDING THIS OFFICIAL STATEMENT... iv INVESTMENT CONSIDERATIONS... v General... v Prepayments of Principal... v Investment Suitability of Tax-Exempt Bonds... v BOND ISSUE SUMMARY... vi TABLE OF CONTENTS... viii INTRODUCTORY STATEMENT... 1 DEFINITIONS... 2 THE BONDS... 3 Authorization and Purpose... 3 Form and Terms... 3 Redemption Provisions... 4 ESTIMATED SOURCES AND USES OF FUNDS... 5 SECURITY AND SOURCE OF PAYMENT FOR THE SCHOOL DISTRICT S GENERAL OBLIGATION DEBT... 5 School District Bankruptcy... 6 UNDERWRITING... 6 RATING... 7 LITIGATION... 7 Litigation Generally... 7 School Funding Litigation... 7 LEGAL MATTERS... 8 TAX MATTERS... 8 General... 8 Original Issue Discount... 9 Amortizable Bond Premium BOOK-ENTRY ONLY SYSTEM Revision of Book-Entry Only System Replacement Bonds TRANSCRIPT AND CLOSING DOCUMENTS CONTINUING DISCLOSURE CONCLUDING STATEMENT APPENDIX A THE GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT... A-1 GENERAL INFORMATION... A-1 Introduction... A-1 Map of Geographic Area... A-3 School District Officials... A-4 School District Employees... A-4 Pension Obligations... A-4 School District Facilities... A-5 Enrollment... A-6 Community School... A-6 Open Enrollment... A-6 Dual Enrollment Programs and Credit Flexibility... A-7 Educational Program... A-7 Page viii

10 State Performance Standards... A-8 National Standardized Test Scores... A-13 Comparative Position of the School District... A-13 ECONOMY AND EMPLOYMENT... A-14 Economic Development... A-14 Labor Force Statistics... A-16 Largest Employers... A-17 SCHOOL DISTRICT PROPERTY TAX BASE... A-18 Ad Valorem Taxes and Assessed Valuation... A-18 Tax Abatements and Economic Development Incentives... A-18 Assessed Valuation... A-20 Largest Taxpayers... A-21 School District History of Voted Taxes... A-22 Property Tax Rates and Collections... A-23 Property Tax Rate Calculations... A-24 Ad Valorem Tax Levies... A-25 Repeal of Property Tax Levies... A-25 Total Property Tax Burden... A-26 State Reimbursement of Property Tax Revenues... A-26 OTHER SOURCES OF SCHOOL DISTRICT FUNDING... A-28 School Foundation Program... A-28 State Classroom Facilities Assistance... A-28 School District Income Tax... A-29 Gross Casino Revenue Tax... A-29 Newark/Granville Community Authority Development Charge... A-29 SCHOOL DISTRICT DEBT AND DEBT LIMITATIONS... A-29 Bond Anticipation Notes... A-31 School District Debt Currently Outstanding... A-33 Debt Service Requirements... A-34 Overlapping Subdivision Indebtedness... A-35 Debt Capacity Analysis... A-36 Lease Obligations... A-36 Future Financings... A-37 FINANCES OF THE SCHOOL DISTRICT... A-37 Budgeting, Tax Levy and Appropriations Procedures... A-37 Financial Reports and Audits... A-38 Five-Year Projection... A-38 Fiscal Oversight System... A-39 General Fund Operations... A-40 General Fund Set-Aside... A-40 Investment of Funds... A-40 School District Insurance... A-41 APPENDIX B - Financial Statements for the Fiscal Year Ended June 30, B-1 APPENDIX C - Five-Year Projection of Operational Revenues and Expenditures... C-1 APPENDIX D - Form of Approving Legal Opinion of Bricker & Eckler LLP... D-1 APPENDIX E - Sample Closing Certificate... E-1 APPENDIX F - Sample Continuing Disclosure Certificate... F-1 ix

11 $23,615,000 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT Licking County, Ohio Refunding Bonds, Series 2015 (General Obligation Unlimited Tax) INTRODUCTORY STATEMENT This Official Statement has been prepared by the Board of Education (the Board ) of the School District in connection with the original issuance and sale by the School District of the Bonds identified on the Cover hereof. All financial and other information presented herein has been provided by the School District from its records, except for information expressly attributed to other sources. The presentation of information, including tables of receipts from taxes and other sources, is intended to show recent historic information, and is not intended to indicate future or continuing trends in the financial position or other affairs of the School District. No representation is made that past experience, as might be shown by such financial and other information, will necessarily continue or be repeated in the future. Certain statements contained in this Official Statement, including, without limitation, statements containing the words believes, anticipates, expects and words of similar import, involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the School District to be materially different from any future results, performance or achievements expressed or implied by such statements. Such factors include, among others, general economic conditions, demographic changes, and existing government regulations and changes in, or the failure to comply with, government regulations. Certain of these factors are discussed in more detail elsewhere in this Official Statement. Given these uncertainties, readers of this Official Statement and investors are cautioned not to place undue reliance on such forward-looking statements. This Official Statement should be considered in its entirety and no subject discussed should be considered less important than any other subject by reason of its location in the text. Reference should be made to laws, reports or documents referred to for more complete information regarding their contents. References herein to provisions of Ohio law (whether codified in the Ohio Revised Code or uncodified), the Ohio Constitution, or federal law are references to such provisions as they presently exist. Provisions of Ohio law, the Ohio Constitution and federal law may in the future, and from time to time, be amended, repealed or supplemented. Additional information relating to the financial condition of the School District may be obtained by contacting Mike Sobul, Treasurer, Granville Exempted Village School District, 130 North Granger Street, Granville, Ohio 43023; telephone: (740) , and from the Ohio Department of Education s website: The School District makes no representation as to the accuracy of the information appearing at such website. 1

12 DEFINITIONS The following capitalized terms, as used in this Official Statement and the Appendices attached hereto, have the following meanings unless otherwise indicated: Annual Report means any annual report provided by the School District referred to in this Official Statement and any appendix hereto. Bankruptcy Code means Title 11 of the United States Code. Board means the Board of Education of the School District. Bond Counsel means Bricker & Eckler LLP, Columbus, Ohio. Bond Registrar means The Huntington National Bank, Columbus, Ohio. Bonds means the School District s $23,615,000 Refunding Bonds, Series 2015 (General Obligation Unlimited Tax), dated September 3, Code means the Internal Revenue Code of 1986, as amended. County means Licking County, the dominant county of the School District, as defined by the Revised Code. County Auditor means the County Auditor of the County. County Treasurer means the County Treasurer of the County. Cover means the cover page and the inside cover of this Official Statement. Current Interest Bonds means Bonds on which interest is payable each June 1 and December 1. Department means the State Department of Education. MSA means the Columbus Metropolitan Statistical Area, as defined by the United States Office of Management and Budget. OMAC means the Ohio Municipal Advisory Council. Refunded Bonds means $27,319, in aggregate principal amount of the School District s Refunding Bonds, Series 2007 maturing December 1, 2018 through December 1, 2031, inclusive. Revised Code means the Ohio Revised Code, as amended. School District means the Granville Exempted Village School District, Licking County, Ohio. State or Ohio means the State of Ohio. State Auditor means the Auditor of the State. State Superintendent means the State Superintendent of Public Instruction. Tax Commissioner means the Tax Commissioner of the State. 2

13 Treasurer means the Treasurer of the School District. Underwriter means Fifth Third Securities, Inc. Authorization and Purpose THE BONDS The Bonds are unlimited tax general obligation bonds issued for the purpose of currently refunding the Refunded Bonds. The Bonds are authorized by a resolution (the Bond Resolution ) passed by the Board on March 16, The Refunded Bonds were issued for the purpose of advance refunding a portion of the (i) School Improvement Bonds, Series 2001, dated October 1, 2001, originally issued in the aggregate principal amount of $21,209,782; (ii) School Improvement Bonds, Series 2004, dated April 15, 2004, originally issued in the aggregate principal amount of $9,870,000 (both issues pursuant to voted authority from the November 2, 2000 election); (iii) Library Improvement Bonds, dated April 6, 2005, originally issued in the aggregate principal amount of $5,175,000 (pursuant to voted authority from the November 2, 2004 election). The Bonds are issued in conformity with Revised Code Chapter 133, and are, therefore, lawful investments for banks, savings and loan associations, credit union share guaranty corporations, trust companies, trustees, fiduciaries, insurance companies, including domestic for life and domestic not for life, trustees or other officers having charge of sinking and bond retirement or other funds of the State, subdivisions and taxing districts, the Commissioners of the Sinking Fund of the State, the Administrator of Workers Compensation, the State teachers, public employees, and school employees retirement systems, and the police and firemen s disability and pension fund, and are eligible as security for the repayment of the deposit of public moneys. A portion of the proceeds of the sale of the Bonds will be deposited in the Escrow Fund within the School District s bond retirement fund and will be used to currently refund the Refunded Bonds. The Escrow Fund will be held by The Huntington National Bank, as escrow trustee (the Escrow Trustee ). Monies in the Escrow Fund will be invested in direct obligations of or obligations guaranteed as to payment by the United States of America and applied, by the Escrow Trustee, to pay debt service on the Refunded Bonds and to redeem the Refunded Bonds on their earliest optional redemption date. Under Ohio law, the final maturity of the Bonds cannot be later than the final maturity of the Refunded Bonds (December 1, 2031). Form and Terms The Bonds will be issued in fully registered form and the Bonds (as shown on the Cover) will bear interest from their dated date until maturity or earlier redemption, at the rates per annum as set forth on the Cover, payable on June 1 and December 1 of each year, and will mature on December 1 in the years as indicated on the Cover. The Bonds will be issued in denominations of $5,000 or any integral multiple thereof, provided that, so long as the Bonds shall be in book-entry form and held by a depository, each Bond will be of a single maturity, and will be numbered as determined by the Treasurer. Principal of the Bonds (as shown on the Cover) will be payable at maturity, in lawful money of the United States of America, at the main office of The Huntington National Bank in the City of Columbus, Ohio, which has been designated by the Board as bond registrar, paying agent, and transfer agent for the Bonds (the Bond Registrar ). Interest on the Bonds will be payable to the person whose 3

14 name appears as the registered holder thereof on the registration records maintained by the Bond Registrar, on the respective Record Date (15th day next preceding an interest payment date) by check mailed to such registered holder at the address of such registered holder as it appears on the registration records. No deduction shall be made for exchange, collection, or service charges. Redemption Provisions The Bonds maturing on or after December 1, 2026 are subject to redemption at the option of the School District, either in whole, or in part, in such order of maturity as the School District shall determine, on any date on or after December 1, 2025, at a redemption price equal to 100% of the principal amount redeemed plus, in each case, accrued interest to the date fixed for redemption. When partial redemption is authorized, the Bonds or portions thereof will be selected by lot within a maturity in such manner as the Bond Registrar may determine, provided, however, that the portion of any such Bond so selected will be in the amount of $5,000 or any integral multiple thereof. The notice of the call for redemption of Bonds shall identify (i) by designation, letters, numbers or other distinguishing marks, such Bonds or portions thereof to be redeemed, (ii) the redemption price to be paid, (iii) the date fixed for redemption, and (iv) the place or places where the amounts due upon redemption are payable. From and after the specified redemption date, interest on such Bonds (or portions thereof) called for redemption shall cease to accrue. Such notice shall be sent by first class mail to each such registered holder at the address shown in the Bond registration records at least 30 days prior to the redemption date. Failure to receive such notice or any defect therein shall not affect the validity of the proceedings for the redemption of any such Bond. [Balance of Page Intentionally Left Blank] 4

15 ESTIMATED SOURCES AND USES OF FUNDS The proceeds of the Bonds will be applied as follows: Total Sources Par value of the Bonds $23,615, Net original issue premium 3,855, Transfers from Prior Issue Debt 308, Service Funds Total Sources $27,779, Uses Deposit to Escrow Fund $27,583, Costs of issuance * 195, Total Uses $27,779, * Includes Underwriter s compensation, legal fees, rating fees, printing and distribution costs, and miscellaneous expenses. SECURITY AND SOURCE OF PAYMENT FOR THE SCHOOL DISTRICT S GENERAL OBLIGATION DEBT The Bonds are voted general obligation debt of the School District, payable from the sources described herein, subject to Chapter 9 of the Bankruptcy Code and other laws affecting creditors rights. The basic security for payment of the Bonds is the requirement that the School District levy ad valorem property taxes outside the ten-mill limitation (which limitation is further described in APPENDIX A under SCHOOL DISTRICT DEBT AND DEBT LIMITATIONS ), which taxes are unlimited as to rate and amount, to the extent necessary to pay the anticipated debt service on the Bonds as the same becomes due, and to the extent that such debt service on the Bonds is not paid from other sources. Such taxes can be expended only for the purpose of paying the anticipated debt service on the Bonds (together with costs of issuing the Bonds) and since such taxes are unlimited as to rate or amount, the rate of millage actually levied in each year while the Bonds are outstanding will be such as is determined to be necessary by the County Auditor to produce the amount necessary to pay debt service on the Bonds due in that year, giving due consideration to the School District s assessed valuation and previous tax collection experience. The Bonds are also secured by a pledge of the full faith and credit of the School District. This pledge includes all of the funds of the School District, except those prohibited from use by the Ohio Constitution, State or federal law, or specifically limited to another use. (See SCHOOL DISTRICT DEBT AND DEBT LIMITATIONS Statutory Debt Limitations Generally in APPENDIX A.) In addition to the right of individual bondholders to sue upon their particular Bonds, State law authorizes the holders of not less than 10% in principal amount of the Bonds to bring mandamus or other actions to enforce all contractual or other rights of the bondholders, including the right to require the 5

16 School District to levy, collect and apply the taxes to pay debt service on the Bonds, and in the case of any default in payment of debt service on the Bonds, to bring an action to require the School District to account as if it were the trustee of an express trust for the bondholders or to enjoin any acts that may be unlawful or in violation of bondholder rights. School District Bankruptcy An Ohio school district may file for bankruptcy under Chapter 9 of the Bankruptcy Code if it meets certain prerequisites under both federal and State law. Section 109(c) of the Bankruptcy Code sets forth the requirements for a State political subdivision to file for bankruptcy protection. In addition to requiring the school district to be insolvent 1, the school district must be specifically authorized, in its capacity as a school district or by name, to be a debtor under such chapter by State law, or by a governmental officer or organization empowered by State law to authorize such entity to be a debtor under such chapter. 2 With regard to State law, Revised Code Section requires that a political subdivision which desires to file bankruptcy seek and obtain permission of the Tax Commissioner. Moreover, Revised Code Section (E)(5) provides that a school district may not file for bankruptcy if it owes money to the State. The foregoing federal and State laws also permit an Ohio county to initiate Chapter 9 proceedings which, because a county collects certain revenues on behalf of a school district (particularly ad valorem property taxes), may adversely affect the financial condition of such school district. UNDERWRITING Fifth Third Securities, Inc. (the Underwriter ) has agreed, pursuant to the Bond Purchase Agreement with the School District dated April 28, 2015 (the Purchase Agreement ), to purchase all, but not less than all, of the Bonds at a purchase price of $27,370, (the Purchase Price ), which is equal to the par amount of the Bonds ($23,615,000.00), plus net original issue premium ($3,855,499.30), less Underwriter s discount ($100,363.75). The Underwriter is purchasing the Bonds as originally issued for purpose of resale. The Underwriter reserves the right to join with dealers and other underwriters in offering the Bonds to the public. The Underwriter may offer and sell the Bonds to certain dealers (including dealer banks and dealers depositing the Bonds into unit investment trusts, certain of which may be sponsored or managed by the Underwriter), and others at prices lower than the public offering prices noted on the Cover. The initial offering prices of the Bonds may be changed, from time to time, by the Underwriter. The Underwriter has agreed to retain $92, from the Purchase Price to pay certain costs of issuance of the Bonds on behalf of the School District, including rating fees, legal fees, registrar and escrow fees, printing and distribution costs, and other miscellaneous expenses. The obligation of the Underwriter to accept delivery of the Bonds is subject to the various conditions set forth in the Purchase Agreement. The Underwriter is obligated to purchase all of the Bonds if any of the Bonds are purchased U.S.C. Section 101(32)(C) requires that in order to be insolvent a school district must not be paying its debts as they come due. 2 See 11 U.S.C. Section 109(c)(2). 6

17 RATING As noted on the Cover, the School District has applied for a rating on the Bonds from Moody s Investors Services ( Moody s ), which have rated the Bonds Aa2. No application for a rating on the Bonds has been made to any other rating agency. The rating reflects only the views of such rating agency. Any explanation of the significance of the rating may only be obtained from such rating agency at Moody s Investors Service, Inc., 7 World Trade Center, New York, New York 10007, telephone (212) ; website: The School District furnished to Moody s certain information and materials, some of which may not have been included in this Official Statement, relating to the Bonds and the School District. Generally, rating agencies base their ratings on such information and materials, as well as investigation, studies and assumptions by the rating agencies. Such ratings are not recommendations to buy, sell or hold the Bonds. There can be no assurance that a rating, when assigned, will continue for any given period of time or that it will not be lowered or withdrawn entirely by a rating agency if, in the rating agency s judgment, circumstances so warrant. In addition, the School District currently expects to provide to Moody s, but assumes no obligation to furnish to the Underwriter or the holders from time to time of the Bonds, further information and materials that it or they may request. However, the School District does not obligate itself hereby to furnish such information and materials to Moody s, and the School District may issue unrated bonds and notes from time to time. Failure by the School District to furnish such information and materials, or the issuance of unrated bonds or notes, may result in the suspension or withdrawal of Moody s rating on the Bonds. Any lowering, suspension or withdrawal of such ratings may have an adverse effect on the marketability or market price of the Bonds. Litigation Generally LITIGATION To the knowledge of the appropriate officials of the School District, no litigation or administrative action or proceeding is pending or threatened restraining or enjoining, or seeking to restrain or enjoin, the issuance and delivery of the Bonds, or the levy and collection of taxes to pay the debt service on the Bonds, or contesting or questioning the proceedings and authority under which the Bonds are to be authorized and are to be issued, sold, executed or delivered, or the validity of the Bonds. A no-litigation certificate to such effect will be delivered to the Underwriter at the time of original delivery of the Bonds to the Underwriter. In common with other political subdivisions, the School District from time to time receives notices of claims for money damages or injunctive relief. However, the School District is not currently a party to any such legal proceedings. School Funding Litigation In 1997, the Ohio Supreme Court determined in the case of DeRolph v. State of Ohio that Ohio s elementary and secondary public school financing system violated the Ohio Constitution. Included in the DeRolph decision was a ruling that property taxes may be used as a part of a school funding solution, but could no longer be the primary means of financing schools. In 2003, the Ohio Supreme Court effectively prohibited further judicial review of the DeRolph case and the United States Supreme Court denied the plaintiffs Petition for Writ of Certiorari, without opinion. 7

18 Throughout its rulings the Ohio Supreme Court did not specifically address, and did not hold as invalid: Voted securities issues (bonds and notes previously issued and bond issues that may be placed on the ballot in the future) and the debt service levy included within such voted authority. Unvoted securities issues (bonds and notes previously issued and future bond and note issues), issued for the purpose of constructing permanent improvements or capital facilities, and the debt service levy included within such authority. Voted levies (property taxes or income taxes). The decisions did not address the current authority of school districts to levy and collect operating levies, and the decisions do not prevent school districts from approving additional levies. LEGAL MATTERS Legal matters incident to the issuance of the Bonds and with regard to the excludability of the interest on the Bonds from gross income for federal income tax purposes (see TAX MATTERS herein) are subject to the approving opinion of Bricker & Eckler LLP, Bond Counsel to the School District. A signed copy of that opinion will be delivered to the Underwriter at the time of original delivery. Assuming no change in applicable law prior to the date of delivery of such opinion, the opinion will be substantially in the form attached hereto as APPENDIX D. The opinion will speak only as of its date, and subsequent distribution of it by recirculation of the Official Statement or otherwise shall create no implication that Bond Counsel has reviewed or expresses any opinion concerning any of the matters referred to in the opinion subsequent to the date thereof. While Bond Counsel has participated in the preparation of portions of this Official Statement, it has not been engaged to confirm or verify, and expresses and will express no opinion as to the accuracy, completeness or fairness of any of the statements in this Official Statement, including its appendices (other than APPENDIX D), or in any other reports, financial information, offering or disclosure documents or other information pertaining to the School District or the Bonds that may be prepared or made available by the School District or others to the holders of the Bonds or others. General TAX MATTERS In the opinion of Bricker & Eckler LLP, Bond Counsel, under existing law, interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103(a) of the Code and is not treated as an item of tax preference under Section 57 of the Code for purposes of the alternative minimum tax imposed on individuals and corporations; it should be noted, however, that for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings. Further, the Bonds are not private activity bonds as defined in Section 141(a) of the Code. Interest on the Bonds, the transfer thereof, and any profit made on their sale, exchange or other disposition, are exempt from the Ohio personal income tax, the Ohio commercial activity tax, the net income base of the Ohio corporate franchise tax, and municipal, school district, and joint economic development district income taxes in Ohio. The opinion on tax matters will be based on and will assume the accuracy of certain representations and certifications made by the Board and others, and the compliance with certain 8

19 covenants of the School District, to be contained in the transcript of proceedings and which are intended to evidence and assure the foregoing, including that the Bonds are and will remain obligations the interest on which is excluded from gross income for federal income tax purposes. Bond Counsel has not and will not independently verify the accuracy of such certifications and representations. The School District has not designated the Bonds as qualified tax-exempt obligations as defined in Section 265(b)(3) of the Code. The Code prescribes a number of qualifications and conditions for the interest on state and local government obligations to be and remain excluded from gross income for federal income tax purposes some of which require future or continued compliance after issuance of the obligations in order for the interest to be and continue to be so excluded from the date of issuance. Noncompliance with these requirements could cause the interest on the Bonds to be included in gross income for federal income tax purposes and thus to be subject to regular federal income tax retroactively to the date of their issuance. The School District has covenanted to take such actions that may be required of it for the interest on the Bonds to be and remain excluded from gross income for federal income tax purposes, and not to take any actions which would adversely affect that exclusion. Under the Code, interest on the Bonds may be subject to a branch profits tax imposed on certain foreign corporations doing business in the United States of America, and a tax imposed on excess net passive income of certain S corporations. Under the Code, the exclusion of interest from gross income for federal income tax purposes can have certain adverse federal income tax consequences on items of income or deductions for certain taxpayers, including among them financial institutions, certain insurance companies, recipients of Social Security and Railroad Retirement benefits, and those that are deemed to incur or continue indebtedness to acquire or carry tax-exempt obligations and individuals otherwise eligible for the earned income tax credit. The applicability and extent of these or other tax consequences will depend upon the particular tax status or other items of income and expenses of the holders of the Bonds. Bond Counsel will express no opinion and make no representation regarding such consequences. From time to time, legislative proposals are pending in the United States Congress that would, if enacted, alter or amend one or more of the federal tax matters referred to above in certain respects or would adversely affect the market value of the Bonds. Court proceedings may also be filed, the outcome of which could modify the tax treatment of obligations such as the Bonds. There can be no assurance that legislation enacted or proposed, or actions by a court, after the date of issuance of the Bonds will not have an adverse effect on the tax status of interest or other income on the Bonds or the market value or marketability of the Bonds. Prospective purchasers of the Bonds should consult their own tax advisers regarding pending or proposed federal and state tax legislation and court proceedings, as to all of which Bond Counsel expresses no opinion. Original Issue Discount Certain of the Bonds may be sold to the public at a price of less than 100% of their face amount (the Discount Bonds ). The following information, which has not been included in the opinion of Bond Counsel, may be helpful to prospective purchasers of the Discount Bonds. Under present federal income tax law, original issue discount (i.e., the difference between the issue price, as hereinafter defined, of a Discount Bond and the stated redemption price at maturity of such Discount Bond) is treated as accruing ( accreted ) over the term of such Discount Bond. The issue price is the price at which a substantial amount of the Discount Bonds is sold to the public (excluding bond houses, brokers or similar persons acting in the capacity of underwriters or wholesalers). 9

20 In general, the amount of original issue discount which is to be accreted in each accretion period will equal (i) the issue price of that Discount Bond, increased by the amount of original issue discount which has been accreted in all prior accretion periods, multiplied by (ii) the initial offering yield of that Discount Bond reflected on the inside cover page of this Official Statement (determined on the basis of compounding at the close of each accretion period and properly adjusted for the length of the accretion period), minus, with respect to the Bonds, interest actually paid during such accretion period. For these purposes, accretion period means a six-month period (or shorter period from the date the Discount Bond was issued) which ends on a day in the calendar year corresponding to the maturity date of that Discount Bond or the date six months before such maturity date. The amount of original issue discount so accreted in a particular accretion period will be considered to accrete ratably on each day of the accretion period. Such accreted amount is used for purposes of determining the adjusted basis for federal income tax purposes of the holder of such Discount Bond but is not included in such holder s gross income for federal income tax purposes. Consequently, a purchaser who buys a Discount Bond in the initial offering at the issue price and holds such Discount Bond to its maturity would not realize any gain or loss for federal income tax purposes upon payment of the stated redemption price of that Discount Bond at maturity. Amortizable Bond Premium Certain of the Bonds may be sold at issue prices greater than the principal amount payable at maturity or earlier call date (the Premium Bonds ). The following information, which has not been included in the opinion of Bond Counsel, may be helpful to prospective purchasers of the Premium Bonds. Premium Bonds will be considered to be issuable with amortizable bond premium (the Bond Premium ). A taxpayer who acquires a Premium Bond in the initial public offering will be required to adjust his or her basis in the Premium Bond downward as a result of the amortization of the Bond Premium, pursuant to Section 1016(a)(5) of the Code. The amount of amortizable Bond Premium will be computed on the basis of the taxpayer s yield to maturity with compounding at the end of each accrual period. Rules for determining (i) the amount of amortizable Bond Premium and (ii) the amount amortizable in a particular year are set forth at Section 171(b) of the Code. No income tax deduction for the amount of amortizable Bond Premium will be allowed to a holder pursuant in Section 171(a)(2) of the Code. The amortization of Bond Premium may be taken into account as a reduction in the amount of tax-exempt income for purposes of determining other tax consequences of owning the Premium Bonds. A purchaser of a Premium Bond at its issue price in the initial public offering who holds that Premium Bond to maturity will realize no gain or loss upon the retirement of such Premium Bond. PROSPECTIVE PURCHASERS OF THE DISCOUNT OR PREMIUM BONDS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSEQUENCES OF THE PURCHASE, SALE, TRANSFER, REDEMPTION, PAYMENT, OR OTHER DISPOSITION OF THE DISCOUNT OR PREMIUM BONDS, INCLUDING, WITHOUT LIMITATION, MODIFICATIONS TO THE METHOD FOR ACCRETING ORIGINAL ISSUE DISCOUNT OR AMORTIZING PREMIUM FOR CERTAIN SUBSEQUENT PURCHASERS, AND INCLUDING THE EFFECT OF ANY APPLICABLE STATE OR LOCAL INCOME TAX LAWS. 10

21 BOOK-ENTRY ONLY SYSTEM The information in this section concerning DTC and DTC s book-entry only system has been obtained from DTC and the School District takes no responsibility for the completeness or accuracy thereof. The School District cannot and does not give any assurances that DTC, Direct Participants or Indirect Participants will distribute to the Beneficial Owners (each as hereinafter defined) (a) payments of interest, principal, or premium, if any, with respect to the Bonds, (b) certificates representing ownership interest in or other confirmation of ownership interest in the Bonds, or (c) redemption or other notices sent to DTC or Cede & Co., its partnership nominee, as the registered owner of the Bonds, or that they will so do on a timely basis or that DTC, Direct Participants or Indirect Participants will act in the manner described in this Official Statement. The current Rules applicable to DTC are on file with the Securities and Exchange Commission and the current Procedures of DTC to be followed in dealing with DTC Participants are on file with DTC. The Depository Trust Company ( DTC ), New York, New York 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 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 3.5 million issues of U.S. and non-u.s. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC s participants ( Direct Participants ) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ( DTCC ). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( Indirect Participants ). DTC has a Standard & Poor s rating of AA+. The DTC rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at 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 the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. 11

22 To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. 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 Bonds. 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 Bond Registrar and request that copies of the notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC s MMI procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the School District as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions and dividend 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 the School District or the Bond Registrar, on payable date in accordance with their respective holdings shown on DTC s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such Participant and not of DTC, the Bond Registrar, or the School District, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the School District or the Bond Registrar, 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. Revision of Book-Entry Only System Replacement Bonds The Bond Resolution provides for issuance of fully registered Bonds (the Replacement Bonds ) directly to owners other than DTC or its nominee only if DTC determines not to continue to act as security depository of the Bonds. In such event, the School District may in its discretion establish a securities depository/book entry relationship with another qualified securities depository. If the School District does not or is unable to do so, and after appropriate notice to DTC, the School District s Bond 12

23 Registrar will authenticate and deliver fully registered Replacement Bonds, in the denominations of $5,000 or any multiple thereof, to or at the direction of and, if the event is not the result of School District action or inaction, at the expense (including printing costs) of, any persons requesting such issuance. Replacement Bonds may be transferred, registered and assigned only in the registration books of the School District s Bond Registrar. TRANSCRIPT AND CLOSING DOCUMENTS A complete transcript of proceedings for the Bonds, including an appropriate no-litigation certificate (described above under LITIGATION ), will be delivered by the School District when the Bonds are delivered by the School District to the Underwriter. The School District will at that time also provide to the Underwriter a certificate of the Treasurer, in the form attached hereto as Appendix E, addressed to the Underwriter relating to the accuracy and completeness of this Official Statement. CONTINUING DISCLOSURE The School District has agreed for the benefit of the holders and beneficial owners of the Bonds to provide annual financial and operating information in its Annual Report, not later than December 1 of each year, and to provide notices of certain events, if material. Concurrently with the delivery of the Bonds, the School District will deliver a certificate of the Treasurer of the School District (the Disclosure Certificate), in the form attached hereto as Appendix F, describing the nature of the information to be provided, the persons and entities to whom such information will be provided and the times at which such information will be provided. The School District s failure to comply with any undertaking contained in the Disclosure Certificate will not constitute an event of default under the Bonds During the last five years, the School District has failed to timely file certain required Annual Information to the Electronic Municipal Market Access ( EMMA ) website operated by the Municipal Securities Rulemaking Board (the MSRB ). On June 3, 2014, the School District made a corrective filing with EMMA that contained required financial information for the fiscal year ending June 30, The School District otherwise has complied during the last five years in all material respects with its continuing disclosure requirements in connection with the School District s outstanding bonds and notes. The School District has instituted procedures to ensure compliance with all future continuing disclosure requirements and has engaged Bond Counsel to assist it in this regard. The Disclosure Certificate is being executed by the School District to assist the Underwriter in complying with Rule 15c2-12(b)(5) (the Rule ) adopted by the Securities and Exchange Commission. Specifically, the School District agrees to provide the Annual Report to the Municipal Securities Rulemaking Board (the MSRB ) in an electronic format, if required, and to provide notice of the enumerated events the MSRB in an electronic format, if required. 13

24 CONCLUDING STATEMENT To the extent that any statements made in this Official Statement involve matters of opinion or estimates, whether or not expressly stated to be such, they are made as such and not as representations of fact or certainty, and no representation is made that any of such statements will be realized. Information herein has been derived by the School District from official and other sources and is believed by the School District to be reliable, but information other than that obtained from official records of the School District has not been independently confirmed or verified by the School District and its accuracy is not guaranteed. Neither this Official Statement nor any statement which may have been made orally or in writing is to be construed as or as part of a contract with the original purchasers or holders of the Bonds. This Official Statement has been duly prepared and delivered by the School District, and executed for and on behalf of the School District by the President and the Treasurer of the Board. GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT, LICKING COUNTY, OHIO By: /s/ Jennifer Cornman President, Board of Education By: /s/ Mike Sobul Treasurer, Board of Education 14

25 APPENDIX A THE GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT GENERAL INFORMATION Introduction Historically, the territory of the School District has been considered rural, but recent residential, industrial and commercial developments have changed the image of the community. With its ideal location 20 minutes from downtown Columbus and Port Columbus International Airport, the School District offers residents a small community, college town environment; yet is situated virtually next to a major, vibrant city with extensive offerings of fine arts, entertainment and recreational opportunities, including COSI, Columbus Museum of Art, Wexner Center for the Performing Arts, Columbus Zoo and Aquarium, and Franklin Park Conservatory. There are several shopping areas within a 30-minute drive, including Easton Town Center and Polaris Fashion Place, two of the leading commercial areas in central Ohio. Denison University, a residential, liberal arts institution located in the School District, was founded in 1831 and provides numerous educational opportunities for School District residents, as well as cultural and athletic events. The three largest municipalities in Licking County are the Cities of Newark and Heath, and the Village of Granville (the Village ). Licking County is home to Dawes Arboretum; Blackhand Gorge; the Newark Earthworks mounds, park and museum; the Longaberger home office, a seven-story building in the shape of a Longaberger basket; Ye Olde Mill, a former grist mill restored by Velvet Ice Cream; and the National Heisey Glass Museum. The School District is an independent political subdivision of the State of Ohio and operates subject to the provisions of the Ohio Constitution and various sections of the Revised Code. Under such laws, there is no authority for the School District to have a charter or adopt local laws. The School District is not a part of, nor under the control of, the Village. The territory of the School District is considerably larger than the territory of the Village. [Balance of Page Intentionally Left Blank] A-1

26 According to information supplied by OMAC, the School District contains portions of the assessed valuation of other subdivisions, as shown below: Subdivision County Overlapping Subdivisions Granville Exempted Village School District Subdivision s Assessed Valuation Within the School District School District s Assessed Valuation Within the Subdivision Licking County 11.28% % Other Political Subdivisions City of Heath City of Newark Village of Granville Granville Township McKean Township Newark Township Newton Township St. Albans Township Union Township Licking County Career Center Source: Ohio Municipal Advisory Council According to the U.S. Bureau of the Census, the estimated population of the School District in 2013 was 12,829. [Balance of Page Intentionally Left Blank] A-2

27 Map of Geographic Area GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT A-3

28 School District Officials The legislative power of the School District is vested in the Board of Education (the Board ), consisting of five members elected at large for staggered four-year terms. The Board meets regularly on the third Monday of each month unless scheduled otherwise. At the first meeting of each year, the Board elects a president and a vice president from its membership, each to serve a one-year term. The Board employs a Superintendent who serves as the executive officer for the Board and a Treasurer who serves as the chief fiscal officer for the Board. Official School District Officials Granville Exempted Village School District Office A-4 Expiration of Current Term Beginning of Tenure Jennifer Cornman Board President December 31, 2017 January 1, 2010 Russell Ginise Board Vice President December 31, 2015 July 12, 2010 Amy Deeds Board Member December 31, 2015 January 1, 2008 Thomas Miller Board Member December 31, 2017 January 1, 2012 Katie Rentel Board Member December 31, 2015 January 1, 2012 Jeff Brown Superintendent Contract February 1, 2011 Mike Sobul Treasurer Contract November 1, 2011 School District Employees The School District currently has 178 certificated employees and 62 classified employees (secretarial, clerical, and bus drivers, as well as other non-teaching, non-administrative personnel). This total of 240 is up from 211 as of April 6, In the opinion of School District officials, labor relations are good. Certified Staff and Classified Staff The teaching or certified staff and the classified staff are represented by the Granville Education Association (G.E.A.) which is affiliated with the Ohio Education Association (O.E.A.), and the National Education Association (N.E.A.). The Board has bargained with the G.E.A since In April 2014, the Board and the G.E.A signed a three-year agreement. The settlement granted the certified and classified staff an annual salary increase averaging two percent. The settlement also provided increases to the deductible, co-pay, and out-of-pocket maximums for both certified and classified employee healthcare plans, while keeping employee contribution amounts level. Certified employees will continue to pay 15% of healthcare premiums while classified employees will continue paying $30 per month for single coverage and $70 per month for family coverage. Pension Obligations Present and retired employees of the School District are covered under two statewide public retirement (including disability retirement) systems. The State Teachers Retirement System (the STRS ) is applicable to all teachers, principals, supervisors and administrators employed by the School District who are required to hold a certificate issued by the Department pursuant to the Revised Code. Other eligible employees are covered by the School Employees Retirement System (the SERS ). Pursuant to federal law, all School District employees hired after March 31, 1986 are required to participate in the federal Medicare program which currently requires employee and employer contributions each equal to

29 1.45% of the employee s wages subject to the Federal Insurance Contribution Act ( FICA ) wage limit. Otherwise, School District employees are not presently covered under the Federal Social Security Act. STRS and SERS are not presently subject to the funding and vesting requirements of the Federal Employee Retirement Income Security Act of Both STRS and SERS were created by and operate pursuant to Ohio law. The State Legislature could determine to amend the format of either system and could revise rates or methods of contribution to be made by the School District into the pension funds and revise benefits or benefits levels. School District Facilities The School District presently operates the following schools: Current School District Facilities Granville Exempted Village School District Name of Building Group/ Grades Housed Enrollment Capacity Number of Teachers * Pupil/ Teacher Ratio Year Building Completed Year(s) of Additions/Renovations Granville Elementary K / , 2003 Granville Intermediate / Granville Middle / Granville High / Total 2,397 2, Source: Granville Exempted Village School District * Number of teachers includes all staff paid under the certified salary schedule. The School District also operates these additional buildings: Name of Building Building Completed Administration Building 1952 Bus Garage 1986 [Balance of Page Intentionally Left Blank] A-5

30 Enrollment The daily average enrollments for past school years, together with projected enrollments for future school years, are shown below: Actual and Projected Enrollment Granville Exempted Village School District Grade * * * * K Totals 2,484 2,482 2,460 2,397 ** 2,398 2,370 2,372 2,321 Source: Granville Exempted Village School District * Projected ** Does not include 16 high school students who attend the local vocational education program of C-TEC of Licking County. Community School The School District does not currently serve as a sponsor for a community school established under Revised Code Chapter Open Enrollment The School District does not have open enrollment. A-6

31 Dual Enrollment Programs and Credit Flexibility The School District is required by State law to offer its students the opportunity to participate in a dual enrollment program. The School District offers the options shown in the table below. Dual Enrollment Programs Granville Exempted Village School District Program Students Participating Post-Secondary 4 Advanced Placement 307 Dual Enrollment * 49 Source: Granville Exempted Village School District * Dual enrollment program sponsored by Central Ohio Technical College and Kenyon College The School District adopted its Credit Flexibility policy in Educational Program As of March 2015, 2,413 students were enrolled in the School District s elementary, intermediate, middle school and high school buildings. Sixteen of those students at the high school level attended the local vocational education program at C-TEC of Licking County. Faculty and administration at each building are supported by the School District personnel and School District Leadership Team. To improve efforts in the areas of curriculum, instruction, and assessment, the School District has developed a Continuous Improvement Plan and Professional Development Model. Each building in turn develops a specific Continuous Improvement Plan that puts the School District s plan into action. Regular updates to courses of study are vetted through credible outside sources and presented for Board of Education approval on a yearly basis. The School District s curriculum includes a solid foundation in the core subjects, including global language. Electives are offered at all levels in accordance with and beyond State requirements. Test scores indicate that the School District s students achieve higher than local, State, and national averages. In addition to the curriculum, a wide range of athletic offerings are available for students in the middle and high schools. For students in grades K 6, partnerships with the Granville Recreation District provide many offerings. In addition to these programs, several club sports and activities are active at all levels. [Balance of Page Intentionally Left Blank] A-7

32 The following highlight specific student achievements from the school year for our School District that will help illustrate the effectiveness of our educational programs: The School District met all national standards and all indicators on the Ohio Local Report Card in the area of achievement. Our Performance Index score places us in the top 30 districts in the State. The School District and each building facilitated at least a year s worth of growth for students. 84% of students taking an AP test scored a 3 or better. Over 200 students took an AP test. 200 senior students, over 90% of the class, took at least one AP test while in high school. Their composite score was The School District is supported by the Granville Education Foundation, Granville Recreation District, and various parent-teacher organizations. The Foundation and parent-teacher organizations provide extra financial support to School District initiatives and teacher grants as well as providing scholarships for students. They provide funds for the creative and unique programs provided to students. The Licking County Foundation is also a supporter of student scholarships, along with many other local organizations. State Performance Standards In August 2013, the Department began the process of phasing in a new model of local report card (the Local Report Card ) evaluations for Ohio school districts. Beginning in the fall of 2016, school districts and individual schools will receive grades on measurements such as the four-year graduation rate. The grades for these measurements will be combined into six broad categories, referred to as components, that will also receive a grade. The component grades will eventually be combined into an overall grade for each school district or individual school. The Local Report Cards for Ohio school districts released in August 2014 contain nine measurements that receive grades. However, the Department will not release component or overall grades until the fall of 2016 in order to give school districts time to adjust to the new evaluation system and focus their efforts on being successful in all of the areas that are being measured. [Balance of Page Intentionally Left Blank] A-8

33 The following table summarizes the School District s letter grade results on its most recent Local Report Card for the school year. Local Report Card Summary, Granville Exempted Village School District Achievement Performance Index Number of State Indicators Met Progress Overall Value-Added Gifted Value-Added Lowest 20% Value-Added Disabled Value-Added Gap Closing Annual Measurement Objectives Graduation Rate 4-Year Graduation Rate 5-Year Graduation Rate Source: Ohio Department of Education A A A A C A C A A The six components that will be on the new Local Report Card are: 1 1. Achievement This component measures absolute academic achievement compared to national standards of success, and this component is comprised of a performance index (the Performance Index ) and a series of 24 State tests (the Indicators ). The Performance Index measures the test results of every student. There are six levels on the Performance Index, and school districts receive points for every student in each of these levels. The Indicators are based on a series of 24 State tests that measure the level of achievement for each student in certain grades and subjects. The State previously required that at least 75% of students score proficient or better to get credit for the corresponding indicator. Starting with the school year, the State requires that a school district or school have 80% of their students reach proficient or better in order to meet an indicator. For this component of the Local Report Card, the two A-F letter grades are determined by (1) the percentage of points that they receive out of a total possible 120 points on the Performance Index, and (2) the number of Indicators met out of the 24 total Indicators. 1 This discussion of the new Local Report Card standards is provided for the convenience of the reader and only summarizes the process by which the Department reaches its designation for school districts. For more information about State performance standards, including more detail about the School District s performance, please see the Department s website relating to State and Local Report Card reporting at A-9

34 Score Letter Grade 90% 100% A 80% 89.9% B 70% 79.9% C 50% 69.9% D Below 50% F For the school year, the School District received a A grade on the Performance Index by scoring points out of 120 points (90.5%), and the School District received an A grade on the Indicators by meeting 24 of 24 (100.0%) of the Indicators. The table below shows the School District s results for each Indicator with bolded Indicators indicating results above the State standard. Performance Indicator State Performance Indicators Granville Exempted Village School District State Standard School District Performance Indicator State Standard School District 3 rd Grade Achievement 8 th Grade Achievement 1. Mathematics 80% 92.2% 12. Mathematics 80% 95.5% 2. Reading Reading Science th Grade Achievement 3. Mathematics 80% 87.4% 4. Reading Ohio Graduation Test (10 th Grade) 15. Mathematics 80% 96.7% 5 th Grade Achievement 16. Reading Mathematics 80% 91.4% 17. Science Reading Social Studies Science Writing th Grade Achievement Ohio Graduation Test (11 th Grade) 8. Mathematics 80% 93.5% 20. Mathematics 80% 99.0% 9. Reading Reading Science th Grade Achievement 23. Social Studies Mathematics 80% 95.4% 24. Writing Reading Source: Ohio Department of Education 2. Progress This component measures the average annual improvement for each student (i.e., whether a student gained more or less a year of knowledge and skills each year). This component is commonly referred to as the value-added grade. A-10

35 For this component of the Local Report Card, the A-F grade is determined by the same value-added index that the State adopted in The ranges set forth in the table below show years of growth in one school year s time. Score Letter Grade +2 and higher A Greater or equal to +1 but less than +2 B Greater or equal to -1 but less than +1 C Greater or equal to -2 but less than -1 D Less than -2 F For the school year, the School District s overall value-added grade was an A, its gifted students value-added grade was a A, its students in the lowest 20% in achievement value-added grade was an C, and its students with disabilities valueadded grade was an A. 3. Gap Closing This component, referred to as Annual Measurement Objectives ( AMO ), measures how well a school district or individual school is doing in narrowing gaps in reading, math and graduation rate among students according to socioeconomic, racial, ethnic or disability status. A school district or school cannot get an A on this measure if one of its groups is not reaching the goal set for all students. This component will review 10 student groups in reading, math and graduation rate and assign a grade for efforts to close achievement gaps in all groups. The 10 student groups, which are the same groups measured by the Adequate Yearly Progress model, are: All students; American Indian/Alaskan Native; Asian/Pacific Islander; Black, non-hispanic; Hispanic; Multiracial; White, non-hispanic; Economically disadvantaged; Students with disabilities; and Limited English proficiency. The ranges for the AMO grades are: Score Letter Grade 90% 100% A 80% 89.9% B 70% 79.9% C 60% 69.9% D Below 60% F For the school year, the School District s AMO grade was a C (73.3%). A-11

36 4. Graduation Rate This component measures the percentage of students who entered the 9th grade and graduated in four and five years. The ranges for the graduation rate measures are different as set forth below: Four-Year Graduation Rate Score Letter Grade 93% 100% A 89% 92.9% B 84% 88.9% C 79% 83.9% D Less than 79% F For the school year, the School District s four-year graduation rate was 96.5%, which resulted in an A grade. Five-Year Graduation Rate Score Letter Grade 95% 100% A 90% 94.9% B 85% 89.9% C 80% 84.9% D Less than 80% F For the school year, the School District s five-year graduation rate was 98.4%, which resulted in a A grade. 5. K-3 Literacy This component measures the improvement in reading for students in kindergarten through grade three. This component aims to ensure that all students are reading at grade level by the end of third grade. Any school district or school that has less than five percent of their kindergartners reading below grade level will not receive a letter grade for this measure or component. The minimum range of a C grade will be the statewide average value for this measure. This measure and component will not appear on the Local Report Card until the Local Report Card released in Prepared for Success This component measures whether students who graduate are prepared for college or a career without needing to take remedial classes. This component contains six measures that do not receive a grade; they are only reported on the school district s or school s Local Report Card. The component grade is based on the percentage of a school district s or school s graduating class that demonstrates college and career readiness. Any student included in any of the six ungraded measures, such as a student who earns an honors diploma, is considered to have demonstrated college and career readiness. A-12

37 National Standardized Test Scores The following table sets forth ACT results for the 208 seniors who took the test and graduated from the School District in ACT Scores for Seniors Graduating in 2014 Granville Exempted Village School District School District State of Ohio United States ACT Score Composite English Mathematics Reading Science Percent of students tested ready for college level courses English Composition 92% 72% 64% Algebra Social Science Biology All 4 courses Sources: ACT and Granville Exempted Village School District Comparative Position of the School District The following tables compare the School District with its similar district cohort (as defined by the Department) and the State average in the areas of sources of revenue, expenditures by category, and teacher statistics. Sources of Revenue, Granville Exempted Village School District School District Similar Districts State of Ohio State Revenue 29.29% 25.71% 42.90% Local Revenue Other Non-Tax Revenue Federal Revenue Source: Ohio Department of Education A-13

38 Expenditures by Category, Granville Exempted Village School District (Dollars per Pupil) School District Similar Districts State of Ohio Administration $1,358 $1,306 $1,426 Building Operations 1,778 1,889 2,099 Instruction 6,237 6,232 6,362 Pupil Support Staff Support Total Spending Per Pupil * $10,395 $10,400 $10,913 * Totals may not sum due to rounding. Source: Ohio Department of Education Teacher Statistics, Granville Exempted Village School District Teachers Salaries School District Similar Districts State of Ohio Average teacher salary $59,792 $63,088 $57,636 Teaching experience 0-4 years 15.92% 20.13% 24.10% 4-10 years years Source: Ohio Department of Education Economic Development ECONOMY AND EMPLOYMENT The School District community is a destination, family-oriented community that strives to make the small-town quality of life as high as possible. Towards that end, the School District, Village, and Granville Township collaborate to manage economic development and focus expansion for sustainability. The School District initiated a community dialogue about the economic sustainability of the community in relation to funding quality of life and education. The community entities that participated include the Village, Granville Township, Granville Chamber of Commerce, Denison University and the Granville Recreation District. These partners combine to form the tax burden for the community. The School District is grateful for the taxpayers continued support of the schools and recognizes the strength of the school system in integral to a vibrant community. The goal for the community forums is to enhance awareness of the complex topic of school funding and the increasing burden upon local taxpayers, both residential and commercial. Beginning a discussion is critical because it can reveal opportunities for the community to explore options to ensure the long-term sustainability of schools and the community at large. Two forums have been held and a third is currently being planned. A-14

39 Recent development has been purposely managed to include exclusive residential homes and reinvestment into the main street retail storefront. The Village is anticipating future commercial development, having annexed land for this purpose. A new highway interchange proposed at State Route 16 and Cherry Valley Road will also afford the region new opportunities for commercial and retail development. The Village recently approved plans for a 16,000 square foot medical facility and is studying the options for redevelopment of an unused manufacturing facility. The School District is located in the Columbus, Ohio MSA, which includes the County. Five Fortune 500 companies are located in the MSA as well as fifteen Fortune 1,000 companies. Other major employers in the region include Whirlpool (Marion County), JP Morgan Chase (Delaware County), Kenworth Trick Company, Inc. (Ross County), Rolls Royce (Knox County), and Honda (Union County). L Brands (formerly known as Limited Brands, Inc.) is headquartered in the County and over 50 of the Fortune 500 companies have a presence in the County. The New Albany International Business Park, located ten minutes west of the School District, provides a large concentration of office development, including, but not limited to: KDC, Axium Plastics, Anomatic Corporation, Sonoco, Pizzuti Co., Exhibit Pro and L Brands. The County is located along interstate 70, which spans the County from east to west. The County is also served by U.S. route 40 (the National Road ) and State Routes 161, 16, 79, 13, 661, 37. The County is within one Day s drive of 60% of the US Population and 50% of the Canadian Population. The County is also rail served by Norfolk-Southern s new rail intermodal facility and also contains the County Airport in the City of Heath, which features a 5,000 foot runway for corporate aircraft. The School District is also within an easy commute of many institutions of higher learning, including The Ohio State University, Denison University, Capital University, Franklin University, Oho Dominican University, Columbus State Community College and Otterbein University. DeVry Institute of Technology is located in nearby Columbus. Other Licking County institutions of higher learning include The Ohio State University-Newark campus and Central Ohio Technical College, Pataskala Branch. [Balance of Page Intentionally Left Blank] A-15

40 Labor Force Statistics Unemployment and labor force statistics specific to the School District are not available. The County and MSA information presented in this section is included for informational purposes only. It should not be implied from the inclusion of such data in this Official Statement that the School District is representative of the County or the MSA, or vice versa. The following statistics are not seasonally adjusted. Area Unemployment Rates (annual percentages) Labor Force (in thousands) Year Licking County Columbus MSA ** State of Ohio United States Year Licking County % 5.2% 5.9% 5.1% * * 87.6 * Unemployment rates are not seasonally adjusted. Through February ** Columbus MSA statistics have not been adjusted to account for the recent addition of Hocking and Perry Counties to the MSA. Source: Ohio Department of Job and Family Services, Bureau of Labor Market Information [Balance of Page Intentionally Left Blank] A-16

41 Largest Employers The following table lists the 50 largest employers in the MSA as of July 2014, at which time Hocking and Perry Counties were not included in the MSA. It should not be implied from the inclusion of such data in this Official Statement that the School District is representative of the MSA, or vice versa. Largest Employers Columbus, Ohio MSA Rank Firm Number of Employees Industry 1 Ohio State University 28,710 Education 2 State of Ohio 23,692 Government 3 JP Morgan Chase & Co. 20,475 Banking & financial services 4 Ohio Health Corp. 19,652 Healthcare 5 Nationwide Mutual Insurance Company 12,433 Insurance and financial services 6 Kroger Co. 11,068 Retail grocery 7 City of Columbus 8,706 Government 8 Mount Carmel Health System 8,362 Healthcare 9 Nationwide Children s Hospital 8,243 Healthcare 10 Columbus City Schools 8,195 Education 11 Honda North America, Inc. 7,900 Auto manufacturing 12 McDonald s Corporation 7,622 Fast food 13 Limited Brands Inc. 7,100 Retail clothing 14 Franklin County 7,064 Government 15 Huntington Bancshares Inc. 5,500 Banking & financial services 16 Cardinal Health Inc. 4,318 Medical products & services 17 Giant Eagle Inc. 3,820 Retail grocery 18 U.S. Postal Service 3,716 Federal mail service 19 American Electric Power 3,578 Electric power utility 20 DLA Land and Maritime 3,400 Defense systems manufacturer 21 PNC Financial Services Group 3,000 Financial services 22 Exel 2,875 Contract logistics provider 23 Abercrombie & Fitch Company 2,650 Retail clothing 24 Express Scripts 2,650 Pharmacy benefit management 25 South-Western City School District 2,471 Education 26 Alliance Data Systems Corp. 2,374 Marketing/credit card transaction services 27 Discover Financial Services LLC 2,082 Financial services 28 TS Tech Americas Inc. 2,078 Auto seat manufacturing 29 Abbott Laboratories/Abbott Nutrition 2,055 Nutrition research and products 30 Fairfield Medical Center 2,041 Healthcare 31 State Farm Insurance 1,950 Insurance and financial services 32 Olentangy Local School District 1,937 Education 33 Dublin City Schools 1,849 Education 34 Battelle Memorial Institute 1,803 Technology & research development 35 Satelite AutoGlass 1,688 Automobile repair 36 Licking Memorial Health Systems 1,687 Healthcare 37 Teleperformance S.A. 1,682 Call Center, customer service, tech support 38 Worthington Industries Inc. 1,645 Steel manufacturing 39 Donatos Pizzeria LLC 1,641 Fast food 40 Wendy s Co. 1,640 Fast food 41 Wasserstrom Co. 1,529 Food service equipment 42 Westerville City School District 1,516 Education 43 CAS-Chemical Abstracts 1,500 Chemical research 44 Columbus State Community College 1,432 Education 45 Thirty-One Gifts LLC 1,388 Retail clothing and accessories 46 UnitedHealth Group 1,363 Health Insurance 47 Arc Industries Inc. 1,350 Contract work for disabled adults 48 Boehringer Ingelheim Roxane Inc. 1,350 Develops & markets generic drugs 49 National Church Residences 1,344 Housing & services for seniors 50 Scotts Miracle-Gro Co. 1,301 Lawn care products A-17

42 Ad Valorem Taxes and Assessed Valuation Overview SCHOOL DISTRICT PROPERTY TAX BASE For property taxation purposes, assessment of real property is performed on a calendar year basis by the elected County Auditor subject to supervision by the Tax Commissioner, and assessment of public utility tangible personal property is performed by the Tax Commissioner. Property taxes are billed and collected by the County Treasurer. Taxes collected from real property in one calendar year are levied in the preceding calendar year on assessed values as of January 1 of that preceding year. Public utility tangible personal property taxes collected in one calendar year are levied in the preceding calendar year on assessed values determined as of December 31 of that second year preceding the tax collection year. Beginning with the 2009 tax year, general business tangible personal property is no longer subject to tax. Real Property The assessed valuation of real property is fixed at 35% of true value and is determined pursuant to rules of the Tax Commissioner, except that real property devoted exclusively to agricultural use is assessed at not more than 35% of its current agricultural use value. Beginning in 2008, certain elderly or disabled resident homeowners receive a flat $25,000 property tax exemption on the market value of their homestead. Ohio law requires the County Auditor, subject to supervision by the Tax Commissioner, to adjust the true value of taxable real property every six years to reflect current fair market values. This sexennial reappraisal is done by individual appraisal of properties. In the third year following a sexennial reappraisal, the County Auditor, again subject to supervision by the Tax Commissioner, performs a triennial update to adjust the value of taxable real property to reflect true values. The triennial update is done without individual appraisal of properties, but with reference to a sales-assessment ratio over the three-year period. Personal Property In 2005, the State accelerated its phase-out of the tangible personal property tax. Since 2008, general business tangible personal property has not been subject to tax. Public utility tangible personal property including tangible personal property of electric utilities not used for transmission and distribution and all tangible personal property of gas utilities was not included in the phase-out created by the State. All public utility tangible personal property is assessed at varying percentages of its true value depending on the type of property and the type of utility. The State currently reimburses School Districts for tax losses resulting from the phase-out of the tangible personal property tax but only for its permanent improvement and classroom facilities maintenance levies. However, recent legislation will reduce and eliminate the amount of such payments. (See SCHOOL DISTRICT PROPERTY TAX BASE Property Tax Rate Calculations. ) Tax Abatements and Economic Development Incentives Tax abatements are temporary property tax exemptions designed to stimulate economic growth or to promote other activities deemed by the State to be in the public interest. Under Ohio law, tax A-18

43 abatements may be granted for urban renewal projects, community redevelopment corporations, community reinvestment areas, property acquired by municipal corporations engaged in urban redevelopment, enterprise zones, railroad property, and for any improvements declared to serve a public purpose in municipalities, townships, and counties. Because the burden of tax abatements falls disproportionately on school districts due to their reliance on property taxes, the State has created safeguards that allow school districts to protect their interests. First, a school district must be given advance notice of a planned abatement, and it must be allowed to comment on the abatement prior to its granting. Under certain circumstances, a board of education may veto a proposed tax abatement and/or negotiate an annual compensation payment. Second, school district representatives sit on tax incentive review councils to monitor compliance with tax abatement agreements and make recommendations on abatements to the governmental entity involved. Finally, municipalities with an income tax in place must negotiate a compensation agreement with a school district if a tax abatement is expected to generate a significant amount of increased payroll to the area. The table below summarizes the tax abated real property within the School District: Property Owner Summary of Real Property Tax Abatements Granville Exempted Village School District (2014 Tax Year) Type of Abatement * Tax Year Beginning End After Tax Year Abatement Percentage Assessed Valuation of Property Sandalwood LLC CRA $124,400 Sandalwood LLC CRA ,900 Total $168,300 * Community Reinvestment Area ( CRA ) Source: Licking County Auditor A-19

44 Assessed Valuation The following table classifies the School District s assessed valuation of taxable property according to use: Assessed Valuation Granville Exempted Village School District (2015 Collection Year) Property Classification Amount Percent of Total Assessed Valuation Real Estate 1 Residential/Agricultural $385,825, % Commercial/Industrial/Mineral 45,925, Public Utility Real 231, Total Real Estate 431,981, Personal Property Public Utility Personal 9,976, Total Assessed Valuation $ 441,958, % Source: Licking County Auditor Historic Growth in Assessed Valuation Granville Exempted Village School District Tax Collection Year Assessed Valuation Percent Increase Over Prior Year $410,642, % ,556, ,422, ,133, ,249,580 (0.68) ,134, ,958, Source: Licking County Auditor 1 Property taxes collected in a calendar year are levied in the preceding calendar year on assessed values as of January 1 of that preceding year. Real property is assessed at 35% of market value and reappraised every six years, with triennial updates every three years. 2 Year of triennial update. The County s next triennial update occurs in tax year 2020, collection year Year of sexennial reappraisal. The County s next sexennial reappraisal occurs in tax year 2017, collection year A-20

45 Largest Taxpayers The following tables list the largest real estate and public utility taxpayers in the School District. Real Estate Taxpayers Largest Taxpayers Granville Exempted Village School District (2015 Collection Year) Rank Name Type of Business Assessed Valuation % of School District s Total Assessed Valuation 1. Middleton House LTD Assisted Living Facilities $4,533, % 2. Owens Corning Science & Technology LLC Manufacturing 2,662, Prairie Enterprises Insurance 2,649, Kendal at Granville Assisted Living 1,888, Bellaire Hospitalities Hospitality Services 1,750, Columbus RD LTD Real Estate 1,074, Cherry Valley Professional Partner LLC Real Estate 921, Granville Apartments Real Estate 905, Granville Golf Course Co. Real Estate 760, Universal RE Holdings LLC Holding Company 759, Source: Licking County Auditor Public Utility Taxpayers Rank Name Type of Business Assessed Valuation % of School District s Total Assessed Valuation 1. Ohio Power Company Electric Utility $5,108, % 2. Columbia Gas Trans Corp Utility Transmission 2,300, Columbus Gas of Ohio Electric Utility 852, AEP Ohio Transmission Co Inc. Utility Transmission 822, Licking Rural Electric Electric Utility 620, Source: Licking County Auditor A-21

46 School District History of Voted Taxes The table below provides the 30-year history of voted taxes in the School District. Issues identified in bold were passed by the voters. Source: Ohio Municipal Advisory Council School District History of Voted Taxes Granville Exempted Village School District Election Date Levy or Bond Issue Description Voting For Voting Against November 4, Mill Current Expense Levy (Renewal 5 Years) % 26.75% May 6, Mill Emergency Levy (Renewal 5 Years) November 5, Mill Current Expense Levy (New Continuing) November 2, Mill Current Expense Levy (New Continuing) May 4, Mill Current Expense Levy (New 5 Years) November 4, Mill Permanent Improvement Levy (Renewal 5 Years) March 4, Mill Current Expense Levy (Renewal Continuing) November 7, 2006 $34,795,000 School Construction Bond Issue November 2, 2004 $5,175,000 Bond Issue November 2, Mill Permanent Improvement Levy (Renewal 5 Years) November 4, % Income Tax Levy (New 5 Years) May 6, Mill Current Expense Levy (New 5 Years) November 5, Mill Current Expense Levy (New Continuing) May 7, Mill Current Expense Levy (New Continuing) November 7, 2000 $31,220,000 School Construction Bond Issue November 2, Mill Current Expense Levy (Renewal Continuing) November 2, Mill Permanent Improvement Levy (Renewal 5 Years) March 19, Mill Current Expense Levy (New 23 Years) March 19, Mill Current Expense Levy (New 4 Years) November 7, Mill Current Expense Levy (New Continuing) August 8, Mill Current Expense Levy (New Continuing) May 2, Mill Current Expense Levy (New Continuing) May 2, % Income Tax Levy (New Continuing) November 8, Mill Current Expense Levy (New 5 Years) November 8, Mill Permanent Improvement Levy (New 5 Years) May 3, Mill Permanent Improvement Levy (New 5 Years) November 2, Mill Current Expense Levy (New Continuing) February 4, Mill Current Expense Levy (New Continuing) November 5, Mill Current Expense Levy (New 3 Years) May 8, 1990 $7,693,107 School Construction Bond Issue November 7, 1989 $11,591,865 School Construction Bond Issue November 3, Mill Permanent Improvement Levy (New 5 Years) November 5, Mill Current Expense Levy (New Continuing) Library Levy 2 Library Bond Issue A-22

47 The School District anticipates presenting a new operating levy to the voters sometime between May 2018 and May 2020 and may attempt to renew its permanent improvement levy in 2019 or consider other options. Property Tax Rates and Collections The following are the rates (in mills per $1.00 of assessed valuation) at which the School District levied ad valorem taxes for the general categories of purposes in recent years (without the reduction factor discussed below). School District Tax Rates Granville Exempted Village City School District Collection Debt Year Operating * Retirement Permanent Improvement Total * Includes inside and outside (voted) millage. Source: Ohio Department of Taxation The total School District operating millage of mills for collection year 2015 includes voted operating levies of mills, which were approved by the School District electorate for a continuing period of time and which do not require a renewal vote. The balance of 5.20 mills constitutes the School District s mandated share of the ten mills authorized to be levied without a vote of the electors of the School District (See SCHOOL DISTRICT DEBT AND DEBT LIMITATIONS Statutory Debt Limitations Generally - Indirect Debt Limitation. ) The following table identifies the historical tax collections for the School District: Property Tax Collections Granville Exempted Village School District Collection Year Assessed Valuation Taxes Levied Taxes Collected (including delinquent taxes) Collection Rate 2008 $401,518,410 $16,099,427 $15,616, % ,642,265 16,543,687 15,593, ,556,350 16,908,332 15,658, ,422,150 18,460,854 17,745, ,133,960 20,827,567 20,073, ,249,580 20,945,763 19,983, ,134,950 21,034,859 20,314, ,958,693 23,413,500 22,850, Source: Licking County Auditor A-23

48 Property Tax Rate Calculations State law has a reduction factor mechanism that is intended to negate increases in taxes resulting from increases in the true value of real property due solely to inflation. Legislation implementing a 1980 constitutional amendment classifies real property as either (1) residential and agricultural or (2) all other real property, and provides for tax reduction factors to be separately computed for and applied to each class. Statutory procedures limit the amount realized by each taxing subdivision from real property taxation, by the application of a tax reduction factor, to the amount realized from those taxes in the preceding year plus: (i) the proceeds of any new taxes (other than renewals) approved by the electors, calculated to produce an amount equal to the amount that would have been realized if those taxes had been levied in the preceding year, and (ii) amounts realized from new and existing taxes on the assessed valuation of real property added to the tax duplicate since the preceding year. Such limitations are expressly inapplicable to amounts realized from taxes levied at a rate required to produce a specified amount, such as for debt service charges or emergency school levies, and from taxes levied inside the tenmill limitation or any applicable municipal charter tax rate limitation. Further, such limitations will not reduce operating millage for school districts below 20 mills or for joint vocational school districts below 2 mills. A reduction factor is computed for each separate levy that is subject to the limitation. A resulting effective tax rate reflects the aggregate of those reductions and is the rate at which real property taxes are, in fact, collected. Real property tax amounts from property devoted to residential and agricultural purposes are, in certain cases, further reduced by an additional 10% (12-1/2% in the case of certain owner-occupied residential property) or a flat, $25,000 reduction in taxable value applicable to certain elderly or disabled resident homeowners, when billed to the taxpayer. These reductions are reimbursed to the taxing subdivisions by the State. A phase out of these reductions began in The 10% reduction for residential and agricultural properties and 2-1/2% additional reduction for owner-occupied residential property do not apply to new levies and replacement levies approved by voters after the August 6, 2013 election. Additionally, starting in the 2014 tax year, the $25,000 reduction in taxable value for certain elderly homeowners and homeowners with disabilities is being grandfathered out, with new reductions limited to property owners with total income less than or equal to $30,000. This figure is adjusted for inflation annually by the Tax Commissioner. [Balance of Page Intentionally Left Blank] A-24

49 Ad Valorem Tax Levies levies: The following table presents certain information concerning the School District s ad valorem tax Year Voted Ad Valorem Tax Levies Granville Exempted Village School District Current Millage Rates (2015 Collection Year) Authorized Mills Rate Levied for Current Collection Year 1 Residential/ Agricultural Commercial/ Industrial Total Voted Operating Millage Inside (Unvoted) Millage Voted Bond Retirement Millage Permanent Improvement Millage Total Rate This is the effective rate. The effective tax rates may be less than the authorized rates listed in the first column. See FINANCES OF THE SCHOOL DISTRICT - Property Tax Rate Calculations. 2 Ohio Department of Taxation does not report the years in which operating levies approved prior to 1976 were voted, thus operating levies approved prior to 1976 are aggregated in this line. Source: Ohio Department of Taxation Repeal of Property Tax Levies Each operating tax levy approved for a continuing period is subject to decrease through a statutory referendum procedure requiring (1) a petition signed by qualified electors of the School District equal in number to those who voted in the last governor s race (to be filed at least 90 days before the general election in any year) stating the amount of the proposed decrease and (2) the approval of the decrease by a majority vote at the general election with the decrease to commence at the expiration of the then current tax levy year. No petition has been filed with respect to any existing current expense tax levy of the School District. If such a petition is filed and subsequently approved by the electors of the School District, under Revised Code Section , the Board must continue to levy and collect such amount as will be A-25

50 sufficient to pay the principal of and interest on any notes in anticipation of an increased rate of levy approved for a continuing period of time. Total Property Tax Burden The following table displays the total effective tax rates levied on property located in the School District. In addition to the taxes levied by the School District, properties in the School District are subject to a county tax levy, a joint vocational school district ( JVSD ) levy, and the taxes levied by other overlapping political subdivisions. Ad Valorem Tax Levies Granville Exempted Village School District (mills per $1.00 of assessed valuation; 2015 Collection Year) Taxing District Taxing Authority School District County JVSD Township Other Total Residential & Agricultural Effective Rates All Other Granville Township Village of Granville McKean Township City of Newark Newark Township Newton Township St. Albans Township Union Township City of Heath * Other includes any taxes levied by municipalities and other miscellaneous districts. Source: Ohio Department of Taxation State Reimbursement of Property Tax Revenues Rollback and Homestead Exemption Reimbursement The State reimburses taxing districts, including school districts, for decreased tax revenues due to (a) the 10% reduction or rollback in certain non-commercial property taxes, (b) the 2-1/2% reduction applicable to certain owner-occupied housing, and (c) the flat, $25,000 reduction in taxable value applicable to certain elderly or disabled homeowners. Such reimbursements are subject to repeal or revision by the State. (See SCHOOL DISTRICT PROPERTY TAX BASE Property Tax Rate Calculations for a discussion of reimbursement by the State for these reductions.) Public Utility Property and Tangible Personal Property Tax Loss Reimbursement In tax year 2001, changes took effect which reduced the assessment percentages applicable to electric generation and natural gas tangible personal property, thereby reducing the amount of tangible public utility property tax revenue collected by taxing districts. In order to replace the taxes no longer received due to the lower assessment percentages, State consumption taxes on electricity and natural gas were enacted in 1999 and 2000, respectively. A-26

51 Beginning in 2006, the State began to phase out the tax on tangible personal property used in business. The State also reimburses certain taxing districts for the loss of tax revenues due to the phaseout of the tax on general business tangible personal property, and on the tangible personal property belonging to telephone, telegraph, and interexchange companies. In order to replace a portion of the lost revenue, a commercial activity tax was enacted in 2005 and is imposed on gross receipts, including receipts from services, in the State. The reimbursement of both types of tangible personal property tax revenue losses were scheduled to phase out by calendar year Instead, recent legislation generally accelerates the phase-out and reduces payments, depending on the type of levy. For fixed-rate levies, the reimbursement amounts for fiscal year 2011 are compared to the total resources of a school district. Total resources includes fiscal year 2010 State aid; fiscal year 2010 reimbursement for current expense fixed-rate levy losses; the average current expense real and public utility taxes payable for tax years 2008 and 2009; the school district s fiscal year 2009 receipts from a school district income tax levied for current expenses; and receipts during calendar year 2009 from a municipal income tax levied for municipal and school district purposes. If a school district s reimbursement payments are less than the threshold percentage of total resources for a year, then no further reimbursement is made. If the reimbursement payments exceed the threshold percentage, then the school district receives the amount in excess of the percentage. For fiscal year 2012, the threshold amount is 2%; for fiscal years 2013 and thereafter, the threshold percentage is 4%. Any reimbursement for 2013 will continue indefinitely. For fixed sum and unvoted debt levy losses, amounts will continue to be reimbursed (less the amount attributed to one-half mill) so long as the levy continues to be imposed for fixed-sum levy purposes, and so long as the levy continues to be imposed for debt purposes until 2018, in the case of unvoted debt levies. Fixed rate levies for purposes other than current expenses are reduced by 25% over reimbursement levels for fiscal year 2010 for fiscal year 2012, and are reduced by 50% for fiscal years 2013 and thereafter. For additional information prepared by the Ohio Department of Taxation to illustrate the amount of reimbursements for future years, go to and [Balance of Page Intentionally Left Blank] A-27

52 School Foundation Program OTHER SOURCES OF SCHOOL DISTRICT FUNDING The State assists public school districts under a statutory program that includes the School Foundation Program. 1 School Foundation Program funds distributed to a school district are required to be used for current operating expenses, unless specifically allocated by the State for some other purpose. Basic eligibility for School Foundation Program payments is based on a school district s compliance with State-mandated minimum standards. The School District is in compliance with those standards and has no reason to believe it will not remain in compliance. The State also assists school districts by funding the School District Solvency Assistance Fund (the Solvency Fund ). Created within the Solvency Fund are the School District Shared Resource Account and the Catastrophic Expenditures Account. A school district must be in a state of fiscal emergency to qualify for assistance and grants from the School District Shared Resource Account. A school district may qualify for assistance and grants from the Catastrophic Expenditures Account if the school district suffers an unforeseen catastrophic event that severely depletes the financial resources of the school district. School districts receiving assistance and grants from the Solvency Fund are required to repay such advances no later than the end of the second fiscal year following the fiscal year in which they received the assistance and grants, and if they fail to do so, the State will repay the Fund from amounts the school district would otherwise receive pursuant to the School Foundation Program. The School District does not have any outstanding advances from the Solvency Fund. The Solvency Fund, with the exception of the Catastrophic Expenditures Account, evolved from statutes declared unconstitutional in DeRolph. (See LITIGATION - School Funding Litigation. ) State Classroom Facilities Assistance The Ohio School Facilities Commission (the Commission ), a division of the Ohio Facilities Construction Commission, was created in 1997 to administer the provision of financial assistance to Ohio school districts for the acquisition or construction of classroom facilities in accordance with Revised Code Chapter Revised Code Chapter 3318 provides for several different school facilities assistance programs involving financial assistance from the State. These programs include the Classroom Facilities Assistance Program, the Exceptional Needs School Facilities Assistance Program, and the Expedited Local Partnership Program. Each of these programs provides state funding for all or a portion of qualifying school facilities projects based on financial tests, inadequate facilities, or a combination of the two. Participation in these programs also requires a school district to commit to adhere to Commission requirements for project construction. The School District is not currently participating in any of the school facilities assistance programs. 1 The Supreme Court of Ohio has declared the School Foundation Program unconstitutional. See LITIGATION School Funding Litigation A-28

53 School District Income Tax Under Ohio law, a school district, with the approval of the voters, may impose an income tax for the purpose of providing additional funds for the operation of the school district. The tax may be imposed upon the income of individuals residing in the school district and estates of decedents who at the time of their death were residents of the school district; or solely upon the earned income of individuals residing in the school district. Such selection must be made by the board of education prior to submission of the question of an income tax to the board of elections and be clearly stated on the election ballot. The tax may be imposed either for a specified number of years or for a continuing period of time. If the tax is imposed for a period in excess of five years, the voters of the school district may, by majority vote, repeal the tax, provided that a proposal to repeal the tax may not be initiated more than once in any five-year period. While the School District does not currently levy an income tax on its residents, this form of funding remains available to the School District. The Board does not, however, anticipate asking voters to approve an income tax in the near future. Gross Casino Revenue Tax In 2013, Ohio public school districts began receiving a share of the gross casino revenue tax (the Casino Tax ). The Casino Tax will be distributed twice a year in proportion to each county s respective public school district student population. The Tax Commissioner, acting as an agent for the counties, will calculate and make payments directly to public school districts based on the student population of each county and the student population of each public school district located in whole or in part in each county. According to the Ohio Department of Taxation, the School District received $124,949 in Casino Tax revenues for fiscal year Newark/Granville Community Authority Development Charge The Newark/Granville Community Authority (the Authority ) is a new community authority operating pursuant to Revised Code Chapter 349. The Authority is an independent political subdivision of the State governed by a Board of Trustees, and it exists solely for the benefit of the School District. The purpose of the Authority is to collect a community development charge form the approximately 350 residential properties within the Authority s district. The community development charge is collected annually in the same manner and at the same time as real property taxes are collected. The annual community development charge is the greater of $455 per residential unit or 5.20 mills, or fifty-two cents ($0.52) for each one hundred dollars ($100.00) of assessed valuation. Under the Authority s current declaration of covenants and governing law, the community development charge may only be used to pay the costs of educational facilities and other capital improvements made for the benefit of the School District. SCHOOL DISTRICT DEBT AND DEBT LIMITATIONS Statutory Debt Limitations Generally The School District may issue voted general obligation bonds, and notes issued in anticipation thereof, pursuant to a vote of the electors of the School District. Ad valorem taxes, without limitation as to amount or rate, assessed to pay debt service on voted bonds are authorized by the electors at the same time they authorize issuance of the bonds. Such voted debt is subject to the direct debt limitations but is not subject to the indirect debt limitation. Voted obligations may also be issued by certain overlapping subdivisions. A-29

54 General obligation bonds, such as the Bonds, and notes issued in anticipation thereof, may also be issued by the School District (and certain overlapping political subdivisions, such as the City and the County) without a vote of the electors. Unvoted debt is subject to both the direct and indirect debt limitations. A political subdivision s debt limitations are based on its tax valuation, which is the aggregate of the valuations of real property, personal property, and public utility property that is subject to ad valorem property taxation. For school districts, tax valuation is calculated in accordance with Revised Code Section (PP) and excludes the valuation of tangible personal property used in business, telephone or telegraph property, interchange telecommunications company property, or personal property owned or leased by a railroad company and used in railroad operations. Direct Debt Limitations Revised Code Section provides that, exclusive of certain exempt debt (discussed below), the net principal amount of unvoted general obligation debt of a school district may not exceed the following percentages of a School District s tax valuation: (a) for permanent improvements generally, one-tenth of one percent (0.10%); and (b) for qualified energy conservation projects under Revised Code Section , nine-tenths of one percent (0.90%). Revised Code Section also provides that the net principal amount of both voted and unvoted general obligation debt of the School District may not exceed 9% of a school district s tax valuation, except in the specific situations discussed below. These two limitations, referred to as the direct debt limitations, may be amended from time to time by the State. State Consents and Special Needs Status Revised Code Section further provides that bonds shall not be submitted to popular vote in an amount which will make the net indebtedness after the issuance of such bonds exceed 4% of a school district s tax valuation, unless the school district obtains the consent of the State Superintendent (acting under policies adopted by the State Board of Education) and the Tax Commissioner (acting under written policies of said Tax Commissioner). Revised Code Section (E) permits a school district to incur indebtedness in excess of the 9% limitation if, based on five-year projections showing annual property value growth of 1.5% or more, the State Superintendent determines that such school district is a special needs district. The School District s outstanding debt is not currently in excess of the 9% direct debt limitation. Exempt Debt The Revised Code provides that certain debt a school district may issue is exempt from direct debt limitations ( exempt debt ). Exempt debt includes, among other things, bonds payable from school district income taxes under Revised Code Section (E); notes issued in anticipation of the collection of current revenues; notes issued for qualified energy savings projects under Revised Code Section ; and certain bonds issued for school construction purposes following declaration of an emergency. Notes issued in anticipation of exempt bonds also are exempt debt. In calculating debt subject to the direct debt limitations, the amount of money in a school district s bond retirement fund allocable to the principal amount of non-exempt debt is deducted from gross non-exempt debt. A-30

55 Indirect Debt Limitation Unvoted general obligation bonds and bond anticipation notes cannot be issued by the School District unless the tax required to be imposed on taxable property in the School District for the payment of the debt service on (a) such bonds (or the bonds in anticipation of which notes are issued), and (b) all outstanding unvoted general obligation bonds (including bonds in anticipation of which notes are issued) of the combination of overlapping taxing subdivisions in the School District resulting in the highest tax rate required for such debt service, in any one year, is ten mills or less per $l.00 of assessed valuation. This indirect debt limitation, the product of which is commonly referred to as the ten-mill limitation, is imposed by a combination of the provisions of Article XII, Sections 2 and 11 of the Ohio Constitution and Revised Code Section The ten-mill limitation is the maximum aggregate millage for all purposes that may be levied on any single piece of property by all overlapping taxing subdivisions without a vote of the electors. The ten mills which may be levied without a vote of the electors is in fact levied, collected and allocated among the School District and its overlapping taxing subdivisions for general fund purposes pursuant to a statutory formula. This inside millage allocated to each overlapping taxing subdivision is required by current Ohio law to be used first for the payment of debt service on unvoted general obligation debt of the subdivision, unless provision has been made for its payment from other sources. The balance of the millage is available for other purposes of the subdivision. Thus, to the extent that this inside millage is required for debt service of a taxing subdivision (which may exceed the formula allocation to that subdivision), the amount that would otherwise be available to that subdivision or to other such overlapping subdivisions for general fund purposes is reduced. A subdivision s allocation of inside millage can be exceeded only in the event that it is required for the payment of debt service on its unvoted general obligation debt and, in that case, the inside millage allocated to the other overlapping subdivisions would be reduced proportionally to bring the aggregate levies of inside millage down to ten mills. In case of notes issued in anticipation of the issuance of unvoted general obligation bonds, the highest annual debt service estimated for the bonds anticipated by the notes is used to calculate the millage required. The ten-mill limitation applies to all unvoted general obligation debt, even if debt service on some of such debt is expected to be paid in fact from income taxes, special assessments, utility earnings or other sources. In calculating whether or not unvoted debt to be issued by the School District is within the tenmill limitation, it is necessary to determine the total outstanding debt service requirements within the tenmill limitation of all the taxing subdivisions overlapping the School District. Bond Anticipation Notes Under Ohio law, notes, including renewal notes, issued in anticipation of the issuance of general obligation bonds may be issued and outstanding from time to time up to a maximum period of twenty years from the date of issuance of the original notes. Any period in excess of five years must be deducted from the permitted maximum maturity of the bonds anticipated, and portions of the principal amount of notes outstanding for more than five years must be retired in amounts at least equal to, and payable not later than, principal maturities that would have been required if bonds had been issued at the expiration of A-31

56 the initial five-year period. The last maturity of any bonds issued to refund general obligation bond anticipation notes may not be later than the year of last maturity permitted by law for the bonds anticipated. Bond anticipation notes may be retired at maturity from the proceeds of the sale of renewal notes, the proceeds of the sale of the bonds anticipated by such notes, from other available funds of the School District, or from a combination of these sources. The ability of the School District to retire its outstanding bond anticipation notes from the proceeds of the sale of either renewal notes or bonds will be dependent upon the marketability of such renewal notes or bonds under market conditions then prevailing. Under present Ohio law, there is no ceiling on the annual interest rate permitted on general obligation notes and bonds of school districts. None of the debt of the School District is currently in the form of general obligation bond anticipation notes. [Balance of Page Intentionally Left Blank] A-32

57 School District Debt Currently Outstanding Upon issuance of the Bonds, the School District will have the following issues of bonds and notes outstanding (excluding the Refunded Bonds to be refunded by the Bonds): Outstanding Debt Granville Exempted Village School District Issue Dated Date Final Maturity Balance Outstanding as of April 28, 2015 School Improvement Refunding 10/15/ /01/2015 $149, Bonds, Series 1993 School Improvement Bonds, Series 10/01/ /01/ , Library Improvement Bonds, Series 04/06/ /01/ , Refunding Bonds, Series /30/ /31/ , Energy Conservation Notes, Series /12/ /12/ , Refunding Bonds, Series /16/ /01/2019 1,295, The Bonds 09/03/ /01/ ,615, Total $26,447, Source: Granville Exempt Village School District [Balance of Page Intentionally Left Blank] A-33

58 Debt Service Requirements The following schedule presents the School District s actual debt service requirements for general obligation debt outstanding (including the Securities and excluding the debt service on the Refunded Bonds) on April 28, 2015: Debt Service Requirements Granville Exempted Village School District Calendar Year Outstanding Obligations The Series 2015 Bonds Total Gross Debt Service Principal Interest Principal Interest 2015 $759, $1,728, $0.00 $288, $2,776, , ,569, ,180, ,081, , ,606, ,180, ,176, , , ,000, ,180, ,996, , , ,005, ,130, ,712, ,655, ,080, ,735, ,740, , ,737, ,825, , ,735, ,915, , ,734, ,015, , ,738, ,110, , ,733, ,220, , ,737, ,330, , ,736, ,400, , ,690, ,080, , ,250, ,130, , ,246, ,190, , ,249, TOTAL $2,832, $4,943, $23,615, $11,676, $43,067, No bonds have been authorized by the electors that have not yet been issued. The School District is not, and has not been, in default in the payment of debt service on any of its general obligation bonds or notes. [Balance of Page Intentionally Left Blank] A-34

59 Overlapping Subdivision Indebtedness In addition to the School District, other political subdivisions have the power to issue bonds and to levy taxes or cause taxes to be levied on taxable real property in the School District. The estimated outstanding bonded indebtedness of such political subdivisions (excluding self-supporting debt and debt payable primarily from enterprise revenues or special assessments) is as follows as of April 28, 2015: Overlapping Units Overlapping Debt Granville Exempted Village School District Estimated Outstanding Debt Percent Applicable to School District Estimated Amount of Overlapping Debt Licking County $5,640, % $638,448 City of Heath 6,335, ,204 City of Newark 29,449, ,496,059 Village of Granville 369, ,000 C-TEC JVSD 21,555, ,360,375 Total $4,879,086 Source: Ohio Municipal Advisory Council, as of April 28, 2015 The following table shows the per capita debt of the residents in the School District based upon the 2013 U.S. Bureau of the Census estimate of 12,829 people residing in the School District, the above overlapping indebtedness figures and the School District debt shown above, including the Bonds: Debt Per Capita Granville Exempted Village School District School District Debt, per capita $2,062 Overlapping Debt, per capita 380 Total Debt, per capita $2,442 Source: Ohio Municipal Advisory Council and Granville Exempted Village School District calculations [Balance of Page Intentionally Left Blank] A-35

60 Debt Capacity Analysis The following table provides an analysis of the School District s debt capacity as of April 28, 2015, including the Bonds but excluding the Refunded Bonds to be refunded by the Bonds. The School District s tax valuation is calculated in accordance with Revised Code Section (PP) and is based on collection year 2015 data provided by the State Department of Taxation. Debt Capacity Granville Exempted Village School District A. Tax Valuation $441,958,703 B. Total Debt, including the Bonds 26,447,754 C. Exempt Debt 0 D. Total non-exempt debt (B minus C) 26,447,754 E. F. G. 1/10 of 1% direct Debt Limitation (1/10 of 1% of Tax Valuation) Total limited tax non-exempt bonds and notes outstanding (not including Revised Code Section (G) debt) Debt Leeway within 1/10 of 1% unvoted debt limitation, but subject to indirect debt limitation (E minus F) 441, ,959 H. 9/10 of 1% direct Debt Limitation (Section (G) debt) (9/10 of 1% of tax valuation) 3,977,628 I. Total Revised Code Section (G) debt 881,843 J. Debt Leeway within 9/10 of 1% unvoted debt limitation, but subject to indirect debt limitation (H minus I) 3,095,785 K. 9% direct debt limitation 39,776,283 L. Debt Leeway within the 9% direct debt limitation (K minus D) 1 13,328,529 1 Debt leeway calculated without reference to applicable moneys in the School District s Bond Retirement Fund. Source: Ohio Department of Taxation and Granville Exempted Village School District calculations Lease Obligations Under Ohio law, school districts have only the authority to lease or lease purchase any capital asset that is expressly granted by statute or necessarily implied from expressly granted authority. Express statutory authority exists for true leases (i.e., leases where no portion of the lease payment is applied toward the purchase of the capital asset) or lease-purchase or installment sale arrangements for the following: land, office equipment, school buses, administrative office facilities and buildings for any school district purpose. Except in cases where lease-purchase or installment sale arrangements include certain provisions providing that the obligations under such agreement may be terminated at the end of a fiscal year (e.g., a requirement of annual appropriation in order to extend the lease term beyond the current fiscal year), such agreements would constitute debt for purposes of the indirect debt limitation A-36

61 and the statutory direct debt limitations discussed more fully herein (see SCHOOL DISTRICT DEBT AND DEBT LIMITATIONS - Statutory Debt Limitations Generally ). The School District s long-term financial obligations other than bonds and notes, consist of two leases for a 77 and 84 passenger bus. Both leases are for three years and expire on December 1, 2017 and May 15, 2018, respectively. These buses require annual payments of $22,597 and $27,952, respectively, and the School District will retain ownership at the end of the lease. The School District anticipates one additional bus lease in July 2015, with an approximate annual payment of $23,000 for three years. Future Financings The School District intends to issue approximately $1,000,000 to $2,000,000 of Energy Conservation Notes in the early summer of FINANCES OF THE SCHOOL DISTRICT Budgeting, Tax Levy and Appropriations Procedures The Revised Code contains detailed provisions regarding School District budgeting, tax levy and appropriation procedures. These procedures involve review by County officials at several steps. School District budgeting for a fiscal year formally begins with the preparation of a tax budget or alternative document as determined by the County Budget Commission (the Budget Commission ), comprised of the County Auditor, County Treasurer and Prosecuting Attorney of the County. After a public hearing, this budget is adopted by the Board by the January 15th prior to the fiscal year to which it pertains. Among other items, the tax budget must show the amounts required for debt service, the estimated receipts for payment from sources other than ad valorem property taxes and the net amount for which an ad valorem property tax levy must be made. The tax budget then is presented for review by the Budget Commission. The Budget Commission holds a public hearing to review the budget, and issues, by March 1st, the Certificate of Estimated Resources which is the basis for School District appropriations and expenditures for the coming fiscal year. Upon approval of the tax budget and issuance of the Certificate of Estimated Resources, the Budget Commission certifies its actions to the Board together with the approved tax rates. Thereafter, the Board levies the approved taxes and certifies them to the proper County officials. The approved and certified tax rates are reflected in the tax bills sent to property owners during the collection year. Real property taxes are payable on a calendar year basis, generally in two installments with the first due usually in January and the second due in June or later. At the start of each fiscal year, the Board adopts a temporary appropriation measure to begin that new fiscal year and then, within three months, a permanent appropriation measure for that fiscal year. Permanent appropriation measures may be amended or supplemented during the fiscal year. Annual appropriations may not exceed the Budget Commission s official estimates of resources. The County Auditor must certify that the Board s appropriation measures, including any supplements or amendments, do not appropriate moneys in excess of the amount set forth in the latest of those official estimates. The County serves as tax collector for the School District. Investments and deposits of County funds are governed by Revised Code Chapter 135 (the Uniform Depository Act ). The County Treasurer is responsible for those investments and deposits. The County s most recent audited financials contain a recitation of the County s current investment practices and can be obtained at the Ohio Auditor of State website: A-37

62 Financial Reports and Audits The School District s fiscal year is the twelve-month period beginning July 1 and ending June 30. The Board maintains its accounts, appropriations and other fiscal records on the basis of generally accepted accounting principles ( GAAP ). The State Auditor is charged by law with the responsibility for auditing the financial statements of each taxing subdivision and most public agencies and institutions. A financial report for each fiscal year is required to be filed with the State Auditor pursuant to Revised Code Section Such reports are required to be submitted to the State Auditor at the close of each fiscal year. At the time of filing of such report, the Treasurer is required to publish a notice that the report is completed and available for review in the Treasurer s office. The most recent audit of the School District s financial statements by the State Auditor was completed through the fiscal year ending June 30, The State Auditor did not make any report recommendations or citations, require any adjustments, or make any findings for recovery. No bringdown procedures have been undertaken by the State Auditor since the date of the financial statements. The audited financial statements for the fiscal year ended June 30, 2014 are attached hereto as APPENDIX B. Governmental Accounting Standards Board pronouncements and Financial Accounting Standards Board pronouncements are the principal sources used to determine the accounting principles employed under GAAP. These publications, among other things, provide for a modified accrual basis of accounting for governmental funds and for a full accrual basis of accounting for proprietary funds and for each major and aggregated non-major fiduciary fund. The publications also further provide for the preparation of balance sheets for each major and non-major fund, and statements of revenues and expenditures, and changes in fund balances (major and aggregated non-major governmental funds) or statements of revenues, expenses and changes in retained earnings/equity (major and aggregated non-major proprietary funds) and statement of cash flows. The principles further require preparation of a statement of net assets and a statement of activities for the entity s business type and government type activities on the full accrual basis of accounting, and management s discussion and analysis of major events and transactions during the year. Five-Year Projection Boards of education are required to submit a five-year projection of operational revenues and expenditures (commonly known as the five-year forecast ) according to Department rules. Pursuant to such rules, the Department reviews the School District s five-year projection to determine if the School District has projected a deficit during the first three years of the five-year projection period. If the Department determines that further fiscal analysis is needed, the Department must forward the projection to the State Auditor, who will determine if the School District must be formally notified of a pending projected deficit. The School District must then take steps to eliminate any deficit in the current year and to plan to avoid projected deficits. The Board approved a five-year projection on October 20, 2014, a copy of which is attached hereto as APPENDIX C. Deficit projections arising from the five-year forecast may have the effect of triggering certain fiscal oversight mechanisms created under State law. A-38

63 Fiscal Oversight System The State has created a fiscal oversight system designed to ensure the financial stability of public school districts so that they can continue to perform the vital governmental mission of educating children while meeting their ongoing obligations to creditors, employees, vendors and suppliers. Under this fiscal oversight system, a school district may be declared to be in a state of fiscal caution, fiscal watch, or fiscal emergency based on certain triggering criteria established by law. These triggering criteria relate primarily to the size of the school district s current and projected operating deficits, but also include an evaluation of the school district s financial practices and its effectiveness in taking the necessary corrective measures. Increasing levels of intervention and control are imposed with each successive determination, culminating (at the fiscal emergency level) in the creation of an independent governing board for the school district. This independent governing board, the Financial Planning and Supervision Commission ( FPSC ), is vested with extraordinary powers, including the power to remove the superintendent and/or the treasurer and to implement staff reductions which would otherwise violate existing collective bargaining agreements. The State Auditor may conduct a performance audit of a school district in fiscal caution, fiscal watch, or fiscal emergency at any time. 1 The School District is not subject to a declaration of fiscal caution, fiscal watch, or fiscal emergency, and is not subject to any directives from the State Auditor, the State Superintendent or a FPSC arising from any prior declaration. 1 For more information about the criteria the State Auditor and State Superintendent use to determine whether a school district should be placed on fiscal caution, fiscal watch, or fiscal emergency, please visit the State Auditor s website at A-39

64 General Fund Operations The General Fund is the main operating fund of the School District. It is the fund from which most of the School District s expenditures are paid and into which most of the School District s revenues are deposited. The School District derives most of its revenues from a tax on real and tangible personal property and from State aid, including the School Foundation Program. (See OTHER SOURCES OF SCHOOL DISTRICT FUNDING School Foundation Program. ) General Fund Set-Aside Ohio school districts are required to establish the following set-aside within their General Fund: Fund Source and Amount of Balance Purpose Capital and Maintenance Fund 1 3% 2 of general fund revenues 3 using the state base-cost formula amount for the preceding fiscal year multiplied by the School District s student population for the preceding fiscal year Acquisition, replacement, enhancement, maintenance, or repair of permanent improvements 1 A school district may elect to set aside funds pursuant to previous law by notifying the State Auditor within 90 days of the beginning of the fiscal year of such election. 2 A different percentage requirement may be set by the State Auditor. 3 A school district may elect to set aside funds from the proceeds of a permanent improvement levy instead of diverting funds from the general fund to meet this requirement. Any balance remaining in the above funds at the end of the current fiscal year is carried over to the next fiscal year. Investment of Funds According to the Treasurer, all moneys of the School District, specifically moneys in the general fund, the bond retirement fund, and all project funds containing proceeds of any debt issuances of the School District (including the Bonds), are presently or will be invested in accordance with the requirements of Ohio law, and in particular the Uniform Depository Act. Under Revised Code Section , the School District may invest its funds, provided that such investments generally must mature or be redeemable within five years from the date of purchase. The classifications of obligations which are eligible for such investment by the School District range from investment in the State Treasury Asset Reserve of Ohio investment pool ( STAR Ohio ) to investment in United States Treasury bills, commercial paper, certificates of deposit and bankers acceptances. Certain investment practices remain exclusive to those school districts whose fiscal officers have completed additional training in accordance with the Uniform Depository Act. Further, pursuant to Revised Code Section , all investments of the School District, except for investments in securities in STAR Ohio and certain no-load money market mutual funds, must be made through members of the National Association of Securities Dealers, Inc., banks, savings banks, or savings and loan associations regulated by the State superintendent of financial institutions or through institutions regulated by the comptroller of the currency, Federal Deposit Insurance Corporation, or board of governors of the Federal Reserve System. The School District interprets the limits on Federal guaranteed investments, bankers acceptances, commercial paper and all other legal investments very conservatively. No moneys of the School District have ever been invested in interest-only obligations, reverse-repurchase obligations, inverse floater A-40

65 obligations, or other investment vehicles commonly referred to as derivative investments. No moneys of the School District are invested in obligations which mature later than the time at which it is reasonably expected that the School District will need access to such moneys in order to meet current financial commitments. The Treasurer has attended special training in all of the investment areas to assure strict compliance with the strictly conservative investment philosophy of the School District. All investments are transacted with banks or other financial institutions operating in the State. Complete detail of the current investment practices of the School District can be found in the most recent audited financial statements of the School District (see APPENDIX B herein). School District Insurance The School District maintains comprehensive insurance coverage with private carriers for real property, building contents and vehicles in a maximum amount of $2,400,000 with a $1,000 deductible clause. In addition, the School District maintains liability coverage with limits of $6,000,000. Vehicle policies include liability coverage for bodily injury and property damage. Other School District insurance includes: $250,000 Crisis Response/School Violence coverage $6,000,000 Excess Liability insurance $250,000,000 Boiler and Machinery insurance $350,000,000 Property insurance $500,000 Crime insurance Ohio law provides immunity for political subdivisions such as the School District from liability in damages. The immunity covers injury, death, or loss to persons or property allegedly caused by an act or omission of such political subdivisions or their employees in connection with governmental and proprietary functions, as defined in the Ohio statutes. Included among such governmental functions are the design, construction, reconstruction, renovation, repair, maintenance, and operation of any school athletic facility, school auditorium, or gymnasium. The statutes have no effect on any liability imposed by federal law or other federal cause of action. Pursuant to Ohio law, there are, however, five areas in which a political subdivision may be held liable for such loss. These include the negligent operation of a motor vehicle by employees engaged within the scope of their employment and authority; negligent performance of proprietary functions; negligent failure to keep public roads in repair, and other negligent failure to remove obstructions from public roads; negligence of employees due to physical defects within or upon the grounds of buildings used in the performance of governmental functions, excluding jails, juvenile detention workhouses and other detention facilities; and liability specifically imposed by statute. Ohio law also imposes a two-year statute of limitations and puts limits on the damages which may be recovered from such political subdivisions. No punitive or exemplary damages can be recovered, and any insurance benefits are deducted from any award against a political subdivision. Although there is no limitation with respect to compensatory damages representing a person s economic loss, there is a $250,000 per person ceiling on the compensatory damage that represents a person s non-economic loss in cases other than wrongful death, in which case there is no maximum limitation. A-41

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67 APPENDIX B BASIC FINANCIAL STATEMENTS Granville Exempted Village School District Licking County, Ohio For the Fiscal Year Ended June 30, 2014 B-1

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69 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT LICKING COUNTY SINGLE AUDIT FOR THE YEAR ENDED JUNE 30, 2014

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71 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT LICKING COUNTY TABLE OF CONTENTS TITLE PAGE Schedule of Federal Awards Receipts and Expenditures... 1 Notes to the Schedule of Federal Awards Receipts and Expenditures... 2 Independent Auditor s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Required By Government Auditing Standards... 3 Independent Auditor s Report on Compliance with Requirements Applicable to the Major Federal Program and on Internal Control Over Compliance Required by OMB Circular A-133, and the Schedule of Federal Awards Receipts and Expenditures... 5 Schedule of Findings... 9

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73 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT LICKING COUNTY SCHEDULE OF FEDERAL AWARDS RECEIPTS AND EXPENDITURES FOR THE YEAR ENDED JUNE 30, 2014 FEDERAL GRANTOR Federal Pass Through Grantor CFDA Program Title Number Receipts Expenditures U.S. DEPARTMENT OF AGRICULTURE Passed Through Ohio Department of Education: Agricultural Research - Basic and Applied Research $ 22,067 $ 16,702 Child Nutrition Cluster National School Lunch Program ,391 75,391 Total U.S. Department of Agriculture 97,458 92,093 U.S. DEPARTMENT OF EDUCATION Passed Through Ohio Department of Education: Title I Grants to Local Educational Agencies ,541 52,749 Special Education Grants to States , ,334 Improving Teacher Quality ,260 24,436 Race to the Top ,922 35,391 Total U.S. Department of Education 492, ,910 Total $ 589,629 $ 588,003 The accompanying notes are an integral part of this schedule. 1

74 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT LICKING COUNTY NOTES TO THE SCHEDULE OF FEDERAL AWARDS RECEIPTS AND EXPENDITURES FISCAL YEAR ENDED JUNE 30, 2014 NOTE A - SIGNIFICANT ACCOUNTING POLICIES The accompanying Schedule of Federal Awards Receipts and Expenditures (the Schedule) reports the Granville Exempted Village School District (the District s) federal award programs receipts and disbursements. The schedule has been prepared on the cash basis of accounting. NOTE B - CHILD NUTRITION CLUSTER The District commingles cash receipts from the U.S. Department of Agriculture with similar State grants. When reporting expenditures on this Schedule, the District assumes it expends federal monies first. 2

75 INDEPENDENT AUDITOR S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS REQUIRED BY GOVERNMENT AUDITING STANDARDS Granville Exempted Village School District Licking County 130 North Granger Street Granville, Ohio To the Board of Education: We have audited, in accordance with auditing standards generally accepted in the United States and the Comptroller General of the United States Government Auditing Standards, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Granville Exempted Village School District, Licking County, Ohio, (the District) as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise the District s basic financial statements and have issued our report thereon dated December 16, Internal Control Over Financial Reporting As part of our financial statement audit, we considered the District s internal control over financial reporting (internal control) to determine the audit procedures appropriate in the circumstances to the extent necessary to support our opinions on the financial statements, but not to the extent necessary to opine on the effectiveness of the District s internal control. Accordingly, we have not opined on it. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, when performing their assigned functions, to prevent, or detect and timely correct misstatements. A material weakness is a deficiency, or combination of internal control deficiencies resulting in a reasonable possibility that internal control will not prevent or detect and timely correct a material misstatement of the District s financial statements. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all internal control deficiencies that might be material weaknesses or significant deficiencies. Given these limitations, we did not identify any deficiencies in internal control that we consider material weaknesses. However, unidentified material weaknesses may exist. Compliance and Other Matters As part of reasonably assuring whether the District s financial statements are free of material misstatement, we tested its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could directly and materially affect the determination of financial statement amounts. However, opining on compliance with those provisions was not an objective of our audit and accordingly, we do not express an opinion. The results of our tests disclosed no instances of noncompliance or other matters we must report under Government Auditing Standards. 88 East Broad Street, Tenth Floor, Columbus, Ohio Phone: or Fax:

76 Granville Exempted Village School District Licking County Independent Auditor s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Required by Government Auditing Standards Page 2 Purpose of this Report This report only describes the scope of our internal control and compliance testing and our testing results, and does not opine on the effectiveness of the District s internal control or on compliance. This report is an integral part of an audit performed under Government Auditing Standards in considering the District s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Dave Yost Auditor of State Columbus, Ohio December 16,

77 INDEPENDENT AUDITOR S REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO THE MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 AND THE SCHEDULE OF FEDERAL AWARDS RECEIPTS AND EXPENDITURES Granville Exempted Village School District Licking County 130 North Granger Street Granville, Ohio To the Board of Education: Report on Compliance for Each Major Federal Program We have audited the Granville Exempted Village School District, Licking County, Ohio s, (the District) compliance with the applicable requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133, Compliance Supplement that could directly and materially affect the Granville Exempted Village School District s major federal program for the year ended June 30, The Summary of Audit Results in the accompanying schedule of findings identifies the District s major federal program. Management s Responsibility The District s Management is responsible for complying with the requirements of laws, regulations, contracts, and grants applicable to its federal program. Auditor s Responsibility Our responsibility is to opine on the District s compliance for the District s major federal program based on our audit of the applicable compliance requirements referred to above. Our compliance audit followed auditing standards generally accepted in the United States of America; the standards for financial audits included in the Comptroller General of the United States Government Auditing Standards; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. These standards and OMB Circular A-133 require us to plan and perform the audit to reasonably assure whether noncompliance with the applicable compliance requirements referred to above that could directly and materially affect a major federal program occurred. An audit includes examining, on a test basis, evidence about the District s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe our audit provides a reasonable basis for our compliance opinion on the District s major program. However, our audit does not provide a legal determination of the District s compliance. Opinion on the Major Federal Program In our opinion, the Granville Exempted Village School District complied, in all material respects with the compliance requirements referred to above that could directly and materially affect its major federal program for the year ended June 30, East Broad Street, Tenth Floor, Columbus, Ohio Phone: or Fax:

78 Granville Exempted Village School District Licking County Independent Auditor s Report on Compliance with Requirements Applicable to the Major Federal Program and on Internal Control Over Compliance Required by OMB Circular A-133 and the Schedule of Federal Awards Receipts and Expenditures Page 2 Report on Internal Control Over Compliance The District s management is responsible for establishing and maintaining effective internal control over compliance with the applicable compliance requirements referred to above. In planning and performing our compliance audit, we considered the District s internal control over compliance with the applicable requirements that could directly and materially affect a major federal program, to determine our auditing procedures appropriate for opining on each major federal program s compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not to the extent needed to opine on the effectiveness of internal control over compliance. Accordingly, we have not opined on the effectiveness of the District s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, when performing their assigned functions, to prevent, or to timely detect and correct, noncompliance with a federal program s applicable compliance requirement. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a federal program compliance requirement will not be prevented, or timely detected and corrected. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a federal program s applicable compliance requirement that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. This report only describes the scope of our internal control compliance tests and the results of this testing based on OMB Circular A-133 requirements. Accordingly, this report is not suitable for any other purpose. Report on the Schedule of Federal Awards Receipts and Expenditures Required by OMB Circular A-133 We have also audited the financial statements of the governmental activities, each major fund and the aggregate remaining fund information of Granville Exempted Village School District (the District) as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise the District s basic financial statements. We issued our unmodified report thereon dated December 16, We conducted our audit to opine on the District s basic financial statements. The accompanying schedule of federal awards receipts and expenditures presents additional analysis required by the U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations and is not a required part of the basic financial statements. The schedule is management s responsibility, and was derived from and relates directly to the underlying accounting and other records management used to prepare the basic financial statements. We subjected this schedule to the auditing procedures we applied to the basic financial statements. 6

79 Granville Exempted Village School District Licking County Independent Auditor s Report on Compliance with Requirements Applicable to the Major Federal Program and on Internal Control Over Compliance Required by OMB Circular A-133 and the Schedule of Federal Awards Receipts and Expenditures Page 3 We also applied certain additional procedures, including comparing and reconciling this schedule directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, in accordance with auditing standards generally accepted in the United States of America. In our opinion, this schedule is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. Dave Yost Auditor of State Columbus, Ohio December 16,

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81 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT LICKING COUNTY SCHEDULE OF FINDINGS OMB CIRCULAR A JUNE 30, SUMMARY OF AUDITOR S RESULTS (d)(1)(i) Type of Financial Statement Opinion Unmodified (d)(1)(ii) (d)(1)(ii) (d)(1)(iii) (d)(1)(iv) (d)(1)(iv) Were there any material control weaknesses reported at the financial statement level (GAGAS)? Were there any significant deficiencies in internal control reported at the financial statement level (GAGAS)? Was there any reported material noncompliance at the financial statement level (GAGAS)? Were there any material internal control weaknesses reported for major federal programs? Were there any significant deficiencies in internal control reported for major federal programs? No No No No No (d)(1)(v) Type of Major Programs Compliance Opinion Unmodified (d)(1)(vi) Are there any reportable findings under.510(a)? No (d)(1)(vii) Major Programs (list): IDEA Part B CFDA # (d)(1)(viii) Dollar Threshold: Type A\B Programs Type A: > $ 300,000 Type B: all others (d)(1)(ix) Low Risk Auditee? Yes None 2. FINDINGS RELATED TO THE FINANCIAL STATEMENTS REQUIRED TO BE REPORTED IN ACCORDANCE WITH GAGAS None 3. FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS 9

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83 Fiscal Year End, June 30, 2014

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85 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT LICKING COUNTY COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2014 TABLE OF CONTENTS I. INTRODUCTORY SECTION PAGE Letter of Transmittal 3-8 Elected Officials and Administrative Staff 9 Organizational Chart 10 Certificate of Achievement for Excellence in Financial Reporting 11 II. FINANCIAL SECTION Independent Auditor's Report Management's Discussion and Analysis Basic Financial Statements: Government-wide Financial Statements Statement of Net Position 29 Statement of Activities 30 Fund Financial Statements Balance Sheet - Governmental Funds 31 Reconciliation of Total Governmental Fund Balances to Net Position of Governmental Activities 32 Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds 33 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 34 Statement of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual (Non-GAAP Budgetary Basis) - General Fund 35 Statement of Fiduciary Net Position 36 Notes to the Basic Financial Statements Combining Statements - Nonmajor Governmental Funds 67 Description of Funds 68-69

86 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT LICKING COUNTY COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2014 TABLE OF CONTENTS Combining Balance Sheet - Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds Individual Fund Schedules of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual (Non-GAAP Budgetary Basis) - Governmental Funds 77 Debt Service Fund 78 Permananet Improvement Fund 78 Food Service Fund 78 Program Donations Fund 79 Public School Support Fund 79 Other Grants Fund 79 Classroom Facilities Maintenance Fund 80 District Managed Activities Fund 80 Auxiliary Services Fund 80 Data Communications Fund 81 Vocational Education Enhancement Fund 81 Race to the Top Fund 81 Title VI-B IDEA Fund 82 Title III Limited English Proficiency Fund 82 Title I Disadvantaged Children Fund 82 Improving Teacher Quality Fund 83 Statement of Changes in Assets and Liabilities - Agency Fund 84 III. STATISTICAL SECTION Description of Contents Net Position By Component - Last Ten Fiscal Years Changes in Net Position of Governmental Activities - Last Ten Fiscal Years Program Revenues by Function - Last Ten Fiscal Years Fund Balances, Governmental Funds - Last Ten Fiscal Years S1 S3 S4-S5 S6-S9 S10-S11 S12-S13

87 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT LICKING COUNTY COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2014 TABLE OF CONTENTS Changes in Fund Balances, Governmental Funds - Last Ten Fiscal Years Assessed and Estimated Actual Value of Taxable Property - Last Ten Collection Years Property Tax Rates - Last Ten Years Property Tax Levies and Collections - Last Ten Years Principal Taxpayers, Real Estate Tax and 2003 Principal Taxpayers, Public Utilities Tax - Tax Years 2012 and 2003 Ratios of Outstanding Debt By Type - Last Ten Fiscal Years Ratios of General Bonded Debt Outstanding - Last Ten Fiscal Years Computation of Direct and Overlapping Debt - Debt Attributable to Governmental Activities Computation of Legal Debt Margin - Last Ten Fiscal Years Demographic and Economic Statistics - Last Ten Years Principal Employers - Current Year and Nine Years Ago School District Employees by Function/Program - Last Ten Fiscal Years Per Pupil Cost - Last Ten Fiscal Years Building Statistics - Last Ten Fiscal Years Full-Time Equivalent Teachers by Education - Last Ten Fiscal Years Teachers' Salaries - Last Ten Fiscal Years Enrollment Statistics - Last Ten Fiscal Years Educational Operating Indicators - Last Ten School Years Capital Asset Statistics - Last Ten Fiscal Years S14-S15 S16-S17 S18-S19 S20 S21 S23 S24-S25 S26 S27 S28-S29 S30 S31 S32 S33 S34-S35 S36 S37 S38 S39 S40-S41

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89 Introductory Section 1

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97 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT ELECTED OFFICIALS AND ADMINISTRATIVE STAFF AS OF JUNE 30, 2014 BOARD OF EDUCATION MEMBERS President Vice-President Member Member Member Dr. Jennifer Cornman Mr. Russell Ginise Ms. Amy Deeds Mr. Thomas Miller Dr. Kathryn Rentel APPOINTED OFFICIALS Superintendent Treasurer Jeffrey R. Brown Mike Sobul ADMINISRATIVE STAFF Director of Educational Operations Director of Business Operations Director of Student Services Director of Technology High School Principal Middle School Principal Intermediate School Principal Elementary School Principal Athletic Director Supervisor of Transportation Tom Fry Tonya Sherburne Kim Pareso Rob Sexton Ryan Bernath Lisa Ormond Gayle Burris Todd Rogers Kevin Jarrett Kim Clary 9

98 ORGANIZATIONAL CHART SUPERINTENDENT S OFFICE TREASURER S OFFICE 10

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103 INDEPENDENT AUDITOR S REPORT Granville Exempted Village School District Licking County 130 North Granger Street Granville, Ohio To the Board of Education: Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Granville Exempted Village School District, Licking County, Ohio (the District), as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise the District s basic financial statements as listed in the table of contents. Management s Responsibility for the Financial Statements Management is responsible for preparing and fairly presenting these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes designing, implementing, and maintaining internal control relevant to preparing and fairly presenting financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to opine on these financial statements based on our audit. We audited in accordance with auditing standards generally accepted in the United States of America and the financial audit standards in the Comptroller General of the United States Government Auditing Standards. Those standards require us to plan and perform the audit to reasonably assure the financial statements are free from material misstatement. An audit requires obtaining evidence about financial statement amounts and disclosures. The procedures selected depend on our judgment, including assessing the risks of material financial statement misstatement, whether due to fraud or error. In assessing those risks, we consider internal control relevant to the District's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not to the extent needed to opine on the effectiveness of the District's internal control. Accordingly, we express no opinion. An audit also includes evaluating the appropriateness of management s accounting policies and the reasonableness of their significant accounting estimates, as well as our evaluation of the overall financial statement presentation. We believe the audit evidence we obtained is sufficient and appropriate to support our audit opinions. 88 East Broad Street, Tenth Floor, Columbus, Ohio Phone: or Fax:

104 Granville Exempted Village School District Licking County Independent Auditor s Report Page 2 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of Granville Exempted Village School District, Licking County, Ohio, as of June 30, 2014, and the respective changes in financial position thereof and the budgetary comparison for the General fund thereof for the year then ended in accordance with the accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require this presentation to include Management s discussion and analysis, listed in the table of contents, to supplement the basic financial statements. Although this information is not part of the basic financial statements, the Governmental Accounting Standards Board considers it essential for placing the basic financial statements in an appropriate operational, economic, or historical context. We applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, consisting of inquiries of management about the methods of preparing the information and comparing the information for consistency with management s responses to our inquiries, to the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not opine or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to opine or provide any other assurance. Supplementary and Other Information Our audit was conducted to opine on the District s basic financial statements taken as a whole. The introductory section, the financial section s combining statements, individual fund statements and schedules and the statistical section information present additional analysis and are not a required part of the basic financial statements. The statements and schedules are management s responsibility, and derive from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. We subjected these statements and schedules to the auditing procedures we applied to the basic financial statements. We also applied certain additional procedures, including comparing and reconciling statements and schedules directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves in accordance with auditing standards generally accepted in the United States of America. In our opinion, these statements and schedules are fairly stated in all material respects in relation to the basic financial statements taken as a whole. We did not subject the introductory section and statistical section information to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion or any other assurance on them.

105 Granville Exempted Village School District Licking County Independent Auditor s Report Page 3 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 16, 2014, on our consideration of the District s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. That report describes the scope of our internal control testing over financial reporting and compliance, and the results of that testing, and does not opine on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District s internal control over financial reporting and compliance. Dave Yost Auditor of State Columbus, Ohio December 16, 2014

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107 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 (UNAUDITED) As management of the Granville Exempted Village School District (the District), we offer readers of the District s financial statements this narrative overview and analysis of the financial activities of the District for the fiscal year ended June 30, We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages 3-8 of this report. Financial Highlights The assets and deferred outflows or resources of the District exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by approximately $3.9 million (net position). Net position increased $1.1 million, or 40 percent, during the fiscal year. As of the close of the most recent fiscal year, the District s governmental funds reported combined ending fund balances of approximately $4.7 million, an increase of $2.1 million in comparison with the prior year. At the end of the current fiscal year, unassigned fund balance for the general fund was approximately $1.0 million, or 4 percent of general fund expenditures. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the District s basic financial statements. The District s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the basic financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the District s finances, in a manner similar to a private-sector business. The statement of net position presents information on all of the District s assets, deferred outflows of resources, liabilities and deferred inflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the District is improving or deteriorating. The statement of activities presents information showing how the government s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). The government-wide financial statements can be found on pages of this report. 19

108 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 (UNAUDITED) Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The District, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The District s major funds are the general and debt service funds. All of the funds of the District can be divided into two categories: governmental funds and fiduciary funds. Governmental Funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The District adopts an annual appropriated budget for its general fund. A budgetary comparison statement has been provided for the general fund to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on pages of this report. Fiduciary Funds Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the District s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statement can be found on page 36 of this report. Notes to the basic financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the basic financial statements begin on page 37 of this report. Other information. The combining and individual fund statements and schedules referred to earlier in connection with nonmajor governmental funds can be found on pages of this report. Government-wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government s financial position. In the case of the District, assets and deferred outflows of resources exceed liabilities and deferred inflows of resources by approximately $3.9 million at the close of the current fiscal year. 20

109 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 (UNAUDITED) By far the largest portion of the District s net position reflects its investment in capital assets (e.g. land, buildings, furniture and equipment), less any related debt used to acquire those assets that is still outstanding. The District uses these capital assets to provide services; consequently, these assets are not available for future spending. Although the District s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An analysis of fiscal year 2014 in comparison with fiscal year 2013 follows for the Statement of Net Position: Change Current and Other Assets $ 27,642,854 $ 23,297, % Capital Assets 32,548,266 33,629, % Total Assets 60,191,120 56,927, % Unamortized Amount on Refunding 647, , % Total Deferred Outflows of Resources 647, , % Current Liabilities 2,911,693 3,094, % Long-term Liabilities 34,195,138 34,578, % Total Liabilities 37,106,831 37,672, % Property Taxes 19,852,171 17,170, % Total Deferred Inflows of Resources 19,852,171 17,170, % Net Investment in Capital Assets 7,821,681 8,620, % Restricted 3,182,664 2,704, % Unrestricted (7,124,668) (8,556,073) -16.7% Total Net Position $ 3,879,677 $ 2,768, % Current and Other Assets increased significantly in comparison with the prior fiscal year-end. This increase is primarily consists of an increase in Pooled Cash and Cash Equivalents as a result of operations ($1.7 million), and an increase in Property Tax Receivable as a result the passage of the new property tax levy in November of 2013 ($1.4 million). Capital Assets and Net Investment in Capital Assets both decreased significantly in comparison with the prior fiscal year-end. These decreases represents the amount in which current year depreciation exceeded current year capital acquisitions. Total Deferred Inflows of Resources increased significantly as a result of the passage of the new property tax levy in November of

110 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 (UNAUDITED) An analysis of fiscal year 2014 in comparison with fiscal year 2013 follows for the Statement of Activities: Governmental Activities Percent Change Program Revenues Charges for Services $ 1,368,170 $ 1,254, % Operating Grants 955, , % Capital Contributions 521, % General Revenues Property Taxes 19,576,834 18,250, % Grants and Entitlements 8,209,863 7,600, % Payment in Lieu of Taxes 240, , % Investment Earnings 11,992 18, % Miscellaneous 110, , % Total Revenues 30,995,546 28,464, % Program Expenses Instructional 15,549,590 14,691, % Support Services 9,622,855 9,551, % Non-instructional Services 990, , % Extracurricular Activites 1,220,139 1,350, % Interest and Fiscal Charges 2,501,513 2,714, % Total Expenses 29,884,767 29,245, % Change in Net Position 1,110,779 (780,558) Net Position at Beginning of Year 2,768,898 3,549,456 Net Position at End of Year $ 3,879,677 $ 2,768,898 The schedule clearly shows the dependence upon tax revenues and state subsidies for governmental activities. Only 9.5 percent of the governmental activities performed by the District are supported through program revenues such as charges for services and operating grants. The remaining 90.5 percent is provided through general revenues such as property taxes and unrestricted grants and entitlements. Revenues Property Taxes increased significantly in comparison with the prior fiscal year due to the passage of the new property tax levy in November of Program Expenses During the fiscal year, program expenses increased only slightly in comparison with the prior fiscal year. 22

111 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 (UNAUDITED) The Statement of Activities shows the cost of program services and charges for service and grants and contributions, offsetting those services. Table 3 shows the total cost of services and the net cost of services. An analysis of fiscal year 2014 in comparison with fiscal year 2013 follows: Total Cost of Total Cost of Net Cost of Net Cost of Services 2014 Services 2013 Services 2014 Services 2013 Program expenses Instructional $ 15,549,590 $ 14,691,969 $ 14,571,469 $ 14,073,841 Support services 9,622,855 9,551,670 8,984,104 9,230,015 Non-instructional Services 990, ,205 58,705 2,984 Extra Curricular Activities 1,220,139 1,350, ,293 1,059,287 Interest 2,501,513 2,714,886 2,501,513 2,714,886 Total $ 29,884,767 $ 29,245,325 $ 27,039,084 $ 27,081,013 Financial Analysis of the District s Funds As noted earlier, the District uses fund accounting to ensure and demonstrate compliance with financerelated legal requirements. Governmental Funds The focus of the District s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the District s financing requirements. In particular, unrestricted fund balance may serve as a useful measure of the District s net resources available for spending at the end of the fiscal year. An analysis of fiscal year 2014 in comparison with fiscal year 2013 follows: Fund Balance Fund Balance Increase/ June 30, 2014 June 30, 2013 (Decrease) General Fund $ 1,204,620 $ 322,576 $ 882,044 Debt Service Fund 2,552,009 2,585,596 (33,587) Other Governmental Funds 948,155 (255,753) 1,203,908 Total $ 4,704,784 $ 2,652,419 $ 2,052,365 General Fund During the current fiscal year, the fund balance in the District s General Fund increased $882,044, compared with a $477,573 increase in the previous fiscal year. Revenues increased approximately $2.0 million during the fiscal year due to the passage of the new property tax levy in November of Expenditures increased $854,473 or 3.8%. This increase is primarily the result inflationary increases. 23

112 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 (UNAUDITED) Debt Service Fund During the current fiscal year, the fund balance in the Debt Service Fund decreased $33,587. This decrease represents the amount in which current year debt service expenditures exceeded property and taxes and related intergovernmental revenues. General Fund Budget Information The District s budget is prepared according to Ohio law and is based on accounting for certain transactions on a basis of cash receipts, disbursements, and encumbrances. The most significant budgeted fund is the general fund. The variance between Original and Final Estimated Resources was insignificant. Actual budgetary revenues exceeded Final Estimated Resources by $1.7 million, or 7 percent. This variance is the result of conservative budgeting. The variance between Original and Final Appropriations was insignificant. Actual budgetary expenditures were $428,158, or 1.8 percent, less than Final Appropriations. Capital Assets At the end of the fiscal year, the District s had $32.5 million (net of accumulated depreciation) invested in capital assets, a decrease of $1.1 million in comparison with the prior fiscal year-end. This decrease represents the amount in which current year depreciation, totaling $1.5 million, exceeded current year capital acquisitions ($419,190). This investment in capital assets includes land, land improvements, buildings and improvements, furniture, fixtures and equipment, and vehicles. Detailed information regarding capital asset activity is included in the Note 6 to the basic financial statements. Debt At the end of the fiscal year, the District had total long-term debt outstanding of $33.1 million, a decrease of $356,536 in comparison with the prior fiscal year-end. This decrease represents the amount in which current debt service payments and amortization, totaling $2.5 million, exceeded new issues and current year accretion, totaling $1.3 million and $770,578, respectively. Detailed information regarding longterm obligations is included in Notes 7 to the basic financial statements. Under current state statutes, the District s general obligation bonded debt issues are subject to a legal limitation based on 9% of the total taxable valuation of real and personal property. As of June 30, 2014, the District s general obligation debt was below the legal limit. Economic Factors The District s net position increased by $1.1 million. The District passed a 5.5 mill operating levy in November of The District administration is committed to minimizing the shortfalls and maintaining a positive cash flow through spending controls that cause the least disruption to academic programs. 24

113 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 (UNAUDITED) Contacting the District s Financial Management This financial report is designed to provide our citizen s, taxpayers, and investors and creditors with a general overview of the District s finances and to show the District s accountability for the money it receives. If you have any questions about this report or need additional financial information you may contact Mike Sobul, Treasurer at Granville Exempted Village School District, 130 North Granger Street, P.O. Box 417, Granville, Ohio You may also the treasurer at msobul@granvilleschools.org. 25

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115 BASIC FINANCIAL STATEMENTS 27

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117 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT LICKING COUNTY STATEMENT OF NET POSITION AS OF JUNE 30, 2014 Governmental Activities Assets Pooled Cash and Cash Equivalents $ 6,231,436 Investments in Segregated Accounts 21,038 Receivables: Property Taxes 21,178,672 Revenue in Lieu of Property Taxes 142,000 Accounts 36,784 Intergovernmental 32,924 Nondepreciable Capital Assets 1,465,969 Depreciable Capital Assets, Net 31,082,297 Total Assets 60,191,120 Deferred Outflows of Resources Unamortized Amount on Refunding 647,559 Total Deferred Outflows of Resources 647,559 Liabilities Accounts Payable 253,235 Accrued Wages and Benefits 1,893,627 Intergovernmental Payable 329,854 Accrued Interest Payable 427,573 Unearned Revenue 7,404 Long-Term Liabilities Due within One Year 1,163,013 Due in More Than One Year 33,032,125 Total Liabilities 37,106,831 Deferred Inflows of Resources Property Taxes 19,852,171 Total Deferred Inflows of Resources 19,852,171 Net Position Net Investment in Capital Assets 7,821,681 Restricted for: Classroom Facilities Maintenance 135,937 Debt Service 2,204,284 Permanent Improvements 580,973 District Managed Student Activities 141,851 Food Service Program 3,355 Other Purposes 116,264 Unrestricted (7,124,668) Total Net Position $ 3,879,677 See accompanying notes to the basic financial statements. 29

118 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT LICKING COUNTY STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2014 Governmental Activities Instruction Regular Instruction 12,378,916 Net (Expense) Revenue and Changes in Program Revenues Net Assets Operating Capital Charges for Grants and Grants and Governmental Expenses Services Contributions Contributions Activities $ $ 233,284 $ 146,436 $ 193,522 $ (11,805,674) Special Instruction 3,043,306 53, ,663 - (2,640,944) Vocational Instruction 127,368 2, (124,851) Other Support Services Pupils 1,779, , ,066 - (1,478,259) Instructional Staff 984, (984,892) Board of Education 28, (28,650) Administration 1,585, (1,585,419) Fiscal Services 896,065-1,767 - (894,298) Business Operations 87, (87,457) Operation and Maintenance of Plant 2,289, ,000 (1,960,545) Pupil Transportation 1,538, (1,538,908) Central 432,876-7,200 - (425,676) Non-instructional Services 990, , ,330 - (58,705) Extracurricular Activities 1,220, ,793 22,053 - (923,293) Interest and Fiscal Charges 2,501, (2,501,513) Total Governmental Activities $ 29,884,767 $ 1,368,170 $ 955,991 $ 521,522 $ (27,039,084) General Revenues Property Taxes Levied for: General Purposes $ 16,296,645 Debt Service 2,495,828 Capital Projects 639,078 Classroom Facilities Maintenance 145,283 Unrestricted Grants & Entitlements 8,209,863 Payment in Lieu of Taxes 240,383 Investment Earnings 11,992 Miscellaneous 110,791 Total General Revenues 28,149,863 Change in Net Position 1,110,779 Net Position Beginning of Year 2,768,898 Net Position End of Year $ 3,879,677 See accompanying notes to the basic financial statements. 30

119 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT LICKING COUNTY BALANCE SHEET GOVERNMENTAL FUNDS AS OF JUNE 30, 2014 Debt Other Total General Service Governmental Governmental Fund Fund Funds Funds Assets: Pooled Cash and Cash Equivalents $ 2,813,278 $ 2,443,889 $ 974,269 $ 6,231,436 Investments in Segregated Accounts ,038 21,038 Receivables: Property Taxes 17,812,194 2,559, ,906 21,178,672 Revenue in Lieu of Property Taxes 142, ,000 Accounts 2,290-34,494 36,784 Intergovernmental ,924 32,924 Total Assets $ 20,769,762 $ 5,003,461 $ 1,869,631 $ 27,642,854 Liabilities: Accounts Payable $ 181,874 $ - $ 71,361 $ 253,235 Accrued Wages and Benefits 1,831,597-62,030 1,893,627 Matured Compensated Absences 107, ,138 Intergovernmental Payable 318,529-11, ,854 Unearned Revenue - - 7,404 7,404 Total Liabilities 2,439, ,120 2,591,258 Deferred Inflows of Resources: Property Taxes 16,699,617 2,400, ,705 19,852,171 Unavailable Revenue 426,387 50,603 17, ,641 Total Deferred Inflows of Resources 17,126,004 2,451, ,356 20,346,812 Fund Balances: Restricted for: Classroom Facilities Maintenance , ,754 Debt Service - 2,552,009-2,552,009 Permanent Improvements , ,350 District Managed Student Activities , ,851 Food Service Program - - 3,355 3,355 Other Purposes , ,264 Assigned for: Public School Support 71, ,854 Instruction 50, ,501 Support Services 108, ,646 Unassigned 973,619 - (2,419) 971,200 Total Fund Balances 1,204,620 2,552, ,155 4,704,784 Total Liabilities, Deferred Inflows of Resources and Fund Balances $ 20,769,762 $ 5,003,461 $ 1,869,631 $ 27,642,854 See accompanying notes to the basic financial statements. 31

120 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT LICKING COUNTY RECONCILIATION OF TOTAL GOVERNMENTAL FUND BALANCES TO NET POSITION OF GOVERNMENTAL ACTIVITIES JUNE 30, 2014 Total Governmental Fund Balances $ 4,704,784 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. 32,548,266 Other long-term assets are not available to pay for current period expenditures and therefore are reported as deferred inflows of resources in the funds. Delinquent Property Tax Receivables 494,641 Long-Term liabilities, including bonds and notes payable, are not due and payable in the current period and therefore are not reported in the funds. Bonds and Notes Payable (Including CABS and Accretion) (31,746,196) Energy Conservation Notes Payable (881,842) Bond Premium (730,881) Bond Discount 214,767 Deferred Amount on Refunding 647,559 Accrued Interest Payable (427,573) Compensated Absences (943,848) Net Position of Governmental Activities $ 3,879,677 See accompanying notes to the basic financial statements. 32

121 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT LICKING COUNTY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 Debt Other Total General Service Governmental Governmental Fund Fund Funds Funds Revenues: Property Taxes $ 16,454,758 $ 2,525,073 $ 794,516 $ 19,774,347 Payment in Lieu of Taxes 240, ,383 Intergovernmental 7,783, , ,457 9,056,183 Charges for Services , ,635 Interest 11, ,992 Tuition and Fees 289, ,500 Extracurricular Activities 221, , ,035 Donations 13,480-61,824 75,304 Other 119,250-17, ,508 Total Revenues 25,134,239 2,831,910 2,696,738 30,662,887 Expenditures: Instruction: Regular 11,401, ,560 11,745,977 Special 2,601, ,653 2,952,507 Vocational 122, ,762 Support services: Pupils 1,641,807-97,782 1,739,589 Instructional Staff 935, ,198 Board of Education 28, ,615 Administration 1,500, ,500,568 Fiscal Services 799,211 37,170 30, ,060 Business Operations 85, ,217 Operation and Maintenance of Plant 1,919, ,240 2,176,024 Pupil Transportation 1,381, ,381,855 Central 415,377-9, ,277 Non-instructional Services 20, , ,310 Extracurricular Activities 702, , ,886 Debt service: Principal Retirement - 2,250,852-2,250,852 Interest and Fiscal Charges - 1,877,475-1,877,475 Bond Issuance Costs - 19,304-19,304 Total Expenditures 23,556,695 4,184,801 2,196,980 29,938,476 Excess (Deficiency) of Revenues Over (Under) Expenditures 1,577,544 (1,352,891) 499, ,411 Other Financing Sources (Uses): Proceeds from Refunding Bonds - 1,300,000-1,300,000 Sale of Assets 4,500-4,150 8,650 Premium on Refunding Bonds - 19,304-19,304 Transfers In , ,000 Transfers Out (700,000) - - (700,000) Total Other Financing Sources (Uses) (695,500) 1,319, ,150 1,327,954 Net Change in Fund Balances 882,044 (33,587) 1,203,908 2,052,365 Fund Balance Beginning of Year 322,576 2,585,596 (255,753) 2,652,419 Fund Balance End of Year $ 1,204,620 $ 2,552,009 $ 948,155 $ 4,704,784 See accompanying notes to the basic financial statements. 33

122 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT LICKING COUNTY RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2014 Net Change in Fund Balances - Total Governmental Funds $ 2,052,365 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. Depreciation Expense (1,500,882) Capital Outlay 419,190 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. Property Taxes (197,513) The issuance of long-term debt (e.g. bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. Issuance of Refunding Bonds (1,300,000) Premium on Issuance of Refunding Bonds (19,304) Bond and Note Principal Repayments 2,250,852 Amortization of Deferred Charge on Refunding (37,003) Amortization of Bond Premium 208,109 Amortization of Bond Discount (12,273) Accretion of Capital Appreciation Bonds (770,848) Some expenses reported in the statement of activities, such as compensated absences payable and other accounts payable, do not require the use of current financial resources and therefore are not reported as expenditures in the funds. Compensated Absences 10,805 Accrued Interest 7,281 Change in Net Position of Governmental Activities $ 1,110,779 See accompanying notes to the basic financial statements. 34

123 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT LICKING COUNTY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL (NON-GAAP BUDGETARY BASIS) GENERAL FUND FOR THE FISCAL YEAR ENDED JUNE 30, 2014 Original Final Variance Budget Budget Actual Over/(Under) Revenues: Property Taxes $ 15,049,512 $ 15,049,512 $ 16,333,328 $ 1,283,816 Payment in Lieu of Taxes 226, , ,383 13,864 Intergovernmental 7,447,887 7,447,887 7,783, ,227 Earnings on Investments 11,088 11,088 11, Tuition & Fees 275, , ,026 16,842 Extracurricular 43,107 43,107 45,745 2,638 Miscellaneous 105, , ,172 6,471 Total Revenues 23,158,998 23,158,998 24,818,535 1,659,537 Expenditures: Instruction: Regular 11,732,526 11,783,539 11,485, ,870 Special 2,582,230 2,549,897 2,545,680 4,217 Vocational 124, , , Support Services: Pupils 1,473,194 1,468,442 1,446,034 22,408 Instructional Staff 1,113,725 1,072,405 1,029,654 42,751 Board of Education 21,005 33,090 28,550 4,540 Administration 1,625,945 1,555,295 1,545,201 10,094 Fiscal 790, , ,334 1,613 Business 115,955 99,555 98, Operation and Maintenance of Plant 1,859,435 1,890,752 1,887,764 2,988 Pupil Transportation 1,454,112 1,505,250 1,479,117 26,133 Central 460, , ,245 12,101 Extracurricular Activities 720, , ,143 2,285 Total Expenditures 24,073,959 24,076,009 23,647, ,158 Excess of Revenues Over (Under) Expenditures (914,961) (917,011) 1,170,684 2,087,695 Other Financing Sources (Uses): Sale of Assets 4,240 4,240 4, Transfers Out - (239,740) (239,740) - Total Other Financing Sources (Uses) 4,240 (235,500) (235,240) 260 Net Change in Fund Balances (910,721) (1,152,511) 935,444 2,087,955 Fund Balances at Beginning of Year 1,352,840 1,352,840 1,352,840 - Prior Year Encumbrances Appropriated 223, , ,959 - Fund Balances at End of Year $ 666,078 $ 424,288 $ 2,512,243 $ 2,087,955 See accompanying notes to the basic financial statements. 35

124 GRANVILLE EXPEMTED VILLAGE SCHOOL DISTRICT LICKING COUNTY STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUND AS OF JUNE 30, 2014 Assets Agency Funds Pooled Cash and Cash Equivalents $ 180,198 Property Tax Receivable 377,979 Accounts Receivable 7,896 Total Assets $ 566,073 Liabilities Held for Student Liabilities $ 110,263 Held for Others 70,056 Accounts Payable 7,775 Total Liabilities 188,094 Deferred Inflows of Resources: Property Taxes 377,979 Total Deferred Inflows of Resources 377,979 Total Liabilities and Deferred Inflows of Resources $ 566,073 See accompanying notes to the basic financial statements. 36

125 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 1 DESCRIPTION OF THE DISTRICT AND REPORTING ENTITY Granville Exempted Village School District (the District ) is organized under Article VI, Sections 2 and 3 of the Constitution of the State of Ohio. The District operates under a locally-elected Board form of government consisting of five members elected at-large for staggered four year terms. The District provides educational services as authorized by State statute and Federal guidelines. The District was established in the late 1800 s. The District serves an area of approximately 48 square miles. It is located in Licking County, and includes all of the Village of Granville and Granville Township as well as portions of the Cities of Newark and Heath and portions of Newark, Newton, McKean, St. Albans and Union Townships. It is staffed by 49 non-certified employees, 158 certified full-time personnel and 19 administrative employees who provide services to 2,460 full time equivalent students. The District currently operates four instructional buildings, one administrative building, and one transportation building. Reporting Entity: A reporting entity is comprised of the primary government, component units, and other organizations that are included to insure that the financial statements are not misleading. The primary government of the District consists of all funds, departments, boards, and agencies that are not legally separate from the District. For the Granville Exempted Village School District, this includes general operations and student related activities of the District. Component units are legally separate organizations for which the District is financially accountable. The District is financially accountable for an organization if the District appoints a voting majority of the organization s governing board and (1) the District is able to significantly influence the programs or services performed or provided by the organization; or (2) the District is legally entitled to or can otherwise access the organization s resources; the District is legally obligated or has otherwise assumed the responsibility to finance the deficits of, or provide financial support to the organization; or the District is obligated for the debt of the organization. Component units may also include organizations that are fiscally dependent on the District in that the District provides the budget, the issuance of debt, or the levying of taxes. The District has no component units. The following activities are included within the reporting entity; Private Schools- Welsh Hills and Granville Christian Academy, private schools, operate within the District boundaries. Current State legislation provides funding to these private schools. These monies are received and disbursed on behalf of the private schools by the Treasurer of the District, as directed by the private schools in accordance with State rules and regulations. This activity is reflected in a special revenue fund for financial reporting purposes. The District is associated with eight organizations, five of which are defined as jointly governed organizations, two as insurance purchasing pools, and one as a related organization. These organizations are the Licking Area Computer Association, Career and Technology Education Centers of Licking County, Metropolitan Educational Council, the School Study Council of Ohio, the Newark-Granville Community Authority, the Ohio School Boards Association Workers Compensation Group Rating Plan, the Metropolitan Educational Council Group Insurance Pool, and the Granville Schools Education Foundation, Incorporated. These organizations are presented in Notes 13, 14, and 15 to the basic financial statements. 37

126 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Government-wide and Fund Financial Statements The government-wide financial statements (i.e. the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities (the District has none), which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds (the District has none), and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual funds are reported as separate columns in the fund financial statements. Nonmajor funds are aggregated and presented in a single column. The District reports the following major governmental funds: General Fund The General Fund is the District s primary operating fund. It accounts for all financial resources of the District, except those required to be accounted for in another fund. Debt Service Fund The Debt Service Fund is used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest, and related costs. Other Governmental Funds of the District account for food services, co-curricular activities, federal and state grants, and other resources. Proprietary Funds Proprietary funds consist of enterprise funds, which are used to report any activity for which a fee is charged to external users for goods or services, and internal service funds, which are used to allocate costs of centralized services. The District reports no proprietary funds. Fiduciary Funds Fiduciary funds are used to account for assets held by the District in a trustee or agency capacity for others and therefore cannot be used to support the District s own programs. Fiduciary funds include pension trust funds, investment trust funds, private-purpose trust funds, and agency funds. The District has two fiduciary funds both being agency funds. One accounts for the Newark-Granville Authority and the other accounts for student activities. As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements; however, interfund services provided and used are not eliminated. 38

127 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) (b) Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are prepared using the economic resources measurement focus and the accrual basis of accounting, as are the fiduciary fund financial statements, except agency funds which do not report results of operations and therefore have no measurement focus. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are prepared using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, are recorded only when payment is due. In applying the susceptible to accrual concept under the modified accrual basis, the following revenue sources are deemed both measurable and available: property taxes available for advance, tuition, grants and student fees. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense) until then. For the District, deferred outflows of resources include deferred charges on refundings reported in the government-wide statement of net position. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. For the District, deferred inflows of resources include property taxes and unavailable revenue. Property taxes represent amounts for which there is an enforceable legal claim as of June 30, 2014, but which were levied to finance fiscal year 2015 operations. These amounts have been recorded as a deferred inflow of resources on both the government-wide statement of net position and the governmental funds balance sheet. Unavailable revenue is reported only on the governmental funds balance sheet, and represents receivables which will not be collected within the availability period. For the District, unavailable revenue includes delinquent property taxes and intergovernmental revenues. These amounts are deferred and recognized as an inflow of resources in the period the amounts become available. 39

128 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Expenditures/Expenses On the accrual basis of accounting, expenses are recognized at the time they are incurred. The measurement focus of governmental fund accounting is on decreases in net financial resources (expenditures) rather than expenses. Expenditures are generally recognized in the accounting period in which the related fund liability is incurred, if measurable. Allocations of cost, such as depreciation, are not recognized in governmental funds. (c) Budgetary Data All funds, except agency funds, are legally required to be budgeted and appropriated. The major documents prepared are the certificate of estimated resources and the appropriations resolution, each of which are prepared on the budgetary basis of accounting. The tax budget demonstrates a need for existing or increases tax rates and the filing requirement is waived by the Licking County Auditor. The certificate of estimated resources establishes a limit on the amount the Board of Education may appropriate. The appropriations resolution is the Board s authorization to spend resources and sets annual limits on expenditures plus encumbrances at the level of control selected by the Board. The legal level of budgetary control has been established by the Board of Education at the fund level for all funds. Any budgetary modifications at this level may only be made by the Board of Education. Budgetary allocations at the function and object level within all funds are made by the Treasurer. Advances in/out are not required to be budgeted since they represent a temporary cash flow resource and are intended to be repaid. The Building Fund is not budgeted as it consists solely of outstanding advances. The certificate of estimated resources may be amended during the year if the projected increases or decreases in revenue are identified by the Treasurer. The amounts reported as the original budgeted amounts on the budgetary statement reflect the amounts on the certificate of estimated resources when the original appropriations were adopted. The amounts reported as the final budgeted amounts on the budgetary statement reflect the amounts on the amended certificate of estimated resources in effect at the time the final appropriations were passed by the Board. The appropriation resolution is subject to amendment throughout the year with the restriction that appropriations cannot exceed estimated resources. The amounts reported as the original budgeted amounts reflect the first appropriation resolution for that fund that covered the entire fiscal year, including amounts automatically carried forward from prior fiscal years. The amounts reported as the final budgeted amounts represent the final appropriation amounts passed by the Board during the fiscal year. (d) Cash and Investments To improve cash management, cash received by the District is pooled and invested. Monies for all funds are maintained in this pool. Individual fund integrity is maintained through the District s records. Interest in the pool is presented as Pooled Cash and Cash Equivalents on the financial statements. Investments of the District s cash management pool and investments with an original maturity of three months or less at the time they are purchased by the District are presented on the financial statements as cash equivalents. Investments with an initial maturity of more than three months that were not purchased from the pool are reported as investments. 40

129 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The District has segregated investments for non-negotiable certificates of deposit held separate from the District s investments. These non-negotiable certificates of deposit are to be used to provide scholarships to graduating seniors. These investments are presented on the financial statements as Investments in Segregated Accounts since they are not deposited into the District treasury. Investments are reported as assets. Accordingly, purchases of investments are not recorded as expenses, and sales of investments are not recorded as revenues. During the fiscal year, the District s investments were limited to State Treasury Asset Reserve of Ohio (STAR Ohio) and certificates of deposit. Investments in segregated accounts, totaling $21,038 at fiscal year-end, represents certificates of deposit held for memorial and scholarship funds. STAR Ohio is an investment pool managed by the State Treasurer s Office which allows governments within the State to pool their funds for investment purposes. STAR Ohio is not registered with the SEC as an investment company, but does operate in a manner consistent with Rule 2a7 of the Investment Company Act of Investments in STAR Ohio are valued at STAR Ohio s share price which is the price the investment could be sold for on June 30, Following Ohio statutes, the Board of Education has, by resolution, specified the funds to receive an allocation of interest earnings. These funds include the general fund and debt service fund. (e) Restricted Assets Assets are reported as restricted when limitations on their use change the nature or normal understanding of the availability of the asset. Such constraints are either imposed by creditors, contributors, grantors, laws of other governments, or imposed by law through constitutional provisions or enabling legislation. The District had no restricted cash and cash equivalents at year-end. (f) Inventory and Prepaid Items Inventories are presented at the lower of cost or market on a first-in, first-out basis and are expensed when used. The District s inventory balances consist of food commodities. Payments made to vendors for services that will benefit periods beyond fiscal year-end are recorded as prepaid items using the consumption method. A current asset for the prepaid amount is recorded at the time of purchase and an expenditure/expense is reported in the year which services are consumed. At fiscal year-end, because inventory and prepaid items are not available to finance future governmental fund expenditures, the fund balance is reserved in the fund financial statements by an amount equal to the carrying value of the asset. The District had no significant prepaid items at year-end. 41

130 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) (g) Capital Assets and Depreciation Capital assets are reported in the government-wide financial statements. Capital assets are defined as assets with an initial, individual cost of more than $5,000. As the District constructs or acquires additional capital assets each period, they are capitalized and reported at historical cost. The reported value excludes normal maintenance and repairs which are essentially amounts spent in relation to capital assets that do not increase the capacity or efficiency of the item or extend its useful life beyond the original estimate. Donated capital assets are recorded at their estimated fair market value as of the date received. The District does not possess any infrastructure. All reported capital assets, with the exception of land and construction in progress are depreciated. Improvements are depreciated over the remaining useful lives of the related capital assets. Depreciation is computed using the straight-line method over the following useful lives: Land Improvements Buildings and Improvements Furniture, Fixtures and Equipment 5 20 Vehicles (h) Interfund Activity Exchange transactions between funds are reported as revenues in the seller funds and as expenditure/expenses in the purchaser funds. Flows of cash or goods from one fund to another without a requirement for repayment are reported as interfund transfers. Interfund transfers are reported as other financing sources/uses in governmental funds. These transfers are eliminated from the statement of activities. On fund financial statements, receivables and payables resulting from short-term interfund loans are classified as interfund loans receivable/payable, receivables and payables resulting from long-term interfund loans are classified as loans to/from other funds, and receivables and payables resulting from payments on-behalf of other funds are classified as due from/to other funds. These amounts are eliminated in the statement of net position. (i) Accrued Liabilities and Long-Term Obligations In general, governmental fund payables and accrued liabilities that once incurred are paid in a timely manner and in full from current financial resources, are reported as obligations of the funds. However, compensated absences and special termination benefits that will be paid from governmental funds are reported as a liability in the fund financial statements only to the extent that they are due for payment during the current year. In the government-wide financial statements, all long-term obligations are reported as liabilities in the statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest rate method. Bonds payable are reported net of the applicable bond premium or discount. 42

131 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as an other financing source. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Long-term notes paid from the governmental funds are recognized as a liability in the fund financial statements since current resources are used to finance the debt. (j) Compensated Absences Vacation benefits are accrued as a liability as the benefits are earned if the employees right to receive compensation is attributable to services already rendered and it is probable that the District will compensate the employees for the benefits through paid time off or some other means. The District records a liability for the accumulated unused vacation time when earned for all employees with more than one year of service. Sick leave benefits are accrued as a liability using the vesting method. The liability includes the employees who are currently eligible to receive termination benefits and those the District has identified as probable of receiving payment in the future. The amount is based on accumulated sick leave and employees wage rates at the fiscal year end, taking into consideration any limits specified in the District s termination policy. The District records a liability for accumulated unused sick leave for all employees having 10 or more years of current service with the District. (k) Net Position Net position represent the difference between assets and deferred outflows of resources and liabilities and deferred inflows of resources. Net investment in capital assets consist of capital assets, net of accumulated depreciation, reduced by the outstanding balance of any borrowing used for the acquisition, construction or improvement of those assets. Net position is reported as restricted when there are limitations imposed on their use either through the enabling legislation or through external restrictions imposed by creditors, grantors or laws or regulations of other governments. Net position restricted for other purposes include resources restricted for auxiliary services and state and federal grants restricted for specified purposes. None of the District s reported net position at June 30, 2014 was restricted by enabling legislation. The District applies restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position are available. (l) Fund Balance GASB Statement No. 54, Fund Balance Reporting became effective for years beginning after June 15, The objective of this Statement is to enhance the usefulness of fund balance information by providing clearer fund balance classifications that can be more consistently applied and by clarifying the existing governmental fund type definitions. This Statement establishes fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. 43

132 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) In accordance with this guidance, the District classifies its fund balance based on the purpose for which the resources were received and the level of constraint placed on the resources. The District may use the following categories: Nonspendable - resources that are not in a spendable form (inventory) or have legal or contractual requirements to maintain the balance intact (unclaimed funds). Restricted - resources that have external purpose restraints imposed on them by providers, such as creditors, grantors, or other regulators. Committed - resources that can be used only for specific purposes pursuant to constraints imposed by formal action (resolution) of the District s highest level of decision-making authority (Board). Assigned - resources that are constrained by the District s intent to be used for specific purposes, but are neither restricted nor committed. This includes the residual balance of all governmental funds other than the General Fund that were not classified elsewhere above. In the General Fund, assigned amounts represent intended uses established by policies of the District Board of Education, which includes giving the Treasurer the authority to constrain monies for intended purposes. Unassigned - residual fund balance within the General Fund not classified elsewhere above and all other governmental fund balances which have a negative fund balance. The District applies restricted resources first when an expense is incurred for purposes which both restricted and unrestricted fund balance/net position is available. The District considers committed, assigned and unassigned fund balances, respectively, to be spent when expenditures are incurred for purposes for which any of the unrestricted fund balance classifications could be used. (m) Extraordinary and Special Items Extraordinary items are transactions or events that are both unusual in nature and infrequent in occurrence. Special items are transactions or events that are within the control of the Board of Education and that are either unusual in nature or infrequent in occurrence. Neither type of transaction occurred during the fiscal year. (n) Bond Premium and Discount/Accounting Gain or Loss On government-wide statements, bond premiums are deferred and accreted over the term of the bonds. Bond premiums are presented as an addition to the face amount of the bonds. For bond refundings resulting in the defeasance of debt reported in the government-wide financial statements, the difference between the reacquisition price and the net carrying amount of the old debt is deferred and amortized as a component of interest expense. The accounting gain or loss is amortized over the remaining life of the old debt or the life of the new debt, whichever is shorter, and is presented as an addition to or reduction of the face amount of the new debt. On the governmental fund financial statements, bond premiums are recognized in the current period. 44

133 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) (o) Management Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reported period. Actual results could differ from those estimates. NOTE 3 BUDGETARY BASIS OF ACCOUNTING While the District is reporting financial position, results of operations, and changes in fund balances on the basis of accounting principles generally accepted in the United States of America (GAAP), the budgetary basis, as provided by law, is based upon accounting for certain transactions on a basis of cash receipts, disbursements, and encumbrances. The Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual (Non-GAAP Basis) General Fund is presented on the budgetary basis to provide a meaningful comparison of actual results with the budget. The major differences between the budget basis and GAAP basis are as follows: 1. Revenues are recorded when received in cash (budget basis) as opposed to when susceptible to accrual (GAAP basis). 2. Expenditures are recorded when paid in cash (budget basis) as opposed to when the liability is incurred (GAAP basis). 3. Encumbrances are treated as expenditures (budget basis) rather than as a reservation of fund balance (GAAP basis). The following table summarizes the adjustments necessary to reconcile the GAAP basis statements to the budgetary basis statements for the General Fund. Net Change in Fund Balance GAAP Basis $ 882,044 Revenues (108,873) Expenditures (78,707) Public School Support Fund 8,666 Other Sources and Uses 460,260 Encumbrances (227,946) Budgetary Basis $ 935,444 With the implementation of GASB Statement No. 54, Fund Balance Reporting, the District s Public School Support Fund, no longer meets the special revenue fund type criteria for reporting in the fiscal year-end external financial statements. As such, this fund is presented as part of the District s General Fund in the yearend financial statements. The budgetary comparison information in the fiscal year-end financial statements is the legally adopted budget for the general fund, without modification for the funds no longer meeting the special revenue criteria. 45

134 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 4 DEPOSITS AND INVESTMENTS Monies held by the District are classified by State statute into three categories. Active monies are public monies determined to be necessary to meet current demands upon the District treasury. Active monies must be maintained either as cash in the District treasury, in commercial accounts payable or withdrawable on demand, including negotiable order of withdrawal (NOW) accounts, or in money market deposit accounts. Inactive deposits are public deposits that the Board has identified as not required for use within the current five year period of designation of depositories. Inactive deposits must either be evidenced by certificates of deposit maturing not later than the end of the current period of designation of depositories, or by savings or deposit accounts including, but not limited to, passbook accounts. Interim deposits are deposits of interim monies. Interim monies are those monies which are not needed for immediate use but which will be needed before the end of the current period of designation of depositories. Interim deposits must be evidenced by time certificates of deposit maturing not more than one year from the date of deposit or by savings or deposit accounts, including passbook accounts. Interim monies held by the District can be deposited or invested in the following securities: 1. United States Treasury bills, bonds, notes, or any other obligation or security issued by the United States Treasury, or any other obligation guaranteed as to principal and interest by the United States; 2. Bonds, notes, debentures, or any other obligation or security issued by any federal government agency or instrumentality including, but not limited to, the Federal National Mortgage Association, Federal Home Loan Bank, Federal Farm Credit Bank, Federal Home Loan Mortgage Corporation, Government National Mortgage Association and Student Loan Marketing Association. All federal agency securities shall be direct issuances of federal government agencies or instrumentalities; 3. Written repurchase agreements in the securities listed above provided the market value of the securities subject to the repurchase agreement must exceed the principal value of the agreement by at least 2 percent and be marked to market daily, and the term of the agreement must not exceed thirty days; 4. Bonds and other obligations of the State of Ohio or Ohio local governments; 5. Time certificates of deposit or savings or deposit accounts including, but not limited to, passbook accounts; 6. No-load money market mutual funds consisting exclusively of obligations described in division (1) or (2) and repurchase agreements secured by such obligations, provided that investments in securities described in this division are made only through eligible institutions; 7. The State Treasurer s investment pool (STAR Ohio); 8. Commercial paper and bankers acceptances if training requirements have been met. Investments in stripped principal or interest obligations, reverse repurchase agreements, and derivatives are prohibited. The issuance of taxable notes for the purpose of arbitrage, the use of leverage, and short selling are also prohibited. An investment must mature within five years from the date of purchase, unless matched to a specific obligation or debt of the District, and must be purchased with the expectation that it will be held to maturity. Investments may only be made through specified dealers and institutions. 46

135 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 4 DEPOSITS AND INVESTMENTS (Continued) Deposits Custodial Credit Risk - In the case of deposits, this is the risk that, in the event of a bank failure, the District s deposits may not be returned. All deposits are collateralized with eligible securities in amounts equal to at least 105% of the carrying value of the deposits. Such collateral, as permitted by the Ohio Revised Code, is held in single financial institution collateral pools at Federal Reserve Banks, or at member banks of the federal reserve system, in the name of the respective depository bank and pledged as a pool of collateral against all of the public deposits it holds or as specific collateral held at the Federal Reserve Bank in the name of the District. At fiscal year-end, the carrying amount of the District s deposits was $6,431,821 and the bank balance was $6,463,095. Of the District s bank balance, $5,560,897 was covered by the Federal Deposit Insurance Corporation (FDIC) and the remaining balance was exposed to custodial risk. Although all statutory requirements for the deposit of money had been followed, noncompliance with federal requirements could potentially subject the District to a successful claim by the FDIC. The District has no deposit policy for custodial credit risk beyond the requirements of State statute. Ohio law requires that deposits be either insured or be protected by eligible securities pledged to and deposited either with the District or a qualified trustee by the financial institution as security for repayment, or by a collateral pool of eligible securities deposited with a qualified trustee and pledged to secure the repayment of all public monies deposited in the financial institution whose market value at all times shall be at least one hundred five percent of the deposits being secured. Investments At fiscal year end, the District s had the following investments: Investment Maturities Percent Within 1 to 2 Investment Type Fair Value of Total 1 Year Years STAR Ohio % Total $ % $ 851 $ - Interest Rate Risk - The District s investment policy addresses interest rate risk to the extent that it allows the Treasurer to invest funds to a maximum maturity of five years. The Treasurer cannot make investments which he/she does not reasonably believe can be held until the maturity date. State statute requires that an investment matures within five years from the date of purchase, unless matched to a specific obligation or debt of the District, and that an investment must be purchased with the expectation that it will be held to maturity. The stated intent of the policy is to avoid the need to sell securities prior to maturity. Credit Risk - STAR Ohio carries a rating of AAAm by Standard and Poor s. Ohio law requires that STAR Ohio maintain the highest rating provided by at least one nationally recognized standard rating service. The District has no investment policy that addresses credit risk. Concentration of Credit Risk - The District places no limit on the amount it may invest in any one issuer. The District s investment percentages are noted in the table above. 47

136 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 5 PROPERTY TAXES Property taxes are levied and assessed on a calendar year basis while the District s fiscal year runs from July through June. First half tax collections are received by the District in the second half of the fiscal year. Second half tax distributions occur in the first half of the following fiscal year. Property taxes include amounts levied against all real and public utility located in the school district. Real property tax revenue received in calendar year 2014 represents collections of calendar year 2013 taxes. Real property taxes received in calendar year 2014 were levied after April 1, 2013, on the assessed value listed as of January 1, 2013, the lien date. Assessed values for real property taxes are established by State law at thirtyfive percent of appraised market value. Real property taxes are payable annually or semi-annually. If paid annually, payment is due December 31; if paid semiannually, the first payment is due December 31 with the remainder payable by June 20. Under certain circumstances, State statute permits alternate payment dates to be established. Public utility property tax revenue received in calendar 2014 represents collections of calendar year 2013 taxes. Public utility real and tangible personal property taxes received in calendar year 2014 became a lien December 31, 2012, were levied after April 1, 2013 and are collected in 2014 with real property taxes. Public utility real property is assessed at thirty-five percent of true value; public utility tangible personal property is currently assessed at varying percentages of true value. The District receives its property taxes from Licking County. The County Auditor periodically advances to the District its portion of taxes collected. Second-half real property tax payments collected by the County by June 30, 2014, are available to finance fiscal year 2014 operations. The amount available to be advanced can vary based on the date the tax bills are sent. Accrued property taxes receivable includes real property and public utility property which are measurable as of June 30, 2014 and for which there is an enforceable legal claim. Although total property tax collections for the next fiscal year are measurable, only the amount of real property taxes available as an advance at June 30 was levied to finance current fiscal year operations and is reported as revenue at fiscal year-end. The portion of the receivable not levied to finance current fiscal year operations is offset by a credit to deferred inflows of resources. On the government-wide financial statements, collectible delinquent property taxes have been recorded as a receivable and revenue, while on fund financial statements the revenue has been reported as a deferred inflow of resources. The assessed values upon which the fiscal year 2014 taxes were collected are: 2013 Second Half Collections 2014 First Half Collections Amount Percent Amount Percent Real Estate $ 415,547, % $ 418,363, % Public Utility Personal 8,702, % 9,721, % Total $ 424,249, % $ 428,084, % Tax rate per $1,000 of assessed valuation $ $

137 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 6 CAPITAL ASSETS A summary of capital asset activity for the fiscal year follows: Beginning Ending Balance Additions Deductions Balance Nondepreciable Capital Assets Land $ 1,465,969 $ - $ - $ 1,465,969 Total Nondepreciable Assets 1,465, ,465,969 Depreciable Capital Assets Land Improvements 2,208, ,208,175 Buildings and Improvements 46,527, ,527,714 Furniture and Equipment 2,213, ,190-2,632,298 Vehicles 2,073, ,073,729 Total Depreciable Assets 53,022, ,190-53,441,916 Less Accumulated Depreciation Land Improvements (1,018,363) (90,050) - (1,108,413) Buildings (17,114,378) (1,177,873) - (18,292,251) Furniture and Equipment (1,477,956) (120,834) - (1,598,790) Vehicles (1,248,040) (112,125) - (1,360,165) Total Accumulated Depreciation (20,858,737) (1,500,882) - (22,359,619) Depreciable Capital Assets, Net of Accumulated Depreciation 32,163,989 (1,081,692) - 31,082,297 Total Capital Assets, Net $ 33,629,958 $ (1,081,692) $ - $ 32,548,266 Depreciation expense was charged to the governmental functions as follows: Regular Instruction $ 480,239 Special Instruction 82,357 Vocational Instruction 4,330 Pupils 53,472 Instructional Staff 47,623 Board of Education 35 Administration 70,336 Fiscal 29,958 Business Operations 1,389 Operation & Maintenance of Plant 164,563 Transportation 161,183 Central 17,226 Non-instructional 38,380 Extracurricular Activities 349,791 Total depreciation expense $ 1,500,882 49

138 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 7 LONG TERM OBLIGATIONS A summary of changes in long-term obligations for the fiscal year ended June 30, 2014 is as follows: Beginning Ending Due Within Balance Additions Reductions Balance One Year 1994 School Improvement Refunding Bonds 2.6%-4.65% $ 238,178 $ - $ (88,378) $ 149,800 $ 79, School Improvement Bonds Capital Appreciation Bonds 4.65%-5.11% 23,732 - (6,435) 17,297 - Capital Appreciation Bonds Accretion 960, ,413 (308,565) 970, , School Improvement Bonds Serial Bonds 2.0%-4.5% 1,300,000 - (1,300,000) - - Capial Appreciation Bonds 27.67%-31.13% 25,000 - (15,000) 10,000 - Capital Appreciation Bonds Accretion 250,615 57,737 (165,000) 143, ,352 Serial/Term Bonds Premium 59,402 - (59,402) Library Improvement Bonds Serial Bonds 3.0%-4.0% 145,000 - (145,000) - - Term Bonds 4.0%-5.0% 305, , ,000 Serial/Term Premium 1,760 - (880) Advance Refunding Bonds Serial Bonds 4.0%-4.75% 10,645,000 - (20,000) 10,625,000 40,000 Term Bonds 4.38% 16,460, ,460,000 - Capital Appreciation Bonds 4.22%-4.26% 274, ,972 - Capital Appreciation Bonds Accretion 1,095, ,698-1,490,084 - Premium on Serial Bonds 233,638 - (21,240) 212,398 - Premium on Capital Appreciation Bonds 624,886 - (124,978) 499,908 - Discount on Term Bonds (227,040) 12,273 - (214,767) Current Refunding Bonds Serial Bonds 1.75%-2.0% - 1,300,000-1,300,000 5,000 Serial Premium - 19,304 (1,609) 17,695 - Total General Obligation Bonds 32,416,372 2,102,425 (2,256,487) 32,262, , House Bill 264 Energy Conservation Notes 3.43% 1,084,316 - (202,474) 881, ,431 Total Bonds and Notes 33,500,688 2,102,425 (2,458,961) 33,144, ,346 Compensated Absences 1,077, ,827 (354,408) 1,050, ,667 Total $ 34,578,255 $ 2,430,252 $ (2,813,369) $ 34,195,138 $ 1,163,013 50

139 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 7 - LONG-TERM OBLIGATIONS (Continued) General Obligation Bonds School Improvement General Obligation Refunding Bonds - On October 15, 1993, the District issued $7,536,838 in School Improvement General Obligation Refunding Bonds with interest rates varying from 2.6 percent to 4.65 percent to advance refund $7,540,000 of outstanding 1990 school improvement bonds with an average interest rate of 10 percent. The proceeds of the refunding were deposited in an irrevocable trust with Park National Bank to provide for all future debt service payments. As a result, the 1990 Series bonds are considered to be defeased and the liability for those bonds has been removed from the financial statements. The 1990 School Improvement Bonds matured on December 2, The total principal and interest requirements to retire the 1994 School Improvement General Obligation Refunding Bonds are as follows: Fiscal Year Ending June 30, Principal Interest 2015 $ 79,779 $ 550, , ,978 Total $149,800 $1,090,251 The District issued School Improvement Bond Anticipation Notes at 4.87 percent for $21,220,000 on May 3, 2001, as a result of the District passing a 7.75 mill levy on November 7, The purpose of the notes was to build a new intermediate/elementary building for grades 4-6, an expansion of the high school, a new maintenance building, renovation of the elementary school and middle school, and to update building technology. The School Improvement Bond Anticipation Notes matured on December 6, On October 4, 2001 the District issued $21,209,782 in General Obligation School Improvement bonds to pay off the bond anticipation notes. The District received $22,053,938 in bond proceeds, which included a premium of $835,218 and accrued interest of $8,938. The $21,209,782 bond issue included serial, term, and capital appreciation bonds in the amount of $2,495,000, $18,685,000, and $29,782 respectively. The capital appreciation bonds will mature December 1, 2012 through These bonds were purchased at a discount at the time of issuance and, at maturity all compound interest is paid and the bond holder collects the face value. However, since interest is technically earned and compounded semi-annually, the value of the bond increases. The maturity amount of the bonds is $2,175,000. The fiscal year 2014 accretion amount is $318,413. During fiscal year 2007, the District advance refunded $18,685,000 of the term bonds. The advance refunded portion of the bonds was removed from the financial statements of the District. The remaining outstanding bonds are being retired from the Debt Service Fund. The original bonds were issued for a twenty seven year period with final maturity at December 1, 2028, and after the advance refunding has a final maturity at December 1,

140 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 7 - LONG-TERM OBLIGATIONS (Continued) The total principal and interest requirements to retire the 2002 School Improvement General Obligation Bonds are as follows: Fiscal Year Ending June 30, Principal Interest 2015 $ 6,159 $ 408, , , , ,409 Total $ 17,297 $ 1,627,703 On April 15, 2004, the District issued $9,870,000 in General Obligation School Improvement Bonds to pay off outstanding 2003 bond anticipation notes. The District received $10,318,130 in bond proceeds, which included $16,078 in accrued interest and $432,052 in premiums. The $9,870,000 bond issue consists of serial, term, and capital appreciation bonds in the amount of $6,855,000, $2,950,000, and $65,000 respectively. Issuance costs associated with the bond issue were $207,507. The capital appreciation bonds will mature December 1, 2012 through These bonds were purchased at a discount at the time of issuance and, at maturity all compound interest is paid and the bond holder collects the face value. However, since interest is technically earned and compounded semi-annually, the value of the bond increases. Therefore, as the value increases, the accretion is booked as principal. The maturity amount of the bonds is $735,000. The fiscal year 2014 accretion amount is $57,737. During fiscal year 2007, the District advance refunded $4,010,000 of the serial bonds, and $2,950,000 of the term bonds. The advance refunded portion of the bonds, as well as the unamortized premium and issuance costs of these advance refunded bonds were removed from the financial statements of the District. The remaining outstanding bonds are being retired from the Debt Service Fund. The serial and term bonds were originally sold at a premium of $432,052, of which $110,318 remained outstanding after the refunding. The premium will be amortized over the life of the bonds. Issuance costs associated with the bond issue were $207,507. The original bonds were issued for a twenty-four year period with final maturity at December 1, 2028, and after the advance refunding has a final maturity at December 1, During fiscal year 2014, the District refunded the remaining $1,300,000 of the serial bonds. The refunded portions of the bonds, as well as the unamortized premium were removed from the financial statements of the District. The remaining outstanding capital appreciation bonds are being retired from the Debt Service Fund. 52

141 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 7 - LONG-TERM OBLIGATIONS (Continued) The total principal and interest requirements to retire the 2004 School Improvement General Obligation Bonds are as follows: Fiscal Year Ending June 30, Principal Interest 2015 $ 10,000 $ 165,000 Total $ 10,000 $ 165,000 On April 6, 2005, the District issued $5,175,000 in General Obligation Library Improvement Bonds to pay off outstanding 2005 bond anticipation notes, on behalf of the Granville Public Library. The District received $5,357,024 in bond proceeds, which included $182,024 in premium. The $5,175,000 bond issue consists of serial and term bonds in the amount of $1,050,000 and $4,125,000 respectively. Issuance costs associated with the bond issue were $128,124. During fiscal year 2007, the District advance refunded $3,820,000 of the term bonds. The advance refunded portion of the bonds, as well as the unamortized premium and issuance costs of these advance refunded bonds were removed from the financial statements of the District. The remaining outstanding bonds are being retired from the Debt Service Fund. The serial and term bonds were originally sold at a premium of $182,024, of which $7,046 remained outstanding after the refunding. The premium will be amortized over the life of the bonds. Issuance costs associated with the bond issue were $128,124. The original bonds were issued for a twenty-six year period with final maturity at December 1, 2031, and after the advance refunding has a final maturity at December 1, The term bonds maturing on December 1, 2015 are subject to mandatory sinking fund redemption at a redemption price of 100% of the principal amount to be redeemed, plus accrued interest to the date of redemption, on December 1 in the years and in the respective principal amounts as follows: Year Principal Amount to be Redeemed 2014 $150,000 The remaining principal amount of $155,000 will be paid at stated maturity on December 1,

142 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 7 LONG-TERM OBLIGATIONS (Continued) The total principal and interest requirements to retire the 2005 Library Improvement General Obligation Bonds are as follows: Fiscal Year Ending June 30, Principal Interest 2015 $ 150,000 $ 9, ,000 3,100 Total $305,000 $12,300 On January 30, 2007, the District issued $29,464,972 of Advance Refunding General Obligation Bonds that were issued to partially refund the 2002 School Improvement Bonds, the 2004 School Improvement Bonds, and the 2005 Library Improvement Bonds. The $29,464,972 bond issue consists of serial, term, and capital appreciation bonds in the amount of $12,730,000, $16,460,000, and $274,972. The bonds were issued for a twenty-four year period with a final maturity at December 1, At the date of refunding, $30,608,490 was deposited in an irrevocable trust to provide for all future debt service payments on the refunded 2002 School improvement Bonds, the 2004 School Improvement Bonds, and the 2005 Library Improvement Bonds. The balance of the outstanding bonds refunded was removed from the District s financial statements, and as of June 30, 2012, the refunded bonds have been paid in full. The advance refunding serial and capital appreciation bonds were issued with a premium in the amount of $371,698 and $1,437,243 respectively, which will be reported as an increase to bonds payable. The advance refunding term bonds were issued with a discount of $306,814 which will be reported as a decrease to bonds payable. These amounts are being amortized to interest expense over the life of the bonds using the straight-line method. The amortization of the premium and discount for fiscal year 2014 was $146,218 and $12,273. Issuance costs associated with the bond issue in the amount of $358,608. The refunding resulted in a difference between the net carrying amount of the debt and the acquisition price of $925,082. The issuance resulted in a difference (savings) between the cash flows required to service the old debt and the cash flows required to service the new debt of $1,971,224. The issuance resulted in an economic gain of $1,097,604. The capital appreciation bonds will mature December 1, 2016 and December 1, These bonds were purchased at a premium at the time of issuance and, at maturity all compound interest is paid and the bond holder collects the face value. However, since interest is technically earned and compounded semi-annually, the value of the bond increases. Therefore, as the value increases, the accretion is booked as principal. The maturity amount of the bonds is $2,660,000. The fiscal year 2014 accretion amount is $394,698. The serial and term bonds maturing after December 1, 2015 are subject to redemption at the option of the District, either in whole or in part, in such order as the District shall determine, on any date on or after December 1, 2015, at a redemption price equal to 100% of the principal amount redeemed plus, in each case, accrued interest to the date fixed for redemption. 54

143 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 7 LONG-TERM OBLIGATIONS (Continued) The term bonds maturing on December 1, 2031 are subject to mandatory sinking fund redemption at a redemption price of 100% of the principal amount to be redeemed, plus accrued interest to the date of redemption, on December 1 in the years and in the respective principal amounts as follows: Principal Amount Year 2025 $ to be Redeemed 2,270, ,365, ,470, ,580, ,645, ,695,000 Total $ 15,025,000 The remaining principal of $1,435,000 will be paid at stated maturity on December 1, The total principal and interest requirements to retire the 2007 Advance Refunding General Obligation Bonds are as follows: Fiscal Year Ending June 30, Principal Interest 2015 $ 40,000 $ 1,211, ,000 1,208, ,557 1,522, ,415 2,276, ,180,000 1,179, ,340,000 4,780, ,330,000 2,294, ,130, ,062 Total $ 27,359,972 $ 14,748,818 On April 16, 2014, the District issued $1,300,000 of Current Refunding General Obligation Bonds that were issued to refund the 2004 School Improvement Bonds. The $1,300,000 bond issue consists of serial bonds. The bonds were issued for a five year period with a final maturity at December 1, The balance of the outstanding bonds refunded was removed from the District s financial statements, and as of June 30, 2014, the refunded bonds have been paid in full. The refunding serial bonds were issued with a premium in the amount of $19,304, which will be reported as an increase to bonds payable. Issuance costs associated with the bond issue in the amount of $19,304. The refunding resulted in a difference between the net carrying amount of the debt and the acquisition price of $137,068. The issuance resulted in a difference (savings) between the cash flows required to service the old debt and the cash flows required to service the new debt of $152,411. The issuance resulted in an economic gain of $128,

144 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 7 LONG-TERM OBLIGATIONS (Continued) The total principal and interest requirements to retire the 2007 Advance Refunding General Obligation Bonds are as follows: Fiscal Year Ending June 30, Principal Interest 2015 $ 5,000 $ 24, $ 175,000 $ 22, $ - $ 20, , ,000 16, ,000 5,650 Total $ 1,300,000 $ 109,157 Energy Conservation Notes On June 12, 2008, the District issued $2,000,000 in unvoted Energy Conservation Notes, under the authority of Ohio Revised Code sections (G) and (B). The Energy Conservation Notes were issued for the purpose of purchasing and installing energy conservation measures. These energy conservation measures include roofing and HVAC improvements. The energy conservation notes mature June 12, The debt will be retired through reductions in energy consumption and cost savings attributed to the installation of the energy conservation improvements. The total principal and interest requirements to retire the 2008 Energy Conservation Notes are as follows: Fiscal Year Ending June 30, Principal Interest 2015 $ 209,431 $ 30, ,566 23, ,073 15, ,772 7,966 Total $ 881,842 $ 77,116 Compensated absences will be paid from the General Fund. The District s overall legal debt margin at June 30, 2014, was $8,817,345, with an unvoted debt margin of $428,085. The District was approved as a special needs district by the Ohio Department of Education. This approval was granted based on projected tax valuation growth figures submitted by the District to the Ohio Department of Education which is used to calculate the legal debt margin. 56

145 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 8 RECEIVABLES Receivables at year-end consisted of property taxes, payments in lieu of taxes, intergovernmental and accounts. All receivables are considered collectible in full due to the ability to foreclose for the nonpayment of property taxes and payments in lieu of taxes, the stable condition of State programs, and the current year guarantee of federal funds. All receivables except property taxes are expected to be received within one year. Property taxes, although ultimately collectible, include some portion of delinquencies that will not be collected within one year. NOTE 9 DEFINED BENEFIT PENSION PLAN (a) School Employees Retirement System Plan Description - The District contributes to the School Employees Retirement System of Ohio (SERS), a cost-sharing multiple employer defined benefit pension plan. SERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Authority to establish and amend benefits is provided by state statute per Chapter 3309 of the Ohio Revised Code. The School Employees Retirement System issues a publicly available, stand-alone financial report that includes financial statements and required supplementary information. That report may be obtained by writing to SERS, 300 East Broad St., Suite 100, Columbus, Ohio or by calling (800) It is also posted on SERS website at 1TUwww.ohsers.org U1T under Employer/Audit Resources. Funding Policy - Plan members are required to contribute 10 percent of their annual covered salary and the District is required to contribute 14 percent of annual covered payroll. The contribution requirements of plan members and employers are established and may be amended, up to a statutory maximum amounts, by the SERS Retirement Board. The Retirement Board acting with the advice of the actuary, allocates the employer contribution rate among the four funds (Pension Trust Fund, Death Benefit Fund, Medicare B Fund, and Health Care Fund) of the System. For fiscal year ending June 30, 2014, the allocation to pension and death benefits is 13.1 percent. The remaining.90% of the 14% employer contribution rate is allocated to the Health Care and Medicare B Funds. The District s contributions for pension obligations to SERS for the fiscal years ended June 30, 2014, 2013, and 2012, were $431,851, $415,592, and $410,152, respectively. The amount contributed for fiscal year 2014 was 80 percent and 100 percent was contributed for fiscal years 2013 and The District s unpaid contribution for fiscal year 2014, including the surcharge, totaling $102,720, has been recorded as a liability in the appropriate funds. (b) State Teachers Retirement System Plan Description - The District contributes to the State Teachers Retirement System of Ohio (STRS), a costsharing multiple employer public employee retirement system. STRS Ohio is a statewide retirement plan for licensed teachers and other faculty members employed in the public schools of Ohio or any school, college, university, institution or other agency controlled, managed and supported, in whole or in part, by the state or any political subdivision thereof. STRS Ohio issues a stand-alone financial report that may be obtained by writing to STRS Ohio, 275 E. Broad St., Columbus, OH , by calling (888) , or by visiting the STRS Ohio web site at 1TUwww.strsoh.org U1T. 57

146 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 9 DEFINED BENEFIT PENSION PLAN (Continued) Plan Description New members have a choice of three retirement plan options, a Defined Benefit (DB) Plan, Defined Contribution (DC) Plan and a Combined Plan. The DB plan offers an annual retirement allowance based on final average salary times a percentage that varies based on years of service, or an allowance based on a member s lifetime contributions and earned interest matched by STRS Ohio funds divided by an actuarially determined annuity factor. The DC Plan allows members to place all their member contributions and employer contributions equal to 10.5 percent of earned compensation into an investment account. Investment decisions are made by the member. A member is eligible to receive a retirement benefit at age 50 and termination of employment. The member may elect to receive a lifetime monthly annuity or lump sum withdrawal. The Combined Plan offers features of the DC Plan and the DB Plan. In the Combined Plan, member contributions are invested by the member, and employer contributions are used to fund the defined benefit payment at a reduced level from the regular DB Plan. The DB portion of the Combined Plan payment is payable to a member on or after age 60; the DC portion of the account may be taken as a lump sum or converted to a lifetime monthly annuity at age 50. Benefits are established by Chapter 3307 of the Ohio Revised Code. A DB or Combined Plan member with five or more years credited service who becomes disabled may qualify for a disability benefit. Eligible spouses and dependents of these active members who die before retirement may qualify for survivor benefits. Members in the DC Plan who become disabled are entitled only to their account balance. If a member of the DC Plan dies before retirement benefits begin, the member s designated beneficiary is entitled to receive the member s account balance. Funding Policy For fiscal year 2014, plan members were required to contribute 11 percent of annual covered salaries. The District was required to contribute 14 percent; 13 percent was the portion used to fund pension obligations. Contribution rates are established by the State Teachers Retirement Board, upon recommendations of its consulting actuary, not to exceed statutory maximum rates of 10 percent for members and 14 percent for employers. Chapter 3307 of the Ohio Revised Code provides statutory authority for member and employer contributions. The District s required contributions for pension obligations to the DB Plan for the fiscal years ended June 30, 2014, 2013, and 2012 were $1,465,787, $1,509,278, and $1,648,162 respectively; 82 percent has been contributed for fiscal year 2014 and 100 percent for fiscal years 2013 and The District s unpaid contribution for fiscal year 2014, totaling $279,168, has been recorded as a liability in the appropriate funds. (c) Social Security System Effective July 1, 1991, all employees not otherwise covered by School Employees Retirement System or State Teachers Retirement System have an option to choose Social Security. As of June 30, 2014, no members of the Board of Education have elected Social Security. The District s liability is 6.2 percent of wages paid. 58

147 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 10 POSTEMPLOYMENT BENEFITS (a) School Employees Retirement System Postemployment Benefits In addition to a cost-sharing multiple-employer defined benefit pension plan the School Employees Retirement System of Ohio (SERS) administers two cost-sharing, multiple employer postemployment benefit plans. Medicare Part B Plan The Medicare B plan reimburses Medicare Part B premiums paid by eligible retirees and beneficiaries as set forth in Ohio Revised Code (ORC) Qualified benefit recipients who pay Medicare Part B premiums may apply for and receive a monthly reimbursement from SERS. The reimbursement amount is limited by statute to the lesser of the January 1, 1999 Medicare Part B premium or the current premium. The Medicare Part B premium for calendar year 2014 was $ for most participants, but could be as high as $ per month depending on their age. SERS reimbursement to retirees was $ The Retirement Board, acting with the advice of the actuary, allocates a portion of the current employer contribution rate to the Medicare B Fund. For fiscal year 2014, the actuarially required allocation is.76%. The District s contributions for the years ended June 30, 2014, 2013 and 2012 were $25,054, $23,476, and $24,222, respectively, 80 percent has been contributed for fiscal year 2014 and 100 percent for fiscal years 2013 and Health Care Plan ORC and permit SERS to offer health care benefits to eligible retirees and beneficiaries. SERS Retirement Board reserves the right to change or discontinue any health plan or program. SERS offers several types of health plans from various vendors, including HMOs, PPOs, Medicare Advantage and traditional indemnity plans. A prescription drug program is also available to those who elect health coverage. SERS employs two third-party administrators and a pharmacy benefit manager to manage the self-insurance and prescription drug plans, respectively. The ORC provides the statutory authority to fund SERS postemployment benefits through employer contributions. Active members do not make contributions to the postemployment benefit plans. The Health Care Fund was established under, and is administered in accordance with Internal Revenue Code 105(e). Each year after the allocation for statutorily required benefits, the Retirement Board allocates the remainder of the employer 14% contribution to the Health Care Fund. For the year ended June 30, 2014, the health care allocation is.14%. An additional health care surcharge on employers is collected for employees earning less than an actuarially determined minimum compensation amount, pro-rated according to service credit earned. Statutes provide that no employer shall pay a health care surcharge greater than 2% of that employer s SERS-covered payroll; nor may SERS collect in aggregate more than 1.5% of the total statewide SERS-covered payroll for the health care surcharge. For fiscal year 2014, the minimum compensation level was established at $20,250. The surcharge, added to the unallocated portion of the 14% employer contribution rate is the total amount assigned to the Health Care Fund. The District s contributions assigned to health care for the years ended June 30, 2014, 2013, and 2012 were $47,810, $87,981, and $56,536, respectively, 80 percent has been contributed for fiscal year 2014 and 100 percent for fiscal years 2013 and

148 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 10 POSTEMPLOYMENT BENEFITS (Continued) The SERS Retirement Board establishes the rules for the premiums paid by the retirees for health care coverage for themselves and their dependents or for their surviving beneficiaries. Premiums vary depending on the plan selected, qualified years of service, Medicare eligibility, and retirement status. The financial reports of SERS Health Care and Medicare B plans are included in its Comprehensive Annual Financial Report. The report can be obtained by contacting SERS, 300 East Broad Street, Suite 100, Columbus, Ohio or by calling toll free (800) It is also posted on SERS website at under Employers/Audit Resources. (b) State Teachers Retirement System Plan Description - The District contributes to the cost-sharing, multiple employer postemployment benefit Health Plan (the Plan ) administered by the State Teachers Retirement System of Ohio (STRS Ohio) for eligible retirees who participated in the defined benefit or combined pension plans offered by STRS Ohio. Benefits include hospitalization, physicians fees, prescription drugs and reimbursement of monthly Medicare Part B premiums. The Plan is included in the report of STRS Ohio which may be obtained by writing 275 E. Broad St., Columbus, OH , by calling (888) , or by visiting the STRS Ohio web site at 1TUwww.strsoh.org U1T. Funding Policy Ohio law authorizes STRS Ohio to offer the Plan and gives the Retirement Board authority over how much, if any, of the health care costs will be absorbed by STRS Ohio. Active employee members do not contribute to the Plan. All benefit recipients pay a monthly premium. Under Ohio law, funding for postemployment health care may be deducted from employer contributions. For 2014, STRS Ohio allocated employer contributions equal to 1 percent of covered payroll to the Health Care Stabilization Fund. The District s contributions for health care for the fiscal years ended June 30, 2014, 2013, and 2012 were $112,753, $116,098, and $126,782, respectively; 82 percent has been contributed for fiscal year 2014 and 100 percent for fiscal years 2013 and NOTE 11 EMPLOYEE BENEFITS (a) Compensated Absences The criteria for determining vacation and sick leave benefits are derived from negotiated agreements and State laws. Classified employees earn ten to twenty days of vacation per fiscal year, depending upon length of service. Accumulated vacation time may be carried forward for the Treasurer and upon approval of the Superintendent, for all other classified employees. Accumulated, unused vacation time is paid to classified employees and administrators upon termination of employment. Teachers do not earn vacation time. Teachers, administrators, and classified employees can earn sick leave at the rate of one and one-fourth days per month. Sick leave may be accumulated up to a maximum of 210 days for all personnel. Upon retirement, payment is made for one-third of accrued, but unused sick leave credit to a maximum of 50 days for classified and certified employees. 60

149 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 11 EMPLOYEE BENEFITS (Continued) (b) Health Care Benefits The District provides health, drug, and dental insurance for all eligible employees through Medical Mutual of Ohio. The District pays medical and drug monthly premiums for staff (family and single coverage). The District pays the total monthly premium for dental insurance coverage for family and single employees. The District also provides vision insurance to its employees through VSP. The District pays the total premium for vision coverage for family and single. The District provides life insurance and accidental death and dismemberment insurance to most employees through the Metropolitan Educational; Council Group Life Insurance. Premiums are paid from the same funds that pay the employees salaries. NOTE 12 RISK MANAGEMENT The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. During the fiscal year, the District contracted with Ohio Casualty for property, boiler and machinery, inland marine, crime insurance, general liability insurance, and fleet insurance. Coverage provided by is as follows: Building and Contents-Replacement Cost ($2,500 deductible) $54,097,639 Inland Marine ($1,000 deductible) Property 1,000,000 Crime Insurance ($1,000 deductible) Money & Securities 500,000 Employee Dishonesty 500,000 Forgery or Alteration 500,000 General Liability Per Occurrence 1,000,000 Aggregate Per Year 3,000,000 Education Umbrella Liability Policy for General Liability Per Occurrence 1,000,000 Aggregate Per Year 3,000,000 Fleet Insurance ($1,000 deductible) 1,000,000 Per Occurrence 1,000,000 Settled claims have not exceeded this commercial coverage in any of the past three years. There have been no significant reductions in insurance coverage from the last year. In fiscal year 2014, the District participated in the Metropolitan Educational Council (MEC), an insurance purchasing pool (Note 14). MEC helps member school districts receive discounted rates on various items such as their life, property, boiler and machinery, inland marine, crime, and freight insurance, services, supplies, and other items. The MEC has over 200 members which include school districts, joint vocational schools, educational service centers and libraries covering 37 counties in Central Ohio. The governing board of MEC is composed of either the superintendent, a designated representative, or a member of the board of education for each participating school district in Franklin County, and one representative from each county outside Franklin County. 61

150 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 12 RISK MANAGEMENT (Continued) For fiscal year 2014, the District participated in the Ohio School Boards Association Workers Compensation Group Rating Plan (GRP), an insurance purchasing pool (Note 14). The intent of the GRP is to achieve the benefit of a reduced premium for the District by virtue of its grouping and representation with other participants in the GRP. The workers compensation experience of the participating school districts is calculated as one experience and a common premium rate is applied to all school districts in the GRP. Each participant pays its workers compensation premium to the State board on the rate for the GRP rather than its individual rate. Participation in the GRP is limited to school districts that can meet the GRP s selection criteria. NOTE 13 JOINTLY GOVERNED ORGANIZATIONS (a) Licking Area Computer Association The District is a participant in the Licking Area Computer Association (LACA) which is a computer consortium. LACA is an association which services fourteen entities within the boundaries of Licking, Knox, and Muskingum Counties. These entities consist of public school districts, private schools, and educational service centers. The organization was formed for the purpose of applying modern technology with the aid of computers and other electronic equipment to administrative and instructional functions among member school districts. The governing board of LACA consists of the superintendents from all participating districts. The continued existence of LACA is not dependent on the District s continued participation and the District has no equity interest in the Association. The LACA constitution states that any school district withdrawing from the Association prior to dissolution forfeits their claim to the Association s capital assets. The District s total payments to LACA for computer services during fiscal year 2014 were $164,641. Financial statements for LACA can be obtained from their fiscal agent the Career and Technology Education Centers of Licking County, 150 Price Road, Newark, OH (b) Career and Technology Education Centers of Licking County The Career and Technology Education Centers of Licking County is a jointly governed organization providing vocational education to its member school districts. The Career and Technology Education Centers of Licking County is a distinct political subdivision of the State of Ohio operated under the direction of a Board consisting of three representatives from the Licking County Educational Service Center, two from the Newark City School District, one from the Heath City School District, and one from the Granville Exempted Village School District, which possesses its own budgeting and taxing authority. During 2014, the District made no contributions to the Career and Technology Education Centers of Licking County. To obtain financial information write to the Career and Technology Education Centers of Licking County, Ben Streby, who serves as Treasurer, at 150 Price Road, Newark, Ohio

151 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 13 JOINTLY GOVERNED ORGANIZATIONS (Continued) (c) Metropolitan Educational Council The District participates in the Metropolitan Educational Council (MEC), a jointly governed organization. The organization is composed of over 200 members which includes school districts, joint vocational schools, educational service centers, and libraries covering 37 counties in Central Ohio. The MEC helps its members purchase services, insurances, supplies, and other items at a discounted rate. The governing board of MEC is composed of either the superintendent, a designated representative or a member of the board of education for each participating school district in Franklin County and one representative from each county outside of Franklin County. Each year, the participating school districts pay a membership fee to MEC to cover the costs of administering the program. The District s membership payment to MEC for fiscal year 2014 was $1,028. Financial information may be obtained from the Metropolitan Educational Council, Cindy Nye, who serves as interim fiscal officer, at 2100 Citygate Dr., Columbus, OH (d) School Study Council of Ohio The School Study Council of Ohio (Council) is a jointly governed organization operated by a Board of Trustees (Board). The Council is comprised of 70 member organizations. The purpose of the Council is to bring about the improvement of education in member school organizations. School districts maintain active membership by paying a yearly membership fee which entitles each school district to attend Council meetings and to vote. School districts that elect to be associate members are entitled to attend meetings and participate in Council discussions but are not entitled to vote. The Board is annually elected from within the Council s active membership. In fiscal year 2014, the Board consisted of twenty-one members. Financial information may be obtained by contacting the School Study Council of Ohio at 4807 Evanswood Drive, Suite 300, Columbus, Ohio (e) Newark-Granville Community Authority The Newark-Granville Community Authority (Authority) is a jointly governed organization created under Section , Ohio Revised Code. The Authority was created for the purposes of encouraging the orderly development of a well-planned, diversified and economically sound new community in central Licking County. The Authority is operated by a Board of Trustees (Board) that is comprised of seven residents of the community who are elected to two-year terms. The revenue source of this organization consists of special assessments imposed by Licking County on Park Trails Community. The special assessment is based on a $250,000 average home value within the community, which results in a minimum annual community development charge of $455 per home for 20 consecutive years. 63

152 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 14 INSURANCE PURCHASING POOLS (a) Ohio School Boards Association Workers Compensation Group Rating Plan The District participates in the Ohio School Boards Association (OSBA) Workers Compensation Group Rating Program (GRP), an insurance purchasing pool. The intent of the GRP is to achieve the benefit of a reduced premium for the District by virtue of its grouping and representation with other participants in the GRP. The workers compensation experience of the participating school districts is calculated as one experience and a common premium rate is applied to all school districts in the GRP. Each participant pays its workers compensation premium to the State, based on the rate for the GRP rather than its individual rate. Total savings are then calculated and each participant s individual performance is compared to the overall savings percentage of the GRP. A participant will then either receive money from or be required to contribute to the Equity Pooling Fund. This equity pooling arrangement insures that each participant shares equally in the overall performance of the GRP. Participation in the GRP is limited to school districts that can meet the GRP s selection criteria. The firm of Sheakley, Inc. provides administrative, cost control and actuarial services to the GRP. The GRP s business and affairs are conducted by a three member Board of directors consisting of the President, the President-Elect and the Immediate Past President of the OSBA. The Executive Director of the OSBA, or his designee, serves as coordinator of the program. Each year, the participating school districts pay an enrollment fee to the GRP to cover the costs of administering the program. (b) Metropolitan Educational Council Group Insurance Pool The District participates in the Metropolitan Educational Council (MEC), an insurance purchasing pool. The MEC helps its members purchase services, insurances, supplies, and other items at a discounted rate. The organization is composed of over 200 members which includes school districts, joint vocational schools, educational service centers, and libraries covering 37 counties in Central Ohio. The governing board of MEC is composed of either the superintendent, a designated representative or a member of the board of education for each participating school district in Franklin County and one representative from each county outside of Franklin County. Each year, the participating school districts pay a membership fee to MEC to cover the costs of administering the program. NOTE 15 RELATED ORGANIZATION Granville Schools Education Foundation, Incorporated The Granville Schools Education Foundation, authorized under Ohio Revised Code Chapter 1702, is a independent nonprofit corporation created in The Foundation s purpose is to improve education for the students of Granville Schools. The Foundation is governed by a Board of Trustees appointed by the Granville Exempted Village School District Board of Education. The Board of Trustees possesses its own contracting and budgeting authority, hires and fires personnel and does not depend on the District for operational subsidies. The District has no ability to impose its will on the organization nor does a burden/benefit relationship exist. Financial information can be obtained from the Granville Schools Education Foundation, Elizabeth Mayberry, who serves as Executive Director, at P.O. Box 84, Granville, Ohio

153 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 16 CONTINGENCIES (a) Grants The District received financial assistance from federal and State agencies in the form of grants. The expenditure of funds received under these programs generally requires compliance with terms and conditions specified in the grant agreements and is subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the General Fund or other applicable funds. (b) Litigation The District is currently not a party to any material legal proceedings. NOTE 17 FUND DEFICIT The following funds had a deficit fund balance at June 30, 2014: Fund Deficit Balance Title VI-B IDEA $ (1,319) Title I Disadvantaged Children (1,100) These deficit fund balances are the result of the recognition of payables in accordance with generally accepted accounting principles. The general fund provides transfers to cover deficit balances; however, this is done when cash is needed rather than when accruals occur. NOTE 18 SET-ASIDE CALCULATIONS The District is required by State statute to annually set aside in the general fund an amount based on a statutory formula for the purchase an equal amount for the acquisition and construction of capital improvements. The following cash basis information describes the change in the year-end set-aside amounts for capital acquisition. Disclosure of this information is required by State statute. Captial Acquisition Set-aside cash balance as of June 30, 2013 $ - Current fiscal year set-aside requirement 423,314 Current Year Offsets (912,063) Qualifying Disbursements - Total $ (488,749) Balance Carried Forward to FY 2015 $ - 65

154 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 NOTE 18 SET-ASIDE CALCULATIONS (Continued) Capital acquisition offsets and qualifying disbursements presented in the table were limited to those necessary to reduce the fiscal year-end balance to zero. Although the District had qualifying disbursements during the fiscal year that would have reduced the set-aside amount for capital acquisitions to below zero, this extra amount may not be used to reduce the set-aside requirement of future years, therefore the District has chosen not to present them. NOTE 19 INTERFUND BALANCES The General Fund made an advance to the Other Governmental Capital Projects Building Fund in the amount of $700,000 for engineering fees for a future middle school building project in December On May 12, 2014, The Board approved to forgive the $700,000 loan from the General Fund to the Building Fund. The loan was reclassified as a transfer during the fiscal year between the funds. During fiscal year 2009, the Debt Service Fund entered into a loan with the Permanent Improvement Fund in the amount of $900,000 with an interest rate of 1 percent. During fiscal year 2014, $225,000 was repaid leaving the loan completely repaid as of fiscal year-end. The District s Debt Service Fund made payments of debt in the amount of $239,740 on behalf of the General Fund in fiscal year This amount was repaid during fiscal year NOTE 20 CHANGES IN ACCOUNTING PRINCIPLES For fiscal year 2014, the District has implemented the following GASB Statement No. 66 Technical Corrections an Amendment of GASB Statements No. 10 and No. 62 resolves conflicting guidance that results from the issuance of GASB Statements No. 54 and No. 62. This Statement also amends GASB Statement No. 10 by removing the provision that limits fund-based reporting of an entity s risk financing activities to the general fund and the internal service fund type. This Statement also amends GASB Statement No. 62 to clarify how to apply GASB Statement No. 13 and results in guidance that is consistent with GASB Statement No. 48. The implementation of this statement did not have an effect on the financial statements of the District. GASB Statement No. 70 Accounting and Financial Reporting for Nonexchange Financial Guarantees enhances comparability of financial statements by requiring consistent reporting by those governmental entities that extend nonexchange financial guarantees and by those governmental entities that receive nonexchange financial guarantees. This Statement was implemented in the District s fiscal year 2014 financial statements; however, there was no effect. 66

155 COMBINING STATEMENTS NONMAJOR GOVERNMENTAL FUNDS 67

156 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT DESCRIPTION OF FUNDS NON-MAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 UNon-major Governmental Funds Non-major Governmental Funds account for revenues from specific sources, which legally, or otherwise, are restricted to expenditures for specific purposes. A description of the District s Non-major Governmental Funds follows: Permanent Improvement Fund - A fund provided to account for all transactions related to acquiring, constructing, or improving school facilities. Building Fund - A fund used to account for the receipts and expenditures related to all special bond funds in the district. All proceeds from the sale of bonds, notes, or certificates of indebtedness, except premium and accrued interest, must be paid into this fund. Expenditures recorded here represent the costs of acquiring capital facilities including real property. Food Service Fund - A fund used to account for the financial activity related to the District's food service operation. Program Donations Fund - A fund used to account for the receipt and expenditure of program donations that can be expended for school district programs. Other Grants Fund A fund used to account for the proceeds of specific revenue sources, except for state and federal grants that are legally restricted to expenditures for specified purposes. Classroom Facilities Maintenance Fund - A fund used to account for the proceeds of a levy for the maintenance of facilities. District Managed Student Activity Fund - A fund provided to account for those student activity programs which have student participation in the activity but do not have student management of the programs. This fund would usually include athletic programs but could also include the band, cheerleaders, flag corps, and other similar types of activities. Auxiliary Services Fund - A fund used to account for monies which provide services and materials to pupils attending non-public schools within the school district. Data Communications Fund - A fund used to account for monies received in order for the District to obtain access to the Ohio Educational Computer Network. Vocational Education Enhancement Fund A fund used to account for Vocational Education Enhancements that: 1) expand the number of students enrolled in tech prep programs, 2) enable students to develop career plans, to identify initial educational and career goals, and to develop a career passport which provides a clear understanding of the student s knowledge, skills, and credentials to present to future employers, universities, and other training institutes, and 3) replace or update equipment essential for the instruction of students in job skills taught as part of a vocational program or programs approved for such instruction by the State Board of Education. 68

157 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT DESCRIPTION OF FUNDS NON-MAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 Race to the Top Fund - A fund used to account for federal funds used to assist states in providing either a new program or expansion of an existing program to support initiatives in the following areas: Standards and Assessments; Using Data to improve Instruction; Great Teachers and Leaders; and Turning Around the Lowest-Achieving Schools. Title VI-B IDEA Fund - A fund used to account for federal funds used to assist states in providing an appropriate public education to all children with disabilities. Title I Disadvantaged Children Fund - A fund used to provide financial assistance to State and Local educational agencies to meet the special needs of educationally deprived children. Included are the Even Start and Comprehensive School Reform programs. Title II-A Improving Teacher Quality Fund - A fund used to account for monies to hire additional classroom teachers in grades 1 through 3, so that the number of students per teacher will be reduced. Miscellaneous Federal Grants Fund - A fund used to account for various monies received through state agencies from the federal government or directly from the federal government which are not classified elsewhere. A separate cost center must be used for each grant. 69

158 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT LICKING COUNTY COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2014 Permanent Food Program Other Improvement Building Service Donations Grants Assets: Pooled Cash and Cash Equivalents $ 559,145 $ - $ 1,835 $ 30,994 $ 3,580 Investments in Segregated Accounts ,038 - Receivables: Property Taxes 657, Accounts 476-1, Intergovernmental Total Assets $ 1,216,915 $ - $ 3,355 $ 52,032 $ 3,580 Liabilities: Accounts Payable $ 31,911 $ - $ - $ 3,501 $ - Accrued Wages and Benefits Intergovernmental Payable Loans from Other Funds Unearned Revenue Total Liabilities 31, ,501 - Deferred Inflows of Resources: Property Taxes 612, Unavailable Revenue 14, Total Deferred Inflows of Resources 626, Fund Balances: Restricted for: Classroom Facilities Maintenance District Managed Student Activities Other Purposes ,531 3,580 Food Service Program - - 3, Permanent Improvements 558, Unassigned Total Fund Balances 558,350-3,355 48,531 3,580 Total Liabilities, Deferred Inflows of Resources and Fund Balances $ 1,216,915 $ - $ 3,355 $ 52,032 $ 3,580 70

159 District Classroom Managed Vocational Facilities Student Auxilary Data Education Race to the TITLE VI-B Maintenance Activities Services Communications Enhancement Top IDEA $ 123,844 $ 110,021 $ 68,806 $ 14,400 $ 479 $ 24,031 $ 19, , , ,515 $ 273,456 $ 142,519 $ 68,806 $ 14,400 $ 479 $ 24,031 $ 49,862 $ - $ 668 $ 1,162 $ 9,900 $ - $ 23,731 $ , , , , ,031 9, ,031 51, , , , , , ,775 4, (1,319) 130, ,851 53,775 4, (1,319) $ 273,456 $ 142,519 $ 68,806 $ 14,400 $ 479 $ 24,031 $ 49,862 71

160 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT LICKING COUNTY COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2014 (CONTINUED) Total Title I Improving Miscellaneous Other Disadvantaged Teacher Federal Governmental Children Quality Grants Funds Assets: Pooled Cash and Cash Equivalents $ 4,796 $ 7,626 $ 5,365 $ 974,269 Investments in Segregated Accounts ,038 Receivables: Property Taxes ,906 Accounts ,494 Intergovernmental 2, ,924 Total Assets $ 7,205 $ 7,626 $ 5,365 $ 1,869,631 Liabilities: Accounts Payable $ - $ 488 $ - $ 71,361 Accrued Wages and Benefits 7, ,030 Intergovernmental Payable 1, ,325 Loans from Other Funds Unearned Revenue - 6,626-7,404 Total Liabilities 8,305 7, ,120 Deferred Inflows of Resources: Property Taxes ,705 Unavailable Revenue ,651 Total Deferred Inflows of Resources ,356 Fund Balances: Restricted for: Classroom Facilities Maintenance ,754 District Managed Student Activities ,851 Other Purposes , ,264 Food Service Program ,355 Permanent Improvements ,350 Unassigned (1,100) - - (2,419) Total Fund Balances (1,100) 512 5, ,155 Total Liabilities, Deferred Inflows of Resources and Fund Balances $ 7,205 $ 7,626 $ 5,365 $ 1,869,631 72

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162 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT LICKING COUNTY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2014 Permanent Food Program Other Improvement Building Service Donations Grants Revenues: Property Taxes $ 647,363 $ - $ - $ - $ - Intergovernmental 97,546-76, Charges for Services , Extracurricular Activities Donations ,553 - Other Total Revenues 745, ,936 56,553 - Expenditures: Instruction: Regular 202, ,435 - Special Support services: Pupils ,687 - Fiscal Services 10,531-17, Operation and Maintenance of Plant 136, ,000 - Central Non-instructional Services , Extracurricular Activities Total Expenditures 349, ,804 61,894 - Net Change in Fund Balances 396,290 - (62,868) (5,341) - Other Financing Sources (Uses): Sale of Assets 4, Transfers In - 700, Total Other Financing Sources (Uses) 4, , Net Change in Fund Balances 400, ,000 (62,868) (5,341) - Fund Balance Beginning of Year 157,910 (700,000) 66,223 53,872 3,580 Fund Balance End of Year $ 558,350 $ - $ 3,355 $ 48,531 $ 3,580 74

163 District Classroom Managed Vocational Facilities Student Auxilary Data Education Race to the TITLE VI-B Maintenance Activities Services Communications Enhancement Top IDEA $ 147,153 $ - $ - $ - $ - $ - $ - 22, ,850 7,200 7,506 37, , , , , , , ,850 7,200 7,506 37, ,758 5, ,111 36, , ,095 2, , , , , , , ,981 9,900 8,111 36, ,308 47,275 84,645 38,869 (2,700) (605) 924 (2,550) ,275 84,645 38,869 (2,700) (605) 924 (2,550) 83,479 57,206 14,906 7, (924) 1,231 $ 130,754 $ 141,851 $ 53,775 $ 4,500 $ 1 $ - $ (1,319) 75

164 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT LICKING COUNTY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2014 (CONTINUED) Total Title I Improving Miscellaneous Other Disadvantaged Teacher Federal Governmental Children Quality Grants Funds Revenues: Property Taxes $ - $ - $ - $ 794,516 Intergovernmental 53,382 24,634 22, ,457 Charges for Services ,635 Extracurricular Activities ,048 Donations ,824 Other ,258 Total Revenues 53,382 24,634 22,067 2,696,738 Expenditures: Instruction: Regular - 22,216 16, ,560 Special 53, ,653 Support services: Pupils ,782 Fiscal Services ,679 Operation and Maintenance of Plant ,240 Central ,900 Non-instructional Services - 1, ,938 Extracurricular Activities ,228 Total Expenditures 53,440 24,122 16,702 2,196,980 Net Change in Fund Balances (58) 512 5, ,758 Other Financing Sources (Uses): Sale of Assets ,150 Transfers In ,000 Total Other Financing Sources (Uses) ,150 Net Change in Fund Balances (58) 512 5,365 1,203,908 Fund Balance Beginning of Year (1,042) - - (255,753) Fund Balance End of Year $ (1,100) $ 512 $ 5,365 $ 948,155 76

165 Individual Fund Schedules of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual (Non-GAAP) Budgetary Basis Governmental Funds 77

166 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT INDIVIDUAL FUND SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL (NON-GAAP BUDGETARY BASIS) - GOVERNMENTAL FUNDS Final Variance Budget Actual Over/(Under) Debt Service Fund Total Revenues and Other Sources $ 4,034,480 $ 4,608,404 $ 573,924 Total Expenditures and Other Uses 4,189,130 4,184,801 4,329 Net Change in Fund Balance (154,650) 423, ,253 Fund Balances - July 1 2,020,286 2,020,286 - Fund Balances - June 30 $ 1,865,636 $ 2,443,889 $ 578,253 Permanent Improvement Fund Total Revenues and Other Sources $ 736,050 $ 746,909 $ 10,859 Total Expenditures and Other Uses 962, , ,196 Net Change in Fund Balance (226,904) 40, ,055 Fund Balances - July 1 330, ,562 - Prior Year Encumbrances Appropriated 132, ,954 - Fund Balances - June 30 $ 236,612 $ 503,667 $ 267,055 Food Service Fund Total Revenues and Other Sources $ 760,000 $ 702,416 $ (57,584) Total Expenditures and Other Uses 790, ,777 22,223 Net Change in Fund Balance (30,000) (65,361) (35,361) Fund Balances - July 1 66,223 66,223 - Prior Year Encumbrances Appropriated Fund Balances - June 30 $ 36,223 $ 862 $ (35,361) 78

167 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT INDIVIDUAL FUND SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL (NON-GAAP BUDGETARY BASIS) - GOVERNMENTAL FUNDS Final Variance Budget Actual Over/(Under) Program Donations Fund Total Revenues and Other Sources $ 57,650 $ 56,553 $ (1,097) Total Expenditures and Other Uses 90,691 70,428 20,263 Net Change in Fund Balance (33,041) (13,875) 19,166 Fund Balances - July 1 48,280 48,280 - Prior Year Encumbrances Appropriated 7,091 7,091 - Fund Balances - June 30 $ 22,330 $ 41,496 $ 19,166 Public School Support Fund Total Revenues and Other Sources $ 225,000 $ 206,826 $ (18,174) Total Expenditures and Other Uses 306, ,965 87,558 Net Change in Fund Balance (81,523) (12,139) 69,384 Fund Balances - July 1 75,292 75,292 - Prior Year Encumbrances Appropriated 6,523 6,523 - Fund Balances - June 30 $ 292 $ 69,676 $ 69,384 Other Grants Fund Total Revenues and Other Sources $ - $ - $ - Total Expenditures and Other Uses Net Change in Fund Balance Fund Balances - July 1 3,580 3,580 - Fund Balances - June 30 $ 3,580 $ 3,580 $ - 79

168 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT INDIVIDUAL FUND SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL (NON-GAAP BUDGETARY BASIS) - GOVERNMENTAL FUNDS Final Variance Budget Actual Over/(Under) Classroom Facilities Maintenance Fund Total Revenues and Other Sources $ 168,139 $ 169,304 $ 1,165 Total Expenditures and Other Uses 159, ,450 30,170 Net Change in Fund Balance 8,519 39,854 31,335 Fund Balances - July 1 68,688 68,688 - Prior Year Encumbrances Appropriated 14,620 14,620 - Fund Balances - June 30 $ 91,827 $ 123,162 $ 31,335 District Managed Activities Total Revenues and Other Sources $ 345,000 $ 251,101 $ (93,899) Total Expenditures and Other Uses 363, , ,292 Net Change in Fund Balance (18,251) 40,142 58,393 Fund Balances - July 1 46,683 46,683 - Prior Year Encumbrances Appropriated 13,251 13,251 - Fund Balances - June 30 $ 41,683 $ 100,076 $ 58,393 Auxiliary Services Total Revenues and Other Sources $ 228,000 $ 227,850 $ (150) Total Expenditures and Other Uses 307, ,810 50,075 Net Change in Fund Balance (79,885) (29,960) 49,925 Fund Balances - July 1 10,204 10,204 - Prior Year Encumbrances Appropriated 78,879 78,879 - Fund Balances - June 30 $ 9,198 $ 59,123 $ 49,925 80

169 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT INDIVIDUAL FUND SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL (NON-GAAP BUDGETARY BASIS) - GOVERNMENTAL FUNDS Final Variance Budget Actual Over/(Under) Data Communication Fund Total Revenues and Other Sources $ 7,200 $ 7,200 $ - Total Expenditures and Other Uses 10,800 9, Net Change in Fund Balance (3,600) (2,700) 900 Fund Balances - July 1 7,200 7,200 - Fund Balances - June 30 $ 3,600 $ 4,500 $ 900 Vocational Education Enhancement Fund Total Revenues and Other Sources $ 8,000 $ 7,984 $ (16) Total Expenditures and Other Uses 8,823 8, Net Change in Fund Balance (823) (823) - Fund Balances - July Prior Year Encumbrances Appropriated Fund Balances - June 30 $ 1 $ 1 $ - Race to the Top Fund Total Revenues and Other Sources $ 37,922 $ 37,922 $ - Total Expenditures and Other Uses 59,422 59, Net Change in Fund Balance (21,500) (21,200) 300 Fund Balances - July Prior Year Encumbrances Appropriated 21,500 21,500 - Fund Balances - June 30 $ - $ 300 $

170 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT INDIVIDUAL FUND SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL (NON-GAAP BUDGETARY BASIS) - GOVERNMENTAL FUNDS Final Variance Budget Actual Over/(Under) Title VI-B IDEA Fund Total Revenues and Other Sources $ 389,758 $ 370,448 $ (19,310) Total Expenditures and Other Uses 433, ,334 49,862 Net Change in Fund Balance (43,438) (12,886) 30,552 Fund Balances - July 1 32,233 32,233 - Fund Balances - June 30 $ (11,205) $ 19,347 $ 30,552 Title I Disadvantaged Children Fund Total Revenues and Other Sources $ 53,382 $ 52,541 $ (841) Total Expenditures and Other Uses 69,953 52,749 17,204 Net Change in Fund Balance (16,571) (208) 16,363 Fund Balances - July 1 5,004 5,004 - Fund Balances - June 30 $ (11,567) $ 4,796 $ 16,363 Improving Teacher Quality Fund Total Revenues and Other Sources $ 34,241 $ 31,260 $ (2,981) Total Expenditures and Other Uses 35,043 30,862 4,181 Net Change in Fund Balance (802) 398 1,200 Fund Balances - July Prior Year Encumbrances Appropriated Fund Balances - June 30 $ - $ 1,200 $ 1,200 82

171 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT INDIVIDUAL FUND SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL (NON-GAAP BUDGETARY BASIS) - GOVERNMENTAL FUNDS Final Variance Budget Actual Over/(Under) Miscellaneous Federal Grants Fund Total Revenues and Other Sources $ 45,000 $ 22,067 $ (22,933) Total Expenditures and Other Uses 45,000 16,702 28,298 Net Change in Fund Balance - 5,365 5,365 Fund Balances - July Prior Year Encumbrances Appropriated Fund Balances - June 30 $ - $ 5,365 $ 5,365 83

172 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUND FOR THE FISCAL YEAR ENDED JUNE 30, 2014 Beginning Ending Balance Additions Deductions Balance Assets Pooled Cash and Cash Equivalents $ 564,280 $ 361,307 $ (745,389) $ 180,198 Accounts Receivable - 7,896-7,896 Property Taxes Receivable 387, ,979 (387,329) 377,979 Total Assets $ 951,609 $ 747,182 $ (1,132,718) $ 566,073 Liabilities Accounts Payable $ 10,782 $ 7,775 $ (10,782) $ 7,775 Held for Student Liabilities 117, ,994 (161,877) 107,690 Held for Others 435, ,991 (591,287) 72,629 Total Liabilities $ 564,280 $ 387,760 $ (763,946) $ 188,094 Deferred Inflows of Resources Property Taxes 387, ,979 (387,329) 377,979 Total Deferred Inflows of Resources $ 387,329 $ 377,979 $ (387,329) $ 377,979 Total Liabilities and Deferred Inflows of Resources $ 951,609 $ 765,739 $ (1,151,275) $ 566,073 84

173 Statistical Section S1

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175 Statistical Section This part of Granville Exempted Village School District's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the District's overall financial health. Contents Financial Trends These schedules contain trend information to help the reader understand how the District's financial position has changed over time. Revenue Capacity These schedules contain information to help the reader understand and assess the factors affecting the District's ability to generate its most significant local revenue source(s), the property tax. Debt Capacity These schedules present information to help the reader assess the affordability of the District's current levels of outstanding debt and the District's ability to issue additional debt in the future. Economic and Demographic Information These schedules offer economic and demographic indicators to help the reader understand the environment within which the District's financial activities take place. Operating Information These schedules contain service data to help the reader understand how the information in the District's financial report relates to the services the District provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the financial statements for the relevant year. S3

176 Granville Exempted Village School District Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) TABLE Net Investment in Capital Assets $ 6,703,576 $ 7,451,314 $ 6,507,468 $ 6,892,455 $ 7,687,855 Restricted for: Capital Projects 435, , , , ,636 Debt Service 1,905,441 1,975,927 2,693,764 2,591,844 3,204,877 Permanent Improvements Classroom Facilities Maintenance - 108, , , ,268 Food Services District Managed Activities - 84,781 80, , ,620 Other Purposes 318,502 32,570 51, ,047 40,957 Unrestricted (Deficit) 1,499,691 1,600, , ,426 (1,530,997) Total Net Positions $ 10,863,153 $ 11,406,410 $ 10,289,205 $ 10,920,008 $ 9,943,216 S4

177 TABLE 1 (Continued) $ 9,596,927 $ 10,307,937 $ 9,694,614 $ 8,620,362 $ 7,821, ,594,857 2,743,069 2,741,579 2,230,590 2,204, , , , , , ,400 88, ,937-84,209-66,223 3,355 90,467 61,702 74,729 57, ,851 72,421 55, ,167 81, ,264 (3,256,300) (6,134,210) (9,278,564) (8,556,073) (7,124,668) $ 9,240,353 $ 7,230,288 $ 3,549,456 $ 2,768,898 $ 3,879,677 S5

178 Granville Exempted Village School District Changes in Net Position of Governmental Activities Last Ten Fiscal Years (accrual basis of accounting) TABLE Expenses Regular Instruction $ 10,007,877 $ 10,483,251 $ 11,610,307 $ 11,823,856 $ 11,896,964 Special Instruction 1,094,548 1,361,964 1,569,026 1,975,964 2,159,916 Vocational Instruction 161, , , , ,681 Other Instruction Pupil Support Services 1,188,512 1,348,706 1,429,099 1,566,360 1,935,428 Instructional Staff Support Services 1,198,148 1,178,556 1,236,667 1,428,716 1,466,119 Board of Education Support Services 69,618 71,297 31, ,069 62,223 Administration Support Services 1,491,165 1,593,691 1,794,830 1,734,575 1,411,719 Fiscal Support Services 555, , , , ,661 Business Support Services 312 2,935 9, ,289 Operation and Maintenance of Plant Support Services 2,060,552 2,196,166 3,090,721 2,227,169 2,294,474 Pupil Transportation Support Services 1,219,641 1,511,470 1,461,364 1,698,740 1,695,459 Central Support Services 182,849 62,828 93, , ,493 Noninstructional Services 24,787 35,142 41,624 35,442 28,336 Extracurricular Activities 740, , , ,305 1,267,208 Intergovernmental 6,119,702 21, Interest and Fiscal Charges 1,718,643 1,810,404 2,185,323 2,086,820 2,200,443 Total Expenses 27,834,430 23,210,956 26,228,185 26,679,741 27,760,413 Program Revenues Charges for Services Regular Instruction 192, , , , ,321 Special Instruction Vocational Instruction Pupil Support Services 94, , , , ,156 Instructional Staff Support Services 2,790 1,880 1,994 3,381 - Administration Support Services 1,256 6,237-1,612 - Operation and Maintenance of Plant Support Services 20,659 21,522 18,999 18,453 - Central Support Services Noninstructional Services 1,639 2, ,971 Extracurricular Activities 188, , , , ,246 Operating Grants and Contributions Regular Instruction 178,971 81, , , ,962 Special Instruction 462, , , , ,759 Intergovernmental 683, Vocational Instruction 9,237 9,673 11,515 10,890 10,650 Pupil Support Services 252, , , , ,283 Instructional Staff Support Services 73,767 62,170 53,404 87,129 17,219 Administration Support Services 91, , ,233 26,001 19,320 Fiscal Support Services Business Support Services - 1, S6

179 TABLE 2 (Continued) $ 11,899,120 $ 12,379,460 $ 12,544,810 $ 12,137,143 $ 12,378,916 2,520,861 2,610,277 2,676,625 2,427,252 3,043, , , , , , ,874,209 1,963,082 1,705,021 1,565,592 1,779,567 1,455,718 1,235,636 1,386,516 1,343, ,892 58,596 53,853 90,042 3,870 28,650 1,582,101 1,644,746 1,592,557 1,524,711 1,585, , , , , , , , ,451 41,163 87,457 2,352,343 2,131,024 2,157,006 2,160,331 2,289,021 1,687,517 1,696,740 1,679,275 1,567,902 1,538, , , , , , , ,418 1,115, , ,670 1,281,203 1,419,083 1,327,444 1,350,595 1,220, ,247,407 2,328,437 2,177,803 2,714,886 2,501,513 29,302,656 29,926,143 30,180,837 29,245,325 29,884, , , , , ,284-15,320 22,329 23,669 53,699-1,599 1,588 1,456 2, , , , , , , , , , , , , , , , , ,643 91, , , ,971 1,013, , , , ,207 11, , , , , ,066 6, , , ,330 2,549 1, S7

180 Granville Exempted Village School District Changes in Net Position of Governmental Activities Last Ten Fiscal Years (accrual basis of accounting) TABLE 2 (Continued) Operating Grants and Contributions (continued) Operation and Maintenance of Plant Support Services 13,701 31,605 28,961 31,754 19,354 Pupil Transportation Support Services 400, , , , ,830 Central Support Services 7,141 7,811 8,109 8,686 - Noninstructional Services 10,324 6,537 5,132 4,001 5,226 Extracurricular Activities 42,622 52,616 62,367 56,271 62,087 Capital Grants and Contributions Regular Instruction 15,015 28,771 20,965 58,935 - Special Instruction ,486 - Administration Support Services - - 1, Fiscal Support Services , Business Support Services Operation and Maintenance of Plant Support Services 12,203 12,386 21,321 13,894 - Pupil Transportation Support Services - 15,331 22,869 16,564 13,283 Extracurricular Activities Total Program Revenues 2,756,982 2,197,064 2,371,901 2,530,724 2,459,667 Net Expense (25,077,448) (21,013,892) (23,856,284) (24,149,017) (25,300,746) General Revenues Property Taxes Levied for: General Purposes 11,551,046 11,612,185 12,149,993 12,821,992 12,838,871 Debt Service 2,327,709 2,507,053 2,730,893 2,877,982 2,909,428 Capital Outlay 469, , , , ,185 Classroom Facilities Maintenance 126, , , , ,071 Grants and Entitlements not Restricted to Specific Programs 6,128,549 6,351,268 6,728,763 6,893,363 7,727,905 Payment in Lieu of Taxes , , ,881 Investment Earnings 301, , , , ,174 Miscellaneous 65,788 47,923 74,526 33,643 53,320 Total General Revenues 20,971,233 21,557,149 23,037,304 24,014,270 24,563,835 Change in Net Position $ (4,106,215) $ 543,257 $ (818,980) $ (134,747) $ (736,911) S8

181 TABLE 2 (Continued) ,500 9, , ,404 61, ,205 9,100 7,200 7,200 7, , , , , ,330 29,135 20,977 16,051 10,145 22, , , , , , , , ,276,534 4,018,366 2,511,306 2,164,312 2,845,683 (26,026,122) (25,907,777) (27,669,531) (27,081,013) (27,039,084) 13,690,792 12,897,027 13,282,827 14,960,136 16,296,645 3,587,543 2,401,124 2,276,729 2,504,600 2,495, , , , , , , , , , ,283 7,430,574 7,630,314 7,789,230 7,600,638 8,209, ,440 98,410 94, , ,383 69,859 36,118 17,373 18,899 11,992 34, , , , ,791 25,850,475 23,897,712 24,311,240 26,300,455 28,149,863 $ (175,647) $ (2,010,065) $ (3,358,291) $ (780,558) $ 1,110,779 S9

182 Granville Exempted Village School District Program Revenues by Function Last Ten Fiscal Years (accrual basis of accounting) TABLE Function Regular Instruction $ 386,523 $ 290,458 $ 403,598 $ 379,364 $ 348,283 Special Instruction 462, , , , ,759 Intergovernmental 683, Vocational Instruction 9,237 9,673 11,515 10,890 10,650 Pupil Support Services 346, , , , ,439 Instructional Staff Support Services 76,557 64,050 55,398 90,510 17,219 Board of Education Support Services Administration Support Services 92, , ,514 27,613 19,320 Fiscal Support Services 315 1,135 1,519 1,230 - Business Support Services - 1, Operation and Maintenance of Plant Support Services 46,563 65,513 69,281 64,101 19,354 Pupil Transportation Support Services 400, , , , ,113 Central Support Services 7,824 7,811 8,109 9,211 - Noninstructional Services 11,963 8,879 5,132 4,001 13,197 Extracurricular Activities 231, , , , ,333 Total Program Revenues $ 2,756,982 $ 2,197,064 $ 2,371,901 $ 2,530,724 $ 2,459,667 S10

183 TABLE 3 (Continued) $ 374,547 $ 695,506 $ 526,060 $ 254,093 $ 573, ,971 1,029, , , , ,207 12,890 1,588 1,456 2, , , , , ,308 6, , , ,330 2,549 1,767 9, ,000 4,500 9, , , ,404 61, ,205 9,100 7,200 7,200 7, , , , , , , , , , ,846 $ 3,276,534 $ 4,018,366 $ 2,511,306 $ 2,164,312 $ 2,845,683 S11

184 Granville Exempted Village School District Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) TABLE General Fund Nonspendable N/A N/A N/A N/A N/A Assigned N/A N/A N/A N/A N/A Unassigned N/A N/A N/A N/A N/A Reserved $ 1,338,222 $ 588,115 $ 725,783 $ 773,671 $ 1,619,422 Unreserved 5,373,477 5,979,415 5,702,660 5,337,556 3,603,983 Total General Fund 6,711,699 6,567,530 6,428,443 6,111,227 5,223,405 All Other Governmental Funds Nonspendable N/A N/A N/A N/A N/A Restricted N/A N/A N/A N/A N/A Unassigned N/A N/A N/A N/A N/A Reserved 612, , ,914 1,839, ,772 Unreserved, Undesignated, Reported in: Capital Projects Funds 156,818 92,357 (554,111) (455,485) (1,195,683) Debt Service Funds 2,256,448 2,531,199 3,051,357 2,927,238 2,924,501 Special Revenue Funds 218, , , , ,614 Total All Other Governmental Funds 3,244,050 3,067,323 3,098,865 4,777,419 3,002,204 Total Governmental Funds $ 9,955,749 $ 9,634,853 $ 9,527,308 $ 10,888,646 $ 8,225,609 N/A- Fund Balance classifications are not applicable due to implementation of GASB 54 in fiscal year 2011 including restatement of fiscal year S12

185 TABLE 4 (Continued) $ 700,000 $ 700,000 $ 700,000 $ 700,000 $ - 2,187, ,554 73, ,001 1,602,172 1,821,366 (928,706) (377,424) 973,619 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 4,489,350 2,726,920 (154,997) 322,576 1,204, , , , ,893,121 2,901,869 2,426,480 3,031,809 3,502,583 (978,304) (913,584) (748,781) (701,966) (2,419) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A - 2,672,123 2,137,158 2,329,843 3,500,164 $ 4,489,350 $ 5,399,043 $ 1,982,161 $ 2,652,419 $ 4,704,784 S13

186 Granville Exempted Village School District Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) TABLE Revenues Property Taxes $ 14,358,838 $ 14,592,531 $ 15,619,320 $ 16,213,099 $ 16,042,938 Payment in Lieu of Taxes , , ,334 Intergovernmental 8,344,965 7,927,106 8,388,818 8,709,326 9,475,414 Charges for Services ,971 Interest 303, , , , ,202 Tuition and Fees 185, , , , ,471 Rent 20,659 21,522 18,999 18,453 - Extracurricular Activities 295, , , , ,402 Gifts and Donations 104,080 91, ,645 82,393 - Miscellaneous 65,788 47,923 74,526 32, ,501 Total Revenues 23,677,941 23,708,470 25,597,494 26,473,761 26,749,233 Expenditures Current: Instruction: Regular 9,274,815 10,073,724 10,830,781 11,178,156 11,184,331 Special 999,867 1,266,684 1,473,832 1,874,110 2,108,382 Vocational 149, , , , ,148 Other/Adult/Continuing Support Services: Pupils 1,193,587 1,294,131 1,374,565 1,446,558 1,852,373 Instructional Staff 1,102,647 1,068,317 1,129,512 1,304,547 1,401,774 Board of Education 69,742 71,297 31, ,069 60,091 Administration 1,434,350 1,550,982 1,707,531 1,655,548 1,412,395 Fiscal 558, , , , ,515 Business 312 2,935 9, ,480 Operation and Maintenance of Plant 2,118,281 2,290,656 2,412,566 2,258,837 2,516,637 Pupil Transportation 1,333,558 1,662,960 1,649,288 1,703,911 1,533,543 Central 182,849 62,828 93, , ,242 Other Operation of Non-Instructional Services 20,782 30,475 36,957 30,715 23,631 Extracurricular Activities 623, , , , ,678 Capital Outlay 134, , , ,698 1,712,558 Intergovernmental 6,119,790 21, Debt Service: Issuance Costs 128, , Principal Retirement 1,145,983 1,174, ,663 1,388,780 1,503,030 Interest and Fiscal Charges 1,666,627 1,722,372 1,879,650 1,966,256 1,997,435 Total Expenditures 28,257,785 24,233,734 26,066,541 27,113,100 29,472,243 Excess of Revenues Over (Under) Expenditures (4,579,844) (525,264) (469,047) (639,339) (2,723,010) Other Financing Sources (Uses) Inception of Capital Lease - 204, ,000 Proceeds from Sale of Capital Assets - - 2, ,973 Donations Refunding Bonds Issued ,464, Premium on Refunding Bonds Issued - - 1,808, Discount on Refunding Bonds Issued - - (306,814) - - Payment to Refunded Bond Escrow Agent - - (30,608,490) - - Proceeds from Sale of Bonds 5,175, Premium on Bonds Sold 182, Proceeds from Sale of Long Term Notes ,000,000 Transfers In 14, Transfers Out (14,463) Total Other Financing Sources (Uses) 5,357, , ,502 2,000,677 59,973 Net Change in Fund Balances $ 777,180 $ (320,896) $ (107,545) $ 1,361,338 $ (2,663,037) Debt Service as a Percentage of Noncapital Expenditures 10.1% 12.6% 10.5% 12.6% 12.9% S14

187 TABLE 5 (Continued) $ 17,926,273 $ 16,012,594 $ 16,268,510 $ 18,453,072 $ 19,774, ,440 98,410 94, , ,383 9,406,457 9,974,078 8,655,657 8,417,303 9,056, , , , , ,635 67,432 37,475 14,850 22,492 11, , , , , , , , , , , ,160 82,721 75, , , , , ,508 28,975,430 27,488,372 26,503,433 28,666,522 30,662,887 11,449,591 12,074,408 12,067,253 11,761,924 11,745,977 2,434,055 2,502,438 2,591,200 2,324,898 2,952, , , , , , ,808,659 1,916,836 1,655,161 1,509,492 1,739,589 1,422,517 1,182,531 1,339,644 1,316, ,198 56,395 51,918 85, ,615 1,531,854 1,566,642 1,526,905 1,448,550 1,500, , , , , , , , ,060 39,222 85,217 2,526,897 2,132,916 2,134,878 2,127,302 2,176,024 1,646,597 1,534,614 1,502,096 1,410,024 1,381, , , , , , , ,891 1,075, , , ,991 1,023, ,971 1,001, , ,348 90, ,304 1,628,238 1,609, , ,769 2,250,852 1,974,732 1,402,275 2,433,256 1,894,837 1,877,475 29,892,628 29,487,425 29,921,815 28,002,110 29,938,476 (917,198) (1,999,053) (3,418,382) 664, , ,578 5,116 1,500 5,846 8,650-82, ,300, , , ,000 (16,000) (700,000) 1,578 88,107 1,500 5,846 1,327,954 $ (915,620) $ (1,910,946) $ (3,416,882) $ 670,258 $ 2,052, % 10.5% 11.2% 9.8% 14.0% S15

188 Granville Exempted Village School District Assessed and Estimated Actual Value of Taxable Property Last Ten Collection Years TABLE 6 Granville Exempted Real Property Tangible Personal Property Public Utility Assessed Value Estimated Estimated Tax Residential/ Commercial/ Actual Assessed Actual Year Agricultural Industrial/PU Value Value Value ,956,730 33,087, ,698,971 8,153,910 32,615, ,713,670 40,551,800 1,063,615,629 7,868,510 31,474, ,246,350 43,791,930 1,105,823,657 7,894,880 31,579, ,971,290 40,007,320 1,119,938,886 6,099,433 24,397, ,031,560 43,102,810 1,151,812,486 6,898,260 27,593, ,712,930 43,559,490 1,180,778,343 7,283,930 29,135, ,794,500 43,907,440 1,187,719,829 7,720,210 30,880, ,931,900 43,993,740 1,196,930,400 8,207,920 32,831, ,959,618 40,300,263 1,186,456,804 8,702,037 34,808, ,932,240 40,431,252 1,195,324,264 9,721,460 38,885,840 Real property is reappraised every six years with a State mandated update of the current market value in the third year following each reappraisal The assessed value of real property (including public utility real property) is 35 percent of estimated true value. Through 2008, personal property tax was assessed on all tangible personal property used in business in Ohio. The assessed value of public utility property ranges from 24 percent of true value to 88 percent, depending on the type of property. General business tangible personal property tax began being phased out in tax year The listing percentage was reduced to percent for tax year 2006, 12.5 percent for tax year 2007, 6.25 percent for tax year 2008 and zero for tax year The tangible personal property values associated with each year are the values that, when multiplied by the applicable rates, generated the property tax revenue billed in that year. For real property, the amounts generated by multiplying the assessed values by the applicable rates would be reduced by the 10 percent, 2 1/2 percent and homestead exemptions before being billed. Values are shown net of exempt property. Source: Ohio Department of Taxation S16

189 TABLE 6 (Continued) Granville Exempted Tangible Personal Property General Business Total Effective Voted Estimated Estimated Tax Rate Tax Rate Assessed Actual Assessed Actual (Per $1,000 of (Per $1,000 of Value Value Value Value Ratio Assessed Value) Assessed Value) 11,016,205 44,064, ,229,315 1,005,379,431 40% ,118,084 40,472, ,252,064 1,135,562,005 34% ,542,663 40,227, ,475,823 1,177,630,713 34% ,578,640 52,629, ,656,683 1,196,965,738 34% ,090,760 49,452, ,123,390 1,228,857,686 34% ,635 9,754, ,165,985 1,219,668,223 35% ,422,150 1,218,600,669 35% ,133,560 1,229,762,080 35% ,961,918 1,221,264,951 35% ,084,952 1,234,210,104 35% S17

190 Granville Exempted Village School District Property Tax Rates (per $1,000 of assessed value) Last Ten Years TABLE 7 Direct Rates Tax Year/ Voted Collection Perm. Classroom Year General Bond Improve. Maintenance Unvoted Total 2013/ / / / / / / / / / Source: Licking County Auditor's Office; Ohio Department of Taxation The rates presented for a particular calendar year are the rates that, when applied to the assessed values presented in the Assessed Value Table, generated the property tax revenue billed in that year. Rates may only be raised by obtaining the approval of a majority of the voters at a public election. S18

191 TABLE 7 (Continued) Overlapping Rates Granville Licking Library Licking Village of Granville Recreation County Union McKean St. Albans Newark Heath Operating County Granville Township District JVSD Township Township Township City City / / / S19

192 Granville Exempted Village School District Property Tax Levies and Collections (1) Last Ten Years TABLE 8 Percent of Current Tax Percent of Calendar Current Collections to Delinquent Total Tax Collection Tax Current Tax Current Tax Total Tax Collections to Year (2) Levy Collections Tax Levy Collections (3) Collections Current Tax Levy ,136,826 16,190, ,609 16,472, ,644,442 16,892, ,702 17,154, ,928,692 17,354, ,241 17,592, ,711,799 17,449, ,861 17,833, ,928,790 17,439, ,952 17,736, % ,352,172 17,463, ,643 17,762, % ,628,331 17,745, % 506,708 18,252, % ,887,927 20,073, % 482,006 20,555, % ,925,405 19,983, % 304,701 20,288, % ,138,427 20,314, % 550,018 20,864, % Source: Licking County Auditor's Office (1) Includes Homestead/Rollback taxes assessed locally, but distributed through the State and reported as Intergovernmental revenue. (2) The 2013 information cannot be presented because all collections have not been made by June 30, (3) The County does not identify delinquent tax collections by tax year. S20

193 Granville Exempted Village School District Principal Taxpayers Real Estate Tax 2013 and 2004 (1) TABLE Percent of Assessed Real Property Name of Taxpayer Value Assessed Value Middleton House LTD $ 4,138, % Prarie Enterprises LTD 2,649, Owens Corning Science & Technology LLC 2,503, Kendal at Granville 1,888, Bellaire Hospitalities 1,750, Columbus RD LTD 1,074, Cherry Valley Professional Partners LLC 921, Granville Apartments 905, Granvillle Golf Course Co. 760, Universal RE Holdings LLC 759, TOTALS $ 17,350, % Total Assessed Valuation $ 418,363, Percent of Assessed Real Property Name of Taxpayer Value Assessed Value Cherry Jack Limited Partnership $ 4,836, % Owens Corning Fiberglas 3,304, Prarie Enterprises LTD 3,174, Denison University 1,907, Columbus Road LTD 1,476, Village of Granville 1,048, Granville Golf Course Co. 993, Granville Apartments 745, Licking Memorial Hospital 578, Mid Ohio Development Corp. 544, Totals $ 18,610, % Total Assessed Valuation $ 325,044,640 Source: Licking County Auditor's Office (1) The amounts presented represent the assessed values upon which 2014 and 2005 collections were based. S21

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195 Granville Exempted Village School District Principal Taxpayers Public Utilities Tax 2013 and 2004 (1) TABLE Percent of Assessed Public Utility Name of Taxpayer Value Assessed Value Ohio Power Company $ 5,090, % Columbia Gas Trans Corp 2,178, Columbia Gas of Ohio 776, AEP Ohio Transmission Co Inc. 736, Licking Rural Electric 612, National Gas & Oil Corp 324, Buckeye Power 2, Total $ 9,721, % Total Assessed Valuation $ 9,721, Percent of Assessed Public Utility Name of Taxpayer Value Assessed Value Ohio Power Co $ 3,083, % Alltel Ohio Inc. 1,787, Columbia Gas Transmission Corp 1,542, Columbia Gas of Ohio Inc. 410, Licking Rural Electrification 256, APT Columbus Inc. 217, CSX Transportation Inc 214, MCI Telecommunications Corp 197, Columbus Southern power Co 196, National Gas & Oil Corp 173, Total $ 8,079, % Total Assessed Valuation $ 8,153,910 Source: Licking County Auditor's Office (1) The amounts presented represent the assessed values upon which 2014 and 2005 collections were based. S23

196 Granville Exempted Village School District Ratio of Outstanding Debt by Type Last Ten Fiscal Years TABLE 11 Energy School Fiscal Estimated Median Personal Conservation Improvement Year Population (1) Income (2) Income (2) Bond (3) Bonds (3) ,670 58, ,615,563-38,144, ,670 61, ,360,473-37,113, ,410 62, ,273,583-36,512, ,410 63, ,369,466 2,000,000 35,550, ,410 63, ,603,046 1,829,000 34,158, ,923 65, ,509,360 1,652,123 33,012, ,923 67, ,220,899 1,469,166 31,973, ,923 68, ,024,354 1,280,060 31,786, ,923 NA NA 1,084,316 32,416, ,923 NA NA 881,842 32,262,310 Sources: (1) from 2010 US Census; estimates - Ohio Municipal Advisory Council (2) Ohio Department of Taxation (3) OMAC; District Financial Records NA - Information Not Available S24

197 TABLE 11 (Continued) Bond Total Ratio of Total Total Debt Capital Anticipation Debt Debt to Personal Per Leases Notes Outstanding Income Capita 226,109-38,370, , ,453-37,304, , ,884-36,656, ,544 95,788-37,645, ,612 92,744-36,079, ,504 35,726-34,700,831 NA 2,685 14,250-33,456,882 NA 2, ,066,987 NA 2, ,500,688 NA 2, ,144,152 NA 2,565 S25

198 Granville Exempted Village School District, Ohio Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years TABLE 12 Net Ratio of General General General General Bonded Debt Bonded Bonded Fiscal Bonded to Estimated Debt per Debt per Year Debt (1) Actual Value (2) Capita Enrollment ,238, ,105 16, ,138, ,011 15, ,818, ,347 14, ,958, ,426 14, ,782, ,275 13, ,070, ,482 12, ,699, ,376 12, ,325, ,347 12, ,270, ,420 12, ,939,868 NA 2,394 12,577 Source: Ohio Municipal Advisory Council (1) Represents Total Debt Outstanding from Table 12 less Capital Leases from Table 12 and Restricted Net Position from Table 1. (2) Represents Net General Bonded Debt outstanding at fiscal year-end divided by the estimated actual value in effect as of fiscal year-end. NA - Information Not Available S26

199 Granville Exempted Village School District Computation of Direct and Overlapping Debt Attributable to Governmental Activities June 30, 2014 TABLE 13 Debt Percentage Amount of Attributable to Applicable Direct and Governmental to School Overlapping Activities District (1) Debt Direct Debt Granville Exempted School District as of June 30, 2014 $ 33,144, % $ 33,144,152 Overlapping Debt: Payable from Property Taxes: Licking County 15,349, % 1,754,449 City of Heath 10,741, % 32,225 City of Newark 27,971, % 1,513,273 Village of Granville (as of 12/31/14) 685, % 685,931 Licking County Career Center 22,748, % 2,529,614 Total Overlapping Debt 77,497,061 6,515,492 Total Direct and Overlapping Debt $110,641,213 $39,659,644 Source: Licking County Auditor (1) Percentages were determined by dividing the assessed or actual valuation of the overlapping government located within the boundaries of the District by the total assessed or actual valuation of the overlapping government. The valuations used were for tax year S27

200 Granville Exempted Village School District Computation of Legal Debt Margin Last Ten Fiscal Years TABLE Assessed Valuation (1) $ 390,252,064 $ 402,475,823 $ 404,656,683 $ 413,123,390 $ 421,165,985 Debt Limit - 9% of Assessed Value (2) 35,122,686 36,222,824 36,419,101 37,181,105 37,904,939 Amount of Debt Applicable to Debt Limit 38,144,380 37,113,971 36,512,188 37,550,001 35,987,066 Less Amount Available in Debt Service 2,256,448 2,531,199 3,051,357 2,927,238 3,097,101 Net Indebtedness Subject to Limitation 35,887,932 34,582,772 33,460,831 34,622,763 32,889,965 Exemptions: Energy Conservation Notes ,000,000 1,829,000 Amount of Debt Subject to Limit 35,887,932 34,582,772 33,460,831 32,622,763 31,060,965 Legal Debt Margin (765,246) 1,640,052 2,958,270 4,558,342 6,843,974 Legal Debt Margin as a Percentage of the Debt Limit -2.18% 4.53% 8.12% 12.26% 18.06% Unvoted Debt Limit -.10% of Assessed Value (1) 390, , , , ,166 Applicable District Debt Outstanding Unvoted Legal Debt Margin $ 390,252 $ 402,476 $ 404,657 $ 413,123 $ 421,166 Unvoted Legal Debt Margin as a Percentage of the Unvoted Debt Limit % % % % % (), g g g general business tangible personal property tax as well as railroad and telephone tangible property. For fiscal year 2013, the tax year 2013 assessed valuation is not available, therefore, the tax year 2012 assessed valuation was used. (2) Ohio Bond Law sets a limit of 9% for overall debt and 1/10 of 1% for unvoted debt. p j compute the margin as specified by statute, i.e. the gross balances, not amounts that are net of premiums or discounts. S28

201 TABLE 14 (Continued) $ 423,422,150 $ 427,133,560 $ 423,961,918 $ 423,961,918 $ 428,084,952 38,107,994 38,442,020 38,156,573 38,156,573 38,527,646 34,665,105 33,442,632 33,066,987 33,500,688 33,144,152 3,461,113 3,278,411 2,521,647 2,585,596 2,552,009 31,203,992 30,164,221 30,545,340 30,915,092 30,592,143 1,652,123 1,469,166 1,280,060 1,084, ,842 29,551,869 28,695,055 29,265,280 29,830,776 29,710,301 8,556,125 9,746,965 8,891,293 8,325,797 8,817, % 25.35% 23.30% 21.82% 22.89% 423, , , , , $ 423,422 $ 427,134 $ 423,962 $ 423,962 $ 428, % % % % % S29

202 Granville Exempted Village School District Demographic and Economic Statistics Last Ten Years TABLE 15 ***Licking County Per Capita Fiscal District Personal Median District Unemployment Year Population (1) Income Income (2) Enrollment (3) Rate (4) ,670 $30,509 $58,094 2, % ,670 32,161 61,272 2, ,410 32,161 62,061 2, ,410 35,952 63,422 2, ,410 35,621 63,842 2, ,923 34,774 65,931 2, ,923 34,774 67,261 2, ,923 35,276 68,584 2, ,923 35,276 NA 2, ,923 NA NA 2, Sources: (1) from 2010 US Census; estimates - Ohio Municipal Advisory Council (2) Ohio Department of Taxation (3) District data (4) Bureau of Labor Statistics Website. All information as of June 30 of each fiscal year. ***Note: School District encompases the Village of Granville, part of the City of Newark and Heath, and several different townships. Per Capital income is not reported by the District. Information is only available by Licking County. S30

203 Granville Exempted Village School District Licking County Principal Employers Current Year and Eight Years Ago TABLE Percentage Number of of Total Employer Nature of Business Employees Employment Licking Memorial Hospital Health Care 1, % Englefield Oil Convenience Stores & Gas Stations 1, State Farm Insurance Insurance/Underwriting 1, Licking County Government Government Services 1, OSU Newark/C.O.T.C. Education 1, Denison University Education Newark City Schools Education Anomatic Corporation Anodizing Alumimum Process Mfg Park National Bank National Commercial Bank Owens Corning Corporation Glass Fiber Building Materials Total 9,951 Total Employment within the County 81, (1) Percentage Number of of Total Employer Nature of Activity Employees Employment Licking Memorial Hospital Health Care 1, % Licking County Government Government Services 1, Owens Corning Corporation Glass Fiber Building Materials 1, Newark City School District Education 1, O.S.U. - Newark/COTC Education 1, State Farm Insurance Insurance/Underwriting Wal*Mart Department/Grocery Store Anomatic Anodizing Aluminum Process Mfg Boeing Company Aerospace Industries Longaberger Specialty Basket and Pottery Mfg Total 9,211 Total Employment within the County 78,500 Source: Licking County Auditor, Licking County Chamber of Commerce and Bureau of Labor Statistics (1) Fiscal year 2005 information not available. S31

204 Granville Exempted Village School District School District Employees by Function/Program Last Ten Fiscal Years TABLE 17 Function/Program Regular Instruction Certified Employees Special Instruction Certified Employees Vocational Instruction Certified Employees Pupil Support Services Certified Employees Classified Employees Instructional Staff Classified Employees Certified Employees Administrators Administration Classified Employees Administrators Fiscal Classified Employees Administrators Pupil Transportation Classified Employees Administrators Totals Source: School District Payroll Records S32

205 Granville Exempted Village School District Per Pupil Cost Last Ten Fiscal Years TABLE 18 State Average State Pupil/ Pupil/ Fiscal General Fund Average Cost Percentage Teaching Teacher Teacher Year Expenditures Enrollment Per Pupil Change Staff Ratio Ratio ,029,132 2,159 8, % ,779,522 2,253 8, % ,253,222 2,334 9, % ,253,297 2,414 8, % ,431,100 2,454 9, % ,670,914 2,533 8, % ,605,540 2,543 9, % ,369,586 2,484 9, % ,702,222 2,482 9, % ,556,695 2,460 9, % Source: School District Records; Ohio Department of Education ilrc - cash basis reporting NA - Information not available S33

206 Granville Exempted Village School District Building Statistics Last Ten Fiscal Years TABLE Granville Elementary School Constructed in 1950, additions in 1952, 1957, 1970, 1997 and 2000, renovated in 2002 Total Building Square Footage 105, , , , ,000 Enrollment Grades K Student Functional Capacity Granville Intermediate School Constructed in 2002 Total Building Square Footage 84,549 84,549 84,549 84,549 84,549 Enrollment Grades Student Functional Capacity Granville Middle School Constructed in 1969, additions in 1993, 2003 Total Building Square Footage 71,655 71,655 71,655 71,655 71,655 Enrollment Grades 6-8 until 2002; 7-8 present Student Functional Capacity Granville High School Constructed in 1992, addition in , , , , ,231 Total Building Square Footage Enrollment Grades Student Functional Capacity District Administration Building Constructed in 1963, renovated in 1997 and 2002 Total Building Square Footage 15,000 15,000 15,000 15,000 15,000 District Transportation/Maintenance Building Constructed in 2003 Total Building Square Footage 2,500 2,500 2,500 2,500 2,500 Source: School District Records Student enrollment is based on the October count for each year. Student Capacity is based on State standards of needed square footage per child S34

207 TABLE 19 (Continued) , , , , , ,549 84,549 84,549 84,549 84, ,655 71,655 71,655 71,655 71, , , , , , ,000 15,000 15,000 15,000 15,000 2,500 2,500 2,500 2,500 2,500 S35

208 Granville Exempted Village School District Full-Time Equivalent Teachers by Education Last Ten Fiscal Years TABLE 20 Degree Bachelor's Degree Bachelor + (150 hours) Master's Degree Master's Master's Total Source: School District Personnel Records S36

209 Granville Exempted Village School District Teachers' Salaries Last Ten Fiscal Years TABLE 21 Average Average Salary Salary Average Fiscal Minimum Maximum Granville Comparable Salary Year Salary (1) Salary (2) Exempted Districts (3) Statewide (3) ,567 67,876 50,752 49,312 49, ,424 69,774 49,037 56,101 51, ,307 71,730 48,973 58,453 52, ,368 74,080 55,273 61,071 54, ,466 76,512 56,545 61,078 54, ,466 76,512 58,070 62,278 55, ,115 77,950 59,809 63,003 56, ,777 79,603 62,416 64,438 58, ,777 79,603 60,225 64,162 57, ,115 80,399 59,067 NA 55,916 Sources: School District Financial Records and the Ohio Department of Education. (1) Starting teacher with no experience - per negotiated agreement. (2) Teacher with a Masters degree and more than 30 year's experience - per negotiated agreement. (3) Provided by the Ohio Department of Education. NA - Information not available. Note: Amounts do not include additional salary steps based on experience or academic credentials, nor fringe benefits such as pension, health insurance, disability, and so on. S37

210 Granville Exempted Village School District Enrollment Statistics Last Ten Fiscal Years TABLE 22 Fiscal Elementary Intermediate Middle High Year School School School School Total , , , , , , , , , ,460 Source: School District Records S38

211 Granville Exempted Village School District Educational Operating Indicators Last Ten School Years TABLE 23 Fiscal Year 2014 Granville Similar State Exempted Districts Average rd Grade Achievement Test Mathematics 92.2% 93.6% 79.7% 91.1% 94.9% 82.0% 89.7% 94.6% 92.9% 95.9% 92.4% 86.5% Reading 89.8% 94.7% 81.0% 93.3% 95.5% 79.9% 95.7% 97.0% 92.3% 94.3% 93.6% 91.7% 4th Grade Proficiency/Achievement Test Citizenship NA NA NA NA NA NA NA NA NA NA NA 83.2% Mathematics 87.4% 93.4% 78.3% 96.3% 91.5% 78.1% 90.3% 92.9% 94.4% 89.2% 91.6% 75.7% Reading 94.0% 96.7% 85.7% 97.9% 95.6% 83.8% 95.7% 94.9% 94.4% 93.5% 90.7% 89.6% Science NA NA NA NA NA NA NA NA NA NA NA 75.1% Writing NA NA NA NA NA NA NA 94.4% 92.3% 90.9% 94.6% 89.0% 5th Grade Achievement Test Mathematics 91.4% 87.8% 67.5% 90.0% 89.3% 66.1% 83.1% 89.5% 89.2% 88.8% 86.6% NA Reading 93.8% 89.7% 71.9% 89.4% 92.1% 74.1% 87.2% 96.0% 93.8% 95.3% 91.6% 96.1% Science 91.7% 87.8% 69.1% 88.0% 92.5% 71.1% 91.1% 95.5% 95.9% 93.0% NA NA Social Studies NA NA NA NA NA NA NA 89.4% 90.7% 84.1% NA NA 6th Grade Proficiency/Achievement Test Citizenship NA NA NA NA NA NA NA NA NA NA NA 91.4% Mathematics 93.5% 92.6% 76.4% 93.2% 94.4% 77.5% 92.8% 94.6% 95.0% 88.8% 87.3% 89.4% Reading 96.7% 95.4% 84.1% 97.9% 98.1% 85.6% 95.7% 97.5% 97.3% 92.4% 95.8% 88.3% Science NA NA NA NA NA NA NA NA NA NA NA 93.1% Writing NA NA NA NA NA NA NA NA NA NA NA 98.4% 7th Grade Achievement Test Mathematics 95.4% 91.1% 72.9% 92.6% 90.4% 74.8% 95.7% 95.2% 90.3% 92.2% 91.1% 89.7% Reading 97.4% 95.6% 83.5% 96.9% 93.3% 77.3% 95.1% 94.6% 90.7% 92.8% 96.4% NA Writing NA NA NA NA NA NA NA 95.5% 97.4% 92.2% NA NA 8th Grade Achievement Test Mathematics 95.5% 94.7% 79.8% 93.8% 96.0% 74.3% 87.0% 92.1% 91.8% 87.1% 90.6% 78.6% Reading 97.4% 96.5% 86.7% 94.8% 93.8% 85.1% 96.5% 92.9% 94.8% 96.0% 93.9% 90.7% Science 92.1% 89.5% 67.6% 80.8% 89.4% 67.4% 90.0% 80.6% 83.6% 89.6% NA NA Social Studies NA NA NA NA NA NA NA 81.2% 80.7% 78.5% NA NA 10th Grade Ohio Graduation Test Mathematics 96.7% 95.4% 81.6% 98.5% 97.8% 82.6% 95.5% 95.5% 95.4% 95.2% 97.3% 96.8% Reading 98.1% 97.2% 88.5% 99.0% 99.1% 87.2% 96.8% 96.8% 96.4% 95.7% 98.6% 99.4% Science 94.3% 93.9% 76.7% 97.5% 96.9% 74.7% 92.8% 92.8% 90.2% 85.5% 92.6% 94.2% Social Studies 94.8% 95.3% 82.3% 98.0% 96.9% 80.1% 95.0% 95.0% 90.7% 91.4% 97.3% 98.1% Writing 96.7% 96.6% 87.3% 98.5% 98.7% 89.5% 95.9% 95.9% 98.5% 94.6% 98.0% 100.0% 11th Grade Ohio Graduation Test (OGT) 1 Mathematics 99.1% 98.4% 89.6% 100.0% 99.0% 89.1% 93.6% 98.4% 97.8% 98.7% 99.3% NA Reading 99.5% 98.9% 93.0% 99.6% 98.4% 92.4% 95.7% 98.9% 97.8% 99.3% 100.0% NA Science 99.0% 97.7% 85.8% 99.1% 99.0% 84.2% 93.0% 95.1% 95.1% 98.0% 99.3% NA Social Studies 98.5% 98.1% 88.8% 99.6% 98.4% 88.0% 96.3% 97.8% 95.7% 99.3% 99.3% NA Writing 100.0% 98.7% 91.2% 99.6% 100.0% 93.4% 98.9% 98.9% 98.4% 99.3% 100.0% NA Student Attendance Rate 96.1% NR NR 96.0% 96.0% 94.5% 95.7% 96.1% 95.9% 96.4% 96.0% 96.2% Student Graduation Rate 96.5% 97.1% 82.4% 99.5% 99.5% 84.3% 98.9% 99.4% 98.7% 97.3% 96.4% 100.0% Student Enrollment Results for 11th grade students who took the test as 10th and 11th graders. ACT Scores (Average) Granville Exempted 25.3 Ohio 22.0 National 21.1 SAT Scores (Average) 1,653 Reading (Verbal) Granville Exempted 552 Mathematics Granville Exempted 564 Writing (initiated 2006) Granville Exempted 537 Source: District Records, Ohio Department of Education Local Report Card, & The College Board NA - Information Not Available S39

212 Granville Exempted Village School District Capital Asset Statistics Last Ten Fiscal Years TABLE Nondepreciable Capital Assets Land $1,465,969 $1,465,969 $1,465,969 $1,465,969 $1,465,969 Construction in Progress - 298, ,640 - Total Nondepreciable Capital Assets 1,465,969 1,764,194 1,465,969 1,782,609 1,465,969 Depreciable Capital Assets Land Improvements 1,115,300 1,238,894 1,156,883 1,074,309 1,015,172 Buildings and Buildings Improvements 35,069,240 34,185,741 33,260,075 32,338,138 33,677,910 Furniture, Fixtures & Equipment 690, , , , ,432 Vehicles 677, , ,219 1,023, ,517 Total Depreciable Capital Assets 37,551,834 36,978,991 36,002,914 34,890,665 36,074,031 Total Capital Assets, Net $39,017,803 $38,743,185 $37,468,883 $36,673,274 $37,540,000 Source: School District Financial Records Depreciable capital assets are presented net of accumulated depreciation. S40

213 TABLE 24 (Continued) $1,465,969 $1,465,969 $1,465,969 $1,465,969 $1,465,969 5,834 7, ,471,803 1,473,269 1,465,969 1,465,969 1,465,969 1,159,119 1,171,289 1,279,862 1,189,812 1,099,762 32,768,073 31,696,542 30,592,142 29,413,336 28,235, , , , ,152 1,033, , , , , ,564 35,365,028 34,644,415 33,515,784 32,163,989 31,082,297 $36,836,831 $36,117,684 $34,981,753 $33,629,958 $32,548,266 S41

214

215 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT LICKING COUNTY CLERK S CERTIFICATION This is a true and correct copy of the report which is required to be filed in the Office of the Auditor of State pursuant to Section , Revised Code, and which is filed in Columbus, Ohio. CLERK OF THE BUREAU CERTIFIED JANUARY 6, East Broad Street, Fourth Floor, Columbus, Ohio Phone: or Fax:

216 THIS PAGE INTENTIONALLY LEFT BLANK

217 APPENDIX C FIVE-YEAR PROJECTION OF REVENUES AND EXPENDITURES Granville Exempted Village School District Licking County, Ohio Following is a summary of a five-year financial projection prepared by the Treasurer of the School District through June 30, 2019, in compliance with Revised Code Section (see discussion in Appendix A under FINANCES OF THE SCHOOL DISTRICT Five-Year Projection ). The projection is based upon certain assumptions required to be made in accordance with rules promulgated by the Department, including the assumption that no revenues from future voter-approved tax levies will be available. A complete version of the projection may be obtained from the Treasurer s office or from the Department. Readers of this Official Statement are cautioned that actual circumstances may differ from the assumptions required to be used in preparation of this projection. As a result, the actual future financial situation of the School District may be materially different from that stated in this projection, and investors are cautioned not to place undue reliance on such forward-looking statements. C-1

218 Granville Five Year Forecast for Fiscal Year 2015 District Type: Exempted Village IRN: County: Licking Date Submitted: 10/21/2014 Date Processed: 5/23/2014 Actual Forecasted Line Revenue: General Property (Real Estate) $14,203,080 $14,098,908 $15,834,758 $16,729,034 $16,996,502 $17,324,778 $17,645,209 $17,599, Tangible Personal Property Tax 614, , , , , , , , Unrestricted Grants in Aid 5,140,918 5,233,469 5,808,902 6,312,697 6,057,861 6,121,195 6,256,373 6,284, Restricted Grants in Aid 30,910 28,345 7,406 38,421 27,725 27,791 27,841 27, Restricted Federal Grants in Aid SFSF 31, Property Tax Allocation 2,239,310 1,920,120 1,970,569 2,012,250 2,033,395 2,052,637 2,077,111 2,107, All Other Operating Revenue 318, , , , , , , , Revenue $22,579,152 $22,535,937 $24,996,259 $26,425,516 $26,327,093 $26,766,979 $27,276,513 $27,316,792 Other Financing Sources Operating Transfers In $ $ $ $ 25,000 $ $ $ $ All Other Financial Sources 98,897 48,507 69,259 64,270 3,200 3,200 3,200 3, Total Other Financing Sources 98,897 48,507 69,259 89,270 3,200 3,200 3,200 3, Total Revenues and Other Financing Sources $22,678,049 $22,584,444 $25,065,518 $26,514,786 $26,330,293 $26,770,179 $27,279,713 $27,319,992 Expenditures: Personnel Services $13,938,630 $13,119,582 $13,136,260 $13,654,809 $14,014,951 $14,411,529 $14,881,105 $15,344, Employees' Retirement/Insurance Benefits 5,872,223 5,253,370 5,708,130 5,959,943 6,592,996 7,123,089 7,718,614 8,373, Purchased Services 2,978,209 3,119,581 3,254,293 3,400,972 3,538,950 3,653,414 3,741,837 3,853, Supplies and Materials 823, , , , , , , , Capital Outlay 40,210 45,484 63,490 63,490 63,490 63,490 63,490 63, Debt Service: All Principal (Historical) 189, , , Debt Service: Principal HB 264 Loans 239, , , , Debt Service: Interest and Fiscal Charges 50, Other Objects 270, , , , , , , , Expenditures $24,163,083 $22,982,258 $23,620,871 $24,589,903 $25,745,249 $26,809,731 $27,987,180 $29,002,831 Other Financing Uses Operational Transfers Out $ 401,243 $ $ 239,740 $ 259,308 $ 25,000 $ 25,000 $ 25,000 $ 25, All Other Financing Uses 44,600 8,989 45,387 25,000 50,000 50,000 50,000 50, Total Other Financing Uses 445,843 8, , ,308 75,000 75,000 75,000 75, Total Expenditures and Other Financing Uses 24,608,926 22,991,247 23,905,998 24,874,211 25,820,249 26,884,731 28,062,180 29,077, Excess Total Revenue $ (1,930,877) $ (406,803) $ 1,159,520 $ 1,640,575 $ 510,044 $ (114,552) $ (782,467) $ (1,757,839) Beginning Cash Balance $ 3,914,501 $ 1,983,624 $ 1,576,821 $ 2,736,341 $ 4,376,916 $ 4,886,960 $ 4,772,408 $ 3,989, Ending Cash Balance $ 1,983,624 $ 1,576,821 $ 2,736,341 $ 4,376,916 $ 4,886,960 $ 4,772,408 $ 3,989,941 $ 2,232, Outstanding Encumbrances $ 94,835 $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 100, Fund Balance June 30 for Certification of Appropriations $ 1,888,789 $ 1,476,821 $ 2,636,341 $ 4,276,916 $ 4,786,960 $ 4,672,408 $ 3,889,941 $ 2,132, Fund Bal June 30 for Cert of Contracts,Salary Sched,Oth Obligations $ 1,888,789 $ 1,476,821 $ 2,636,341 $ 4,276,916 $ 4,786,960 $ 4,672,408 $ 3,889,941 $ 2,132, Unreserved Fund Balance June 30 $ 1,888,789 $ 1,476,821 $ 2,636,341 $ 4,276,916 $ 4,786,960 $ 4,672,408 $ 3,889,941 $ 2,132,102 C-2

219 Granville Exempted Village Schools Five Year Forecast Assumptions October 2014 This forecast includes the General Fund and the HB264 Debt Payment Fund. OVERVIEW: During fiscal year 2014, the district successfully passed a new 5.5 mill continuing operating levy, renewed a five-year, 1.7 mill permanent improvement levy, and negotiated a three-year contract with all bargaining unit staff members. Accomplishing these three things places the district on solid economic footing through the five-year forecast period. In the first two years of the forecast, revenues continue to outpace expenditures. In the third year, revenues and expenditures are about in balance. The final two years reverse that, but the district is expected to finish the five-year period with a fund balance in excess of $2.2 million. The district administration remains committed to controlling spending to address the net operating deficits in fiscal years 2018 and 2019 and keep annual expenses and revenues balanced for as long as possible. Revenue, Expenditures and Cash Balance $35,000,000 Revenue, Levies, Expenditures and Cash Balance $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $ Actual 2013Actual 2014Actual 2015Proj. 2016Proj. 2017Proj. 2018Proj. 2019Proj. Total Revenue Replace/Renew Levies New Levies Total Expenditures Cash Balance PROJECTED Total Revenue $26,514,786 $26,330,293 $26,770,179 $27,279,713 $27,319,992 Replace/Renew Levies $0 $0 $0 $0 $0 New Levies $0 $0 $0 $0 $0 Total Expenditures $24,874,211 $25,820,249 $26,884,731 $28,062,180 $29,077,831 Revenue Over/(Under) Expenditures $1,640,575 $510,045 ($114,551) ($782,467) ($1,757,839) Cash Balance $4,376,916 $4,886,961 $4,772,410 $3,989,943 $2,232,104 C-3

220 ENROLLMENT: Over the last four years, enrollment in the district has been declining. The primary cause of the decline is that kindergarten classes entering the district have been significantly smaller than the senior classes that exited the year before. Beginning next year, with anticipated larger kindergarten classes and a pick- up in residential development, enrollment is expected to stabilize over the remainder of the forecast period around the 2,400 student level, which is down nearly seven percent from the peak enrollment in the 2009/2010 school year. Head Count Summary/Analysis GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT Prior Year Actual/Estimated Enrollment (October Count) 2,460 2,402 2,407 2,409 2,413 Projected Changes to Prior Year Enrollment Net All Grade Level Mobility Factor (Change) to Prior Year Net Aggregate Manual Adjustments to Mobility Factor New Kindergartners In Loss of Seniors from Prior Year Net Change in Outgoing and Incoming Pupils Current Year Estimated Enrollment (Simulated October Count) 2,402 2,407 2,409 2,413 2,398 District Head Count Grade K Total Can Differ by Rounding 2,402 2,407 2,409 2,413 2,398 Year Over Year Percentage Change 2.36% 0.21% 0.08% 0.17% 0.62% 3,000 Historic vs. Projected Enrollment 2,500 2,000 2,574 2,460 2, ,398 2, ,036 2,103 2,235 2,334 2,411 2,494 2,510 2,574 2,542 2, P 2016 P 2017 P 2018 P 2019 P 2,482 2,460 2,402 2,407 2,409 2,413 2,398 1,500 1, P 2016 P 2017 P 2018 P 2019 P C-4

221 REVENUE: Overview Total revenues are expected to grow at an average annual rate of 1.8 percent over the forecast period. Most of the growth occurs in the first year due to the passage of the operating levy and increases in state aid under the new school funding formula. Over the final four years of the forecast, the average annual growth rate is just 0.8 percent. Sources of Revenue and Annual Changes 2009 Personal 2018 Real Estate 60% Property 2% Income Real Estate 65% Tax 0% Personal Property 3% All Other Revenue 3% Property Tax Allocation 7% State Foundation & Restricted 28% All Other Revenue 1% Property Tax Allocation 8% Income Tax State Foundation & 0% Restricted 23% Previous PROJECTED Projected 5 Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year 5 Year Average Average Annual % Annual % Real Estate 5.80% 5.65% 1.60% 1.93% 1.85% 0.26% 2.15% Personal Property 10.27% 9.93% 3.50% 3.50% 3.50% 3.50% 4.79% Income Tax 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% State Foundation & State Restricted 0.20% 9.19% 4.18% 1.04% 2.20% 0.45% 1.74% Prop Tax Allocation 7.12% 2.12% 1.05% 0.95% 1.19% 1.44% 1.35% All Other Revenue 3.57% 18.02% 28.70% 0.11% 0.27% 1.16% 9.65% Total Oper. Revenue 4.37% 5.72% 0.37% 1.67% 1.90% 0.15% 1.81% C-5

222 1.01 Real Estate Revenue Real Estate Revenue is dependent upon valuations, tax rates, and collection (rate) performance by local taxpayers % of Total Real Estate Re13.84% of Total Real Estate Revenue Effective Effective Gross Real Property Year Over Year ResidentialYear Over Yea Business Year Over Yea Collection Tax Year Valuation Change Tax Rate Change Tax Rate Change Rate ,272,420 12,567,570 All Taxes ,701,940 2,429, ,925,640 3,223, (0.44) 96.2% Actual ,547,562 (3,378,078) % Actual ,363,492 2,815, % Actual ,996,508 12,633, (0.54) (0.51) 98.3% Projected ,162,554 3,166, % Projected ,031,050 6,868, % Projected ,765,219 21,734, (1.45) (2.02) 97.4% Projected ,158,416 4,393, % Projected Note: Tax Rates Include Existing Renewal Levies Included as Renewed, No New Levies Included Real Estate Revenue $11,975,014 $13,418,681 $14,203,080 $14,098,908 $15,834,758 $16,729,034 $16,996,502 $17,324,778 $17,645,209 $17,599, In Perspective: Real estate revenues jumped in FY 2014 and 2015 because of the passage of the new operating levy in November In addition, during FY 2014, the district received delinquency payments that were $375,000 above normal levels. Valuation is expected to increase $12.6 million in tax year 2014 (taxes due in 2015). Most of this growth is being driven by increases in Current Agricultural Use Values as part of the Licking County triennial update and by the ending of the Kendal TIF at the end of 2013, making that property subject to taxation beginning in Most of the growth in 2016 is driven by the expected completion of the senior living facility at S. Cherry and Weaver road and expected completion of apartment units off River Road. The growth in 2017 is due to expected increases during the sexenial reappraisal. C-6

223 1.02 Personal Tangible Revenue Public Utility Personal Property Tax Year Tax Rate Valuation $9,721,460 $10,061,711 $10,413,871 $10,778,356 $11,155,599 $11,546,045 Public Utility PP Revenue $616,242 $680,990 $614,410 $658,515 $737,670 $810,934 $839,317 $868,693 $899,097 $930, In Perspective: Over the past six years, Public Utility Property values have grown at an average annual rate of 6.7 percent. The forecast continues growth each year, but a slower rate of growth. Although not a major taxpayer in the district, Columbia Gas has challenged its taxable value in various parts of the state and has paid taxes during 2014 only for the undisputed portion of its tax bill. This has resulted in a reduction of revenue in the district of about $14,000, or about two percent of total Public Utility revenue. C-7

224 1.035 Unrestricted State Funding Foundation and Restricted State Funding Funded Enrollment 2,406 2,403 2,405 2,409 2,394 Valuation Per Pupil $170,531 $170,531 $176,898 $176,898 $182,463 Per Pupil Core Funding $5,800 $5,858 $5,917 $5,976 $6,036 State's Share 34.3% 31.6% 31.6% 32.1% 32.1% Net Per Pupil (State Share) $1,991 $1,854 $1,872 $1,917 $1, Core Foundation Funding $5,550,858 $6,095,277 $5,851,404 $5,914,624 $6,049,646 $6,078,837 All Other State Funding $258,044 $217,419 $206,457 $206,571 $206,727 $205,951 Restricted State Funding $7,406 $38,421 $27,725 $27,791 $27,841 $27,902 Foundation and Restricted State Funding $5,910,033 $5,852,294 $5,203,646 $5,261,814 $5,816,308 $6,351,117 $6,085,587 $6,148,986 $6,284,215 $6,312, In Perspective: State aid through the new state funding formula is rising sharply in fiscal year In 2016, aid is expected to retreat from the peak in The reason for the drop off beginning in 2016 is the expected decline in the district's State Share Index. This decline is expected to occur because of projected declines in district enrollment that are faster than statewide enrollment drops and increases in property valuations at the same time as statewide valuations are expected to decline. Both of these trends make the district wealthier under the state funding formula, decreasing aid from the state. Casino tax revenues are also included in this line item. In 2014, the district received about $129,000 in casino tax distributions. This amount is expected to decline slightly each year of the forecast Restricted Aid Restricted aid is comprised of small amounts of career technical assistance, economic disadvantaged aid, and catastrophic cost allocations to cover special education costs. The amounts in the forecast are shown in the table above in the Unrestricted Aid section payments are artificially high because the state did not make payment of FY 2014 Catastrophic Aid Special Education allocations until July, causing those to fall into the current year. We are anticipating FY 2015 payments to be made late this fiscal year. C-8

225 1.05 Property Tax Allocation Property Tax Allocation Reimbursement for: Tangible Pers. Fixed Rate $0 $0 $0 $0 $0 $0 Tangible Pers Fixed Sum (Emerg.) $0 $0 $0 $0 $0 $0 Reimbursement for Rollback and Homestead Real Estate $1,970,569 $2,012,250 $2,033,395 $2,052,637 $2,077,111 $2,107,050 Property Tax Allocation Revenue $2,991,825 $2,505,494 $2,239,310 $1,920,120 $1,970,569 $2,012,250 $2,033,395 $2,052,637 $2,077,111 $2,107, In Perspective: Property tax allocation is expected to remain stable through the forecast period. There are slight increases each year moving in concert with residential new contruction. There was not a jump that normally would have occurred in 2014 from the passage of the new levy. Because of changes in state law, new levies enacted beginning last November do not qualify for the 10 percent and 2.5 percent rollbacks. As a result, the district's current effective rate on the 10 percent rollback is 8.68 percent. C-9

226 1.06 Other Revenue All Other Revenue Total $596,580 $636,954 $522,181 $372,293 $371,886 $370,882 $366,573 Other Revenue $624,064 $361,673 $318,706 $596,580 $636,954 $522,181 $372,293 $371,886 $370,882 $366, In Perspective: The largest component of other revenue over the last few years has been the payments in lieu of taxes received by the district as a result of the Kendal Tax Increment Financing (TIF) project. The TIF project ended at the end of 2013, so calendar year 2014 was the last time the district received these payments. Thie elimination of the payments is driving the sharp declines in other revenue in 2015 and In fiscal year 2015, the district received the final half year payment. Moving forward, the previously exempt value at Kendal will be included in taxable property yielding additional revenue through the real estate tax. In future years, most of the other revenue will come from kindergarten tuition and other academic and activity fees Other Financing Sources This category is used sparingly and only when other revenue categories do not appropriately capture the essence of a transaction. In FY 2014, the district received almost $35,000 as a worker s compensation premium rebate, a $10,000 SERS overpayment rebate, an $11,000 rebate from excess deductions by the state for community school costs in FY 2013, and a $3,200 gas tax rebate from the state. In FY 2015, the district is receiving a $36,000 worker s compensation rebate, a SERS rebate and reimbursements from the state of about $24,000 and a $3,200 gas tax rebate. Going forward, the only expected ongoing revenue is the gas tax rebate from the state. C-10

227 EXPENDITURES: Overview Expenditures are expected to grow at an annual rate of about 4.2 percent over the forecast period. The largest driver of the expenditure increases is health insurance costs. Despite benefit design changes that increased costs to employees that were included in the recent contract with the Granville Education Association, costs are still expected to grow by double digit amounts in 2016 and beyond because of anticipated utilization rates and market trends. Types of Expenditures and Annual Change Benef its 22% Benef its 29% Salaries 56% Purch Serv 14% Salaries 53% Purch Serv 13% Other Exp 3% Capital Outlay 1% Supp & Mat 4% Other Exp 1% Capital Outlay 0% Supp & Mat 4% Previous Projected Projected 5 Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year 5 Year Average Average Annual % Annual % Salaries 1.06% 3.95% 2.64% 2.83% 3.26% 3.11% 3.16% Benefits & Retirement 2.76% 4.41% 10.62% 8.04% 8.36% 8.49% 7.98% Purchased Services 1.24% 4.51% 4.06% 3.23% 2.42% 3.00% 3.44% Supplies and Materials 0.31% 9.21% 2.29% 1.76% 1.78% 1.79% 3.36% Capital Outlay 14.28% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Debt and Intergov. Pmts 0.00% 0.00% 0.00% 0.00% 0.00% 39.74% 7.95% All Other Exp. 6.76% 6.95% 0.88% 1.91% 1.92% 1.89% 0.07% Operating Expenditures 1.09% 4.10% 4.70% 4.13% 4.39% 3.63% 4.19% C-11

228 3.01 Personal Services Salaries Total $13,938,630 $13,119,582 $13,136,260 $13,654,809 $14,014,951 $14,411,529 $14,881,105 $15,344,618 Annual Dollar Increase $819,048 $16,678 $518,549 $360,142 $396,578 $469,575 $463,513 Annual Percent Growth 5.88% 0.13% 3.95% 2.64% 2.83% 3.26% 3.11% Salaries Year Over Year Percentage (%) Change 6.0% 4.0% 2.0% 0.0% 2.0% 4.0% 6.0% 8.0% Year over Year Expenditure Variance Actual 5 Year Average Projected 5 Year Average History Enrollment Change Compared to Staffing Change Student Employee ADM % Change FTE % Change , , % % , % % , % % , % % , % % Earlier this year, the district finalized a three year agreement with the Granville Education Association that included two percent base increases in each year of the contract. This comes on the heels of a twoyear contract that included no base increase in 2012/13 and a one percent base increase in 2013/14. Staff also did not receive step increases in 2012/13. Step increases will be granted each year of the new contract. Staffing levels are expected to be stable as the loss in students we have been experiencing is expected to end after the current year. C-12

229 3.02 Benefits Benefits Health Insurance $ Chg $436,975 $187,646 $580,963 $463,725 $516,942 $577,775 Health Insurance % Chg 15.7% 5.8% 17.0% 11.6% 11.6% 11.6% Health Insurance $2,791,589 $3,228,564 $3,416,210 $3,997,174 $4,460,899 $4,977,842 $5,555,617 All Other Benefits $2,461,781 $2,479,566 $2,543,733 $2,595,823 $2,662,190 $2,740,772 $2,818,341 Total $5,253,370 $5,708,130 $5,959,943 $6,592,996 $7,123,089 $7,718,614 $8,373,958 Benefits Year Over Year Percentage (%) Change 15.0% 10.0% 5.0% 0.0% 5.0% 10.0% 15.0% Year over Year Expenditure Variance Actual 5 Year Average Projected 5 Year Average Per Pupil Fringe Benefit Expenditures for General Fund $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 2,009 2,016 2,193 2,364 2,117 2,320 2,481 2,739 2,957 3,199 3, In Perspective: For the 2014/2015 school year, health care rates increase by just 7.5 percent because of savings realized in negotiations. In 2015/16, health insurance premiums are expected to increase 18 percent because of utilization rates. Growth rates in 2017 and beyond are assumed at 12 percent, the current market trend rate. Dental and vision costs are expected to have modest increases through the forecast period. All other benefits are directly tied to changes in wages and salaries. C-13

230 3.03 Purchased Services Purchased services include utilities, contractual agreements, professional development, tuition charges related to charter and community schools, special education services, property insurance, and other contractual expenses. A number of these expenses, which are primarily outside the control of the district, are expected to continue to rise through the forecast period. On average, these costs are expected to grow by an average of about 3.7 percent per year through the forecast period Materials/ Supplies/Textbooks Educational supplies, including fee based supplies, standardized testing materials, maintenance supplies, transportation supplies, and fuel are included in this line item. After bumps in this line item in both 2014 and 2015, annual growth rates are in line with inflation. The jump in 2015 is because of testing costs. In prior years, about $35,000 of these costs were paid through two Race to the Top grants. Those grants are not available beginning in Capital Outlay Minimal resources are allocated for capital needs due to the 1.7 mill permanent improvement levy and the 0.5 mill maintenance levy, which provide the district with dedicated revenue to purchase textbooks and maintain, improve and equip the district in a sufficient manner. The district is also utilizing designated funds from the Newark-Granville Community special assessment to address capital needs & 4.06 Principal and Interest HB264 Energy Project Payment of the principal and interest for the HB year, two million dollar energy improvement loan which is being repaid through the Debt Service Fund, is required to be reflected in the forecast Other Objects Auditor/Treasurer fees, State Auditor fees, services provided by the Educational Service Centers, and fixed expenses are the main components of this line item. Auditor/Treasurer fees are a percentage of taxes received and increase as tax revenue increases. Expenditures in this line item are expected to grow modestly through the forecast period, primarily because of tax collection fees which are a percentage of revenue Operating Transfers Out In 2015, the district is planning to do transfers out of $234,000. Of the $234,000, about $100,000 will go to the food service fund. That fund operates on a cost neutral basis for its contract with an outside food vendor (AVI). However, each year, there are costs outside the AVI contract that are not covered by revenue from the food service operations. Historically, those costs were covered by the district holding food service bills from one year until revenue is collected from operations in the next year. To end this practice, a one-time transfer of about $75,000 was made to bring the overall food service account current. Ongoing payments of about $25,000 per year are anticipated to cover costs for Pay-for-It fees and other operating costs outside the contract with AVI that are not covered by food charges. The remainder of the $234,000 will go to the permanent improvement (PI) fund. Even with passage of the PI renewal, demands on that revenue are greater than the revenue available. The transferred money will be used on one-time capital projects. Those projects include repairing dormers in the high school that are current causing leaking into the Industrial Technology room; installing security cameras at the intermediate C-14

231 school, middle, and high schools; replacing all AEDs in the district; and running fiber optic cable from the elementary school to the high school (this will greatly expand capacity in the district and pay for itself within 2.5 years through savings on renting of bandwidth currently) Reservations of Fund Balance All school districts are required to set-aside three percent of revenue to be spent or set aside for capital improvements. As the district has sufficient capital resources through the permanent improvement fund, the district will not need to place any into a set-aside account. We will continue to monitor the district s set-aside responsibilities to insure compliance in this area. Certification of Adequate Revenues Rules (Rule ) prescribe the events for which a District must certify availability of revenue pursuant to Ohio Revised Code Section , which include, among others: 1. Negotiated agreements; 2. Appropriations; 3. Contracts for benefits; such as health insurance; 4. Increase salary or wage schedules; 5. Construction contracts. C-15

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233 APPENDIX D FORM OF APPROVING LEGAL OPINION OF BRICKER & ECKLER LLP Fifth Third Securities, Inc. Columbus, Ohio We have acted as bond counsel to the Granville Exempted Village School District, Licking County, Ohio (the School District ) in connection with the issuance by the School District of its $23,615,000 Refunding Bonds, Series 2015, dated September 3, 2015 (the Bonds ). In such capacity, we have examined such law and such certified proceedings, certifications and other documents as we have deemed necessary to render this opinion. Regarding questions of fact material to our opinion, we have relied on the certified proceedings and other certifications of public officials and others furnished to us without undertaking to verify the same by independent investigation. Based upon the foregoing, we are of the opinion that, under existing law: 1. The Bonds have been duly authorized and executed by the School District, and are valid and binding general obligations of the School District. 2. The Bonds are secured by the pledge of the full faith and credit of the School District for the payment thereof and by the pledge of the School District to levy ad valorem taxes outside the ten mill limitation of Article XII, Section 2 of the Constitution of the State of Ohio, upon all property on the general tax lists and duplicates of the School District, in an amount sufficient to pay the principal of and interest on the Bonds when due, which taxes are unlimited as to rate and amount. 3. The interest on the Bonds is excludable from gross income for federal income tax purposes under Section 103(a) of the Internal Revenue Code of 1986, as amended (the Code ), and is not treated as an item of tax preference under Section 57 of the Code for purposes of the alternative minimum tax imposed on individuals and corporations; it should be noted, however, that for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings. The opinion set forth in the preceding sentence is 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, and continue to be, excludable from gross income for federal income tax purposes. The School District has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds. D-1

234 4. Interest on the Bonds, the transfer thereof, and any profit made on their sale, exchange or other disposition, are exempt from the Ohio personal income tax, the Ohio commercial activity tax, the net income base of the Ohio corporate franchise tax, and municipal, school district, and joint economic development district income taxes in Ohio. Although we have participated in the preparation of portions of the Official Statement, dated April 21, 2015 (the Official Statement ), relating to the Bonds, we have not been engaged to review the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds (except to the extent, if any, stated in the Official Statement) and we express no opinion and make no representation relating thereto (excepting only the matters set forth as our opinion in the Official Statement). Further, we express no opinion regarding tax consequences arising with respect to the Bonds other than as expressly set forth herein. Please be advised that the rights of the holders of the Bonds and the enforceability thereof are limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors rights generally, and by equitable principles, whether considered at law or in equity. This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur. We bring to your attention the fact that our legal opinions are an expression of our professional judgment and are not a guarantee of a result. D-2

235 APPENDIX E $23,615,000 Granville Exempted Village School District Licking County, Ohio Refunding Bonds, Series 2015 (General Obligation Unlimited Tax) SAMPLE CLOSING CERTIFICATE To Fifth Third Securities, Inc.: It is my understanding that, in considering whether to purchase the above-captioned obligations, you have relied on the Official Statement for such obligations dated April 28, 2015 (the Official Statement ), which Official Statement was prepared and executed by and for the Granville Exempted Village School District, Licking County, Ohio (the School District ) under the direction of the Board of Education of the School District. In connection with your reliance as stated above, I hereby certify that: 1. I have reviewed the Official Statement and have made such investigation and inquiries as I deemed necessary in the circumstances; 2. The statements and information contained in the Official Statement are correct and complete in all material respects, and they do not omit any statement or information necessary in order to make the statements and information therein, in light of the circumstances under which they were made, not misleading or incomplete in any material respect; and 3. To the best of my knowledge, since the date of the Official Statement, nothing has occurred which has caused, or which might reasonably be expected to cause, a material adverse change in the condition or prospects of the School District. Date: September 3, 2015 Treasurer, Board of Education Granville Exempted Village School District Licking County, Ohio E-1

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237 APPENDIX F $23,615,000 Granville Exempted Village School District Licking County, Ohio Refunding Bonds, Series 2015 (General Obligation Unlimited Tax) SAMPLE CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the Disclosure Certificate ) is executed and delivered by the Treasurer of the Granville Exempted Village School District, Licking County, Ohio (the School District ) pursuant to the resolution of the Board of Education of the School District authorizing the issuance and sale of the above-captioned obligations (the Obligations ). The School District covenants and agrees as follows: Section 1. Definitions. The following capitalized terms shall have the following meanings: Annual Report means any annual report provided by the School District referred to in the Official Statement and any appendix thereto. EMMA shall mean the Electronic Municipal Market Access system of the MSRB for use in the collection and dissemination of information, which system the Securities and Exchange Commission has stated to be consistent with its Rule 15c2-12. Currently, the following is the website address for EMMA: emma.msrb.org. Listed Events shall mean any of the events listed in Section 5 of this Disclosure Certificate. MSRB shall mean the Municipal Securities Rulemaking Board, located at: 1900 Duke Street, Suite 600 Alexandria, VA Phone: (703) Fax: (703) Internet: Official Statement shall mean the Official Statement prepared in connection with the sale of the Obligations. Participating Underwriter shall mean any of the original underwriters of the Obligations required to comply with the Rule in connection with the offering of the Obligations. Rule shall mean Rule 15c2-12(b)(5) adopted by the United States Securities and Exchange Commission ( SEC ) under the Securities Exchange Act of 1934, as the same may be amended from time to time. Section 2. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the School District for the benefit of the holders and beneficial owners of the Obligations and in order to assist the Participating Underwriter in complying with the Rule. F-1

238 Section 3. (a) (b) Section 4. (a) Provision of Annual Reports. The School District shall, not later than December 1 of each year, commencing December 1, 2015, provide to the MSRB in an electronic format as prescribed by the MSRB an Annual Report for the fiscal year of the School District ended June 30 of such year, which Annual Report shall be consistent with the requirements of Section 4 of this Disclosure Certificate. The School District shall furnish an Annual Report to any person requesting the same. Requests for Annual Reports shall be made to: Granville Exempted Village School District, Attention: Treasurer, 130 North Granger Street, Granville, Ohio 43023; telephone: (740) If the School District fails to provide an Annual Report to the MSRB by the date set forth in subsection (a) of this Section 3, the School District shall send in a timely manner to the MSRB notice of such failure, which shall include a statement as to the date by which the School District anticipates that the Annual Report will be provided to the MSRB. Contents of the Annual Report. The Annual Report shall contain or incorporate by reference the following: (1) Audited basic financial statements of the School District. (2) Five-Year Projection of the School District. (3) Fiscal year data for the table entitled History of Voted Taxes and contained in APPENDIX A to the Official Statement under the caption SCHOOL DISTRICT PROPERTY TAX BASE History of Voted Taxes. (4) Fiscal year data for the table entitled Property Tax Collections and contained in APPENDIX A to the Official Statement under the caption SCHOOL DISTRICT PROPERTY TAX BASE Property Tax Rates and Collections. All or any of the items listed above may be included by specific reference from other documents which have previously been provided to the MSRB or to the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB. If this School District prepares a Comprehensive Annual Financial Report ( CAFR ) that includes each of the items listed above, the School District may designate the CAFR as the Annual Report. (b) The audited basic financial statements of the School District to be included in the Annual Report shall be initially prepared in accordance with generally accepted accounting principles and shall be accompanied by a report of the Auditor of the State of Ohio, or, if applicable, the independent certified public accountants who audited the financial statements; provided, however, if such audited financial statements are not available to the School District at the time of providing the F-2

239 Annual Report to the MSRB as provided in Section 3 of this Disclosure Certificate, the School District will provide such audited financial statements to the MSRB as provided in Section 3 of this Disclosure Certificate as soon as they are available. Section 5. Reporting of Significant Events. The School District shall provide to the MSRB in a timely manner not in excess of ten business days after the occurrence of the eventnotice of any of the following events with respect to the Obligations: (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n) Principal and interest payment delinquencies; Non-payment related defaults, if material; Unscheduled draws on debt service reserves reflecting financial difficulties; Unscheduled draws on credit enhancements reflecting financial difficulties; Substitution of credit or liquidity providers, or their failure to perform; Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form TEB) or other material notices or determinations with respect to the tax status of the Obligations, or other material events affecting the tax status of the Obligations; Modifications to rights of holders of the Obligations, if material; (1) Calls for redemption of the Obligations, if material, other than calls pursuant to the mandatory sinking fund provisions of the Obligations, if any, and (2) tender offers; Defeasances; Release, substitution or sale of property securing repayment of the Obligations, if material; Rating changes; Bankruptcy, insolvency, receivership or similar event of the School District; 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 of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and Appointment of a successor or additional trustee or the change of name of a trustee, if material. F-3

240 For the purposes of subsection (l), above, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the School District in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the School District, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the School District. Section 6. Means of Reporting Information. The School District shall provide information to the MSRB s EMMA disclosure service as prescribed by the MSRB. As of the date hereof, submissions must be by electronic submission in an electronic portable document format ( PDF ) that shall have a word-search function permitting a user to search the document. The School District is authorized to transmit information to the MSRB by whatever means are mutually acceptable to the School District and the MSRB. Section 7. Termination of Reporting Obligation. The School District s obligation under this Disclosure Certificate shall terminate upon the defeasance, redemption or payment in full of all of the Obligations. Section 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the School District may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, if the School District has received an opinion of counsel knowledgeable in federal securities laws to the effect that such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule. Section 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the School District from disseminating any other information (using the means of dissemination set forth in this Disclosure Certificate or any other means of communication) or including any other information in any Annual Report or providing notice of occurrence of events, in addition to that which is required by this Disclosure Certificate. If the School District chooses to include any information in an Annual Report or provide notice of occurrence of events which are not Listed Events in addition to that which is specifically required by this Disclosure Certificate, the School District shall have no obligation to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. Section 10. Default; Remedies. Failure of the School District to perform any of its undertakings contained in this Disclosure Certificate shall not constitute an event of default with respect to the Obligations. The exclusive remedy for any such failure shall be enforcement of the School District s obligations to so perform by actions or proceedings taken in accordance with Ohio Revised Code Section (B)(4)(b) or Section (C)(1) of the Revised Code. F-4

241 Section 11. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the School District, the Participating Underwriter and the holders of the Obligations, and shall create no rights in any other person or entity. Date: September 3, 2015 GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT LICKING COUNTY, OHIO By: Treasurer, Board of Education F-5

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