SCHOOL DISTRICT OF RIVERVIEW GARDENS ST. LOUIS COUNTY, MISSOURI

Transcription

1 This Preliminary Official Statement and the information contained herein are subject to completion and amendment. These securities may not be sold nor may offers to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances may this Preliminary Official Statement constitute an offer to sell or a solicitation of an offer to buy, nor may there be any sale of these securities in any jurisdictions in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. PRELIMINARY OFFICIAL STATEMENT DATED APRIL 18, 2018 NEW ISSUE BOOK-ENTRY ONLY BANK QUALIFIED SERIES 2018A BONDS ONLY S&P Direct Deposit Program Rating: AA+ See BOND RATING herein In the opinion of Gilmore & Bell, P.C., Bond Counsel to the District, under existing law and assuming continued compliance with certain requirements of the Internal Revenue Code of 1986, as amended (the Code ), (1) the interest on the Series 2018A Bonds (including any original issue discount properly allocable to an owner thereof) is excludable from gross income for federal income tax purposes, and is not an item of tax preference for purposes of the federal alternative minimum tax, (2) the interest on the Series 2018A Bonds (including any original issue discount properly allocable to an owner thereof) is exempt from income taxation by the State of Missouri and (3) the Series 2018A Bonds are qualified tax-exempt obligations within the meaning of Section 265(b)(3) of the Code. The interest on the Series 2018B Bonds is included in gross income for federal income tax purposes, and is not exempt from income taxation by the State of Missouri, both in accordance with the owner s method of accounting. See TAX MATTERS in this Official Statement. SCHOOL DISTRICT OF RIVERVIEW GARDENS ST. LOUIS COUNTY, MISSOURI $8,555,000 * General Obligation Bonds (Missouri Direct Deposit Program) Series 2018A Dated: Date of Delivery $3,145,000 * Taxable General Obligation Refunding Bonds (Missouri Direct Deposit Program) Series 2018B Due: April 1, as shown on the inside cover The General Obligation Bonds, Series 2018A (the Series 2018A Bonds ) and Taxable General Obligation Refunding Bonds, Series 2018B (the Series 2018B Bonds and, together with the Series 2018A Bonds, the Bonds ) will be issued by the School District of Riverview Gardens, St. Louis County, Missouri (the District ) for the purposes of providing funds to (1) refund certain of the District s outstanding lease obligations, (2) pay the costs of the Project and (3) pay the costs of issuance related to the Bonds. See the section captioned PLAN OF FINANCING. The Bonds will be issued as fully-registered bonds in the denomination of $5,000 or integral multiples thereof. Principal on the Bonds will be payable annually as set forth on the inside cover of this Official Statement. Interest on the Bonds is payable semiannually on each April 1 and October 1, commencing October 1, 2018, by check, electronic transfer or draft mailed to the persons who are the registered owners of the Bonds as of the close of business on the 15 th day of the month preceding the applicable interest payment date. The Series 2018A Bonds are subject to optional redemption prior to maturity. See the caption THE BONDS Redemption Provisions. The Series 2018B Bonds are not subject to optional redemption prior to maturity. THE BONDS AND INTEREST THEREON WILL CONSTITUTE GENERAL OBLIGATIONS OF THE DISTRICT, PAYABLE FROM AD VALOREM TAXES WHICH MAY BE LEVIED WITHOUT LIMITATION AS TO RATE OR AMOUNT UPON ALL OF THE TAXABLE TANGIBLE PROPERTY, REAL AND PERSONAL, WITHIN THE TERRITORIAL LIMITS OF THE DISTRICT. The Bonds are offered when, as and if issued by the District and accepted by the Underwriter, subject to the approval of validity by Gilmore & Bell, P.C., St. Louis, Missouri, Bond Counsel, and subject to certain other conditions. Certain legal matters will be passed upon for the Underwriter by Thompson Coburn LLP, St. Louis, Missouri. It is expected that the Bonds will be available for delivery through the facilities of The Depository Trust Company in New York, New York on or about May 8, * Preliminary; subject to change. The date of this Official Statement is April, 2018.

2 SCHOOL DISTRICT OF RIVERVIEW GARDENS ST. LOUIS COUNTY, MISSOURI $8,555,000 * General Obligation Bonds (Missouri Direct Deposit Program) Series 2018A $3,145,000 * Taxable General Obligation Refunding Bonds (Missouri Direct Deposit Program) Series 2018B MATURITY SCHEDULE* Base CUSIP: SERIES 2018A BONDS Maturity (April 1) Principal Amount* Rate Price CUSIP 2022 $115,000 % % , , , , , , , , , , , , , , , ,000 SERIES 2018B BONDS Maturity (April 1) Principal Amount* Rate Price CUSIP 2019 $785,000 % % , , ,000 * Preliminary; subject to change.

3 SCHOOL DISTRICT OF RIVERVIEW GARDENS ST. LOUIS COUNTY, MISSOURI 1370 Northumberland Drive St. Louis, Missouri (314) SPECIAL ADMINISTRATIVE BOARD Dr. Lynn Beckwith, Jr., Chair and Member Veronica Morrow-Reel, Vice Chair and Member Dr. Mark Tranel, Secretary/Treasurer and Member ADMINISTRATION Dr. Scott Spurgeon, Superintendent Patrick Lanane, Chief Financial Officer BOND COUNSEL Gilmore & Bell, P.C. St. Louis, Missouri UNDERWRITER Stifel, Nicolaus & Company, Incorporated St. Louis, Missouri UNDERWRITER S COUNSEL Thompson Coburn LLP St. Louis, Missouri PAYING AGENT UMB Bank, N.A. St. Louis, Missouri

4 REGARDING USE OF THIS OFFICIAL STATEMENT THE BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON THE EXEMPTION CONTAINED IN SECTION 3(a)(2) OF SUCH ACT. The information set forth herein has been obtained from the District and other sources which are deemed to be reliable, but is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation by, the District or the Underwriter. The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the 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. No dealer, broker, salesperson or any other person has been authorized by the District or the Underwriter to give any information or make any representations, other than those contained in this Official Statement, in connection with the offering of the Bonds, and if given or made, such other information or representations must not be relied upon as having been authorized by the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any state in which it is unlawful for such person to make such offer, solicitation or sale. The information herein is subject to change without notice, and neither the delivery of this Official Statement nor the sale of any of the Bonds hereunder shall under any circumstances create any implication that there has been no change in the affairs of the District or the other matters described herein since the date hereof. IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF SUCH BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS IN THIS OFFICIAL STATEMENT Certain statements included in or incorporated by reference in this Official Statement that are not purely historical are forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended, and reflect the District s current expectations, hopes, intentions, or strategies regarding the future. Such statements may be identifiable by the terminology used such as plan, expect, estimate, budget, intend or other similar words. THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. INCLUDED IN SUCH RISKS AND UNCERTAINTIES ARE (i) THOSE RELATING TO THE POSSIBLE INVALIDITY OF THE UNDERLYING ASSUMPTIONS AND ESTIMATES, (ii) POSSIBLE CHANGES OR DEVELOPMENTS IN SOCIAL, ECONOMIC, BUSINESS, INDUSTRY, MARKET, LEGAL AND REGULATORY CIRCUMSTANCES, AND (iii) CONDITIONS AND ACTIONS TAKEN OR OMITTED TO BE TAKEN BY THIRD PARTIES, INCLUDING CUSTOMERS, SUPPLIERS, BUSINESS PARTNERS AND COMPETITORS, AND LEGISLATIVE, JUDICIAL AND OTHER GOVERNMENTAL AUTHORITIES AND OFFICIALS. ASSUMPTIONS RELATED TO THE FOREGOING INVOLVE JUDGMENTS WITH RESPECT TO, AMONG OTHER THINGS, FUTURE ECONOMIC, COMPETITIVE, AND MARKET CONDITIONS AND FUTURE BUSINESS DECISIONS, ALL OF WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT ACCURATELY. FOR THESE REASONS, THERE CAN BE NO ASSURANCE THAT THE FORWARD-LOOKING STATEMENTS INCLUDED IN THIS OFFICIAL STATEMENT WILL PROVE TO BE ACCURATE. UNDUE RELIANCE SHOULD NOT BE PLACED ON FORWARD-LOOKING STATEMENTS. ALL FORWARD-LOOKING STATEMENTS INCLUDED IN THIS OFFICIAL STATEMENT ARE BASED ON INFORMATION AVAILABLE TO THE DISTRICT ON THE DATE HEREOF, AND THE DISTRICT ASSUMES NO OBLIGATION TO UPDATE ANY SUCH FORWARD-LOOKING STATEMENTS IF OR WHEN ITS EXPECTATIONS OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR OR FAIL TO OCCUR, OTHER THAN AS INDICATED UNDER THE CAPTION CONTINUING DISCLOSURE UNDERTAKING.

5 TABLE OF CONTENTS Page INTRODUCTION... 1 General... 1 Purpose of the Bonds... 1 Security for the Bonds... 1 Continuing Disclosure... 2 THE BONDS... 2 General... 2 Book-Entry Only System... 3 Registration, Transfer and Exchange of Bonds... 4 Redemption Provisions... 5 SECURITY FOR THE BONDS... 6 Pledge of Full Faith and Credit... 6 Levy and Collection of Annual Tax... 6 Direct Deposit of State Aid Payments... 7 PLAN OF FINANCING... 7 Refunding of the Refunded Obligations... 7 The Project... 8 Sources and Uses of Funds... 8 RISK FACTORS... 8 Ad Valorem Property Taxes... 9 Secondary Market Prices and Liquidity... 9 No Reserve Fund or Credit Enhancement... 9 Ratings Bankruptcy Pensions and Other Postemployment Benefits State Aid Amendment of the Resolution Loss of Premium from Redemption Tax-Exempt Status and Risk of Audit Defeasance Risks THE DISTRICT LEGAL MATTERS BOND RATING VERIFICATION OF MATHEMATICAL COMPUTATIONS TAX MATTERS IRS Circular 230 Notice Series 2018A Bonds Series 2018B Bonds Other Federal Income Tax Consequences to Owners of All Bonds CONTINUING DISCLOSURE UNDERTAKING Description of Undertaking Prior Compliance ABSENCE OF LITIGATION UNDERWRITING CERTAIN RELATIONSHIPS MISCELLANEOUS APPENDIX A INFORMATION REGARDING THE DISTRICT APPENDIX B AUDITED FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR S REPORT OF THE DISTRICT FOR THE FISCAL YEAR ENDED JUNE 30, 2017 (i)

6 THIS PAGE INTENTIONALLY LEFT BLANK

7 OFFICIAL STATEMENT SCHOOL DISTRICT OF RIVERVIEW GARDENS ST. LOUIS COUNTY, MISSOURI $8,555,000 * General Obligation Bonds (Missouri Direct Deposit Program) Series 2018A $3,145,000 * Taxable General Obligation Refunding Bonds (Missouri Direct Deposit Program) Series 2018B INTRODUCTION The following introductory information is subject in all respects to more complete information contained elsewhere in this Official Statement. The order and placement of materials in this Official Statement, including the appendices hereto, are not to be deemed to be a determination of relevance, materiality or relative importance, and this Official Statement, including the cover page and appendices, should be considered in its entirety. The offering of the Bonds to potential investors is made only by means of the entire Official Statement. General This Official Statement, including the cover page and appendices hereto, is furnished to prospective purchasers in connection with the offering and sale of $8,555,000 * aggregate principal amount of General Obligation Bonds (Missouri Direct Deposit Program), Series 2018A (the Series 2018A Bonds ) and $3,145,000 * aggregate principal amount of Taxable General Obligation Refunding Bonds (Missouri Direct Deposit Program), Series 2018B (the Series 2018B Bonds and, together with the Series 2018A Bonds, the Bonds ) by the School District of Riverview Gardens, St. Louis County, Missouri (the District ). The issuance and sale of the Bonds are authorized by a resolution of the Special Administrative Board of the District expected to be adopted on April 24, 2018 (the Resolution ). All capitalized terms used herein and not otherwise defined herein have the meanings assigned to those terms in the Resolution. Purpose of the Bonds The Bonds are being issued for the purposes of providing funds to (1) refund all of the remaining outstanding Riverview Gardens School District Educational Facilities Authority Leasehold Revenue Refunding Bonds, Series 2010 (School District of Riverview Gardens, St. Louis County, Missouri), maturing in the years 2019 and thereafter, in the aggregate principal amount of $2,230,000 (the Refunded Series 2010 Bonds ), and the Refunding Certificates of Participation (School District of Riverview Gardens, St. Louis County, Missouri, Lessee), Series 2015, maturing in the years 2019 and thereafter, in the aggregate principal amount of $1,075,000 (the Refunded Series 2015 Certificates and, together with the Refunded Series 2010 Bonds, the Refunded Obligations ), (2) pay the costs of acquiring, constructing, renovating, furnishing and equipping school sites, buildings and related facilities for school purposes, including roof, HVAC, parking and technology improvements (the Project ) and (3) pay the costs of issuing the Bonds. See the section herein captioned PLAN OF FINANCING. Security for the Bonds General. The Bonds will constitute general obligations of the District and will be payable as to both principal or Redemption Price of and interest on the Bonds from ad valorem taxes, which may be levied * Preliminary; subject to change.

8 without limitation as to rate or amount upon all of the taxable tangible property, real and personal, within the territorial limits of the District. See the section herein captioned SECURITY FOR THE BONDS. Direct Deposit Agreement. Pursuant to a Direct Deposit Agreement among the Office of the Treasurer of the State of Missouri, the Department of Elementary and Secondary Education of the State of Missouri, the Health and Educational Facilities Authority of the State of Missouri, BOKF, N.A. and the District, the District will agree that a portion of its State Aid payments will be transferred to BOKF, N.A., as Direct Deposit Trustee, in order to pay the debt service on the Bonds. See the section herein captioned SECURITY FOR THE BONDS Direct Deposit of State Aid Payments. Continuing Disclosure The District has agreed in an Omnibus Continuing Disclosure Undertaking dated as of March 1, 2013, as amended and supplemented (the Omnibus Continuing Disclosure Undertaking ), to provide its audited financial statements and certain other financial and operating information relating to the District by not later than 180 days after the end of each fiscal year of the District, commencing with the fiscal year ending June 30, 2018, and to provide notices of the occurrence of certain enumerated events. The District will enter into an Adoption Agreement dated as of May 1, 2018 (the Adoption Agreement ) to make the Omnibus Continuing Disclosure Undertaking applicable to the Bonds. See the caption CONTINUING DISCLOSURE UNDERTAKING herein. General THE BONDS The Bonds are being issued in the aggregate principal amount of $11,700,000 *, consisting of the Series 2018A Bonds in the aggregate principal amount of $8,555,000 * and the Series 2018B Bonds in the aggregate principal amount of $3,145,000 *. The Bonds are dated as of the date of original delivery of and payment for such Bonds and the principal is payable on April 1 in the years and in the principal amounts set forth on the inside cover page hereof, subject to redemption and payment prior to maturity, upon the terms and conditions described under the section herein captioned THE BONDS Redemption Provisions. Interest on the Bonds is calculated at the rates per annum set forth on the inside cover page, computed on the basis of a 360-day year of twelve 30-day months. The Bonds shall consist of fully-registered bonds in denominations of $5,000 or any integral multiple thereof. Interest on the Bonds is payable from the date thereof or the most recent date to which interest has been paid and is payable semiannually on April 1 and October 1 in each year, beginning October 1, The interest payable on each Bond on any Interest Payment Date will be paid to the person in whose name such Bond is registered (the Registered Owner or Owner ) as shown on the registration books (the Bond Register ) at the close of business on the 15 th day (whether or not a Business Day) of the calendar month next preceding an interest payment date (the Record Date ). Interest on the Bonds will be paid to the Registered Owners thereof (i) by check or draft mailed by UMB Bank, N.A. (the Paying Agent ) to the address of such Registered Owner shown on the Bond Register or such other address furnished to the Paying Agent in writing by such Registered Owner, or (ii) by electronic transfer to such Registered Owner upon written notice signed by such Registered Owner and given to the Paying Agent not less than 15 days prior to the Record Date for such interest payment, containing the electronic transfer instructions including the name and address of the bank (which shall be in the continental United States), its ABA routing number and the account number to which such Registered Owner wishes to have such transfer directed, and an acknowledgment that an electronic transfer fee may be applicable. * Preliminary; subject to change

9 The principal or the Redemption Price (defined herein) of the Bonds will be paid by check, electronic transfer or draft to the Registered Owner of such Bond at the maturity of such Bond or otherwise, upon presentation and surrender of such Bond at the payment office of the Paying Agent in St. Louis, Missouri or at such other payment office designated by the Paying Agent. Book-Entry Only System General. The Bonds are available in book-entry only form. Purchasers of the Bonds will not receive certificates representing their interests in the Bonds. Ownership interests in the Bonds will be available to purchasers only through a book-entry system (the Book-Entry System ) maintained by The Depository Trust Company ( DTC ), New York, New York. The following information concerning DTC and DTC s book-entry system has been obtained from DTC. The District takes no responsibility for the accuracy or completeness thereof and neither the Indirect Participants nor the Beneficial Owners should rely on the following information with respect to such matters, but should instead confirm the same with DTC or the Direct Participants, as the case may be. There can be no assurance that DTC will abide by its procedures or that such procedures will not be changed from time to time. DTC and its Participants. 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 Ownership Interests. 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. Transfers. 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 - 3 -

10 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. Notices. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices will be sent to DTC. If less than all of the Bonds within a maturity are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Voting. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the 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 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Payments of Principal, Redemption Price and Interest. Payment of principal or Redemption Price of and interest on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC s practice is to credit Direct Participants accounts upon DTC s receipt of funds and corresponding detail information from the District or the Paying Agent, on the payment 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 Paying Agent or District, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal or Redemption Price of and interest on the Bonds to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the District or Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. Discontinuation of Book-Entry System. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the District or the Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered. The District may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered to DTC. Registration, Transfer and Exchange of Bonds The District will cause the Bond Register to be kept at the principal payment office of the Paying Agent or such other office designated by the Paying Agent for the registration, transfer and exchange of the - 4 -

11 Bonds as provided in the Resolution. Upon surrender of any Bond at the principal payment office of the Paying Agent, or at such other office designated by the Paying Agent, the Paying Agent shall transfer or exchange such Bond as provided in the Resolution. The Paying Agent shall transfer or exchange such Bond for a new Bond or Bonds in any authorized denomination of the same Stated Maturity and series and in the same aggregate principal amount as the Bond that was presented for transfer or exchange. Bonds presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Paying Agent, duly executed by the Registered Owner thereof or by the Registered Owner s duly authorized agent. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Paying Agent, are the responsibility of the Registered Owners of the Bonds. If any Registered Owner fails to provide a correct taxpayer identification number to the Paying Agent, the Paying Agent may make a charge against such Registered Owner sufficient to pay any governmental charge required to be paid as a result of such failure. The District and the Paying Agent shall not be required (i) to register the transfer or exchange of any Bond that has been called for redemption after notice of such redemption has been mailed by the Paying Agent in accordance with the Resolution and during the period of 15 days next preceding the date of mailing of such notice of redemption, or (ii) to register the transfer or exchange of any Bond during a period beginning at the opening of business on the day after receiving written notice from the District of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest pursuant to the Resolution. Redemption Provisions Optional Redemption of Series 2018A Bonds. At the option of the District, the Series 2018A Bonds or portions thereof maturing on April 1, 20 and thereafter may be called for redemption and payment prior to their Stated Maturity on April 1, 20 and thereafter, as a whole or in part, at any time at the Redemption Price of 100% of the principal amount thereof, plus accrued interest thereon to the Redemption Date (as defined herein). No Optional Redemption of Series 2018B Bonds. redemption and payment prior to their Stated Maturity. The Series 2018B Bonds are not subject to Selection of Series 2018A Bonds to Be Redeemed. Series 2018A Bonds shall be redeemed only in the principal amount of $5,000 or any integral multiple thereof. When less than all of the Outstanding Series 2018A Bonds are to be redeemed, such Series 2018A Bonds shall be redeemed in such order of their Stated Maturities as shall be determined by the District, and Series 2018A Bonds of less than a full Stated Maturity and bearing interest at the same interest rate shall be selected by the Paying Agent in $5,000 units of principal amount by lot or in such other equitable manner as the Paying Agent may determine. In the case of a partial redemption of Series 2018A Bonds, when Series 2018A Bonds of denominations greater than $5,000 are then Outstanding, then for all purposes in connection with such redemption each $5,000 of face value shall be treated as though it were a separate Series 2018A Bond of the denomination of $5,000. If it is determined that one or more, but not all, of the $5,000 units of face value represented by any Series 2018A Bond are selected for redemption, then upon notice of intention to redeem such $5,000 unit or units, the Registered Owner of such Series 2018A Bond or the Registered Owner s duly authorized agent shall present and surrender such Series 2018A Bond to the Paying Agent (1) for payment of the price which such Series 2018A Bonds are to be redeemed (the Redemption Price ) and interest to the date fixed for redemption (the Redemption Date ) of such $5,000 unit or units of face value called for redemption, and (2) for exchange, without charge to the Registered Owner thereof, for a new Series 2018A Bond or Series 2018A Bonds of the aggregate principal amount of the unredeemed portion of the principal amount of such Series 2018A Bond. If the Registered Owner of any such Series 2018A Bond fails to present such Series 2018A Bond to the Paying Agent for payment and exchange as aforesaid, such Series 2018A Bond - 5 -

12 shall, nevertheless, become due and payable on the Redemption Date to the extent of the $5,000 unit or units of face value called for redemption (and to that extent only). Notice of Redemption. Unless waived by any Registered Owner of Series 2018A Bonds to be redeemed, official notice of any redemption shall be given by the Paying Agent on the District s behalf, by mailing a copy of an official redemption notice by first class mail at least 30 days and not more than 60 days prior to the Redemption Date to the State Auditor of Missouri and each Registered Owner of the Series 2018A Bond or Series 2018A Bonds to be redeemed at the address shown on the Bond Register. The failure of any Registered Owner to receive the foregoing notice or any defect therein shall not invalidate the effectiveness of the call for redemption. So long as DTC is effecting book-entry transfers of the Series 2018A Bonds, the Paying Agent shall provide the notices specified in the Resolution to DTC. It is expected that DTC will, in turn, notify its Participants and that the Participants, in turn, will notify or cause to be notified the Beneficial Owners. Any failure on the part of DTC or a Participant, or failure on the part of a nominee of a Beneficial Owner of a Series 2018A Bond (having been mailed notice from the Paying Agent, a Participant or otherwise) to notify the Beneficial Owner of the Series 2018A Bond so affected, will not affect the validity of the redemption of such Series 2018A Bond. Effect of Call for Redemption. After an amount of money sufficient to pay the Redemption Price has been deposited with the Paying Agent and notice of redemption has been given on the Redemption Date designated in the notice, (1) the Series 2018A Bonds (or portions thereof) to be redeemed will become due and payable on the Redemption Date at the Redemption Price specified in the notice and (2) from and after the Redemption Date (unless the District defaults in the payment of the Redemption Price) such Series 2018A Bonds or portions of Series 2018A Bonds shall cease to bear interest. All Series 2018A Bonds that have been surrendered for redemption shall be canceled and destroyed by the Paying Agent pursuant to the Resolution and shall not be reissued. Pledge of Full Faith and Credit SECURITY FOR THE BONDS The Bonds will constitute general obligations of the District and will be payable as to both principal or Redemption Price of and interest on the Bonds from ad valorem taxes, which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the District. Levy and Collection of Annual Tax Under the Resolution, there is levied upon all of the taxable tangible property within the District a direct annual tax sufficient to produce the amounts necessary for the payment of the principal or Redemption Price of and interest on the Bonds as the same become due and payable in each year. Such taxes shall be extended upon the tax rolls in each year, and shall be levied and collected at the same time and in the same manner as the other ad valorem taxes of the District are levied and collected. Except as otherwise provided under the heading SECURITY FOR THE BONDS Direct Deposit of State Aid Payments, the proceeds derived from said taxes shall be deposited in the Debt Service Fund, shall be kept separate and apart from all other funds of the District, and shall be used solely for the payment of the principal or Redemption Price of and interest on the Bonds as and when the same become due, taking into account scheduled mandatory redemptions, if any, and the fees and expenses of the Paying Agent

13 Direct Deposit of State Aid Payments Pursuant to Section et seq. of the Revised Statutes of Missouri, as amended, and related statutes (the Deposit Law ), the State of Missouri (the State ) and the District may agree to transfer to BOKF, N.A., as direct deposit trustee (the (the Deposit Trustee ), a portion of the District s State aid payments and distributions normally used for operational purposes ( State Aid ) in order to provide for payment of debt service on the Bonds. On the date of issuance of the Bonds, the District will enter into a Direct Deposit Agreement with respect to the Series 2018A Bonds (the 2018A Deposit Agreement ) and a Direct Deposit Agreement with respect to the Series 2018B Bonds (the 2018B Deposit Agreement and collectively, with the Series 2018A Deposit Agreement, the Deposit Agreement ) each with the Office of the Treasurer of the State of Missouri ( Treasurer s Office ), the Department of Elementary and Secondary Education of the State of Missouri ( DESE ), the Health and Educational Facilities Authority of the State of Missouri and the Deposit Trustee. The 2018A Deposit Agreement will provide for payment of one-eighth (1/8) of the aggregate amount of debt service due on the Series 2018A Bonds on October 1, 2018 and April 1, 2019 to be paid in each of the eight (8) months of June 2018 through January 2019, and one-tenth (1/10) of the annual debt service due in the next bond year to be paid in each of the ten (10) months of April 2019 through January 2020 and each succeeding ten (10) similar months (i.e., April through January) for each bond year after the Series 2018A Bonds are issued as long as the Series 2018A Bonds are outstanding. The 2018B Deposit Agreement will provide for payment of one-eighth (1/8) of the aggregate amount of debt service due on the Series 2018B Bonds on October 1, 2018 and April 1, 2019 to be paid in each of the eight (8) months of June 2018 through January 2019, and one-tenth (1/10) of the annual debt service due in the next bond year to be paid in each of the ten (10) months of April 2019 through January 2020 and each succeeding ten (10) similar months (i.e., April through January) for each bond year after the Series 2018B Bonds are issued as long as the Series 2018B Bonds are outstanding. Amounts of State Aid to the District in excess of the one-tenth (1/10) monthly deposit will not be deposited with the Deposit Trustee but will be transferred directly to the District as has historically been the case with all State Aid. Each month, pursuant to the terms of the Deposit Agreement, DESE will advise the Treasurer s Office of the amount of the District s State Aid to be deposited with the Deposit Trustee for the purpose of paying the Bonds, as specified in the Deposit Agreement. If there is a shortfall in a monthly payment, it is to be made up in the succeeding monthly payment of State Aid. Following receipt of the deposits, the Deposit Trustee will invest the amounts for the benefit of the District. The Deposit Trustee will transfer to the Paying Agent the amount necessary for payment of debt service on the Bonds not later than the day prior to each payment date with respect to the Bonds. The District remains obligated to provide funds to the Paying Agent for the debt service on the Bonds if the amounts of State Aid transferred are not sufficient to pay the Bonds when due. Nothing in the Deposit Law or the Deposit Agreement relieves the District of its obligation to make payments of principal of and interest on the Bonds, or to impose any debt service levy sufficient to retire the Bonds. Moneys of the District which would otherwise be used to pay the Bonds on each payment date may be transferred to the District s operational funds to replace State Aid funds used to pay the Bonds. The State has not committed pursuant to the Deposit Law, the Deposit Agreement or otherwise to maintain any particular level of State Aid on behalf of the District, and the State is not obligated in any manner, contractually or morally, to make payments of debt service on the Bonds, other than its obligation to make transfers to the Deposit Trustee as described above. No assurance can be made that the amount of annual State Aid to the District will not in the future drop below that of the annual debt service requirements on the Bonds. Refunding of the Refunded Obligations PLAN OF FINANCING The District will use a portion of the proceeds of the Bonds for the purpose of providing funds to refund the Refunded Obligations. In order to do so, the District will enter into an Escrow Trust Agreement dated as of May 1, 2018 (the Escrow Agreement ) with UMB Bank, N.A., St. Louis, Missouri, as Escrow - 7 -

14 Agent (the Escrow Agent ). Pursuant to the Escrow Agreement, the District will deposit with the Escrow Agent a portion of the proceeds of the Bonds and other legally available money, as indicated below under the caption Sources and Uses of Funds. Pursuant to the Escrow Agreement, the Escrow Agent will apply the moneys so deposited to purchase direct non-callable obligations of the United States (the Escrowed Securities ) maturing in such amounts and at such times as shall be sufficient, together with the interest to accrue thereon, to (1) pay the Refunded Series 2010 Bonds maturing on May 1, 2019, (2) redeem the Refunded Series 2010 Bonds maturing on May 1, 2020 and thereafter on May 1, 2019, at a redemption price of 100% of the principal amount thereof, plus accrued interest thereon to the date of redemption and (3) pay the Refunded Series 2015 Certificates maturing on April 1, 2019 and April 1, 2020 as they become due. After the issuance of the Bonds and the deposit of the proceeds thereof and other legally available money with the Escrow Agent pursuant to the Escrow Agreement, the Refunded Obligations will be payable from the maturing principal of the Escrowed Securities, together with earnings thereon and other money held for such purpose by the Escrow Agent. The Escrow Agreement provides that the Escrowed Securities and the moneys held uninvested by the Escrow Agent in the Escrow Fund are irrevocably pledged to the payment of the Refunded Obligations and the interest thereon and may be applied only to such payment. The Project In April 2018, voters in the District authorized $11,700,000 of general obligation bonds for the purpose of funding the Project and refunding certain lease obligations. Approximately $8,555,000 of Bond proceeds will be used to pay the costs of the Project. Approximately $3,145,000 of Bond proceeds and other legally available money will be used for refunding the Refunded Obligations. Sources and Uses of Funds The estimated sources and uses of the proceeds of the Bonds are as follows: Sources of Funds Series 2018A Series 2018B Total Par Amount of Bonds $ $ $ Plus: Net Original Issue Premium Plus: Series 2015 Certificates Debt Service Reserve Fund Total $ $ $ Uses of Funds Deposit to the 2018A Account of the Capital Projects $ $ $ Fund Deposit to the Escrow Fund Costs of Issuance (including Underwriter s Discount) Total $ $ $ RISK FACTORS The following is a discussion of certain risks that could affect the payments to be made by the District with respect to the Bonds. In order to identify risk factors and make an informed investment decision, potential investors should be thoroughly familiar with this entire Official Statement (including its appendices) in order to make a judgment as to whether the Bonds are an appropriate investment. Prospective purchasers of the Bonds should consider carefully all possible factors that may result in a default in the payment of the Bonds, the redemption of the Series 2018A Bonds prior to maturity, a determination that the interest on the Series 2018A Bonds might be deemed taxable for purposes of federal and Missouri income taxation, or that - 8 -

15 may affect the market price or liquidity of the Bonds. This discussion of risk factors is not, and is not intended to be, comprehensive or exhaustive. Ad Valorem Property Taxes The Resolution levies a direct annual tax on all taxable tangible property within the District sufficient to produce amounts necessary for the payment of the principal of and interest on the Bonds each year. Declining property values in the District, whether caused by national or global financial crises, natural disasters, local economic downturns, or other reasons, may require higher levy rates, which may increase the burden on local taxpayers and affect certain taxpayers willingness or ability to continue timely paying property taxes. See FINANCIAL INFORMATION CONCERNING THE DISTRICT Historic Assessed Valuation in APPENDIX A of this Official Statement. In addition, the issuance of additional general obligation bonds by the District or other indebtedness by other political subdivisions in the District would increase the tax burden on taxpayers in the District. See FINANCIAL INFORMATION CONCERNING THE DISTRICT Overlapping Bonded Indebtedness in APPENDIX A of this Official Statement. Missouri law limits the amount of general obligation debt issuable by the District to 15% of the assessed valuation of taxable tangible property in the District. See FINANCIAL INFORMATION CONCERNING THE DISTRICT Debt Limitation and Debt Capacity in APPENDIX A of this Official Statement. Other political subdivisions in the District are subject to similar limitations on general obligation debt imposed by Missouri law, including cities, counties and certain other political subdivisions, which are limited to general obligation debt of 20%, 10% and 5% of assessed valuation of taxable tangible property, respectively. Concentration of property ownership in the District would expose the District s ability to collect ad valorem property taxes to the financial strength and ability and willingness of major taxpayers to pay property taxes. In calendar year 2017, no single property owner owned more than 1.35% of the total taxable property in the District. See FINANCIAL INFORMATION CONCERNING THE DISTRICT Assessed Valuation Components in APPENDIX A of this Official Statement. Secondary Market Prices and Liquidity The Underwriter will not be obligated to repurchase any of the Bonds, and no representation is made concerning the existence of any secondary market for the Bonds. No assurance is given that any secondary market will develop following the completion of the offering of the Bonds and no assurance is given that the initial offering price for the Bonds will continue for any period of time. Prices of municipal securities in the secondary market are subject to adjustment upward and downward in response to changes in the credit markets and changes in the operating performance or tax collection patterns of issuers. Particularly, prices of outstanding municipal securities should be expected to decline if prevailing market interest rates rise. Municipal securities are generally viewed as long-term investments, subject to material unforeseen changes in the investor s or the issuer s circumstances, and may require commitment of the investor s funds for an indefinite period of time, perhaps until maturity. No Reserve Fund or Credit Enhancement No debt service reserve fund will be funded with respect to the Bonds and no financial guaranty insurance policy, letter of credit or other credit enhancement will be issued to insure payment of the Bonds. Accordingly, any potential purchaser of the Bonds should consider the financial ability of the District to pay the Bonds. As described under SECURITY FOR THE BONDS in this Official Statement, the District has irrevocably pledged its full faith, credit and resources for the prompt payment of the Bonds and levied a direct annual tax, without limitation, sufficient to pay principal and interest on the Bonds on all taxable tangible property in the District

16 Ratings S&P Global Ratings, a division of S&P Global Inc. (the Rating Agency ) has assigned the Bonds the rating set forth under BOND RATING in this Official Statement. The rating reflects only the views of the Rating Agency, and an explanation of the significance of the rating may be obtained therefrom. There is no assurance that the rating will remain in effect for any given period of time or that it will not be revised, either downward or upward, or withdrawn entirely, by the Rating Agency if, in its judgment, circumstances warrant. Any such downward revisions or withdrawal of a rating may have an adverse effect on the market price of the Bonds. Bankruptcy In addition to the limitations on remedies contained in the Bond, the rights and remedies provided by the Bonds may be limited by and are subject to (1) bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws affecting creditors rights, (2) the application of equitable principles, and (3) the exercise of judicial discretion in appropriate cases and to limitations on legal remedies against political subdivisions in the State. Section of the Revised Statutes of Missouri, as amended, requires that any interest and sinking fund moneys only be used to pay principal and interest on the Bonds. The District, like all other Missouri political subdivisions, is specifically authorized by Missouri law to institute proceedings under Chapter 9 of the Federal Bankruptcy Code. Such proceedings, if commenced, are likely to have an adverse effect on the market price of the Bonds. Pensions and Other Postemployment Benefits The District contributes to two cost-sharing multiple-employer defined benefit pension plans on behalf of its employees: (1) The Public School Retirement System of Missouri and (2) The Public Education Employee Retirement System of Missouri. See THE DISTRICT Pension and Employee Retirement Plans in APPENDIX A of this Official Statement. Future required contribution increases beyond the current fiscal year may require the District to increase its revenues, reduce its expenditures, or some combination thereof, which may impact the District s operations or limit the District s ability to generate additional revenues in the future. State Aid Approximately 54% of the District s revenue is derived from State Aid. See FINANCIAL INFORMATION CONCERNING THE DISTRICT Sources of Revenue and Missouri School Finance Laws in APPENDIX A of this Official Statement. Reductions in State Aid could occur in the future if, for example, the State faces fiscal problems in the future, or the District experiences a decline in enrollment. Reductions in State Aid could force the District to make budget cuts or operational adjustments and may adversely affect the rating on the Bonds or the market price of the Bonds. Amendment of the Resolution Certain amendments, effected by resolution of the District, to the Bonds and the Resolution may be made with written consent of the Registered Owners of not less than a majority in principal amount of the Bonds then outstanding. Such amendments may adversely affect the security of the owners of the Bonds; provided that, no amendments may (1) extend the maturity of any payment of principal or interest due upon any Bond, (2) alter the optional redemption provisions of any Bond, (3) effect a reduction in the amount which the District is required to pay as principal of or interest on any Bond, (4) permit preference or priority of any Bond over any other Bond, or (5) reduce the percentage in principal amount of Bonds required for the written consent to any modification or alteration of the provisions of this Resolution without the written consent of the Registered Owners of all of the Bonds at the time outstanding

17 Loss of Premium from Redemption Any person who purchases the Series 2018A Bonds at a price in excess of their principal amount or who holds such Series 2018A Bonds trading at a price in excess of par should consider the fact that the Series 2018A Bonds are subject to redemption prior to maturity at the redemption prices described herein in the event such Series 2018A Bonds are redeemed prior to maturity. See THE BONDS Redemption Provisions in this Official Statement. Tax-Exempt Status and Risk of Audit The failure of the District to comply with certain covenants set forth in the Resolution could cause the interest on the Series 2018A Bonds to become included in federal gross income for federal and Missouri income tax purposes retroactive to the date of issuance of the Bonds. The Resolution does not provide for the payment of any additional interest, redemption premium or penalty if the interest on the Series 2018A Bonds becomes included in gross income for federal income tax purposes. See TAX MATTERS in this Official Statement. The Internal Revenue Service (the IRS ) has established an ongoing program to audit tax-exempt obligations to determine whether interest on such obligations should be included in gross income for federal income tax purposes. Owners of the Series 2018A Bonds are advised that, if an audit of the Series 2018A Bonds were commenced, the IRS, in accordance with its current published procedures, is likely to treat the District as the taxpayer, and the owners of the Series 2018A Bonds may not have a right to participate in such audit. Public awareness of any audit could adversely affect the market value and liquidity of the Series 2018A Bonds during the pendency of the audit, regardless of the ultimate outcome of the audit. Defeasance Risks When all Bonds are deemed paid and discharged as provided in the Resolution, the requirements contained in the Resolution and the pledge of the District s faith and credit thereunder and all other rights granted thereby will terminate with respect to the Bonds or scheduled interest payments thereon so paid and discharged. Bonds or scheduled interest payments thereon shall be deemed to have been paid and discharged within the meaning of the Resolution if there has been deposited with the Paying Agent, or other commercial bank or trust company moneys and/or Defeasance Obligations that, together with the interest to be earned on any such Defeasance Obligations, will be sufficient for the payment of the Bonds to the stated maturity or prior redemption date. There is no legal requirement in the Resolution that Defeasance Obligations be rated in the highest rating category by any rating agency. Prices of municipal securities in the secondary market are subject to adjustment upward and downward in response to changes in the credit markets, and that could include the rating of Bonds defeased with Defeasance Obligations to the extent the Defeasance Obligations have a change or downgrade in rating. THE DISTRICT The District is located in the northeast corner of St. Louis County, Missouri. It is about 12 square miles in area and includes several municipalities and unincorporated areas of St. Louis County. See APPENDIX A - INFORMATION REGARDING THE DISTRICT for further information regarding the District. The State Board of Education classified the District as unaccredited as of July 2, As a result, the District s corporate organization lapsed on June 30, On May 20, 2010, the State Board of Education approved the recommendation by the Commissioner of Education to appoint a three-member special administrative board to assume control of the District, effective July 1, Effective January 4, 2017, the District regained provisional accreditation from the State Board of Education. The Special Administrative Board continues to operate the District and retains all authority granted to a board of education for the operation of the District. See APPENDIX A - INFORMATION REGARDING THE DISTRICT School Rating and Accreditation for further information regarding the District accreditation status

18 LEGAL MATTERS Legal matters with respect to the authorization, execution and delivery of the Bonds are subject to the approval of Gilmore & Bell, P.C., St. Louis, Missouri, Bond Counsel, whose approving opinion will be available at the time of delivery of the Bonds. Thompson Coburn LLP, St. Louis, Missouri will pass upon certain legal matters relating to this Official Statement. The various legal opinions to be delivered concurrently with the delivery of the Bonds express the professional judgment of the attorneys rendering the opinions as to the legal issues explicitly addressed therein. By rendering a legal opinion, the opinion giver does not become an insurer or guarantor of that expression of professional judgment, of the transactions opined upon, or of the future performance of parties to such transaction, nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction. BOND RATING The Rating Agency has assigned a municipal bond rating of AA+ to the Bonds based on the District s participation in the Missouri Direct Deposit Program. Such rating reflects only the view of the Rating Agency, and an explanation of the significance of such rating may be obtained therefrom. There is no assurance that the rating will remain in effect for any given period of time or that it will not be revised, either downward or upward, or withdrawn entirely, by the Rating Agency if, in its judgment, circumstances warrant. The Underwriter has not undertaken any responsibility to bring to the attention of the holders of the Bonds any proposed revision or withdrawal of a rating of the Bonds or to oppose any such proposed revision or withdrawal. Pursuant to the Omnibus Continuing Disclosure Undertaking, the District is required to bring to the attention of the holders of the Bonds any change to a rating of the Bonds but has not undertaken any responsibility to oppose any such change. See the section herein captioned CONTINUING DISCLOSURE UNDERTAKING. Any revision or withdrawal of a rating could have an adverse effect on the market price and marketability of the Bonds. VERIFICATION OF MATHEMATICAL COMPUTATIONS Robert Thomas CPA, LLC, Shawnee Mission, Kansas, will deliver to the District a report indicating that such firm has examined, in accordance with standards established by the American Institute of Certified Public Accountants, the information and assertions provided by the Underwriter and the District and its representatives. Included in the scope of their examination will be a verification of the mathematical accuracy of the mathematical computations of the adequacy of the initial cash deposit together with the maturing principal of and interest on the Escrowed Securities in the Escrow Fund to pay, when due, the maturing principal of and interest on the Refunded Obligations as the same becomes due and payable (as described herein under the captions PLAN OF FINANCING Refunding of the Refunded Obligations ). TAX MATTERS The following is a summary of the material federal and State of Missouri income tax consequences of holding and disposing of the Bonds. This summary is based upon laws, regulations, rulings and judicial decisions now in effect, all of which are subject to change (possibly on a retroactive basis). This summary does not discuss all aspects of federal income taxation that may be relevant to investors in light of their personal investment circumstances or describe the tax consequences to certain types of owners subject to special treatment under the federal income tax laws (for example, dealers in securities or other persons who do not hold the Bonds as a capital asset, tax-exempt organizations, individual retirement accounts and other tax deferred accounts, and foreign taxpayers), and, except for the income tax laws of the State of Missouri, does not discuss the consequences to an owner under any state, local or foreign tax laws. The summary does not

19 deal with the tax treatment of persons who purchase the Bonds in the secondary market. Prospective investors are advised to consult their own tax advisors regarding federal, state, local and other tax considerations of holding and disposing of the Bonds. IRS Circular 230 Notice TO ENSURE COMPLIANCE WITH TREASURY DEPARTMENT CIRCULAR 230, OWNERS OF THE SERIES 2018B BONDS ARE HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF FEDERAL TAX ISSUES IN THIS OFFICIAL STATEMENT RELATING TO THE SERIES 2018B BONDS IS NOT INTENDED OR WRITTEN TO BE RELIED UPON, AND CANNOT BE RELIED UPON, BY OWNERS OF THE SERIES 2018B BONDS FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON THOSE OWNERS UNDER THE INTERNAL REVENUE CODE; (B) THE DISCUSSION OF FEDERAL TAX ISSUES IN THIS OFFICIAL STATEMENT RELATING TO THE SERIES 2018B BONDS WAS WRITTEN IN CONNECTION WITH THE PROMOTION OR MARKETING OF THOSE SERIES 2018B BONDS; AND (C) OWNERS OF THE SERIES 2018B BONDS SHOULD SEEK ADVICE FROM AN INDEPENDENT TAX ADVISOR BASED ON THEIR PARTICULAR CIRCUMSTANCES. Series 2018A Bonds Opinion of Bond Counsel Regarding the Series 2018A Bonds In the opinion of Gilmore & Bell, P.C., Bond Counsel to the District, under the law existing as of the issue date of the Series 2018A Bonds: Federal and State of Missouri Tax Exemption. The interest on the Series 2018A Bonds (including any original issue discount properly allocable to an owner thereof) is excludable from gross income for federal income tax purposes and is exempt from income taxation by the State of Missouri. Alternative Minimum Tax. The interest on the Series 2018A Bonds is not an item of tax preference for purposes of computing the federal alternative minimum tax. Bank Qualification. The Series 2018A Bonds are qualified tax-exempt obligations for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the Code ). Bond Counsel s opinions are provided as of the date of the original issue of the Series 2018A Bonds, subject to the condition that the District comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Series 2018A Bonds in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. The District has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause the inclusion of interest on the Series 2018A Bonds in gross income for federal and State of Missouri income tax purposes retroactive to the date of issuance of the Series 2018A Bonds. Bond Counsel is expressing no opinion regarding other federal, state or local tax consequences arising with respect to the Series 2018A Bonds, but has reviewed the discussion under the heading TAX MATTERS. Other Federal Income Tax Consequences to Owners of the Series 2018A Bonds Original Issue Discount. For federal income tax purposes, original issue discount is the excess of the stated redemption price at maturity of a Series 2018A Bond over its issue price. The issue price of a Series 2018A Bond is generally the first price at which a substantial amount of the Series 2018A Bonds of that maturity have been sold to the public. Under Section 1288 of the Code, original issue discount on tax-exempt bonds accrues on a compound basis. The amount of original issue discount that accrues to an owner of a Series 2018A Bond during any accrual period generally equals (1) the issue price of that Series 2018A Bond, plus the amount of original issue discount accrued in all prior accrual periods, multiplied by (2) the yield to

20 maturity on that Series 2018A Bond (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period), minus (3) any interest payable on that Series 2018A Bond during that accrual period. The amount of original issue discount accrued in a particular accrual period will be considered to be received ratably on each day of the accrual period, will be excludable from gross income for federal income tax purposes, and will increase the owner s tax basis in that Series 2018A Bond. Prospective investors should consult their own tax advisors concerning the calculation and accrual of original issue discount. Original Issue Premium. For federal income tax purposes, premium is the excess of the issue price of a Series 2018A Bond over its stated redemption price at maturity. The issue price of a Series 2018A Bond is generally the first price at which a substantial amount of the Series 2018A Bonds of that maturity have been sold to the public. Under Section 171 of the Code, premium on tax-exempt bonds amortizes over the term of the Series 2018A Bond using constant yield principles, based on the purchaser s yield to maturity. As premium is amortized, the owner s basis in the Series 2018A Bond and the amount of tax-exempt interest received will be reduced by the amount of amortizable premium properly allocable to the owner, which will result in an increase in the gain (or decrease in the loss) to be recognized for federal income tax purposes on sale or disposition of the Series 2018A Bond prior to its maturity. Even though the owner s basis is reduced, no federal income tax deduction is allowed. Prospective investors should consult their own tax advisors concerning the calculation and accrual of bond premium. Collateral Federal Income Tax Consequences. Prospective purchasers of the Series 2018A Bonds should be aware that ownership of the Series 2018A Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits, certain S corporations with excess net passive income, foreign corporations subject to the branch profits tax, life insurance companies, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry or have paid or incurred certain expenses allocable to the Series 2018A Bonds. Bond Counsel expresses no opinion regarding these tax consequences. Purchasers of Series 2018A Bonds should consult their tax advisors as to the applicability of these tax consequences and other federal income tax consequences of the purchase, ownership and disposition of the Series 2018A Bonds, including the possible application of state, local, foreign and other tax laws. Series 2018B Bonds Tax Status of Series 2018B Bonds; Interest Taxable No Federal or Missouri Tax Exemption. The interest on the Series 2018B Bonds is included in gross income for federal income tax purposes, in accordance with an owner s normal method of accounting, and is not exempt from income taxation by the State of Missouri. Bond Counsel is expressing no opinion regarding federal, state or local tax consequences arising with respect to the Series 2018B Bonds. Purchasers of Series 2018B Bonds should consult their tax advisors as to the applicability of these tax consequences and other income tax consequences of the purchase, ownership and disposition of the Series 2018B Bonds, including the possible application of state, local, foreign and other tax laws. Other Federal Income Tax Consequences to Owners of the Series 2018B Bonds Collateral Federal Income Tax Consequences. Prospective purchasers of the Series 2018B Bonds should be aware that ownership of the Series 2018B Bonds may result in collateral federal income tax consequences to certain taxpayers. Bond Counsel expresses no opinion regarding these tax consequences. Purchasers of Series 2018B Bonds should consult their tax advisors as to the applicability of these tax consequences and other federal income tax consequences of the purchase, ownership and disposition of the Series 2018B Bonds, including the possible application of state, local, foreign and other tax laws

21 Other Federal Income Tax Consequences to Owners of All Bonds Sale, Exchange or Retirement of Bonds. Upon the sale, exchange or retirement (including redemption) of a Bond, an owner of the Bond generally will recognize gain or loss in an amount equal to the difference between the amount of cash and the fair market value of any property received on the sale, exchange or retirement of the Bond (other than in respect of accrued and unpaid interest) and such owner s adjusted tax basis in the Bond. To the extent a Bond is held as a capital asset, such gain or loss will be capital gain or loss and will be long-term capital gain or loss if the Bond has been held for more than 12 months at the time of sale, exchange or retirement. Reporting Requirements. In general, information reporting requirements will apply to certain payments of principal, interest and premium paid on the Bonds, and to the proceeds paid on the sale of the Bonds, other than certain exempt recipients (such as corporations and foreign entities). A backup withholding tax will apply to such payments if the owner fails to provide a taxpayer identification number or certification of foreign or other exempt status or fails to report in full dividend and interest income. The amount of any backup withholding from a payment to an owner will be allowed as a credit against the owner s federal income tax liability. Description of Undertaking CONTINUING DISCLOSURE UNDERTAKING In accordance with the requirements of Rule 15c2-12 (the Rule ) promulgated by the Securities and Exchange Commission, the District has agreed to file with the Municipal Securities Rulemaking Board (the MSRB ), through the Electronic Municipal Market Access system ( EMMA ), the following financial information and operating data (the Annual Report ): (1) The audited financial statements of the District for the prior fiscal year, prepared in accordance with the accounting principles described in the notes to the financial statements set forth in Appendix B of this Official Statement. If audited financial statements are not available by the time the Annual Report is required to be filed pursuant to the Omnibus Continuing Disclosure Undertaking, the Annual Report shall contain unaudited financial statements in a format similar to the audited financial information contained in this Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report promptly after they become available. (2) Updates as of the end of the fiscal year of the financial information and operating data contained in APPENDIX A of this Official Statement in the tables located under the sections captioned: THE DISTRICT Enrollment and FINANCIAL INFORMATION CONCERNING THE DISTRICT Historic Assessed Valuation, Assessed Valuation Components, Tax Rates and Tax Collection Rates, with such modifications to the formatting and general presentation thereof as deemed appropriate by the District; provided, any substantive change to information provided shall be effected only in accordance with the Omnibus Continuing Disclosure Undertaking. No later than 10 business days after the occurrence of any of the following events, the District shall give, or cause to be given, to the MSRB, through EMMA, notice of the occurrence of any of the following events with respect to the Bonds ( Material Events ): (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancement reflecting financial difficulties;

22 (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Forms 5701-TEB) or other material notices or determinations with respect to the tax-exempt status of the Series 2018A Bonds, or other material events affecting the tax-exempt status of the Series 2018A Bonds; (7) modifications to rights of holders of the Bonds, if material; (8) bond calls, if material, and tender offers; (9) defeasances; (10) release, substitution or sale of property securing repayment of the Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the District (which shall be deemed to occur as provided in the Rule); (13) the consummation of a merger, consolidation or acquisition involving the District or the sale of all or substantially all of the assets of the 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 (14) appointment of a successor or additional trustee or the change of name of the trustee, if material. Nothing in the Omnibus Continuing Disclosure Undertaking shall prevent the District from disseminating any other information, using the means of dissemination set forth in the Omnibus Continuing Disclosure Undertaking or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is required by the Omnibus Continuing Disclosure Undertaking. If the District chooses to include any information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is specifically required by the Omnibus Continuing Disclosure Undertaking, the District shall have no obligation under the Omnibus Continuing Disclosure Undertaking to update such information or include it in any future Annual Report or notice of occurrence of a Material Event. These covenants have been made in order to assist the Underwriter in complying with the Rule. Prior Compliance During the past five years, the District has failed to associate its audited financial statements and operating data filings to EMMA with all of its prior issues. The District failed to file timely audited financial statements and operating information for the fiscal years ended June 30, 2013, and June 30, Additionally, the District s fiscal years filings omitted certain required operating data. The omitted operating data for fiscal year 2013 was included in either the District s official statement for its Taxable General Obligation Refunding Bonds (Missouri Direct Deposit Program), Series 2013 filed on EMMA on February 19, 2013 or the District s annual report filed for fiscal year 2014 filed on EMMA on December 24, 2014, though neither were incorporated by reference and no notices of failure to provide were filed. Furthermore, the District failed to file timely notice of the Rating Agency s determination to lower the underlying rating on the District s previously issued general obligation bonds from A+ to BBB and notice of S&P s determination to lower the underlying rating on the District s previously issued appropriation-backed lease obligations from A to BBB-. The District subsequently provided notice of such rating changes on the MSRB s EMMA website. Additionally, the District may not have filed event notices on EMMA relating to rating changes on its outstanding bonds insured by municipal bond insurers; however, the District believes that information was disseminated or available through other sources

23 ABSENCE OF LITIGATION As of the date hereof, there is no controversy, suit or other proceeding of any kind pending or, to the District s knowledge, threatened wherein or whereby any question is raised or may be raised, questioning, disputing or affecting in any way the legal organization of the District or its boundaries, or the right or title of any of its officers to their respective offices, or the legality of any official act in connection with the authorization, issuance and sale of the Bonds, or the constitutionality or validity of the Bonds or any of the proceedings had in relation to the authorization, issuance or sale thereof, or the levy and collection of a tax to pay the principal and interest thereof, or which might affect the District s ability to meet its obligations to pay the Bonds. UNDERWRITING Stifel, Nicolaus & Company, Incorporated, St. Louis, Missouri (the Underwriter ), has agreed to purchase the Series 2018A Bonds at a price of $ (which is equal to the aggregate original principal amount of the Series 2018A Bonds, less an underwriting discount of $, plus a net original issue premium of $ ), and the Series 2018B Bonds at a price of $ (which is equal to the aggregate original principal amount of the Series 2018B Bonds less an underwriting discount of $ ). The Underwriter is purchasing the Bonds for resale in the normal course of the Underwriter s business activities. The Underwriter reserves the right to offer any of the Bonds to one or more purchasers on such terms and conditions and at such price or prices as the Underwriter, in its discretion, shall determine. CERTAIN RELATIONSHIPS Gilmore & Bell, P.C., Bond Counsel, has represented the Underwriter and the Paying Agent in transactions unrelated to the issuance of the Bonds, but is not representing either of them in connection with the issuance of the Bonds. Thompson Coburn LLP, counsel to the Underwriter, has represented the Paying Agent in transactions unrelated to the issuance of the Bonds, but is not representing the Paying Agent in connection with the issuance of the Bonds. MISCELLANEOUS The references, excerpts and summaries of all documents referred to herein do not purport to be complete statements of the provisions of such documents, and reference is made to all such documents for full and complete statements of all matters of fact relating to the Bonds, the security for the payment of the Bonds and the rights of the Owners thereof. During the period of the offering, copies of drafts of such documents may be examined at the offices of the Underwriter. The information contained in this Official Statement has been compiled from official and other sources that are deemed to be reliable, and while not guaranteed as to completeness or accuracy, is believed to be correct as of this date. Any statement made in this Official Statement involving matters of opinion or of estimates, whether or not expressly so stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the information presented herein since the date hereof. This Official Statement is not to be construed as a contract or agreement between the District, the Paying Agent, or the Underwriter and the purchasers or Owners of any Bonds

24 The District has duly authorized the delivery of this Official Statement. SCHOOL DISTRICT OF RIVERVIEW GARDENS, ST. LOUIS COUNTY, MISSOURI By: Chair of the Special Administrative Board

25 APPENDIX A INFORMATION REGARDING THE DISTRICT

26 THIS PAGE INTENTIONALLY LEFT BLANK

27 TABLE OF CONTENTS Page THE DISTRICT... A-1 General... A-1 Governance of the District... A-1 Administration... A-2 Professional Staff... A-2 Enrollment... A-3 School Rating and Accreditation... A-3 Budgetary Impact of Student Transfers to Accredited School Districts... A-4 School Facilities... A-5 National School Lunch Program... A-7 Educational Programs and Services... A-7 Employee Relations... A-8 Pension and Employee Retirement Plans... A-8 FINANCIAL INFORMATION CONCERNING THE DISTRICT... A-11 Sources of Revenue... A-11 Local Revenue... A-12 County Revenue... A-12 Federal Revenue... A-12 Missouri School Finance Laws... A-13 Accounting, Budgeting and Auditing Procedures... A-16 Summary of Revenues and Expenditures... A-17 Historic Assessed Valuation... A-19 Assessed Valuation Components... A-19 Tax Assessments and Collections... A-19 Tax Rates... A-20 Tax Collection Rates... A-21 Major Taxpayers... A-22 Tax Abatement and Tax Increment Financing... A-22 District s Rights in the Event of Tax Delinquencies... A-22 General Obligation Bonds Outstanding... A-23 Debt Service Requirements General Obligation Bonds... A-24 Lease Obligations... A-24 Other Lease Obligations... A-25 Overlapping Bonded Indebtedness... A-25 Debt Ratios and Related Information... A-26 Short-Term Borrowings... A-26 Other Long-Term Obligations of the District... A-26 Debt Limitation and Debt Capacity... A-27 Anticipated Future Borrowings... A-27 (i)

28 THIS PAGE INTENTIONALLY LEFT BLANK

29 THE DISTRICT General The District is located in the northeast corner of St. Louis County, Missouri in an area south of Interstate 270, north of Jennings Road, east of West Florissant Avenue and generally west of Riverview Drive. It is about twelve square miles in area and includes the municipalities of Bellefontaine Neighbors, Moline Acres, Riverview, the unincorporated areas of Capitol Hill, Castle Point, Glasgow Village, Hathaway Manor, Hathaway Meadows, a part of Dellwood, a small portion of Ferguson, and other small areas. The population of the District is approximately 41,000. The District is bounded on the east by the St. Louis Public School District, on the north by the Hazelwood School District, on the west by Ferguson-Florissant School District, and on the south by the Jennings School District. Governance of the District The Board. The District lost its accreditation status on July 2, 2007 from the State Board of Education, which resulted in the lapse of the District s corporate organization on June 30, Prior to June 30, 2010, the District was governed by a seven-member elected board (the Divested Board ). Upon the lapse of the District s corporate organization, a three-member special administrative board (the Board ) was appointed to act as the governing body of the District. Effective January 4, 2017, the District regained provisional accreditation from the State Board of Education. See the sections below in this APPENDIX A captioned School Rating and Accreditation and Budgetary Impact of Student Transfers to Accredited School Districts for a discussion of the District s loss of accreditation. The Board is responsible for the supervision and governance of the District. The Board may sue and be sued, purchase, receive, hold and sell property, and do all things necessary to accomplish the purposes for which the District is organized. The Board has final control over all school matters except as limited by State of Missouri ( State ) law. Generally, the Board s responsibilities are to set policy for the District to ensure efficient operations, to select and evaluate the Superintendent of Schools, to adopt an annual budget and its supporting tax rate and to foster good community relations and communications. The Board members, who are appointed by the State Board of Education and serve without compensation, consist of two residents of the District and a professional administrator, who serves as the Chair of the Board. The authority of the Board was for an initial three-year term following its appointment, effective July 1, 2010, and was extended by the State Board of Education in 2016 for an additional three-year term through June The current members of the Board include: Name Dr. Lynn Beckwith, Jr. Mrs. Veronica Morrow-Reel Dr. Mark Tranel Title Chair and Member Vice Chair and Member Secretary/Treasurer and Member The Divested Board. The Divested Board does not have the power to govern the District subsequent to the appointment of the Board. A-1

30 Administration The District s general administrative team is headed by the Superintendent of Schools who reports directly to the Board and serves as the chief executive officer of the District. The Superintendent s central administrative staff also includes a Chief Financial Officer. The Superintendent of the District is Dr. Scott Spurgeon. Dr. Spurgeon assumed the position of Superintendent of the District on July 1, Dr. Spurgeon previously served as superintendent of Belleville Township High School. Mr. Patrick Lanane serves as Chief Financial Officer for the District. Mr. Lanane has forty years of service in public education. In July 2017, upon the resignation of the District s previous Chief Financial Officer, Mr. Lanane was hired in a consulting role as Chief Financial Officer for the District. Mr. Lanane previously served as Assistant Superintendent and Chief Financial Officer of the Lindbergh School District from 1993 until his retirement from that school district in Prior to joining the District, he served as Chief Financial Officer for foster child charity, Angels Arms, from 2013 to Mr. Lanane s position as consultant to the District is expected to continue through the school year. Professional Staff With the transition from the Divested Board to the Board, the District opened all positions for application. In the process, all professional staff were required to apply for a position, were interviewed and, subsequently, hiring decisions were made. This process enabled the District to retain a dynamic teaching and administrative staff. The District employs 21 principals and assistant principals, 9 central office administrators, 406 instructors and 410 support personnel. The following table sets forth the number of staff employed by the District. The table reflects certain staffing changes in the past few years related to declining enrollment in the District over the last several years. In addition, the Board has adopted fund balance goals to provide sufficient funds to cover unanticipated expenses or loss of revenue. In making staff reductions, the District has remained well within the Department of Elementary and Secondary Education ( DESE ) staffing guidelines. Certificated Non-Certificated School Year Personnel Personnel Total Staff Source: School District of Riverview Gardens. [Remainder of page intentionally left blank] A-2

31 Enrollment Listed below are the District s actual enrollment figures for the following school years. School Year Elementary Middle School High School Total ,738 1,145 1,145 5, ,898 1,179 1,066 5, ,015 1,230 1,167 5, ,878 1,089 1,074 5, ,202 1,169 1,013 5,384 Source: School District of Riverview Gardens. School Rating and Accreditation DESE administers the Missouri School Improvement Program ( MSIP ), the State s school accountability system or reviewing and accrediting public school districts in the State. Since MSIP was established in 1990, four review cycles have been completed, each cycle lasting from five to six years. The fifth cycle, referred to as MSIP 5, began in the school year. DESE computes an Annual Performance Report ( APR ) for every public school district and charter local education agency and for each school. This overall score is comprised of scores for each of the MSIP 5 performance standards: (1) Academic Achievement (percent proficient or advanced in English language arts, mathematics, science and social studies), (2) Subgroup Achievement (percent proficient or advanced in English language arts, mathematics, science and social studies for students in certain super subgroups (Hispanic, Black, FRL (free/reduced price lunch eligible), IEP (Individualized Education Program for child with disability), ELL (English Language Learners)), (3) High School Readiness (K-08 districts) or College and Career Readiness (K-12 districts) based on certain test scores, (4) Attendance Rate, and (5) Graduation Rate (K-12 districts). Status, progress and growth (where applicable) are used to calculate a comprehensive score used to determine the accreditation level of a school district. Under MSIP 5, there are four levels of school accreditation: (1) Accredited With Distinction, for districts with equal to or greater than 90% of the points possible on the APR and meeting other criteria yet to be determined by the State Board of Education (a resolution to adopt criteria was considered but withdrawn in September 2014 and no further attempt to adopt criteria has been made making the achievement of the status Accredited with Distinction impossible until criteria have been adopted), (2) Accredited, for districts with scoring equal to or greater than 70% of the points possible on the APR, (3) Provisional, for districts with equal to or greater than 50% but less than 70% of the points possible on the APR, and (4) Unaccredited, for districts scoring less than 50% of the points possible on the APR. State law defines several circumstances under which the State Board of Education may intervene in the governance of a district. If a district s rating remains unaccredited for two years, State law requires that its corporate organization lapse and, in such circumstance, the law provides for intervention by the State Board of Education. In 2007, the District underwent a review of its resources, processes and performance by DESE. Based on this review, DESE recommended an unaccredited rating for the District in large part due to leadership and poor academic performance. Based on this review, the State Board of Education voted to classify the District as unaccredited. Since that time, the District and DESE have monitored the educational programs and improvement initiatives in an effort to raise student test scores district-wide. The State Board of Education on May 23, 2009, reviewed the District s accreditation status and voted to set an effective date of classification of the District as unaccredited as of July 2, A-3

32 Pursuant to Sections and of the Revised Statutes of Missouri, as amended, the District s corporate organization lapsed on June 30, 2010, since it had been unaccredited for more than two years. Under State law, upon lapse of a District s corporate organization the State Board of Education may intervene in the governance and operation of the District by (1) appointing a special administrative board; (2) attaching the territory of the District to another district or districts for school purposes; or (3) establishing one or more school districts within the territory of the District based on factors set forth in the statute. On May 20, 2010, the State Board of Education approved the recommendation by the Commissioner of Education to intervene in the governance and operation of the District and appointed the Board to assume control of the District, effective July 1, Effective January 4, 2017, the State Board of Education granted the District provisional accreditation status. However, the State Board of Education voted to keep the District under the leadership of the Board. The current term of the Board expires in June The Board operates the District and retains all authority granted to a board of education for the operation of the District. The MSIP accreditation system is based on a 140-point scale, with 90 points required for full accreditation and 70 points required for provisional accreditation. The District earned 63.5 points for the fiscal year ended June 30, 2014 and an additional 47.5 points for the fiscal year ended June 30, 2015, increasing the District s total points to 111. While such score met the point criteria for the District to be classified in the accredited category, DESE had the authority to require that the District remain unaccredited even though the District s scores met accredited standards. In the District s APR, the District earned points. Because the District scored in the fully accredited range on its annual report card for two consecutive years, the State Board of Education voted unanimously to grant the District provisionally accredited status effective January 4, In the District s APR, the District earned 99 points. The MSIP classification is not a bond or debt rating, but is solely an evaluation made by DESE. Budgetary Impact of Student Transfers to Accredited School Districts On June 11, 2013, the Missouri Supreme Court issued its opinion in Breitenfeld v. Sch. Dist. of Clayton, 399 S.W.3d 816 (Mo. 2013) (en banc), upholding Section et seq. of the Revised Statutes of Missouri, as amended, which provides that the board of education of each district in this state that does not maintain an accredited school... shall pay the tuition of and provide transportation... for each pupil resident therein who attends an accredited school in another district of the same or an adjoining county. The school year was the first year for implementation of State law allowing students to transfer from an unaccredited school district to an accredited school district and providing that the unaccredited school district shall pay tuition and transportation costs for students to attend an accredited school district. For the school year, the District paid tuition costs for over 1,000 students to transfer to twenty-one accredited districts, two of which were designated for transportation, at a cost to the District of approximately $11 million for the fiscal year ended June 30, For the school year, the District paid tuition and transportation costs for approximately 700 students to transfer to accredited school districts at a cost to the District of approximately $7 million for the fiscal year ended June 30, For the school year, approximately 520 students elected to transfer from the District to accredited school districts at an approximate cost of $6,000,000. For the school year, approximately 436 students elected to transfer from the District to accredited school districts at an approximate cost of $4,500,000. For the school year, 110 students elected to transfer to accredited school districts at an estimated cost of $800,000 for tuition and other payments; however, for the school year, due to the District s provisionally accredited status and no longer being unaccredited, the District is not paying the transportation costs of students in the transfer program. It is A-4

33 estimated that the costs associated with transfers will continue to decrease at a rate of approximately 25% per year until all transfer students have graduated. To date, the District indicates tuition and other payments related to such transfers have been paid timely by the District to the accredited school districts. However, the costs associated with the transfer of students to accredited school districts significantly impacted the District s finances and operations since the school year as the District utilized operating reserves to pay the costs of transportation and tuition associated with the transfers. The District s unrestricted fund balance reserve has declined from approximately 57% of expenditures at fiscal year ending June 30, 2013 to approximately 20% at fiscal year ended June 30, For the fiscal year ending June 30, 2016, the unrestricted fund balance reserve was 15% of expenditures. For the fiscal year ending June 30, 2017, the unrestricted fund balance reserve was approximately 16% of expenditures and for the fiscal year ending June 30, 2018 it is project to be approximately 17.5%. School Facilities The District currently owns and operates one early childhood education center, nine elementary schools, two middle schools and one senior high school. [Remainder of page intentionally left blank] A-5

34 Listed below is information about each of the schools operated by the District. Riverview Gardens Sr. High Location: 1218 Shepley Enrollment: 1,013 Capacity: 2,350 Central Middle School Location: 9800 Patricia Barkalow Enrollment: 531 Capacity: 1,275 Westview Middle School Location: 1915 Nimnich Enrollment: 638 Capacity: 975 Danforth Elementary School Location: 1111 St. Cyr Road Enrollment: 299 Capacity: 400 Gibson Elementary Location: 9926 Fonda Drive Enrollment: 481 Capacity: 625 Glasgow Elementary School Location: Renfrew Drive Enrollment: 304 Capacity: 650 Highland Elementary School Location: 174 Shepley Enrollment: 168 Capacity: 625 Koch Elementary School Location: 1910 Exuma Drive Enrollment: 369 Capacity: 625 Lemasters Elementary School Location: 1825 Crown Point Drive Enrollment: 312 Capacity: 650 Lewis & Clark Elementary School Location: Prince Drive Enrollment: 271 Capacity: 625 Meadows Elementary School Location: 9801 Edgefield Drive Enrollment: 359 Capacity: 675 Moline Elementary School Location: 9865 Winkler Drive Enrollment: 368 Capacity: 900 Early Childhood Education Center Location: 1111 St. Cyr Road Enrollment: 271 Capacity: 190 [Remainder of page intentionally left blank] A-6

35 National School Lunch Program Certain District students are eligible to receive free or reduced price lunches ( FRL ) under The National School Lunch Program (the NSLP ), which include students who participate in certain federal assistance programs (including the Supplemental Nutrition Assistance Program) or that qualify based on household income. Currently, more than 50% of the students in each of the District s schools qualify for FRL as shown in the table below. All of the District s schools are Community Eligibility Provision (CEP) eligible. January 2017 Full-Time Enrollment January 2017 Full-Time Enrollment FRL Count 2017 Percentage of FRL Participation School Riverview Gardens Sr. High 1, , % Central Middle School Danforth Elementary School Westview Middle School Gibson Elementary Glasgow Elementary School Highland Elementary School Lemasters Elementary School Lewis & Clark Elementary School Meadows Elementary School Koch Elementary School Moline Elementary School Source: School District of Riverview Gardens and DESE. Educational Programs and Services The District is proud of the programs and services it provides and the quality of students it educates. Outlined in the following paragraphs are selected honors programs, special education programs and extra-curricular activities offered by the District. Special Education Programs. The District is a component district of the Special School District of St. Louis County. The District s special education for its students is supplied by the Special School District of St. Louis County. Extra-Curricular Activities. The District has a full program of extra-curricular activities. The athletic program includes fall, winter and spring sports for both boys and girls. Some interscholastic teams include both underclass and varsity level competition. An intramural program offers recreational opportunities for students interested in exercise and leisure time pursuits. Clubs and organizations ranging from athletic support groups to music, journalism, drama, yearbook and student council are also available. At the middle schools, students have the opportunity to participate in intramurals, student council, drama and music. The District is committed to encouraging students to take advantage of the opportunity offered by its program of extra-curricular activities. A-7

36 Employee Relations The District s teaching staff is unionized with the National Education Association (NEA), and they may join professional groups or associations and participate in collective bargaining with the District pursuant to State law. Pension and Employee Retirement Plans The District contributes to two cost-sharing multiple-employer defined benefit pension plans on behalf of its employees: (i) The Public School Retirement System of Missouri ( PSRS ), which provides retirement, disability and death benefits to full-time (and certain part-time) certificated employees of school districts and certain other educational entities in Missouri and employees of certain related employers; and (ii) The Public Education Employee Retirement System of Missouri ( PEERS ), which provides retirement and disability benefits to employees of school districts and certain other educational entities in Missouri and of certain related employers who work 20 or more hours per week and do not contribute to PSRS. Benefit provisions relating to both PSRS and PEERS are set forth in Chapter 169 of the Revised Statutes of Missouri, as amended. The statutes assign responsibility for the administration of both plans to a seven-member Board of Trustees of PSRS (the PSRS Board ). PSRS and PEERS had 534 and 530 contributing employers, respectively, during the fiscal year ended June 30, PSRS and PEERS issue a publicly available financial report that includes financial statements and required supplementary information. The PSRS/PEERS Comprehensive Annual Financial Report for the fiscal year ended June 30, 2017 (the 2017 PSRS/PEERS CAFR ), the comprehensive financial report for the plans, is available at The link to the 2017 PSRS/PEERS CAFR is provided for general background information only, and the information in the 2017 PSRS/PEERS CAFR is not incorporated by reference herein. The 2017 PSRS/PEERS CAFR provides detailed information about PSRS and PEERS, including their respective financial positions, investment policy and performance information, actuarial information and assumptions affecting plan design and policies, and certain statistical information about the plans. PSRS and PEERS Contributions. Employees who contribute to PSRS are not eligible to make Social Security contributions, except in limited circumstances. For the fiscal year ended June 30, 2017, PSRS contributing employees were required to contribute 14.5% of their annual covered salary and their employers, including the District, were required to contribute a matching amount of 14.5% of each contributing employee s covered salary. The contribution requirements of members and the District are established (and may be amended) by the PSRS Board based on the recommendation of an independent actuary. State statute prohibits the PSRS Board from approving an increase greater than 1.0% in aggregate of PSRS contributing member covered pay of the previous year. Employees who contribute to PEERS are eligible to make Social Security contributions. For the fiscal year ended June 30, 2017, PEERS contributing employees were required to contribute 6.86% of their annual covered salary and their employers, including the District, were required to contribute a matching amount of 6.86% of each contributing employee s covered salary. The contribution requirements of members and the District are established (and may be amended) by the PSRS Board based on the recommendation of an independent actuary. State statute prohibits the PSRS Board from approving an increase greater than 0.5% in aggregate of PEERS contributing member covered pay of the previous year. PSRS and PEERS Funded Status. PSRS and PEERS reported funded ratios of 84.0% and 85.8%, respectively, as of June 30, 2017, according to the 2017 PSRS/PEERS CAFR. Funded ratios are A-8

37 intended to estimate the ability of current plan assets to satisfy projected future liabilities. The PSRS and PEERS funded ratios are determined by dividing the smoothed actuarial value of plan assets by the plan s actuarial accrued liability determined under the entry age normal cost method with normal costs calculated as a level percentage of payrolls, along with certain actuarial assumptions based on an experience study conducted in PSRS and PEERS amortize unfunded actuarial liabilities using a closed 30-year method. Additional assumptions and methods used to determine the actuarial funded status of PSRS and PEERS are set forth in the Actuarial Section of the 2017 PSRS/PEERS CAFR. The funding objective of each plan, as stated in each plan s Actuarial Funding Policy, is to achieve a funded ratio of 100% over a closed 30-year period. The following provides a historical comparison of actual employer contributions to actuarially determined contributions and the historical funded status for the plans for the years shown: Schedule of Employer Contributions PSRS PEERS Year Ended June 30, Actuarially Determined Contribution Actual Employer Contributions Contributio n Excess/ (Deficiency) * Actuarially Determined Contribution Actual Employer Contributions Contribution Excess/ (Deficiency) * 2017 $642,821,624 $684,857,718 $ 42,036,094 $108,807,233 $111,239,585 $ 2,432, ,155, ,953,683 26,798, ,011, ,654,638 2,643, ,438, ,924,899 (9,514,085) 105,739, ,624,310 (2,114,782) ,459, ,989,869 35,530,476 98,497, ,699,735 2,201, ,232, ,040, ,808,067 87,013,816 97,059,313 10,045,497 Source: Schedules of Employer Contributions in the Financial Section of the 2017 PSRS/PEERS CAFR. * The annual statutory increase in the total contribution rate may not exceed 1% of pay for PSRS and 0.5% of pay for PEERS. The limitation on contribution increases resulted in a deficiency for some of the years presented. Contributions were funded to the maximum statutory limit each year. Schedule of Funding Progress (Dollar amounts in thousands) PSRS PEERS Year Ended June 30, Actuarial Value of Assets Actuarial Accrued Liability Funded Ratio Actuarial Value of Assets Actuarial Accrued Liability Funded Ratio 2017 $37,373,740 $44,501, % $4,470,270 $5,209, % ,419,278 41,744, ,157,427 4,809, ,073,415 40,610, ,915,199 4,512, ,846,599 38,483, ,584,719 4,211, ,443,147 36,758, ,237,200 3,967, Source: Schedule of Funding Progress in the Actuarial Section of the 2017 PSRS/PEERS CAFR. [Remainder of page intentionally left blank] A-9

38 As stated in the District s audited financial statements and the GASB 68 footnote disclosure prepared by PSRS and PEERS and provided to the District, the District s contributions to PSRS and PEERS for the years shown were as follows: District Contributions to PSRS and PEERS PSRS PEERS Year Ended June 30, Annual Contribution * Contribution (% of Payroll) Annual Contribution * Contribution (% of Payroll) 2017 $3,568, % $658, % ,624, , ,492, , ,413, , ,458, , Source: Audited financial statements of the District; Financial Statement Information Related to the Public School and Education Employee Retirement Systems of Missouri, prepared by PSRS and PEERS for the District (Unaudited). * The annual contributions equaled the amounts required by the PSRS Board for each year. The District s contribution to PSRS and PEERS during the fiscal year ended June 30, 2017 constituted approximately 6.6% of the District s total expenditures during the fiscal year. The District will be required to contribute 14.5% of covered payroll for PSRS contributing employees and 6.86% of covered payroll for PEERS contributing employees during the fiscal years ending June 30, 2018 and June 30, 2019, equal to the contribution percentages for the fiscal year ended June 30, Estimated Proportionate Share of PSRS/PEERS Liability. The District has not implemented GASB Statement No. 68, Accounting and Financial Reporting for Pensions An Amendment of GASB Statement No. 27, because the District s financial statements are prepared on a modified accrual basis of accounting, which is a comprehensive basis of accounting different from accounting principles generally accepted in the United States of America. PSRS and PEERS, however, have implemented GASB Statement No. 67, Financial Reporting for Pension Plans An Amendment of GASB Statement No. 25. Accordingly, PSRS and PEERS are required annually to provide each contributing Missouri school district reports estimating each district s proportionate share of the net pension liability of PSRS and PEERS as of the end of the prior fiscal year. The estimate is computed for each district by multiplying the net pension liability of a plan (calculated by determining the difference between the plan s total pension liability and fiduciary net position) by a percentage reflecting the district s proportionate share of contributions to the plan during the fiscal year (calculated by dividing the District s actual contributions by the actual contributions of all participating employers for PSRS and PEERS, respectively, for the fiscal year ended June 30, 2016). At June 30, 2017 (measured as of June 30, 2016), the District s proportionate share of the net pension liability of PSRS and PEERS was $ 40,246,470 and $ 5,372,437, respectively, as determined by PSRS and PEERS on an accrual basis of accounting. At June 30, 2016, the District s contribution to PSRS and PEERS represented % and %, respectively, of the overall contributions to PSRS and PEERS during the fiscal year. In addition, for the year ended June 30, 2017, the district recognized pension expense of $658,304 for PSRS and $3,568,730 for PEERS, its proportionate share of the total pension expense. Detailed information about the calculation of the net pension liability of the plans, including information about the assumptions used, is available in Note 5 of the 2017 PSRS/PEERS CAFR. A-10

39 The net pension liability of PSRS and PEERS is based on a 7.75% discount rate, which was also the assumed investment rate of return for the plans effective for the fiscal year ended June 30, PSRS and PEERS further advised the District that its proportionate share of the net pension liability using a 1% higher or lower discount rate at June 30, 2017 (measured as of June 30, 2016) would be as follows: Proportionate Share of Net Pension Liability Sensitivity District s proportionate share of PSRS net pension liability District s proportionate share of PEERS net pension liability / (asset) 1.0% Decrease (6.75%) Current Discount Rate (7.75%) 1.0% Increase (8.75%) $68,276,469 $40,246,470 $16,907,236 $ 9,342,856 $ 5,372,437 $ 2,040,278 For the fiscal year ended June 30, 2017, the PSRS Board revised the actuarial assumed rate of return from 8.0% to 7.75% along with several other revisions and changes in assumptions made by the PSRS Board in light of the actuarial experience studies and asset-liability study conducted in fiscal year With respect to the fiscal year ending June 30, 2018, the PSRS Board has revised the actuarial assumed rate of return from 7.75% to 7.6% and increased the assumption for cost-of-living adjustments for the June 30, 2017 valuations, which are relevant for the fiscal year ending June 30, For additional information regarding the District s pensions and employee retirement plans, see Note 6 to the District s financial statements included in APPENDIX B to this Official Statement. For additional information regarding PSRS and PEERS, see the 2017 PSRS/PEERS CAFR. Sources of Revenue FINANCIAL INFORMATION CONCERNING THE DISTRICT The District finances its operations through the local property tax levy, State sales tax, State Aid (as defined below), federal grant programs and miscellaneous sources, including without limitation State Aid for transportation, a State sales tax on cigarettes and a pro rata share of interest income from the counties in which each school district operates. Debt service on general obligation bonds is paid from amounts in the District s Debt Service Fund. The primary source of money in the Debt Service Fund is local property taxes derived from a debt service levy. As discussed below, the Debt Service Fund may, however, also contain money derived from transfers from the Incidental Fund, from State Aid in the Classroom Trust Fund, and from certain other taxes or payments-in-lieu-of-taxes that may be placed in the Debt Service Fund at the discretion of the Board. State and federal revenue, as well as Proposition C sales tax revenue (included in the Local Revenue category below), are received on a continuous monthly basis throughout the fiscal year. Local taxes, however, are received primarily in January, over six months into a district s fiscal year. Districts that receive a smaller percentage of revenue from State and federal aid and depend more on local revenues will typically carry a larger fund balance than other districts that may be receiving a larger percent of its revenue from State and federal aid amounts rather than local taxes. A-11

40 The following table sets forth the amount and percentage of all revenues derived by the District from various sources for the fiscal year ended June 30, 2017: Revenue Source Revenues % of Total Local Revenue $18,419,152 29% County Revenue 941,262 1 State Revenue 35,118, Federal Revenue 9,468, Other Revenue 796,185 1 Total (1) $64,743, % (1) Total amounts to more than 100% due to rounding. Source: School District of Riverview Gardens and FY 2017 District s Audited Financial Statements. Local Revenue The primary sources of local revenue are (1) taxes upon real and personal property within a district, excluding railroad and utility property taxes, which are more fully described below, and (2) receipts from a 1% state sales tax (commonly referred to as Proposition C revenues ) approved by the voters in Proposition C revenues are deemed to be local revenues for school district accounting purposes. Proposition C revenues are distributed to each school district based on the district s weighted average daily attendance (see Weighted ADA under Missouri School Finance Laws below). For the fiscal year, each school district received approximately $979 per pupil from Proposition C revenues based upon each district s Weighted ADA. County Revenue For school taxation purposes, all State assessed railroad and utility property within a county is taxed uniformly at a rate determined by averaging the tax rates of all school districts in the county. No determination is made of the assessed value of the railroad and utility property that is physically located within the boundaries of each school district. Such tax collections for each county are distributed to the school districts within that county according to a formula based in part on total student enrollments in each district and in part on the taxes levied by each district. County revenue also includes certain fines and forfeitures collected with respect to violations within the boundaries of the school district. Federal Revenue School districts receive certain grants and other revenue from the federal government that are required to be used for the specified purposes of the grant or funding program. The federal Every Student Succeeds Act ( ESSA ) was signed into law on December 10, ESSA replaces the No Child Left Behind Act. Each state education agency must develop a state accountability plan ( ESSA Plan ) that incorporates testing based on challenging academic standards. The ESSA Plans were required to be submitted to the United States Department of Education (the DOE ) by either April 3 or September 18, Under ESSA, states can decide how much weight to give standardized tests in their accountability systems and determine what consequences, if any, should attach to poor performance. However, at least 95% of eligible students are required to take the state-chosen standardized test and federal funding can be withheld if states fall below the 95% threshold. A-12

41 The transition to new ESSA Plans began during the school year, with full implementation expected in the school year once a state s ESSA Plan is approved by the DOE. If a state s ESSA Plan is not approved prior to the school year then a state may delay, until the school year, implementation of certain aspects of the ESSA Plan. The State submitted its plan to the DOE on September 13, 2017 in order to meet the September 18, 2017 deadline. The DOE is in the process of reviewing the State s plan. Under ESSA, the State will continue to test students through the Missouri Assessment Program. Missouri School Finance Laws State Aid. The amount of State Aid for school districts in Missouri has typically been calculated using a complex formula. The impact of SB 287 was to transition the State away from a local-tax-ratebased formula to a formula that is primarily student-needs-based. The formula was phased in over a seven-year period, which began in the fiscal year and ended with the school year. Since the school year, State Aid has been calculated solely using the student-needs-based formula. Property Tax Levy Requirements. The sum of a district s local property tax levies in its Incidental and Teachers Funds must be at least $2.75 per $100 assessed valuation in order for the district to receive increases in State Aid above the level of State Aid it received in the fiscal year. Levy reductions required as a result of a Hancock rollback (see FINANCIAL INFORMATION CONCERNING THE DISTRICT Tax Rates Operating Levy below) will not affect a district s eligibility for State Aid increases. The Formula. A district s State Aid is determined by first multiplying the district s weighted average daily attendance ( Weighted ADA ) by the State adequacy target ( State Adequacy Target ). This figure may be adjusted upward by a dollar value modifier ( DVM ). The product of the Weighted ADA multiplied by the State Adequacy Target multiplied by the DVM is then reduced by a district s local effort ( Local Effort ) to calculate a district s final State Aid amount. The State Aid amount is distributed to the districts on a monthly basis. Weighted ADA. Weighted ADA is based upon regular term ADA plus summer school ADA, with additional weight assigned in certain circumstances for students who qualify for FRL, receive special education services ( IEP ), or possess limited English language proficiency ( LEP ). These FRL, IEP and LEP students are weighted to the extent they exceed certain thresholds (based on the percentage of students in each of the categories in certain high performing districts ( Performance Districts ), which thresholds can change every two years. For fiscal years 2017 and 2018, DESE has revised the thresholds downward as required under SB 586, which modified the definition of State Adequacy Target to require that a future recalculation of the State Adequacy Target never result in a decrease from the State Adequacy Target as calculated for fiscal years 2017 and This lowering of the thresholds means more FRL, IEP and LEP students will be included in Weighted ADA. The District s State Aid revenues would be adversely affected by decreases in its Weighted ADA resulting from decreased enrollment generally and, specifically, decreased enrollment of FRL, IEP and LEP students. State Adequacy Target. The State Aid formula requires DESE to calculate a State Adequacy Target, which is intended to be the minimum amount of funds a school district needs in order to educate each student. DESE s calculation of the State Adequacy Target is based upon amounts spent, excluding federal and State transportation revenues, by Performance Districts. Every two years, using the most current list of Performance Districts, DESE will recalculate the State Adequacy Target. The recalculation can never result in a decrease from the State Adequacy Target as calculated for fiscal years 2017 and A-13

42 2018 and any State Adequacy Target figure calculated subsequent to fiscal year For fiscal years 2017 and 2018, the State Adequacy Target is $6,131 per pupil. For fiscal year 2017, the State Adequacy Target was at an adjusted level because education funding was not fully funded. For fiscal year 2018, the foundation formula is expected to be fully funded, but the Governor still has the ability to withhold money throughout the year. Dollar Value Modifier. The DVM is an index of the relative purchasing power of a dollar in different areas of the State. The DVM is calculated as one plus 15% of the difference of the regional wage ratio (the ratio of the regional wage per job divided by the State median wage per job) minus one. The law provides that the DVM can never be less than DESE revises the DVM for each district on an annual basis. The DVM for the District for and was and 1.095, respectively. The DVM for the District for is Local Effort. For the fiscal year, the Local Effort figure utilized in a district s State Aid calculation was the amount of locally generated revenue that the district would have received in the fiscal year if its operating levy was set at $3.43. The $3.43 amount is called the performance levy. For all years subsequent to the fiscal year, a district s Local Effort amount has been frozen at the amount, except for adjustments due to increased locally collected fines or decreased assessed valuation in the district. Growth in assessed valuation and operating levy increases will result in additional local revenue to the district, without affecting State Aid payments. Categorical-Source Add-Ons. In addition to State Aid distributed pursuant to the formula as described above, the formula provides for the distribution of certain categorical sources of State Aid to school districts. These include (1) 75% of allowable transportation costs, (2) the career ladder entitlement, (3) the vocational education entitlement and (4) educational and screening program entitlements. Classroom Trust Fund (Gambling Revenue) Distribution. A portion of the State Aid received under the formula will be in the form of a distribution from the Classroom Trust Fund, a fund in the state treasury containing a portion of the State s gambling revenues. This money is distributed to school districts on the basis of ADA (versus Weighted ADA, which applies to the basic formula distribution). The funds deposited into the Classroom Trust Fund are not earmarked for a particular fund or expense and may be spent at the discretion of the local school district except that, beginning with the fiscal year, all proceeds of the Classroom Trust Fund in excess of amounts received in the fiscal year must be placed in the Teachers or Incidental Funds. For the fiscal year, each school district received approximately $405 per pupil based on their ADA. Classroom Trust Fund dollars do not increase the amount of State Aid. Mandatory Deposit and Expenditures of Certain Amounts in the Teachers Fund. The following State and local revenues must be deposited in the Teachers Fund: (1) 75% of basic formula State Aid, excluding State Aid distributed from the Classroom Trust Fund (gambling revenues); (2) 75% of one-half of the district s local share of Proposition C revenues; (3) 100% of the career ladder State matching payments; and (4) 100% of local revenue from fines and escheats based on violations or abandoned property within the district s boundaries. In addition to these mandatory deposits, school districts are also required to spend for certificated staff compensation and tuition expenditures each year the amounts described in clauses (1) and (2) of the preceding paragraph. Since the fiscal year, school districts are further required to spend for certificated staff compensation and tuition expenditures each year, per the second preceding year s Weighted ADA, as much as was spent in the previous year from local and county tax revenues deposited in the Teachers Fund, plus the amount of any transfers from the Incidental Fund to the Teachers Fund A-14

43 that are calculated to be local and county tax sources. This amount is to be determined by dividing local and county tax sources in the Incidental Fund by total revenue in the Incidental Fund. Commencing with the fiscal year, the formula provides that certificated staff compensation now includes the costs of public school retirement and Medicare for those staff members. These items were previously paid from the Incidental Fund. Failure to satisfy the deposit and expenditure requirements applicable to the Teachers Fund will result in a deduction of the amount of the expenditure shortfall from a district s basic formula State Aid for the following year, unless the district receives an exemption from the State Board of Education. A school board may transfer any portion of the unrestricted balance remaining in the Incidental Fund to the Teachers Fund. Any district that uses a transfer from the Incidental Fund to pay for more than 25% of the annual certificated compensation obligation of the district, and has an Incidental Fund balance on June 30 in any year in excess of 50% of the combined Incidental and Teachers Fund expenditures for the fiscal year just ended, will be required to transfer the excess from the Incidental Fund to the Teachers Fund. Limited Sources of Funds for Capital Expenditures. School districts may only pay for capital outlays from the Capital Projects Fund. Sources of revenues in the Capital Projects Fund are limited to (1) proceeds of general obligation bonds such as the Bonds (which are repaid from a Debt Service Fund levy) and lease financings, (2) revenue from the school district s local property tax levy for the Capital Projects Fund, (3) certain permitted transfers from the Incidental Fund and (4) a portion of the funds distributed to school districts from the Classroom Trust Fund. Capital Projects Fund Levy. Prior to setting tax rates for the Teachers and Incidental Funds, each school district must annually set the tax rate for the Capital Projects Fund as necessary to meet the expenditures of the Capital Projects Fund for capital outlays, except that the tax rate set for the Capital Projects Fund may not be in an amount that would result in the reduction of the equalized combined tax rates for the Teachers and Incidental Funds to an amount below $2.75. The District s current Capital Projects Fund levy is $0.00 per $100 of assessed valuation. Transfers from the Incidental Fund to the Capital Projects Fund. In addition to money generated from the Capital Projects Fund levy, each school district may transfer money from the Incidental Fund to the Capital Projects Fund for certain purposes, including: (1) the amount to be expended for transportation equipment that is considered an allowable cost under the State board of education rules for transportation reimbursements during the current year; (2) the amount necessary to satisfy obligations of the Capital Projects Fund for State-approved area vocational-technical schools; (3) current year obligations for lease-purchase obligations entered into prior to January 1, 1997; (4) the amount necessary to repay costs of one or more guaranteed energy savings performance contracts to renovate buildings in the school district, provided that the contract specified that no payment or total of payments shall be required from the school district until at least an equal total amount of energy and energy-related operating savings and payments from the vendor pursuant to the contract have been realized; and (5) to satisfy current year capital project expenditures, an amount not to exceed the greater of (a) $162,326 or (b) seven percent (7%) of the State Adequacy Target (which DESE calculated at $6,241 for and for ; but see State Adequacy Target above) times a school district s Weighted ADA. The District did not make any transfers from the Incidental Fund to the Capital Projects Fund under this provision during the fiscal year. Transfers from Incidental Fund to Debt Service Fund and/or Capital Projects Fund. If a school district is not using the seven percent (7%) or the $162,326 transfer discussed in parts (5)(a) and (5)(b) of the prior paragraph and is not making payments on lease purchases pursuant to Section , A-15

44 RSMo, then the school district may transfer from the Incidental Fund to the Debt Service and/or the Capital Projects Fund the greater of (1) the State Aid received in the school year as a result of no more than eighteen (18) cents of the sum of the Debt Service Fund levy and Capital Projects Fund levy used in the foundation formula and placed in the Capital Projects Fund or Debt Service Fund, or (2) Five percent (5%) of the State Adequacy Target (which DESE calculated at $6,241 for and for ; but see State Adequacy Target above) times the district s Weighted ADA. The District did not make any transfers under this provision during the fiscal year. Accounting, Budgeting and Auditing Procedures The accounts of the District are organized on the basis of legally established funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures. District resources are allocated to, and accounted for, individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The following fund types and account groups are used by the District. Governmental Funds. General (Incidental) Fund This fund is used to account for general activities of the District, including expenditures for non-certified employees, pupil transportation costs, plant operation, fringe benefits, student body activities, community services, food service and any expenditures not required or permitted to be accounted for in other funds. Special Revenue (Teachers ) Fund This fund is used to account for financial resources and expenditures for certificated employees involved in administration and instruction. It includes revenues restricted by the State and the local tax levy for the payment of teacher salaries and certain employee benefits. Capital Projects Fund This fund is used to account for the accumulation of resources to be used for the acquisition or construction of major capital assets. Debt Service Fund This fund is used to account for the accumulation of resources for, and the payment of, principal, interest and fiscal charges on long-term debt. Basis of Accounting. Basis of accounting refers to when revenues and expenditures are recognized in the accounts and reported in the financial statements. The District prepares its District-wide and fund financial statements using the modified accrual basis, which is a comprehensive basis of accounting other than U.S. generally accepted accounting procedures. Budgets and Budgetary Accounting. The District follows these procedures in establishing the budgetary data reflected in the financial statements: 1. In accordance with Chapter 67 of the Revised Statutes of Missouri, the District adopts a budget for each fund. 2. Prior to July, the Superintendent, who serves as the budget officer, submits to the Board a proposed budget for the fiscal year beginning on the following July 1. The proposed budget includes estimated revenues and proposed expenditures for all District funds. Budgeted expenditures cannot exceed beginning available monies plus estimated revenues for the year. A-16

45 3. A public hearing is conducted to obtain taxpayer comments. Prior to its approval by the Board of Education, the budget document is available for public inspection. 4. Prior to July 1, the budget is enacted by a vote of the Board. 5. Subsequent to its formal approval of the budget, the Board has the authority to make necessary adjustments to the budget by formal vote of the Board. Adjustments made during the year are reflected in the budget information included in the financial statements. The financial statements of the District are audited annually by a firm of independent certified public accountants in accordance with generally accepted auditing standards. The firm of Kerber, Eck & Braeckel LLP, St. Louis, Missouri audited the financial statements of the District for the fiscal year ended June 30, A summary of significant accounting policies of the District is contained in the Notes to the financial statements. Summary of Revenues and Expenditures The following Summary Statement of Revenues, Expenditures and Changes in Fund Balances was prepared from the District s audited financial statements for the fiscal years ended June 30, 2013 through June 30, The statement set forth below should be read in conjunction with the other financial statements and notes set forth in APPENDIX B of this Official Statement and the financial statements on file at the District s office. [Remainder of page intentionally left blank] A-17

46 SUMMARY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES Fiscal Years Ended June General Fund: Beginning Balance $ 9,669,327 $ 15,798,761 $ 19,745,059 $ 32,749,591 $ 31,161,652 Revenues 30,518,344 26,885,247 30,115,163 25,737,812 30,125,917 Expenditures (28,674,540) (33,014,636) (34,061,461) (38,742,344) (28,537,978) Other Sources (Uses) (1,147,769) Ending Balance $ 10,365,407 $ 9,669,372 $ 15,798,761 $ 19,745,059 $ 32,749,591 Special Revenue Fund: Beginning Balance $ 1,561,530 $ $ $ $ Revenues 29,676,947 30,844,752 29,038,009 26,550,120 26,758,022 Expenditures (30,059,095) (29,283,222) (29,038,009) (26,550,120) (26,758,022) Other Sources (Uses) Ending Balance $ 1,179,382 $ 1,561,530 $ $ $ Capital Projects Fund: Beginning Balance $ 741,766 $ 155,964 (19,210) $ 749,669 $ 894,551 Revenues 79,504 2,107,383 2,667,798 2,305,392 2,087,722 Expenditures (1,612,577) (4,141,581) 2,492,624 (3,074,271) (3,800,717) Other Sources (Uses) 1,147,769 Ending Balance $ 356,462 $ 741,766 $ 155,964 $ (19,210) $ 749,669 Debt Service Fund: Beginning Balance $ 1,685,129 $ 2,060,257 $ 2,365,054 $ 2,419,579 $ 2,643,353 Revenues 3,874,285 2,785,388 2,712,528 2,932,913 2,881,474 Expenditures (3,410,803) (3,160,156) (3,017,325) (2,987,438) (3,105,037) Other Sources (Uses) Ending Balance $ 2,148,611 $ 1,685,129 $ 2,060,257 $ 2,365,054 $ 2,419,579 Other Governmental Funds Beginning Balance $ (400,850) $ 92,292 $ 94,313 $ 92,197 $ 92,197 Revenues 594,433 2,935,311 1,197,822 1,195,370 1,188,808 Expenditures (594,420) (649,015) (1,199,843) (1,193,254) (1,188,808) Other Sources (Uses) (2,779,438) Ending Balance $ (400,837) $ (400,850) $ 92,292 $ 94,313 $ 92,197 Total Funds: Beginning Balance $ 13,256,947 $ 18,107,274 $ 22,185,216 $ 36,011,036 $ 34,791,753 Revenues 64,743,513 65,558,081 65,731,320 58,721,607 63,041,943 Expenditures (64,351,435) (70,248,970) (69,809,262) (72,547,427) (63,390,562) Other Sources (Uses) (159,438) Ending Balance $ 13,649,025 $ 13,256,947 $ 18,107,274 $ 22,185,216 $ 36,011,036 Source: School District of Riverview Gardens and FY FY 2017 District s Audited Financial Statements. [Remainder of page intentionally left blank] A-18

47 Historic Assessed Valuation The assessed value of all taxable property situated in the District as of January 1 (as finalized on December 31) for the following years are noted below: Calendar Assessed Percentage Year Valuation (1) Change 2017 $193,868, % ,319, ,841, ,870, ,763,460 N/A (1) Includes the incremental increase in assessed valuation over the established assessed valuation base within a tax increment financing district located in the District. Source: St. Louis County Department of Revenue, Collection Division. Assessed Valuation Components The following shows the total assessed valuation and estimated actual value by category of all taxable tangible property (excluding state assessed railroad and utility property) situated in the District as of January 1, 2017 (as finalized on December 31, 2017): (1) Assessed Valuation (1) Assessment Rate Estimated Actual Valuation Real Estate (2) Residential $132,445,250 19% $697,080,263 Agricultural 8, ,036 Commercial 26,235, ,395,427 Total Real Estate 158,689, ,476,726 Personal Property (2) 35,179, /3 11,725,277 TOTAL $193,868,950 $717,202,003 Includes the incremental increase in assessed valuation over the established assessed valuation base within a tax increment financing district located in the District. (2) Includes Manufacturer s Equipment. Locally Assessed Railroad and Utility Property are included in the real estate and personal property totals. Source: St. Louis County Department of Revenue, Collection Division. Tax Assessments and Collections The District does not assess or collect ad valorem property taxes, but instead delegates those responsibilities to St. Louis County (the County ), as described below. On or before the first day of September in each year, the Board estimates the amount of taxes that will be required during the ensuing school year to pay interest due on bonds issued and the principal of bonds maturing in such year and the costs of operation and maintenance plus such amount as may be required to cover emergencies and anticipated tax delinquencies, and the tax rate required to produce that A-19

48 amount. The Board certifies the tax rate to the County Clerk. The officers of the County, at the time they make the levy for state, county, city, school district, and other ad valorem taxes, levy the tax rate certified by the Board upon all taxable tangible property in the District. All officers of the County and of the State concerned with the assessment and collection of taxes, fines, and penalties must perform their duties in relation to the levy, assessment, and collection of the District taxes as they do in relation to state, county, city, school district, and other ad valorem taxes. All District taxes levied must be based upon the assessed valuation of lands and other taxable tangible property in the District as may be determined by the records in the offices of the County Assessor and County Clerk, and must be collected and remitted to the District. All the rights and remedies provided by the laws of the State for the collection of state, county, city, school district, and other ad valorem taxes are applicable to the collection of taxes authorized to be collected by the District. The County levies taxes against real and tangible personal property, other than inventory of merchants and manufacturers and household goods of individuals. Prior to January 1, 1985, State law required that property be assessed at 33-1/3 percent of its true value. A 1982 amendment to the Constitution of the State changed the provisions requiring uniformity in taxation of real property by directing such property to be subclassed as agricultural, residential or commercial and permitting different assessment ratios for each subclass. As a result of the 1982 amendment, agricultural property is assessed at 12 percent of true value, residential property is assessed at 19 percent of true value, and commercial property is assessed at 32 percent of true value. Real property within the County is assessed by the County Assessor. The County Assessor is responsible for preparing the tax roll each year and for submitting the tax roll to the County Board of Equalization. The County Board of Equalization has the authority to adjust and equalize the assessment of properties appearing on the tax rolls. Certain properties, such as those used for charitable, educational, and religious purposes, are exempt from ad valorem taxes. In addition, pursuant to State statutes, the County may grant real property tax abatement, under certain conditions, to businesses building or rehabilitating property within the County. Tax Rates Debt Service Levy. The District is required under Article VI, Section 26(f) of the Missouri Constitution to levy an annual tax on all taxable tangible property therein sufficient to pay the interest and principal of the indebtedness as they fall due and to retire the same within 20 years from the date of issue. The Board may set the tax rate for debt service, without limitation as to the rate or amount, at the level required to make such payments. Operating Levy. The District s operating levy for the year is $ per $100 of assessed valuation. [Remainder of page intentionally left blank] A-20

49 The following table shows the District s tax levies (per $100 of assessed valuation) for each of the following fiscal years: Capital Debt Adjusted (1) Fiscal Year Special Revenue General Projects Service Tax Levy Ending June 30 Fund Fund Fund Fund Total $ - $ $ - $ $ (1) Adjusted for Proposition C rollback and revaluation. Under Proposition C, revenues generated by a 1% state sales tax are credited to a special trust fund for districts and are deemed to be local revenues. In August 1992, the voters in the District approved a permanent waiver of the Proposition C rollback. Source: School District of Riverview Gardens. Tax Collection Rates Fiscal Year Ending June 30 (1) Assessed Valuation on January 1 (2) Current Taxes Collected By Due Date Delinquent Taxes Collected (3) Current and Delinquent Taxes Collected Current Year Tax Levy % of Levy % of Levy (3) 2017 $184,319,110 $11,261,480 $ 9,404, % $1,645,899 $11,050, % ,841,490 10,412,978 8,641, ,322,001 9,963, ,870,250 10,816,021 9,112, ,570,292 10,683, ,763,460 10,907,129 9,242, ,755,779 10,998, ,026,930 12,785,433 10,919, ,556,533 12,475, (1) Taxes are levied and collected on a calendar year basis. Numbers shown reflect taxes levied and collected in the District s fiscal year, as indicated. (2) Includes the incremental increase in assessed valuation over the established assessed valuation base within a tax increment financing district located in the District. The District estimates the amount attributable to the one small tax increment financing district located in the District to be approximately $2,575,770 for the year ended December 31, (3) Delinquent taxes are shown in the year payment is actually received, which may cause the percentage of current and delinquent taxes collected to exceed 100%. Current and Delinquent Taxes Collected also includes the current year s protested taxes which have been released. Source: School District of Riverview Gardens. [Remainder of page intentionally left blank] A-21

50 Major Taxpayers The largest identifiable taxpayers within the District for calendar year 2017 are listed below. These taxpayers represent approximately 7.25% of the District s 2017 assessed valuation of $193,868,950. (1) % of District s Assessed 2017 Total Assessed Taxpayer Valuation Valuation Missouri American Water Company $ 2,626, % Realty Income Properties 7 LLC 1,768, Ventura Village Partners LP 1,566, ARC DB5PROP001 LLC 1,315, N W Apartments LP 1,307, Laclede Gas Company 1,188, Woodlands Apartments LLC 1,178, EAN Holdings LLC 1,123, CSMA BLT LLC 1,062, Oakmont Partners LLC 917, Total $14,053, % (1) Percentage does not total due to rounding. Source: St. Louis County Department of Revenue, Collection Division. Tax Abatement and Tax Increment Financing Under Missouri law, tax abatement is available for redevelopers of areas determined by the governing body of a city to be blighted. The Land Clearance for Redevelopment Authority Law authorizes ten year tax abatement pursuant to Sections to , Revised Statutes of Missouri, as amended. In lieu of ten year tax abatement, a redeveloper that is an urban redevelopment corporation formed pursuant to Chapter 353, Revised Statutes of Missouri, as amended, may seek real property tax abatement for a total period of 25 years. In addition, the Industrial Development Law, Chapter 100, Revised Statutes of Missouri, as amended, authorizes real and personal property tax abatement for corporations for projects for industrial development. In addition, the Real Property Tax Increment Allocation Redevelopment Act, Sections to , Revised Statutes of Missouri, as amended, makes available tax increment financing for redevelopment projects in certain areas determined by the governing body of a city or county to be a blighted area, conservation area, or economic development area, each as defined in such statute. Currently, a small portion of the District is located in a tax increment financing district. Neither tax abatement nor tax increment financing will diminish the amount of property tax revenues currently collected by the District in the affected areas, but instead will act to freeze such revenues at current levels and will deprive the District of future increases in ad valorem property tax revenues which would otherwise have resulted from increases in assessed valuation in such areas until the tax increment financing obligations issued are repaid and the tax abatement period terminates. District s Rights in the Event of Tax Delinquencies Taxes on real estate become delinquent on January 1 and the collector is required to enforce the state s lien by offering the property for sale on the fourth Monday in August. If the offering does not A-22

51 produce a bid equal to the delinquent taxes plus interest, penalty, and costs, the property is offered for sale again the following year. If the second offering also does not produce a bid adequate to cover the amount due, the property is sold the following year to the highest bidder. Tax sales at the first or second offerings are subject to the owner s redemption rights. Delinquent personal property taxes constitute a debt of the person assessed with the taxes, and a personal judgment can be rendered for such taxes against the debtor. Personal property taxes become delinquent on January 1. Collection suits may be commenced on or after February 1 and must be commenced within three years. General Obligation Bonds Outstanding The District fixes an annual debt service levy and levies taxes to meet the annual debt service requirements of its general obligation bonds. Article VI, Section 26(b) of the Constitution of the State of Missouri limits the outstanding amount of authorized general obligation bonds of a school district to 15% of assessed valuation of taxable tangible property within the school district. The following table illustrates the District s total outstanding general obligation bond indebtedness at the time of delivery of the Bonds. Date of Original Amount Range of Amount Final Bond of Issue Interest Rates Outstanding Maturity 2010B $ 9,600, % % $ 7,820,000 4/1/ C 4,660, % 4,660,000 4/1/ ,349, % % 5,440,000 4/1/ ,700,000 * % * 11,700,000 * 4/1/2038 Total $35,309,920 * $29,620,000 * * Preliminary; subject to change. Source: School District of Riverview Gardens. [Remainder of page intentionally left blank] A-23

52 Debt Service Requirements General Obligation Bonds The following schedule shows the annual principal and interest requirements for all outstanding general obligation bonds of the District, including the Bonds. * (1) (2) Fiscal Year Ended Outstanding The Bonds June 30 Bonds Principal * Interest Total Total 2019 $ 2,414,117 $ 785,000 $ $ $ ,405, , ,423, , ,403, , ,391, , ,204, , ,207, , ,205, , ,229, , ,227, , ,230, , ,220, , , , , , , , , ,000 $20,565,031 $11,700,000 Preliminary; subject to change. Subsidy Payments in amounts originally expected to be made by the United States Treasury to the District equal to approximately 35% of the amount of each interest payment on the Series 2010B Bonds and 100% of the amount of each interest payment on the Series 2010C Bonds. Under the Balanced Budget and Balanced Budget and Emergency Deficit Control Act of 1985, as amended, certain automatic reductions in the amounts of subsidy payments have occurred since March 1, The subsidy payments were reduced by 8.7% for the federal fiscal year ending September 30, 2013, by 7.2% for the federal fiscal year ending September 30, 2014, by 7.3% for the federal fiscal year ending September 30, 2015, by 6.8% for the federal fiscal year ending September 30, 2016, by 6.9% for the federal fiscal year ending September 30, 2017, and by 6.6% for the federal fiscal year ending September 30, 2018, as a result of automatic cuts in federal spending commonly referred to as sequestration. Excludes the Refunded Obligations. Lease Obligations Obligations secured by annually appropriated funds do not constitute an indebtedness for purposes of any State statutory or constitutional debt limit. Such obligations are payable solely from annually appropriated funds of a governmental body available therefor and neither taxes nor a specific source of A-24

53 revenues can be pledged to make payments on such obligations. Any increase in taxes required to generate sufficient funds with which to make payments on such obligations are subject to voter approval. The Bonds are being issued for the purposes of providing funds to refund all of the remaining outstanding Riverview Gardens School District Educational Facilities Authority Leasehold Revenue Refunding Bonds, Series 2010 (School District of Riverview Gardens, St. Louis County, Missouri), maturing in the years 2019 and thereafter, in the aggregate principal amount of $2,230,000 (the Refunded Series 2010 Bonds ) and the Refunding Certificates of Participation (School District of Riverview Gardens, St. Louis County, Missouri, Lessee), Series 2015, maturing in the years 2019 and thereafter, in the aggregate principal amount of $1,075,000 (the Refunded Series 2015 Certificates and together with the Refunded Series 2010 Bonds, the Refunded Obligations ). With the refunding of the Refunded Obligations, the District will no longer have any outstanding long-term lease obligations secured by annually appropriated funds. Other Lease Obligations During fiscal year 2013, the District entered into a lease agreement to acquire 12 school buses. Lease payments for the fiscal year ended June 30, 2017 were approximately $103,995. The District has entered into an operating lease agreement for various copiers owned by Ricoh USA, Inc. Lease payments for the year ended June 30, 2017 were approximately $97,000. For additional information regarding the lease agreements, see Note 4 to the financial statements included in APPENDIX B to this Official Statement. Overlapping Bonded Indebtedness (As of April 1, 2018) Approx. General Approx. Amount of Obligation Percent Overlapping Taxing Body Debt Applicable Debt (1) St. Louis County $ 96,850, % $ 1,278,420 City of Bellefontaine Neighbors 11,545, ,492,502 City of Ferguson 5,610, ,626 City of Moline Acres 2,215, ,215,000 Metro North Fire Protection District 4,820, ,135,560 Riverview Fire Protection District 1,930, ,000 Total $122,970,000 $17,267,108 (1) Overlapping bonded indebtedness excludes neighborhood improvement district general obligation bonds which are paid from special assessments. Source: The most recent information available from the Municipal Securities Rulemaking Board via the Electronic Municipal Market Access system. To the knowledge of the District, there are no other political subdivisions with boundaries overlapping the District or lying wholly within the District that have any general obligation bonds outstanding. However, political subdivisions may have ongoing programs requiring the issuance of bonds, the amounts of which cannot be determined at this time. A-25

54 Debt Ratios and Related Information * (1) (2) Estimated District Population 41,000 Assessed Valuation $ 193,868,950 Estimated Actual Value $ 717,202,003 Net Outstanding Direct Debt (1), (2) $ 27,941,097 * Overlapping General Obligation Debt $ 17,267,108 Total Direct and Overlapping General Obligation Debt (1), (2) $ 45,208,205 * Per Capita Direct Debt (1), (2) $ * Per Capita Direct and Overlapping General Obligation Debt (1), (2) $ 1, * Ratio of Direct Debt to Assessed Valuation (1), (2) 14.41% * Ratio of Direct Debt to Estimated Actual Value (1), (2) 3.90% * Ratio of Direct and Overlapping General Obligation Debt to Assessed Valuation (1), (2) 23.32% * Ratio of Direct and Overlapping General Obligation Debt to Estimated Actual Value (1), (2) 6.30% * Preliminary; subject to change. Includes the Bonds. Outstanding general obligation bonds totaling $29,620,000 * less a Debt Service Fund balance of $1,678,903 available to pay principal of bonds. Short-Term Borrowings The District has no outstanding short-term debt. Other Long-Term Obligations of the District Operating leases entered into by the District are payable from the general revenues of the District and are subject to annual appropriation by the Board of Education. As of June 30, 2017, the total amount outstanding was $193,436. The following table sets forth the future minimum lease obligations of the District: Year Ended June 30 Lease Payment 2018 $96, ,718 For more information regarding operating leases, see Note 6 of the financial statements included in APPENDIX B to this Official Statement. The District has a capital leases for school buses. As of June 30, 2017, the total amount outstanding was $353,889. The following table sets forth the future minimum lease obligations of the District: Year Ended June 30 Lease Payment 2018 $117, , ,963 A-26

55 For more information regarding capital leases, see Note 4 of the financial statements included in APPENDIX B to this Official Statement. Debt Limitation and Debt Capacity Under Article VI, Section 26(b) of the Constitution of Missouri, the District may incur indebtedness for authorized school district purposes not to exceed 15% of the valuation of taxable tangible property in the District according to the last completed assessment upon the approval of four-sevenths of the qualified voters in the District voting on the proposition at any municipal, primary or general election or two-thirds voter approval on any other election date. The current legal debt limit of the District is approximately $29,080,342 (which limit does not include State and locally assessed railroad and utility property). The total outstanding indebtedness of the District is $29,620,000 *. Taking into account a Debt Service Fund balance of $1,678,903 available to pay principal of general obligation bonds of the District, the legal debt margin of the District is approximately $1,139,245. * Because of the manner in which tax collections are distributed to school districts from assessments of State assessed railroad and utility property (see the caption FINANCIAL INFORMATION CONCERNING THE DISTRICT Assessed Valuation Components ), the valuation of such property physically located within a school district is not normally determined unless, without the value of such property included in the calculation, the school district would exceed its legal debt limit. If the value of State assessed railroad and utility property physically located within the District were determined, the District s legal debt limit and its legal debt margin shown in the previous paragraph would be increased by 15% of the assessed value of such State assessed railroad and utility property. Anticipated Future Borrowings The District does not anticipate borrowing any additional funds. * * * * * * Preliminary; subject to change. A-27

56 THIS PAGE INTENTIONALLY LEFT BLANK

57 APPENDIX B AUDITED FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR S REPORT OF THE DISTRICT FOR THE FISCAL YEAR ENDED JUNE 30, 2017

58 THIS PAGE INTENTIONALLY LEFT BLANK

59 RIVERVIEW GARDENS SCHOOL DISTRICT FINANCIAL STATEMENTS June 30,201,7

60 THIS PAGE INTENTIONALLY LEFT BLANK

61 RIVERVIEW GARDENS SCHOOL DISTRICT TABLE OT'CONTENTS Page INDEPENDENT AUDITORS' REPORT MANAGEMENT'S DISCUSSION AND ANALYSIS _ UNAUDITED J 5 BASIC FINANCIAL STATEMENTS Govemment-Wide Financial Statements Statement of Net Position - Modified Accrual Basis 14 Statement of Activities - Fund Financial Statements Modified Accrual Basis 15 Balance Sheet - Governmental Funds I6 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds Notes to Basic Financial Statements T7 18 SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - Unaudited General Fund Special Revenue Fund Debt Service Fund Capital Projects Fund Notes to Supplementary Information

62 THIS PAGE INTENTIONALLY LEFT BLANK

63 CPAs and Management Consultants Kerber, Eck & Braeckel,-,-' One South Memorial Drive, Ste.900 St. Louis, MO ph fax Special Administrative Board Riverview Gardens School District Report on the Financial Statements Independent Auditors' Report We have audited the accompanying financial statements of the govemmental activities - modified accrual basis, each major fund and the aggregale remaining fund information of the Riverview Gardens School District ("District") as of and for the year ended June 30, 2017, 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 the preparation and fair presentation of these financial statements in accordance with the modified accrual basis of accounting described in Note 1; this includes determining that the modified accrual basis of accounting is an acceptable basis for the preparation of the financial statements in the circumstances. Management is also responsible for the design, implementation, and maintenance of intemal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or effor. Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. AccordinglY, we expless no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as 'well as evaluating the overall presentation of the financial statements. Other Locations Carbondale, ll. Columbia, ll. Harrisburg, ll. Litchfield, ll. O'Fallon, ll'springfield, ll'capegirardeau,mo'milwaukee'wl

64 We believe that the audit evidence we have obtained is suffrcient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities - modified accrual basis, each major fund and the aggregate remaining fund information of the District as of June 30,2017, and the respective changes in modified accrual basis financial position - for the year then ended in conformity with the modified accrual basis of accounting described in Note 1. Basis of Accounting We draw attention to Note 1, which describes the basis of accounting. The govemment-wide financial statements are prepared on the modified accrual basis of accounting, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America for those statements. Our opinions are not modified with respect to that matter. Other Matters Other Information Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the District's basic financial statements. The management's discussion and analysis and budgetary comparison schedules as listed on the table of contents, which are the responsibility of management, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 19,2017, on our consideration of the District's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion 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. St. Louis, Missouri December 19,2017 K*U,Eql. 4 {à,*"}"lv-r

65 RIVERVIEW GARDENS SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS _ UNAUDITED The Management's Discussion and Analysis (MD&A) of the Riverview Gardens School District ("District") provides an overview and analysis of the District's financial activities for the fiscal year ended June 30, The intent of the MD&A is to look at the District's financial performance as a whole. Readers should also review the financial statements found in the financial section starting on page 14 andthe notes thereto to enhance their understanding of the District' s financial performance. The fund financial statements of the District have been prepared on the modified accrual basis of accounting, as applied to local governmental units. In accordance with accounting principles generally accepted in the United States of America the government-wide financial statements are required to be reported on the accrual basis of accounting; however, they are prepared on the modified accrual basis of accounting, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America for these financial statements. Additional information on the District's basis of accounting can be found in Note 1. X'inancial Highlights Key financial highlights for the fiscal year ended June 30, 2017, include the following: The governmental activities net position and governmental funds ending balance were 513,649,025 as compared to $13,256,947 the previous year. Program revenues made up 23Yo of the total revenues for the year ended June 30, 2017, which is an increase of IYo from the prior year. These program revenues covered 23o/o of the program expenditures leaving 77Yo to be covered by general revenues and net position. Using the Basic Financial Statements The District's basic financial statements consist of a series of fina:rcial sta,tements and the associated notes to those statements. The statements are organized so the reader can understand the operations of the District as a whole (i.e., an entire operating entity). The "Basic Financial Statements" section includes government-wide financial statements, fund financial statements and notes to financial statements. The government-wide financial statements, consisting of the Statement of Net Position - modified accrual basis and the Statement of Activities - modified accrual basis are presented on pages 14 and 15, respectively. These statements provide highly consolidated financial information and render a govemment-wide perspective of the District's financial condition. The statements present an aggregale view of the District's finances. 5

66 RIVERVIEW GARDENS SCHOOL DISTRICT MANAGEMENT' S DISCUSSION AND ANALYSIS - UNAUDITED By showing the change in net position for the year, the reader may ascertain whether the D-istrict's flinancial conãition has improved or deteriorated. The changes which are discussed in this MD&A may be financial or non-financial in nature. Non-financial factors which may have an impact on the District's financial condition include increases in or erosion of the property tax base within the District, facilities maintenance and condition, mandated educational programs for which lifile or no funding is provided, or other external factors. To provide more in depth reporting of the District's financial position and changes in financial position, fund financial information is presented in the "Fund Financial Statements" section üeginning on page 16. These fund financial statements report governmental activities on the modified accrual basis of accounting. Fund financial statements also provide more in-depth data on the District's most significant funds: its General Fund, Special Revenue Fund, Debt Service Fund and Capital Projects Fund. These funds are considered oomajor funds" in accordance with requirements established by the Missouri Department of Elementary and Secondary Education. Government-Wide Financial Analysis Net position of the District reflects the difference between total assets and deferred inflows and liabilities and consists of the following at June 30,: Net Position Unrestricted Restricted $ 11,238,321 2, $ 1 1,308,687 1,948,260 Total net position _$ 13,649, The restricted net position is restricted for payment of principal and interest on general obligation bonds and capital projects. 6

67 RIVERVIE\il GARDENS SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS - TJNAUDITED Governmental Activities Key elements of the change in net position is as follows for the years ended June 30,: Revenues Program revenues Charges for services Operating grants and contributions General revenues Taxes Sales tax State aid Interest and investment earnings Proceeds from certificates of participation Miscellaneous Total revenues g r,823,767 12,769,203 r1,250,007 6,055,721 31,817,711 82,442 s 2,027,728 12,758,589 9,968,783 6,003,596 31,862,861 36,702 2,620, , ,954 64,743,513 66,225,213 Expenses Instruction Support services Community services Facilities acquisition and construction Principal, interest and other expenses on long-term debt Total expenses Change in net position Net position at beginning of Year Net position at end of Year 28,272,447 28,884,952 2,373, ,687 4,123,186 30,378,707 30,056,029 2,243,393 1,357,5r3 7,040,4gg 64,3 5l,435 71,075,540 Jy,u ló l+,ó)v,j t) 13,256,947 18,107,274 s 13,649,025 g 13,256,947 7

68 RIVERVIEW GARDENS SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS _ UNAUDITED As reflected above, the District's governmental activities expenses for the years ended June 30, 2017 and2016, of $64,351,435 and $7I,075,540 respectively, are not all borne by the taxpayers of the District. Of these amounts, $1,823,7 67 and 52,027,728 wete paid by those who benefited from the services rendered (e.g., charges for school lunches) and $44,586,914 and $44,621,450 were paid through federal grants and contributions and general state aid. Consequently, the net costs of $ 17,940,7 54 and, $24,426,362 after taking into consideration these fees and grants, were paid from other general revenues, which include property taxes paid by the taxpayers of the District as well as other taxes and additional state funding. Additionally, the District utilized existing net position for the year ending June 30, 20t6. The next table shows the total cost of programs and the net cost of these programs (after deducting charges for services and grants and contributions revenue). The net cost presentation allows the taxpayers of the District to determine the remaining cost of the various categories which were borne by them or paid from other general revenues and net position, and allows them the opportunity to assess the cost of these functions in comparison to the benefits received. A summary of total and net costs of programs of govemmental activities is as follows for the years ended June 30,: Total cost of 201',l 2016 Net cost Total cost of programs of programs Net cost of programs Instruction Guidance/Attendance Health, psychological and speech services Improvement of instruction Professional development Media services Board of Education services Executive administration Building level administration n--^:-^-- DUslllçùs alu ^-r c^^^l lt)!4r ^^-,:^^- Þçt v rle Operation of plant Security services Pupil transportation Food services Printing, publishing and duplicating services Central ofïice support Community services Facilities acquisition and construction Principal, interest and other expenses on long-term debt $ 28,272,447 2,t29, ,271 2,023, , ,611 ttt,734 3,096,886 3,333,864 1 t AO À^/l lrluortvr 5,952,711 t,462,4r4 2,373,550 2,987,913 14,591 2,009,848 2,373, ,687 4,123,186 s 19,697,679 2,129, ,923 2,023, , ,61I 111,734 3,096,886 3,333,864 alj)v ^1< Á.14 tv s,952,7tt 1,462,414 1,765,478 (769,e20) 14,591 2,009,848 2,324, ,254 4,123,186 $30,378,107 2,420, 4 1,076,367 2,012, , , ,921 2,791,260 3,671,419 t tft,) 1Q2 6,467,633 t,462,925 2,695,771 3,108,087 1,820,247 2,243,393 1,357,513 7,040,498 $21,835,'t47 2,420,1r4 993,755 2,012, , ,902 tt8,92t 2,791,260 3,671,4r9 7.<A 1^'7 6,467,633 1,462,925 2,097,384 (699,22e) 1,820,247 2,141, ,636 7,040,498 Total $ 64,351,435 $ 49, s s 71,075,540 s 56,289,223 8

69 RIVERVIEW GARDENS SCHOOL DISTRICT MANAGEMENT' S DISCUSSION AND ANALYSIS _ UNAUDITED Governmental Funds Financial Analysis The District uses funds to control and manage money for particular purposes (e.g', dedicated taxes and bond proceeds). The fund basis financial statements as presented on the modified accrual basis of accounting allows the District to demonstrate its stewardship over and accountability for resources provided by the taxpayers and other entities. These statements also allow the reáder to obtain more insight into the financial workings of the District and assess further the District's financial health. As presented on the Balance Sheet on page 16, the District's combined governmental fund balaices increased 5392,078 to $13,649,025 at June 30, 2017 compared to 513,256,947 at June 30,2016. The fund balance of the operating funds (General and Special Revenue) increased by $313,887 as compared to a decrease of $4,567,8 49 in The cessation of the deficit spending for FY is a result of the substantial reduction in the number of transfer students for the school year and the ensuing payment by the District of those tuition costs. While the District has controlied the total deficit spending, the cost of the transfer program exceeds the District's ability to eliminate other expenditures and continues to erode fund balances. The fund balance of the Debt Service Fund increased by $463,482 as compared to a decrease of 5375,128 the previous year. The major source of debt service funding is local property taxes amounting to 53,273,469. The 52,148,611 balance of the Debt Service Fund is legally restricted for payment of bond principal, interest and related fees. The fund balance of the Capital Projects Fund decreased by $385,304 as compared to an increase of $585,802 the previous Year. Signifiea,nt local revenues of $18,419,152 is primarily derived from local property tax, sales tax, food service and earnings on investments. County revenues of $94I,262 are primarily derived from state assessed utility property and county fines. State funding, which makes up 54Yo of total revenues, increased from the previous year by 552,545 to $35,1 18,222. 9

70 RIVERVIEW GARDENS SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS _ UNAUDITED Federal funding which makes up 15% of total revenues decreased to $9,468,692 from 59,555,773 the previous year. Significant federal revenues are as follows for the years ended June 30,: School Lunch and Breakfast Program Title I - ESEA School Improvement Grants Title IIA Career & Technical Education $ 3,812,967 3,932,736 r,002, ,003 $ 94,502 3,753,278 4,073, , ,756 Total governmental funds expenditures were 564,351,435 for the year compared to $70,248,970 the prãvious year. The General Fund accounts for 528,674,540 or 45%o of the total expenditures. The Special iìevenue (Teachers) Fund accounts for $30,059,095 or 47Yo of total expenditures and cónsists of certificated teachers' salaries and benefits. Debt Service Fund expenditures of $3,410,803 or 5Yo of total expenditures are for principal and interest on general obligation bonds. Capital Projects Fund expenditures of 51,612,577 or 2o/o of total expenditures are for construction projects, facility repairs and equipment. Non-major fund expenditures were 8594,420 or l%o of total expenditures. The following tables summarize the governmental fund revenues and expenditures for the years ended June 30,: Revenues Local County State Federal Other 2017 % 2016 $ 18,419, ,262 35,118,222 9,468, % t% 54% 15% l% $ 16,871, ,954 35,065,677 9,555,773 a J % 26% l% s3% t5% 5% Total revenues s 64, % $ 65,558, % Expenditures Instruction Support services Debt service Facilities acquisition and construction Community service s 28,272,447 28,884,952 4,123, ,687 2, % 45% 6% l% 4% $ 30,378,107 30,056,029 3,927,494 3,643,947 2,243,393 43% 43% 6% 5% 3% Total expenditures s 64,351, % s 70,248, % 10

71 RIVERVIEW GARDENS SCHOOL DISTRIC1 MANAGEMENT'S DISCUSSION AND ANALYSIS _ UNAUDITED Budgetary Highlights Over the course of the year, the Special Administration Board revised the District's budget to take into consideration expected Changes in revenues and expenditures. Missouri statutes for public School finance, Section , RSMO. require a budget amendment if anticipated äxpenditures are in excess of budgetary goals. The original budget was adopted on June 28, Schedules by fund, comparing actual revenues and expenditures to the original and final budgets are provided in th"'osupplementary Information" section for the General Fund, Special Revenue Fund, Debt Service Fund, and Capital Projects Fund on pages 35 through 38. Operating revenues were slightly greater than final budgeted amounts (reflecting additional State revenues) and total expendilur.r *... less than fïnal budgeted amounts. The major contributing factor that resulted inã significant expenditure reduction was the reduction in the number of transfer students and the payment by the District of the accompanying tuition. Capitat Assets and Debt Administration Capital Assets The District operates under the modified accrual basis of accounting, therefore, capital asset purchases are recorded as expenditures and depreciation is not recognized. Capital assets are not reflected in the financial statements. Long-Term Debt At June 30,20!7, the District had outstanding general obligation bonds of $19,424,92I aftet principal payments of $1,865,000 during the year and certificates of participation of $1,595,000 a-fter prineipal payments of $510,000 ma-de during the year. State statutes limit the amount of general obligation debt a school district may issue to 15% of the assessed valuation. The debt limitation is 527,416,209 at June 30, 2017, based on the December 31,2016 assessed values. The District has capital leases with outstanding future lease payments of $332,388 at June 30, 2017 after principal payments of approximately $103,995 made during the year. The District operates on the modified accrual basis of accounting; therefore, payments on longterm debt are recorded as expenditures. Long-term debt is not reflected in the financial statements. Commitments for long-term debt and other obligations are disclosed in the notes to the financial statements in Note 4. 11

72 RIVERVIEW GARDENS SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS _ UNAUDITED Economic Factors During the past several years the funding provided by the State of Missouri has not kept pace with the amount required to fully fund the Foundation Formula for State Aid. A general obligation bond issuè was successfully completed in 2010, but left the District well short of addiessing capital needs. The assessed value of the District has been decreasing which limits debt capacity to address capital needs issues. Local taxes for 2016 continued to decline in the amounti collected. It is expected that local revenues will decrease significantly in the future as the District reached the statutory tax rate ceiling in Data from the County Assessor's offrce, for 2016 assessment year (FY17), reflect an increase in real estate assessed values of approximately 6%. At the prior reassessment year, 20t5, the District experienced a 3o/o decline in total assessed valuation. V/hile the District continues to prepare for substantial reductions in future local revenues, increasing trends in enrollment and declines in the number of transfer students provide optimistic projections in State revenue. The most recent data, as provided by the Saint Louis County Assessor's office, lists the District's 2016 Top Ten Taxpayers and their corresponding assessed valuation as follows: Rank Amount 1 Lipton Properties VII Ltd. 2 Venture Village Partners LP 3 NW Apartments LP 4 American Water Company 5 V/oodlands Apartments LLC 6 Laclede Gas CompanY 7 Dellwood Acquisitions Inc. 8 AR-C SSMAMOOOO1 LLC 9 EAN Holdings LLC i0 Maatador Holdings LLC $ 1,983,860 r,662,960 1,187,510 1,178,100 1,1 10,820 1,063,600 1,042, s30 970, ,750 The Missouri Supreme Court ruling that allows students from unaccredited school districts to transfer to higher performing districts continues to have a negative annual impact on the District. The District supported the transfer of approximately 400 students across 20 pafücipating districts for the year ending June 30,2017, compared to 500 students for the year ending June 30,2016. Looking forward, the number of transfer students has continued to decline. Additionally, the Superintendent and District staff have secured reduced tuition amounts from several of the participating districts and the total expenditures for the program are expected to continue to decline from the amount in prior years. t2

73 RIVERVIE\ry GARDENS SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED As of June 30,2017,the District has an unrestricted net position of approximately $11 million. Contacting the District's Financial Management This financial report is designed to provide citizens, taxpayers, investors and creditors with a general overview of the Riverview Gardens School District fïnances and to demonstrate the Dirttict" accountability for the money it receives. If you have any questions about this report please contact Dr. Scott Spurgeon, Superintendent. 13

74 RIVERVIEW GARDENS SCHOOL DISTRICT STATEMENT OF NET POSITION. MODIFIED ACCRUAL BASIS June ASSETS Cash and temporary investments Restricted cash and temporary investments Receivables Property taxes receivable less allowance for uncollectible taxes of 8225,230 Sales tax Grants Inventory Prepaid items Total assets $ Governmental activities 13,3 15,189 r,028,701 5,677,966 1,055,965 r,241, , ,052 22,843,802 LIABILITIES Accounts payable and other liabilities Accrued payroll liabilities Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred property taxes Defened grants Total defened inflows of resources 435,797 2,934,888 3,370,685 5,264, ,425 5,824,092 NET POSITION Restricted for Debt service Capital projects Unrestricted Total net position 2,148,61r 262,093 rr,238,321 $ 13,649,025 See notes to basic financial statements t4

75 RTVERVIEW GARDENS SCHOOL DISTRICT STATEMENT OF ACTIVITIES - MODIFIED ACCRUAL BASIS Year ended June 30,2017 Expenses Program revenues Charges for Operating grants and services contributions Net (expense) revenue and changes in net position Total govemmental activities Govemmental activities Inshuction Attendance Guidance Health, psychological and speech services Improvement of instruction Professional development Media services Board of Education services Executive administration Building level administration Business and fiscal services Operation of plant Securþ seryices Pupil transportation Food services Printing, publishing and duplicating services Central office support services Communþ services Facilities acquisition and construction Principal, interest and other expenses on long-term debt Total govemmental activities s 28,272,447 72s,374 1,404, ,271 2,023, , ,61I ttl,734 3,096,886 3,333,864 1,188,404 5,952,711 1,462,414 2,373,5s0 2,987,913 14,591 2,009,848 2,373, ,687 $ 174,019 $ 8,400, ,788 r97,369 46,329 48, , , , ,703 3,711,504 s (r9,697,67e) (725,374) (1,404,270) (861,923) (2,023,522) (201,0e0) (890,61 l) (11t,734) (3,096,886) (3,333,864) (42s,616) (5,952,711) (1,462,414) (r,76s,478) 769,920 (14,591) (2,009,848) (2,324,334) (103,254) 186 (4,123,186) $ $ 1,823,767 $l (49,7s8,465) General revenues Taxes Property taxes, levied for general purposes Property taxes, levie<i for <Íebt service Sales taxes M & M surtax Interest and investment eamings State aid Miscellaneous Total general revenues 7,793,289 3,343,0i5 6,055, ,703 82,442 31,817, ,150,543 Change in net position Net position at July l, 201ó Net position at June 30, , s 13,649,025 See notes to basic financial statements. l5

76 RTVERVIE\ry GARDENS SCHOOL DISTRICT BALANCE SHEET. GOVERNMENTAL FUNDS June General Fmd Special Revenue Fund Debt Service Fund Capital Projects Fud Nomajor Governmental Fmd Total Govemmental Fmds ASSETS Cash and temporary invesûnents Restricted cash and temporary investínents Receivables Property taxes receivable less llowance for uncollectible taxes of$225,230 Sales tax Gmts Inventory Prepaid items Due ûom other ft ds $ 11,095,959 $ 3,977, ,540 t,24t, , , ssg,425 6t9.957 $ 2,218, ,608 t,700,077 s 642 $ 262, $ 13,315,189 1,028,701 5,67'.1,966 1,055,965 1,241, , ,052 r-352"391 Total assets $ 17,927A42 s 1,179,382 s s S $ 18 S "193 LIABILITIES, DEFERRED INFLOWS OF RESOIJRCES AND FUND BALANCES LIABILITIES Accoutrts payable and other liabilities Accrued payroll liabilities Due to other fi.mds $ 388,163 2,934,888 $ $ g 47,634 $ ,797 2,934,888 L Total liabilities 3,323,0s1 951,536 47, ,85s 4,723,076 DEFERRED INFLOWS OF RESOIIRCES Defened property taxes Defened grants 3,679, ,585,108 5,264,667 ss9.425 Total deferred inflows of resources 4,238,984 1,585,108 s,824,092 FT]ND BALANCES Nonçendable Inventory Prepaid items Resticted Debt seßice Capital projects Assigned Teacher salaries and benefits Capital projects Unassigned 106, , ,179,382 2,r48, ,093 94,369 ( ) t06,254 4t8,052 2,148,6tt 262,093 t,179"382 94, r s6-462 ( ) Total fimd balmces s J-Jl-u442- Total liabilities, defened inflows of resowces and fimd balmces s $ $ $ l8 S See notes to basic fi mcial statements. 16

77 RIVERVIEW GARDENS SCHOOL DISTRICT STATEMENT OT' RXVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS Year ended General Fund Special Revenue Fmd Debt Senice Fwtd Capital Prcjects Fmd Nomajor Govemental Fwd Total Govemental Fwds Revenues Losal Comty State Federal Other Total revenues $ 12,521, ,869 10,630,46 I 6,368, ,369 30,5 18,344 g 2,434,334 61,04 I 24,487,761 2,693,81 I $ 3,387,794 80, ,139 29,676,947 3,874,285 $ 75,104 $ t7 4,400 79, , $ 18,419, ,262 3s, 8,222 9,468, ,185 64,743,st3 Expenditures Curent Iûstruction Attendance Guidanoe Health, psychologioal md speech services Improvement of instruction Professional development Media seruices Board of Education services Exesutive administration Building level administration Business md fiscal services Operation ofplant Security sewices Pupil transportation Food services Printing, publishing md duplicating sewices Central office support seflices Comunity sewices Faoilities acquisition and comtruction Debt seruice Prinoipal retirement Interest md other fiscal chuges Total expenditures 7,608, ,303 54, , , ,526 88,304 ttt, ,7 t6 t,134,773 I,188,404 5,7 t6,t32 1,449,t54 2,373,550 2,987,9t3 14,591 1,876,429 1,355,59 I 28,674,540 20,261, ,071 1,350,107 I 1,635 t,47 1,615 57, ,307 2,6t6,170 2,t99,091 7,000 1,009,835 30,059,095 2,375,000 1,035,803 3,4 10,803 40t,692 6,945 4, ,579 t3, ,419 7, , ,995 13,968 1,612, , , ,420 28,272, ,374 t404, ,271 2,023, , ,61 I tti,734 3,096,886 3,333,864 I,188,404 s,952,7n t,462,414 2,373,550 2,987,913 14,591 2,009,848 2,373,t63 697,687 2,943,995,179,191 64,35t,435 Excesg ofrevenues over (under) expenditure 1,843,804 (382,148) 463,482 ( 1,533,073) l3 392,0'18 Other financing sources (uses) Trmsfers (t,t47,769) t,t47,769 NET CHANCE IN FUND BALANCE (382,t48) 463,482 ( ) l Fund balance at July l, ,669,372 1,56 1,530 1,685,129 74t,766 (400,850) t3,256,947 Fud balance at June30,2017 $ 10,365,407 _$!J:2.1!?_ $ 2,148,6t I _$ if4í2_ $ (400,837) _! i3,6{2p? _ See notes to basic finmcial statements' 17

78 RIVERVIEW GARDENS SCHOOL DISTRICI NOTES TO BASIC F'INANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Riverview Gardens School District (the "District") was established under the Statutes of the State of Missouri. The District operates under the regulations pursuant to RSMo of the Public School Laws of Missouri, which designates a Board of Education to act as the governing authorþ. The District provides educational services to primarily pre-kindergarten through high school students. The Riverview Gardens School District Special Administrative Board (the "Board") is the basic level of government that has financial accountability and control over all activities related to public education in the District. These financial statements are presented on the modified accrual basis of accounting. This modified accrual basis of accounting differs from accounting principles generally accepted in the United States of America (GAAP) for the government-wide financial statements. Generally accepted accounting principles include relevant Govemmental Accounting Standards Board (GASB) pronouncements. Principles Determining the Scope of Reporting Entify The financial statements present the District (the primary govemment) and its component unit, the Riverview Gardens School District Educational Facilities Authority (the "Authority"). Component units are legally separate entities that are included in the District's reporting entity because of the significance of their operating or financial relationships with the District. Its pu{pose is to act on behalf of the District in its acquisitions, construction, improvement, extension, repair, remodeling, renovation, and financing capital improvement projects. Although legally separate, the Authority is blended and presented as a "nonmajor fund" in the accompanying financial statements. Separate financial statements for the Authority are not issued. The District is associated with other organizations which may include various Parent Teacher Organizations (PTO's), booster clubs, etc. Under governmental standards for defining the financial reporting entity, these organizations may be considered to be part of the reporting entity of the District. However, the balances and activities of such orgartizations have not been included in these financial statements due to their overall immateriality to the District. Basis of Presentation Government-Wide Financial Statements The Statement of Net Position and the Statement of Activities display information about the reporting unit as a whole. These statements distinguish between activities that are governmental and those that are considered business-type activities. The District has no business-type activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions. 18

79 RIVERVIEW GARDENS SCHOOL DISTRIC1 NOTES TO BASIC FINANCIAL STATEMENTS The Statement of Net Position presents the financial condition of the governmental activities ai year end. The Statement of Activities presents a comparison between direct expenses and program revenues for each program of the District's governmental activities. Direct expenses are those associated and clearly identifiable to a particular function. Amounts reported as program revenues include charges paid by the recipient ofthe goods or services offered by the programs and grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues not classified as program revenues, including all taxes, are presented as general revenues of the District. The comparison of direct expenses with program revenues identifies the extent to which each governmental function is selêfinancing or draws from the general revenues of the District. Fund Financial Statements The fund financial statements arc organized into funds, each of which is considered to be a separate accounting entity. Each fund is accounted for by providing a separate set of self-balancing accounts that constitute its assets, liabilities, fund equity, revenues, and expenditures. The District segregates transactions related to certain functions or activities into separate funds in order to aid in financial management and to demonstrate legal compliance. The focus is on major funds. Each major fund is presented in a separate column while non-major funds arc aggregated and presented in a single column. The major funds of the District are described below: Governmental Funds General Fund This fund is the primary operating fund of the District and is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Fund This fund accounts for revenues derived from specific taxes or other earmarked tevenue sources. The Special Revenue (Teachers') Fund is a special revenue fund which accounts for expenditures for certified employees involved in administration and instruction, and includes revenues restricted, committed or assigned for the payment of teacher salaries and certain benefits. Debt Service X'und This fund is used to account for and report financial resources that are restricted, committed, or assigned to expenditures for the periodic payment of principal, interest, and fiscal charges on certain long-term debt. t9

80 RIVERVIEW GARDENS SCHOOL DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS Capital Projects Fund This fund is used to account for and report financial resources that are restricted, committed or assigned to expenditures for facilities acquisition and construction. Measurement tr'ocus and Basis of Accounting Measurement focus is a term used to describe which transactions are recorded within the various financial statements. Basis of accounting refers to when transactions are recorded regardless of the measurement focus applied. Measurement Focus The government-wide financial statements are prepared using the economic resources measurement focus, within the limitations of the modified accrual basis of accounting. The accounting objectives of this measurement focus are the determination of changes in net position, financial position, and cash flows. All assets, whether current or noncunent, are reported within the limitations of modified accrual basis of accounting. The fund financial statements are preparsd using the current financial resources measurement focus. Only current financial assets and liabilities are generally included in the balance sheets. The operating statements present sources and uses of available spendable financial resources during a given period. The fund financial statements use fund balance as their measure of available spendable financial resources at the end of the period. Basis of Accounting The government-wide financial statements and fund financial statements are prepared using the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when measurable and available. Measurable means knowing or being able to reasonably estimate the amount. Available means collectible within the cunent period or within 60 days after year end. Property and sales taxes, interest, grants and similar revenues are susceptible to accrual and so have been recognized as revenues in the cunent fiscal year. Miscellaneous revenue items, which are not susceptible to accrual, are recognized as revenues only as they are received in cash. Expenditures, including facilities acquisition and construction, are recorded when the related fund liabilþ is incurred, except for principal and interest on general obligation long-term debt which are reported when due. 20

81 RIVERVIEW GARDENS SCHOOL DISTRICT NOTES TO BASIC F'INANCIAL STATEMENTS Cash and Investments Cash resources from all funds, except the Debt Service Fund, are combined to form a pool of cash and temporary investments, which is managed by the District Treasurer. State law requires that all deposits of the Debt Service Fund be kept separate and apart from all other funds of the District. Interest income earned is allocated to contributing funds based on each funds' proportionate shares of funds invested. The District's investments in extemal investment pools ätrd -or"y market funds are reported at amortized cost, which approximates fair value. Restricted Assets Restricted assets include cash and investments that are legally restricted as to their use. Interfund Receivables and Payables Interfund receivables and payables are the result of all cash receipts being deposited in the General Fund. These interfund balances are temporary and are adjusted in the subsequent month through a reallocation of cash. Interfund receivables and payables between funds are eliminated in the Statement of Net Position. Receivables Major receivables include property and sales taxes, and state and federal grants. Allowances for uncollectible property taxes are based on historical trends. Inventories Inventory consists of food commodities and is stated at cost, on the first-in, first-out basis. Reporteã inventories at year-end are offset by a nonexpendable fund balance account since they do not represent expendable financial resourcss. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods. Reported prepaid it.-r at year-end are offset by a nonexpendable fund balance account since they do not represent expendable financial resources. Fund Balances - Governmental Funds Govemmental funds report the following classifications of fund balance: Nonspendable - includes amounts that cannot be spent because they are either not spendable in form or are legally or contractually required to be maintained intact 2l

82 RIVERVIEW GARDENS SCHOOL DISTRIC1 NOTES TO BASIC FINANCIAL STATEMENTS includes amounts restricted by external sources (creditors, laws of other Restricted - governments, etc.) or by constitutional provision or enabling legislation. Committed - includes amounts that can only be used for specific putposes. Committed fund balance is reported pursuant to resolutions passed by the Board, the District's highest level of decision making authority. Commitments may be modified or rescinded only through resolutions approved by the Board. Assigned - includes amounts that the District intends to use for a specific pu{pose, but do not meet the definition of restricted or committed fund balance. Under the District's adopted policy, amounts may be assigned by the Chief Financial Officer. Unassigned - includes amounts that have not been assigned to other funds or restricted, committed, or assigned to a specific purpose within the General Fund. The District's policy requires a minimum unassigned fund balance of l5o/o of its prior year operating expenditures in order to cover unexpected expenditures and revenue shortfalls. In other governmental funds, if expenditures incurred for specific purposes exceed the amounts restricted, committed or assigned for those pufposes, a negative unassigned fund balance may be reported. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, the District considers restricted funds to have been spent first. When an expenditure is incurred for which committed, assigned, or unassigned fund balances are available, the District considers amounts to have been spent first out of committed funds, then assigned funds, and finally unassigned funds, as needed, unless the Board has provided otherwise in its commitment or assignment actions. The District has not reported any committed fund balances. The details of the fund balances are included in the Balance Sheet - Governmental Funds. Net Position Net position represents the difference between assets and liabilities in the government-wide financial statements. Net position is reported as restricted when there are limitations imposed on their use either through enabling legislation adopted by the District or through external restrictions imposed by creditors, grantors, or laws or regulations of other governments. The remaining balance of net position is reported as unrestricted. When both restricted and unrestricted resources are available for use, it is the District's policy to use restricted resources first and unrestricted resources as they are needed. Revenue Property taxes attach as an enforceable lien on property as of January 1. Taxes are levied anlually by November 1 and are due by December 31. Property taxes are recognized in the fiscal year levied to the extent collected within 60 days of year end. Revenues not collected within 60 days of year end are reported as deferred inflow of resources. 22

83 RIVERVIEW GARDENS SCHOOL DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS Nonexchange transactions in which the District receives value without directly giving value in return include property taxes, grants, entitlements, and donations. On the modified accrual basis, revenues from nonexchange transactions must be measureable and available before recognized. Sales tax is collected by the State of Missouri and remitted to districts within the state on a per pupil basis. The state receives the sales tax approximately one month after collection by vendors. Sales taxes collected by the state in June and July, which represent sales for May and June, and received by the District in July and August have been accrued and reported as sales tax receivable. Entitlements and grants are recognized as revenue in the fiscal year in which all eligibility requirements have been satisfied and are considered available. Grants and entitlements received before eligibility time requirements are met are reported as deferred inflows of resources. Estimates The preparation of the financial statements in conformþ with the modified accrual basis of accounting requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from these estimates. NOTE 2. CASH AND TEMPORARY INVESTMENTS The District is governed by the deposit and investment limitations of state law in accordance with Section of the RSMo. The District has investments managed by BOK Financial in conjunction with the Missouri School District Direct Deposit Program. These investments are restricted for payment of interest and retirement of general obligation bonds issued through the MOHEFA Bond Program. The District also has funds invested in the Missouri Security Investment Program. All funds in these programs are invested in accordance with Section RSMo. Each school district o\ryns a pro rata share of each investment, which is held in the name of the Fund. 23

84 RIVERVIE\ry GARDENS SCHOOL DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS The cash deposits and temporary investments are summarized and presented in the financial statements as follows as of June 30,2017: Cash Deposits Cash on hand Investments Money market funds External investment pool Missouri School District Direct Deposit Progmm (MOFIEFA) Missouri Security Investment Program (MOSIP) s 563, , ,1t3 766,608 12,671,159 13,779,880 Total $ 14,343,890 Deposits Missouri statutes require that all deposits with financial institutions be collateralized in an amount at least equal to uninsured deposits. At June 30,2017, the carrying amount of the deposits under District control was $563,710 and the bank balance was $3,211,795. Of the bank balance, $250,000 was covered by federal depository insurance and $2,96I,795 \ryas collateralized with securities held by the District's safekeeping agent, Commerce Bank and Trust, pledged in the name of the District. Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affèct the fair value of an investment. Generally, the longer an investment has until maturity, the greater the sensitivity of its value to changes in market interest rates. One of the ways the District manages its exposure to interest rate risk is by purchasing investments with short-term maturities to provide the cash flow and liquidity needed for operations. At June 30, 2017, all of the District's investments mature within one year. Credit Risk Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognzed statistical rating organization. The District's investments in MOHEFA and money market funds were not rated by a nationally recognized statistical rating organization. The District's investments in MOSIP are rated AAAm by Standard and Poor's. 24

85 RIVERVIEW GARDENS SCHOOL DISTRICT NOTES TO BASIC F'INANCIAL STATEMENTS Custodial Credit Risk Custodial credit risk is the risk that, in the event of the failure of the counterparty, the District will not be able to recover the value of its investment or collateral securities that are in possession of an outside party. Investment securities are exposed to custodial credit risk if the securities are uninsured, are not registered in the name of the government, and are held by the party who sold the security to the District or its agent but not in the government's name. All investments, evidenced by individual securities, are registered in the name of the District or of a type that are not exposed to custodial credit risk. Concentration of Credit Risk An investment in any one issuer representing 5% or more of total investments, excluding investments issued or explicitly guaranteed by the U.S. government, investments in mutual funds, external investment pools, and other pooled investments is considered to be a concentration of credit risk. At June 30, 2017, the District has no investments in any one issuer representing5/o or more total investments. As a means of limiting its exposure to losses arising from concentration of investments, the District's investment policy mandates that the portfolio not have a concentration of assets in specific maturity, specific issuer, or specific class of securities. At a minimum, diversification standards by security type and issuer are established as (a) U.S. treasuries and securities having principal and/or interest guaranteed by the U.S. Government - 100%; (b) collateralized time and demand deposits - 100%; (c) U.S. Government agencies, and government sponsored enterprises, no more than 600/o; (d) collateralízed repurchase agreements, no more thart 50%o; (e) U.S. Government callable securities, no more than 30o/o; and (Ð Commercial Paper and Bankers' Acceptances, no more than 500/o. NOTE 3 - TAXES Property taxes attach as an enforceable lien on property as of January 1. Taxes are levied on November I and are payable by December 31. All unpaid taxes become delinquent January 1 of the following year. The county collects the property taxes and remits them to the District. The District also receives sales tax collected by the State of Missouri and remitted to the District based on eligible pupil counts. The District is required to reduce its property tax levy by one-half the amount of sales tax estimated to be received in the subsequent calendar year. 25

86 RIVERVIEW GARDENS SCHOOL DISTRICI NOTES TO BASIC FINANCIAL STATEMENTS The assessed valuation of the tangible taxable property for the calendar year 2016 for purposes of local taxation was: Real estate Residential Agricultural Commercial Personal property $ 128,224,800 9,2r0 19,677,734 34,862,950 $ 182,774,690 Property taxes receivable at June 30,2017, of $5,903,196 (net of allowance for uncollectible taxes of $225,230) represents uncollected taxes from the prior year's levy. The tax levy per $100 of the assessed valuation of tangible taxable property for the calendar year 2016 for pu{poses of local taxation was: Unadjusted Adjusted General Fund Special Revenue Fund Debt Service Fund Capital Projects Fund $ $ ss 1 $ $ The receipts of current anii delinquent property taxes during the fiscal year ended June 30, 2017, aggregated approximately 97o/o of the 2016 assessment computed on the basis of the levy as shown above. 26

87 RIVERVIEW GARDENS SCHOOL DISTRICI NOTES TO BASIC FINANCIAL STATEMENTS NOTE4-LONG-TERMDEBT The following is a sunmary of changes in long-term debt for the year ended June 30, 2017: General obligation bonds Leasehold revenue bonds Certificates of Participation Capital lease Balance at July l,2016 s 21,289,921 $ 3,180,000 $ 2,105,000 $ 436,383 Reductions (l (465,000) (510,000) (103,995) Balance at June 30,2017 s 19,424,921 $ 2,715,000 $ 1,595,000 $ 332,388 Amounts due within one year S I,504,921 $ 485,000 $ 520,000 s 107,324 Principal and interest on general obligation bonds and certificates of participation are paid from the Debt Service Fund. Principle and interest on leasehold revenue bonds are paid from the Nonmajor Govemmental Fund. The capital lease is paid from the Capital Projects Fund. General Obligation Bonds General obligation bonds payable consist of the following at June 30,2017: Date issued Maturity date Rate of interest Original lssue amount Balance at June 30, 20t /r /10 r0/2sltr 04101/30 04t01/26 04/ t5% % 530% 2,00% % $ 9,600,000 4,660,000 9,349,921 $ 8,720,000 4,660,000 6,044, ,424,921 27

88 RI\rERVIEW GARDENS SCHOOL DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS The annual requirements to amortizethe general obligation bonds as of June 30,2017, including interest payments, are as follows: Year ending June 30, Principal Interest Total t t 8 1,504,921 1,960,000 2,010,000 2,090,000 $ 1,316, , , ,220 $ 2,820,980 2,823,480 2,799,900 2,802, ,135, ,520 2,764, ,315,000 1,960,245 8,275, ,410, ,000 3,824,000 _s ß,a4,% s 6, g 26)t0245 Legal Debt Margin Article VI, Section 26(b), Constitution of Missouri, limits the outstanding amount of authorized general obligation bonds of a district to fifteen percent of the assessed valuation of a district. The legal debt margin of the District at June 30, 2017 was: Constitutional debt limit 8 27,416,204 General obligation bonds payable (19,424,921) Amount available in Debt Service Fund 2,148,61I Legal debt margin $ 10,139,894 Leasehold Revenue Bonds The District adopted a resolution approving the formation of the Authority on January 11, The Authority is organized under the not-for-profit provisions of Chapter 355, revised statutes of Missouri (1986) as amended, for the purpose of acting on behalf of the District in its acquisition, construction, improvement, extension, repair, remodeling, renovation, and financing of capital improvement projects, and other purposes as specified in the Authority's Articles of Incorporation. As discussed in Note 1, the Authority has been determined to be a component unit of the District. 28

89 RIVERVIEW GARDENS SCHOOL DISTRICT NOTES TO BASIC F'INANCIAL STATEMENTS The Authority issued leasehold revenue bonds to finance a portion of the costs of such projects. The leasehold revenue bonds and all interest thereon are special, limited obligations of the Authority, payable solely from rental payments under an annually renewable lease agreement between the Authority and the District. Leasehold revenue bonds consist of the following at June 30,2017 Date issued Maturity date Rate of interest Original issue amount Balance at June 30, U %-4.35% $ 5,600,000 $ 2,715,000 The annual requirements to amortize the leasehold revenue bonds as of June 30,2017, including interest payments, are as follows: Year ending June 30, Principal Interest Total $ 485,000 $ $ 515, , , ,000 ll2,2l5 93,543 72,943 50,325 23, , , , , ,925 Leasehold Revenue Advanced Refunding $ 715 $ 352,951 $ 3,067,951 In prior years the District defeased certain leasehold revenue bonds by placing the proceeds of the new bonds in an irrevocable trust fund to purchase government obligations. As of June 30, 2017, there is no debt outstanding from current and prior years that is considered to be defeased. There is 5262,093 in the reserve account as of June 30,2017. Certificates of PartÍcipation During 2016 the District issued 52,620,000 in Series 2015 refunding certificates of participation. Principal payments on the certificates for the year ended June 30, 2017 were $510,000. Interest ranges from 2.0o/o to 2.5Yo. 29

90 RIVERVIEW GARDENS SCHOOL DISTRICT NOTES TO BASIC F'INANCIAL STATEMENTS Certificates of participation consist of the following at June 30,2017: Principal Interest Total t $ 520, , ,000 $ 35,288 24,ggg 13,625 $ 555, ,ggg 558,625 $ 1,595,000 $ 73,901 $ 1,669,901 Capital Lease During 2013, the District entered into a lease agreement with Sovereign Bank Corporation to acquire twelve school buses. Lease payments for the year ended June 30, 2017 werc approximately $ 1 03,995. The following is a schedule of future minimum lease payments under the capital leases together with the present value of the net minimum lease payments as of June 30,2017 Year ending June 30, s tt7,963 Il7, ,963 Total future minimum lease payments 353,889 Less amount representing interest (21,501) Present value of future minimum lease payments $ 332,388 Operating Lease The District has entered into an operating lease agreement for various copiers owned by Ricoh USA, [nc. Lease payments for the year ended June 30, 2017 were approximately $97,

91 RIVERVIEW GARDENS SCHOOL DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS Future minimum lease commitments under the operating lease as of June 30, 2017 are as follows: Year ending June 30, $ 96, t8 $ 193,436 NOTE5-TAXABATEMENTS The District is subject to various tax abatement agreements granted by St. Louis County and municipalities with in the District. District property tax revenues were reduced by $3,307 as a result of these abatements. NOTE 6 - RETIREMENT PLANS The District contributes to The Public School Retirement System of Missouri (PSRS), a cost-sharing multiple-employer defined benefit pension plan. PSRS provides retirement and disability benefits to certificated employees who work 17 or more hours per week and death benefits to members and beneficiaries. Positions covered by the PSRS are not covered by Social Security. PSRS benefit provisions are set forth in Chapter l of the Missouri Revised Statutes. The statutes assign responsibility for the administration of the system to a seven-member Board of Trustees. PSRS issues a publicly available financial report that includes financial statements and required supplementary information. That reporl may be obtained by writing to: The Public School Retirement System of Missouri, PO Box 268, Jefferson City, MO 65t02, orby calling PSRS members were required to contribute 14.5% of their annual covered salary and the District is required to contribute a matching amount. The contribution requirements of members and the District are established and may be amended by the PSRS Board of Trustees. The District's contributions to PSRS for the years ended June 30, 2017, 2016, and 2015 were $3,568,730, $3,624,572 and83,492,174,respectively, equal to the required contributions. The District also contributes to Public Education Employee Retirement System (PEERS) of Missouri (formally The Non-Teacher School Employee Retirement System of Missouri), a cost-sharing multiple-employer defined benefit pension plan. PEERS provides retirement and disability benefits to employees of the District who work 20 or more hours per week and who do not contribute to the PSRS. 31

92 RIVERVIEW GARDENS SCHOOL DISTRICT NOTES TO BASIC F'INANCIAL STATEMENTS Positions covered by the PEERS are also covered by Social Security. Benefit provisions are set forth in Chapter of the Missouri Revised Statutes. The statutes assign responsibiltty for the administration of the system to the Board of Trustees of the PSRS. PEERS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to: The Public Education Employee Retirement System of Missouri, PO Box 268, Jefferson City, Missouri or by calling PEERS members are required to contribute 6.86%o of their annual covered salary and the District is required to contribute a matching amount. The contribution requirements of members and the District are established and may be amended by the Board of Trustees. The District's contributions to PEERS for the years ended June 30, 2017, 2016, and 2015 were $658,304, $708,863, and $660,594, respectively, equal to the required contributions. NOTE 7. EMPLOYEE BENEF'IT PLANS The District offers its employees tax-sheltered annuity programs created in accordance with the Internal Revenue Code Section 403(b). The plans, available to all District employees, permit them to defer a portion of their salary for investment purposes. The District also offers a Section 125 cafeteria plan to all employees. Under this plan, the deferred portion can be used to purchase health insurance benefits. NOTE 8 - OTHER POST EMPLOYMENT BENEFITS In addition to the pension benefits disclosed in Notes 6 and 7,the District allows employees who retire from the District to participate in the District's health, vision, and dental insurance plans. The retirees must pay l00yo of their coverage. Retirees received medical benefits totaling approximately $441,418. The District finances these benefits on a pay-as-you-go basis. NOTE 9. INSURANCE PROGRAM The District, along with various other local school districts, participates in the Missouri United School Insurance Council (MUSIC), an insurance association for workers' compensation, general liability, and property casualty insurance. The purpose of MUSIC is to distribute the cost of self-insurance over similar entities. MUSIC requires an annual premium payment to cover estimated claims payable and reserves for claims for each entity. Part of the assessment then goes to buy excess insurance contracts for the group as a whole. Should the contributions received by MUSIC be in excess or not be sufficient, rebates or special assessments can be made of the member Districts. There have been no significant changes in insurance coverage from the prior year. 32

93 RIVERVIEW GARDENS SCHOOL DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS NOTE 10. COMMITMENTS AND CONTINGENCIES Litigation Various claims and lawsuits are pending against the District. In the opinion of District management, the potential loss on all claims and lawsuits will not be significant to the District's financial statements taken as a whole. Grants Audits The District receives federal grants and state funding for specific purposes that are subject to review and audit. These reviews and audits could lead to requests for reimbursement or to withholding of future funding for expenditures disallowed under or other noncompliance with the terms of the grants and funding. Protested Taxes Each year the county remits certain urnesolved protested tax pa rments to the District. When the county refunds tax payments to those who are successful in their protests, it withholds the refunded amount from future distributions to taxing districts. Normal withholdings by the county are not material in relation to the District's financial position and of operations. NOTE 11. TRANSFER PROGRAM On January 4,2017 the District became'þrovisionally accredited". Therefore state laws allowing students to transfer to accredited schools and for the District to pay the associated transportation costs became voluntary for the District. Beginning the 2017-t8 school year the District has elected to cease providing transportation for transfer students and will no longer accept new students into the program. This is expected to reduce annual costs for the program by $3.5M for and diminishing each year thereafter. NOTE 12. ACTUAL EXPENDITURES IN EXCESS OF BUDGET For the year ended June 30, 2077, the District's actual expenditures were in excess of its budgeted expenditures in the Debt Service Fund by 5392,078. J-1

94 SUPPLEMENTARY INFORMATION

95 RTVERVIEW GARDENS SCHOOL DISTRICT SCHEDULE OF REVENUES, EXPENDTTURES AND CHANGES IN Ftt D BALANCES - BUDGET AND ACTUAL - GENERAL FT]ND - IJNAI.,IDITED Year ended June 2011 Revenues Local County State Federal Other Budgeted amounts Original Final Actual $ 12,406, ,000 r,796,749 7,449,863 40,000 $ 10,198, ,O00 676,814 7,1 93, ,000 $ 12,521, ,869 10,630,461 6,368, ,369 Original to final Variances - positive (negative) $ (2,207,s88) $ (1,1 19,935) (2s6,678) Final to actual 2,323, ,869 9,953,647 (824,443) 157,369 Total revenues 22,264,938 18,680,737 30,s18,344 (3,584,201) 11,837,607 Expenditures Cunent lnstruction Attendance Guidance Health, psychological and speech services Improvement of instruction Professional development Media services Board of Education services Executive administration Building level administration Business and fiscal services Operation olplant Security services Pupil transportation Food services Printing, publishing and duplicating services central office support services Community services 8,367,562 8s0, , ,286 t97, ,21s 106, ,363 1,1 1 5,653 t,41s,672 1,353,953 6,594,238 1,239,540 1,176,272 3,291,121 t,727,144 1, I 56,1 0?. 10,233, , ,125 1,017, , ,215 r, i 06, ,363 r,241,799 1,414,972 1,353,9s3 6,604,540 1,239,540 1,188,272 3,291,121 I,7 55,844 1, ,608,9s4 453,303 54, , , ,s26 88, , ,716 1,134,773 I, I 88,404 5,716,132 1,449,154 2,373,550 2,987,913 14,s91 1,876,429 1,355,591 (1,86s,798) (r49,490) (28,47s) (138,ee4) (745,603) (1,000,000) (126,146) 700 (l 0,302) (12,000) (28,700) (s4s.324\ 2,624, ,286 75,962 53, ,249 70,689 I,018,456 1, , ,199 16s,s49 888,408 (20e,614) (1,1 8s,278) 303,208 (14,s91) (120,585) 345,835 Total expenditures 30,024,888 34,67s,020 28,674,s40 (4,6s0,132) 6,000,480 Other financing uses Transfers NETCHANGEINFUNDBALANCE $ (7,759,9s0) $ (1s'994'283) Fund balance at July I, 2016 (1,147,769) 696,03s 9,669,372 (1,147,769) _q G 31É! $ Fund balance at June 30, $ 10,365,407 See notes to supplementary information. 35

96 RIVERVIEW GARDENS SCHOOL DISTRICT SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES. BUDGET AND.ÀCTUAL - SPECIAL REVENUE FUND - UNAUDITED Year ended June Revenues Local County State Federal Budgeted amounts Original Final $ 2,100,000 55, ,825 s 2,133,298 55,000 33,625,470 2,977,683 Actual s 2,434,334 61,041 24,487,761 2,693,8rr Original to final Variances - positive Final to actual $ 33,298 $ 301,036 6,041 42,64s (9,r37,709) (283,872) Total revenues 35,737,825 38,791,451 29,6'76,947 3,0s3,626 (9,1 14,s04) Expenditures Current Instruction Attendance Guidance Health, psychological and speech services Improvement of inst uction Professional development Media services Executive administration Building level administration Central office support services Community services 19,349, ,t39 1,311, ,239 20,704, ,561 1,317,425 9,6s ,026 20,261,80r 272,071 1,350, I 07 I r,635 1,47,615 (1,3s4,9s6) ('t,422) (s,800) (e,6s2) (1,s29,787) 146, ,843 1,302,0'10 2,411, , ,843 t,418,174 2,403,100 s ,307 2,616,170 2,199,091 (l 16,104) 8,000 7,000 1,086,260 1, ,009,835 (787,629) 442,215 64,490 (32,682) (1,e83) 333,4t1 88, ,536 (t,197,996) 204,009 (7,000) 864,054 Total expenditures (3,803,3s0) 27, ,976, r7.691 NET CHANGE IN FUND BALANCE _q qjé4,i!2_ $ 7,814,66s (382,148) $ $ ( ) Fund balance at July I, 2016 I,561,530 Fund balance at June 30,2017 s t See notes to supplementary information. 36

97 RIVERVIEW GARDENS SCHOOL DISTRICT SCHEDULE OF REVENUES, EXPENDITURES AND CÍIANGES IN FTJND BALANCES. BUDGET AND ACTUAL - DEBT SERVICE FTJ ID - I.]NATJDITED Year ended June 30,2017 Revenues Local County Federal Budgeted amounts Original Final Actual $ $ 2,376,662 $ 3,387,794 80,3s2 406,139 Original to final s 2,376,662 Variances - positive (negative) Final to actual $ l,0ll,l32 80, r39 Total revenues 2.376,662 3,874,285 2,376,662 1,497,623 Expenditures Debt service Principal retirement Interest and other fiscal charges 1,930, ,930,000 l ,375,000 1,035,803 (445,000) s2,922 Total expenditures 3,018,725 3,018,725 3,410,803.(392,078) NET CHANCE IN FI.'ND BALANCE $ (3,018,725) $ 463,482 s 2,376,662 $ 1,105,545 Fund balance at July l, 2016 r,68s,129 Fund balance at June 30, 2017 $ 2,148,611 See notes to supplementary information. '37

98 RIVERVIEW GARDENS SCHOOL DISTRICT SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET ÀND ACTUAL ' CAPITALPROJECTS FUND - UNAUDITED Year ended June 2017 Original amounts Final Actual Original to fïnal Variances - positive (negative) Final to actual Revenues Local State Other $ $ $ 75,104 $ 1,1 49, , r,149, ,075 $ 75,104 (r,149,908) (95,67s) Total revenues 1,249,983 79,504 1,249,983 (1,170,479) Expenditures Current Instruction Health, psychological and speech services Improvement of instruction Executive administration Operation ofplant Security services Pupil transportation Food services Central office support services Community. services Facilities acquisition and construction Debt service Principal retirement Interest and other fiscal charges Total expenditures 75,i50 3,300 3s, ,500 7,000 n7, ,000 70,000 4,750 1,399, , ,300 5,000 2, ,500 7, , ,000 97,000 7,787 1,399, ,692 6,945 4, ,579 13, ,419 7, , , , ,968 2,560,352 2,852,10s 1,612,577 (274,6s8) (1 s,000) 30,000 (2,0s8) (27,000) (3,037) (5 1,884) I 1,35s 70s 2, ,921 (6,260) n'7, ,000 (2e,4t9) 50 '102,158 (103,9es) 28s,876 (291,7s3) 1,239,528 Other financing sources Transfers I,t ,147,769 NET CHANGE IN FIJND BALANCE $ (2,s60,3s2) $0 122\ (38s,304) $ 958,230 $ Fund balance at July l, ,766 Fund balance at June 30,2017 $ See notes to supplementary information. 38

99 RIVERVIEW GARDENS SCHOOL DISTRICT NOTES TO SUPPLEMENTARY INFORMATION NOTE 1 _ BUDGETS AND BUDGETARY ACCOUNTING The District follows these procedures in establishing the budgetary data reflected in the financial statements: In accordance with Chapter 67 RSMo, the District adopts a budget for each fund. Prior to July, the Chief Financial Officer, who serves as the budget offi.cer, submits to the Board a proposed budget for the fiscal year beginning on the following July l. The proposed budget includes estimated revenues and proposed expenditures for all District funds. Budgeted expenditures cannot exceed beginning available monies plus estimated revenues for the year. A public hearing is conducted to obtain taxpayer comments. Prior to its approval by the Board, the budget document is available for public inspection. Prior to July 1, the budget is legally enacted by a vote of the Board. Subsequent to the formal approval of the budget, the Board has the authority to make necessary adjustments to the budget by formal vote of the Board. Adjustments made during the year are reflected in the budget information included in the financial statements. Capital outlay acquired through capital lease obligations are not reported as an expenditure and the proceeds are not reported as an other financing source for budgetary pu{poses. 39