RATINGS: Direct Deposit Program: Moody s: Aa1

Transcription

1 NEW ISSUE BOOK-ENTRY ONLY RATINGS: Direct Deposit Program: Moody s: Aa1 Direct Deposit Program: S&P: AA+ Underlying: Moody s: Aa2 See BOND RATINGS herein In the opinion of Gilmore & Bell, P.C., Bond Counsel, 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 Bonds 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 imposed on individuals and corporations, (2) the interest on the Bonds is exempt from Missouri income taxation by the State of Missouri and (3) the Bonds have not been designated as qualified tax-exempt obligations within the meaning of Section 265(b)(3) of the Code. See TAX MATTERS in this Official Statement. $20,655,000 WENTZVILLE R-IV SCHOOL DISTRICT, ST. CHARLES COUNTY, MISSOURI GENERAL OBLIGATION REFUNDING BONDS (MISSOURI DIRECT DEPOSIT PROGRAM) SERIES 2014 Dated: Date of Delivery Due: March 1, as shown on the inside cover The General Obligation Refunding Bonds (Missouri Direct Deposit Program), Series 2014 (the Bonds ) will be issued by the Wentzville R-IV School District, St. Charles County, Missouri (the District ) for the purpose of providing funds to currently refund a portion of the District s outstanding general obligation bonds, as further described herein under the section captioned PLAN OF FINANCING Refunding of the Refunded Bonds. Principal on the Bonds will be payable annually as set forth on the inside cover of this Official Statement, commencing on March 1, Interest on the Bonds is payable semiannually on each March 1 and September 1, commencing on September 1, 2014, by check or draft mailed (or by wire transfer in certain circumstances as described herein) to the persons who are the registered owners of the Bonds as of the close of business on the 15th day of the month preceding the applicable interest payment date. The 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. See inside cover for maturities, principal amounts, interest rates, prices and CUSIP numbers. This cover page contains information for quick reference only. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. 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. Bond Counsel will also pass on certain matters relating to this Official Statement. 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 January 14, The date of this Official Statement is December 19, 2013.

2 $20,655,000 WENTZVILLE R-IV SCHOOL DISTRICT, ST. CHARLES COUNTY, MISSOURI GENERAL OBLIGATION REFUNDING BONDS (MISSOURI DIRECT DEPOSIT PROGRAM) SERIES 2014 MATURITY SCHEDULE Base CUSIP: Due (March 1) Principal Amount Interest Rate Price CUSIP 2015 $1,905, % % XL ,000, XM , XW , XP ,370, XN ,550, XR ,565, XQ ,800, XT ,450, XS , XV ,280, XU6

3 WENTZVILLE R-IV SCHOOL DISTRICT ST. CHARLES COUNTY, MISSOURI BOARD OF EDUCATION Mr. Dale Schaper, President and Director Ms. Courtney Tieman, Vice President and Director Ms. Sandy Garber, Secretary and Director Ms. Terry Ratcliff, Director Ms. Heather Reiter, Director Ms. Sherry Cox, Director Ms. Sandy Fitzgerald, Director DISTRICT ADMINISTRATION Dr. Curtis Cain, Superintendent Ms. Pam Frazier, Chief Financial Officer Dr. Jennifer Allen, Assistant Superintendent Curriculum Dr. Susan Hladky, Assistant Superintendent Human Resources Ms. Cheri Thurman, Assistant Superintendent Special Services Dr. Melody Marcantonio, Assistant Superintendent Student Services Mr. Matt Deichmann, Director of Community Relations BOND COUNSEL Gilmore & Bell, P.C. St. Louis, Missouri UNDERWRITER Stifel, Nicolaus & Company, Incorporated 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. 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 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.

5 TABLE OF CONTENTS 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... 2 Registration, Transfer and Exchange of Bonds Upon Discontinuance of Book-Entry Only System... 4 No Redemption... 5 SECURITY FOR THE BONDS... 5 General... 5 Direct Deposit of State Aid Payments... 5 PLAN OF FINANCING... 6 Refunding of the Refunded Bonds... 6 Sources and Uses of Funds... 7 VERIFICATION OF MATHEMATICAL COMPUTATIONS... 7 THE DISTRICT... 7 LEGAL MATTERS... 7 BOND RATINGS... 8 TAX MATTERS... 8 Opinion of Bond Counsel... 8 Other Tax Consequences... 9 CONTINUING DISCLOSURE UNDERTAKING 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, 2013 APPENDIX C - FORM OF OPINION OF BOND COUNSEL Page (i)

6 THIS PAGE INTENTIONALLY LEFT BLANK

7 OFFICIAL STATEMENT $20,655,000 WENTZVILLE R-IV SCHOOL DISTRICT, ST. CHARLES COUNTY, MISSOURI GENERAL OBLIGATION REFUNDING BONDS (MISSOURI DIRECT DEPOSIT PROGRAM) SERIES 2014 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 $20,655,000 aggregate principal amount of General Obligation Refunding Bonds (Missouri Direct Deposit Program), Series 2014 (the Bonds ) by the Wentzville R-IV School District, St. Charles County, Missouri (the District ). The issuance and sale of the Bonds is authorized by a resolution of the Board of Education of the District adopted on December 19, 2013 (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 purpose of providing funds to (1) currently refund a portion of the District s outstanding General Obligation Refunding and Improvement Bonds, Series 2005A (the Series 2005A Bonds ) and (2) 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 and interest 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. See the section herein captioned SECURITY FOR THE BONDS General. 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, Wells Fargo Bank, N.A. and the District, dated as of the date of issuance of the Bonds, the District will agree that a portion of its State Aid (defined herein) payments will be transferred to Wells Fargo Bank, 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.

8 Continuing Disclosure The District has agreed in an Adoption Agreement dated as of January 1, 2014, relating to the District s Omnibus Continuing Disclosure Undertaking dated as of March 1, 2013 (together, the Continuing Disclosure Undertaking ) to provide certain financial information and operating data relating to the District and to provide notices of the occurrence of certain enumerated material events relating to the Bonds. The financial information, operating data and notice of events will be filed by the District in compliance with Rule 15c2-12 promulgated by the Securities and Exchange Commission. See the section herein captioned CONTINUING DISCLOSURE UNDERTAKING. General THE BONDS The Bonds are being issued in the aggregate principal amount of $20,655,000. The Bonds are dated as of the date of original delivery of and payment for such Bonds and the principal is payable on March 1 in the years and in the principal amounts set forth on the inside cover page hereof. 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 said interest has been paid and is payable semiannually on March 1 and September 1 in each year, beginning September 1, Payment of the interest on the Bonds will be made to the person in whose name such Bond is registered on the registration books (the Bond Register ) at the close of business on the 15th 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 by check or draft mailed by UMB Bank, N.A. (the Paying Agent ) to each Owner at the address shown on the Bond Register or at such other address as is furnished to the Paying Agent in writing by such Registered Owner, or 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), the ABA routing number and the account number to which such Owner wishes to have such transfer directed and an acknowledgement that an electronic transfer fee is payable. Principal of the Bonds will be paid by check or draft to the Registered Owner of such Bond at the maturity of such Bond, upon presentation and surrender of such Bond at the payment office of the Paying Agent in Kansas City, Missouri or at such other payment office as 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. -2-

9 DTC will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Bond certificate will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity and will be deposited with DTC. DTC 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 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 tenders, defaults, and -3-

10 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. 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 and Interest. Payment of principal 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 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 securities 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 Direct Participants holding a majority position in the Bonds 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, registered in the name of DTC s partnership nominee, Cede & Co. (or such other name as may be requested by an authorized representative of DTC), and delivered to DTC (or a successor securities depository), to be held by it as securities depository for Direct Participants. If, however, the system of book-entry-only transfers has been discontinued and a Direct Participant has elected to withdraw its Bonds from DTC (or such successor securities depository), Bond certificates may be delivered to Beneficial Owners in the manner described herein under the caption Registration, Transfer and Exchange of Bonds Upon Discontinuance of Book Entry Only System. Registration, Transfer and Exchange of Bonds Upon Discontinuance of Book-Entry Only System The Paying Agent will keep or cause to be kept the Bond Register at its principal payment office or such other office designated by the Paying Agent. Upon surrender of any Bond to the Paying Agent, the Paying Agent shall transfer or exchange Bonds as provided in the Resolution. Any Bond may be transferred upon the Bond Register by the person in whose name it is registered and 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. The Owner requesting such transfer or exchange will be required to pay any additional costs or fees that might be incurred in the secondary market with respect to such exchange. In the event 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. -4-

11 No Redemption The Bonds are not subject to optional redemption prior to maturity. General SECURITY FOR THE BONDS Pledge of Full Faith and Credit. The Bonds will constitute general obligations of the District and will be payable as to both principal and interest 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 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 of and interest on the Bonds as and when the same become due and the fees and expenses of the Paying Agent. 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 a Missouri bank, as direct deposit trustee (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 (the Deposit Agreement ) 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 Deposit Agreement will provide for payment of one-tenth (1/10) of the debt service due on September 1, 2014 and March 1, 2015 to be paid in each of the ten (10) months of March 2014 through December 2014 and one-tenth (1/10) of the annual debt service in each succeeding ten (10) similar months (i.e., March through December) for each bond year after the Bonds are issued as long as the 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 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 and interest on the Bonds, or to impose any debt service levy sufficient to retire the -5-

12 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 Bonds PLAN OF FINANCING The proceeds of the Bonds will be used for the purpose of refunding and redeeming the Series 2005A Bonds maturing on March 1, 2015 and thereafter (as further described in this section, the Refunded Bonds ), on March 1, 2014, at a redemption price of 100% of the principal amount thereof, plus accrued interest thereon to the date of redemption. The District will enter into an Escrow Trust Agreement dated as of January 1, 2014 (the Escrow Trust Agreement ), with UMB Bank, N.A., Kansas City, Missouri, as escrow agent (the Escrow Agent ). Pursuant to the Escrow Trust Agreement, the District will transfer a portion of the proceeds of the Bonds to the Escrow Agent for deposit in the Escrow Fund (the Escrow Fund ) established under the Escrow Trust Agreement. Such moneys deposited into the Escrow Fund will be used to purchase direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (the Escrowed Securities ). The Escrowed Securities will mature in such amounts and at such times as shall be sufficient, together with any cash deposit to the Escrow Fund, to redeem and pay the Refunded Bonds on March 1, The proceeds of the Bonds and any Escrowed Securities deposited in the Escrow Fund will be irrevocably pledged to the payment of the Refunded Bonds. Robert Thomas CPA, LLC, Shawnee Mission, Kansas (the Escrow Verifier ), a firm of independent certified public accountants, will provide a report to the effect that the cash and/or Escrowed Securities held in the Escrow Fund will provide sufficient moneys to make the required payments in accordance with the District s refunding plan as set forth herein. See the section herein captioned VERIFICATION OF MATHEMATICAL COMPUTATIONS. Set forth below is a description of the Refunded Bonds: REFUNDED BONDS Maturity Date (March 1) Original Principal Amount Principal Amount Previously Refunded (1) Principal Amount Being Refunded Interest Rate 2015 $ 3,505,000 $ 1,550,000 $ 1,955, % ,840,000 1,800,000 2,040, ,820,000 1,700,000 4,120, ,420,000 5,000,000 13,420, Total $42,210,000 $10,050,000 $21,535,000 (1) Proceeds of the District s General Obligation Refunding Bonds (Missouri Direct Deposit Program), Series 2013 were used to refund a portion of the Series 2005A Bonds. -6-

13 Sources and Uses of Funds The sources and uses of the proceeds of the Bonds are as follows: Sources of Funds: Par Amount of Bonds $20,655, Plus: Original Issue Premium 1,498, Total $22,153, Uses of Funds: Deposit to Escrow Fund $21,962, Costs of Issuance (including Underwriter s Discount) 191, Total $22,153, VERIFICATION OF MATHEMATICAL COMPUTATIONS Upon delivery of the Bonds, the Escrow Verifier will deliver to the District and the Underwriter 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 its examination will be a verification of the mathematical accuracy of (a) the adequacy of the money and Escrowed Securities held in the Escrow Fund to redeem and pay the principal of, redemption premium, if any, and interest on the Refunded Bonds on March 1, 2014 (as described under the caption PLAN OF FINANCING Refunding of the Refunded Bonds ), and (b) the mathematical computations supporting the conclusion that the Bonds are not arbitrage bonds under Section 148 of the Internal Revenue Code of 1986, as amended (the Code ). Such verification of the accuracy of the computations will be based upon information supplied by the Underwriter and on interpretations of the Internal Revenue Code of 1986, as amended, provided by Bond Counsel. THE DISTRICT The District, comprising an area of approximately 89 square miles, is located in St. Charles County, Missouri, approximately 35 miles west of the City of St. Louis, Missouri. See APPENDIX A INFORMATION REGARDING THE DISTRICT for further information regarding the District. 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. Gilmore & Bell, P.C. will also 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. -7-

14 BOND RATINGS Moody s Investors Service, Inc. ( Moody s ) has assigned a municipal bond rating of Aa1 to the Bonds and Standard & Poor s Ratings Services, a division of Standard & Poor s Financial Services LLC, a part of McGraw Hill Financial, Inc. ( Standard & Poor s and together with Moody s, the Rating Agencies ), has assigned a municipal bond rating of AA+ to the Bonds based upon the District s participation in the Missouri Direct Deposit Program. In addition, Moody s has assigned a municipal bond rating of Aa2 to the Bonds based on the underlying credit of the District. Such ratings reflect only the views of the Rating Agencies, and an explanation of the significance of each rating may be obtained therefrom. There is no assurance that the ratings will remain in effect for any given period of time or that they will not be revised, either downward or upward, or withdrawn entirely, by the Rating Agencies if, in their 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 the ratings of the Bonds or to oppose any such proposed revision or withdrawal. Pursuant to the Continuing Disclosure Undertaking, the District is required to bring to the attention of the holders of the Bonds any revision or withdrawal of the ratings of the Bonds but has not undertaken any responsibility to oppose any such revision or withdrawal. See the section herein captioned CONTINUING DISCLOSURE UNDERTAKING. Any such revision or withdrawal of the ratings could have an adverse effect on the market price and marketability of the Bonds. 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 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. Opinion of Bond Counsel In the opinion of Gilmore & Bell, P.C., Bond Counsel, under the law existing as of the issue date of the Bonds: Federal and Missouri Tax Exemption. The interest on the Bonds is excludable from gross income for federal income tax purposes and is exempt from income taxation by the State of Missouri. Alternative Minimum Tax. Interest on the Bonds is not an item of tax preference for purposes of computing the federal alternative minimum tax imposed on individuals and corporations, but is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations. Bank Qualification. The Bonds have not been designated as qualified tax-exempt obligations for purposes of Section 265(b) of the Code. -8-

15 Bond counsel s opinions are provided as of the date of the original issue of the 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 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 Bonds in gross income for federal and Missouri income tax purposes retroactive to the date of issuance of the Bonds. Bond Counsel is expressing no opinion regarding other federal, state or local tax consequences arising with respect to the Bonds but has reviewed the discussion under the heading TAX MATTERS. Other Tax Consequences Original Issue Premium. If a Bond is issued at a price that exceeds the stated redemption price at maturity of the Bond, the excess of the purchase price over the stated redemption price at maturity constitutes premium on that Bond. Under Section 171 of the Code, the purchaser of that Bond must amortize the premium over the term of the Bond using constant yield principles, based on the purchaser s yield to maturity. As premium is amortized, the owner s basis in the Bond and the amount of tax-exempt interest received will be reduced by the amount of amortizable premium properly allocable to the owner. This 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 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. 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. Collateral Federal Income Tax Consequences. Prospective purchasers of the Bonds should be aware that ownership of the 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 Bonds. Bond Counsel expresses no opinion regarding these tax consequences. Purchasers of 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 Bonds, including the possible application of state, local, foreign and other tax laws. -9-

16 CONTINUING DISCLOSURE UNDERTAKING The District will covenant in the Continuing Disclosure Undertaking to file certain financial information and operating data relating to the District (updated within not later than 180 days following the end of its fiscal year, which currently ends June 30) (the Annual Report ) commencing with the Annual Report for the fiscal year ending June 30, 2014, and to file notices of the occurrence of certain enumerated events, if material. The Annual Report shall be filed by or on behalf of the District with the Municipal Securities Rulemaking Board (the MSRB ) through the Electronic Municipal Market Access system ( EMMA ). The Annual Report shall include: (a) (b) 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. Information relating to the District and its operations set forth in the tables under the following sections in Appendix A of this Official Statement: THE DISTRICT, FINANCIAL INFORMATION CONCERNING THE DISTRICT - Sources of Revenue, - Summary of Revenues and Expenditures, - Historic Assessed Valuation, - Assessed Valuation, - Tax Rates, - Tax Collection Record and DEBT STRUCTURE OF THE DISTRICT, and information with respect to litigation if, in the judgment of the District, such litigation would have a material adverse affect on the financial condition of the District. Within 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 enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions; the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 570-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; (7) modifications to rights of bondholders, 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; (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 Paying Agent, if material. -10-

17 Nothing in the Continuing Disclosure Undertaking shall be deemed to prevent the District from disseminating any other information using the means of dissemination set forth in the 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 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, the District shall have no obligation 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 Rule 15c2-12 promulgated by the Securities and Exchange Commission. The District has made a similar undertaking with respect to its outstanding obligations to file an Annual Report for each fiscal year of the District. The District covenanted to include in its Annual Report the District s audited financial statements for the previous year in addition to updated information relating to the District and its operations. The District is currently in compliance with such prior continuing disclosure obligations. 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 Bonds at a price of $22,039, (which is equal to the aggregate original principal amount of the Bonds, less an underwriting discount of $113,602.50, plus original issue premium of $1,498,371.00). 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 them in connection with the issuance of the Bonds. -11-

18 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; following delivery of the Bonds, copies of such documents may be examined at the principal payment office of the Paying Agent. 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. The District has duly authorized the delivery of this Official Statement. WENTZVILLE R-IV SCHOOL DISTRICT, ST. CHARLES COUNTY, MISSOURI By: /s/ Dale Schaper President of the Board of Education -12-

19 APPENDIX A INFORMATION REGARDING THE DISTRICT

20 TABLE OF CONTENTS THE DISTRICT... A-1 General... A-1 Board of Education... A-1 Administration... A-2 Professional Staff... A-2 Enrollment... A-3 Students to Classroom Teacher Ratio... A-3 Cost Per Pupil... A-3 Academic Achievement... A-3 Education Programs... A-3 School Rating and Accreditation... A-4 School Facilities... A-4 Retirement Plan... A-4 FINANCIAL INFORMATION CONCERNING THE DISTRICT... A-5 Sources of Revenue... A-5 Tax Limitation Provisions... A-10 Accounting, Budgeting and Auditing Procedures... A-11 Summary of Revenues and Expenditures... A-12 Historic Assessed Valuation... A-14 Assessed Valuation... A-14 Tax Assessments and Collections... A-14 Property Assessed by State... A-15 Tax Rates... A-15 Tax Collection Record... A-16 Major Taxpayers... A-17 Tax Abatement and Tax Increment Financing... A-17 District s Rights in the Event of Tax Delinquencies... A-17 ECONOMIC INFORMATION CONCERNING THE DISTRICT... A-18 Commerce, Industry and Employment... A-18 Population and Other Statistics... A-19 Recreational Facilities... A-20 Municipal Services and Utilities... A-20 DEBT STRUCTURE OF THE DISTRICT... A-21 Debt Ratios and Related Information... A-21 General... A-21 General Obligation Bonds Outstanding... A-22 History of General Obligation Indebtedness... A-22 General Obligation Debt Service Requirements... A-23 Debt Limitation and Debt Capacity... A-23 Overlapping Indebtedness... A-24 Lease Obligations... A-24 Future Plans... A-25 (i)

21 THE DISTRICT General The District is located in east central Missouri approximately 35 miles west of the City of St. Louis and covers approximately 89 square miles in St. Charles County, Missouri. The District is traversed by two major highways: Interstate 70 and U.S. Highway Both Interstate 70 and U.S. Highway provide direct access to the City of St. Louis. Incorporated cities within the District are the City of Wentzville, the City of Foristell and the City of Lake Saint Louis. The District overlaps the Village of Dardenne Prairie and small portions of the City of O Fallon and the Village of Flint Hill. According to the Missouri Census Data Center, the District s population in 2010 was 71,390 compared to 32,342 in The District s student enrollment for the school year is 14,239. The District is governed by a seven member Board of Education and administered by the Superintendent. The District operates schools with grades K through 12. Programs offered by the District are comprehensive with an academic curriculum encompassing several foreign languages, math, science, literature, composition and social studies. The District operates under the oversight of the State of Missouri Department of Elementary and Secondary Education. The District operates on a fiscal year commencing July 1 of each year and ending on June 30 of the following calendar year (the Fiscal Year ). Board of Education The District is governed by the Board of Education (the Board ). The Board is composed of seven members elected at large. Pursuant to state statutes, Board members serve three year terms. Subsequent to each election, the Board elects a president, vice president, secretary and treasurer. While the president and vice president are required to be members of the Board, the secretary and treasurer are not required to be members of the Board. The current members of the Board are as follows: Name Office Original Term Began (April) Current Term Expires (April) Dale Schaper President and Director Courtney Tieman Vice President and Director Sandy Garber Secretary and Director Terry Ratcliff Director Heather Reiter Director Sherry Cox Director Sandy Fitzgerald Director The Board has the responsibility of determining the policy of the District within the legal framework established by the Missouri Revised Statutes. The Board makes all final decisions concerning employment, termination of services, expenditures of funds, contracts, establishment of new programs, student fees, tax levies and construction of facilities. A-1

22 The chief executive officer is the Superintendent of the District, who is selected by the Board. The day-to-day affairs of the District are managed by the Superintendent under the direction of the Board. In addition to day-to-day management, the Superintendent s responsibilities include, among others, making policy recommendations to the Board, recommending all additions or changes in personnel and personnel policies, and directing school construction and new programs. Reporting to the Superintendent are the Chief Financial Officer, Assistant Superintendent for Curriculum, Assistant Superintendent for Human Resources, Assistant Superintendent for Special Services, Assistant Superintendent for Student Services and Director of Community Relations. Administration Dr. Curtis Cain is in his first year as Superintendent of the District. Before coming to the District, Dr. Cain was the Associate Superintendent for Educational Services at Shawnee Mission School District in Kansas. Dr. Cain earned his Doctor of Philosophy Degree in Educational Administration at Iowa State University. He holds certificates in Master of Science in Educational Administration and Bachelor of Science in Social Science Education. Ms. Pam Frazier is in her first year as Chief Financial Officer of the District. Prior to joining the District, Ms. Frazier served as Chief Financial Officer of the Warren County (Missouri) R-III School District. Ms. Frazier earned her Masters of Business Administration from Lindenwood University and her Bachelor of Science in Accounting from Columbia College. She is also a licensed Certified Public Accountant. Professional Staff General. The District currently has a total of 1,888 employees, including 69 administrative personnel, 980 teachers or certified personnel and 839 support staff or other employees. Full-time teachers of the District can be members of either the Missouri Teachers Association or the Missouri National Education Association. Clerical and custodial staff are members of the Missouri Federation of Teachers Local The District has no record of any work stoppages or labor disputes. Summary of Staff. Approximately 80% of the District s teachers hold advanced degrees and many are accomplished experts in fields such as writing, history, music, art, science, athletics and others. Of the District s employees, approximately 68% are tenured. The following table sets forth the District s staffing at the beginning of the Fiscal Years 2010 through 2014: Staff (1) Administrators Teachers/Classroom Support Support Staff Total 1,686 1,724 1,753 1,816 1,888 (1) Administrators include superintendents, principals and area directors. Teachers/Classroom Support includes teachers/librarians, counselors and teacher aids. Support Staff includes maintenance, custodial, food service, secretaries, clerks and nurses. A-2

23 Enrollment The following table sets forth the District s enrollment for the school years ending June 30, 2010 through 2014: Year Grades K-5 Grades 6-8 Grades 9-12 Total % Change ,075 2,786 3,264 12,125 N/A ,337 2,895 3,399 12, % ,534 3,022 3,547 13, ,700 3,172 3,788 13, ,975 3,247 4,006 14, Students to Classroom Teacher Ratio For the school year the average class size is approximately 18 students for the elementary schools, 18 students for the middle schools and approximately 29 students for the high schools. Cost Per Pupil The following table sets forth the District s instructional expenditures per pupil (cost per average daily attendance) for the school years ending June 30, 2010 through 2014: Year Cost % Change 2010 $9,045 N/A , % , , , Academic Achievement According to the District s records, approximately 35% of the graduating students attend two year colleges and 38% attend 4 year universities and colleges. The following table is a summary of academic achievements for the school years ending June 30, 2008 through 2012: Student Achievements Education Programs Number of Graduates % Attending College 79% 85% 73% 72% 73% Average ACT Scores The District operates schools with grades K through 12. The District operates under the oversight of the Missouri Department of Elementary and Secondary Education ( DESE ). Programs offered by the District are comprehensive with an academic curriculum encompassing several foreign languages, math, science, literature, composition and social studies. The District offers numerous special programs such as gifted, adult A-3

24 education, early childhood, parents as first teachers, individualized learning center, therapeutic learning center and a comprehensive special education program. School Rating and Accreditation State law requires DESE to regularly evaluate each public school district. The process of accrediting school districts is mandated by state law, and the specific responsibilities are outlined both by rules of the State Board of Education and in Section of the Revised Statutes of Missouri, as amended. Under DESE s current accreditation system, school districts are evaluated every five years based on DESE standards in three areas: resource standards, educational process standards and performance standards. Districts receive an evaluation judgment for each of the three sets of standards and an overall evaluation, which evaluations are in one of four categories: accredited, provisionally accredited, interim or unaccredited. As of September 2014, 97.3% of all school districts in the State of Missouri (the State ) were accredited, 2.1% were provisionally accredited and 0.6% were unaccredited under the Missouri School Improvement Program ( MSIP ) rating system. DESE has assigned the District accredited status, the highest accreditation status given by DESE. The District has received a waiver from the next MSIP review due to high performance achievement. School Facilities For the school year, the District operated ten elementary schools, three middle schools and three senior high schools with a total enrollment of 14,228 students. The following table contains descriptive information on the various schools operated by the District: Grades Student Student Year School Served Capacity Enrollment Constructed Holt High School ,600 1, Liberty High School Timberland High School ,000 1, Wentzville Middle School 6-8 1,200 1, Frontier Middle School 6-8 1, South Middle School 6-8 1,275 1, Boone Trail Elementary K Heritage Primary K Heritage Intermediate Green Tree Elementary K Crossroads Elementary K Prairie View Elementary K Peine Ridge Elementary K Duello Elementary K Lakeview Elementary K Discovery Ridge Elementary K Retirement Plan The District contributes to the Public School Retirement Systems of Missouri ( PSRS ) and the Public Education Employee Retirement System of Missouri ( PEERS ), cost-sharing multiple-employer defined benefit pension plans. PSRS and PEERS provide retirement and disability benefits to full-time (and certain part-time) employees and death benefits to members and beneficiaries. Positions covered by PSRS are not covered by Social Security. Benefit provisions for these systems are set forth in Chapter 169 of the Missouri Revised Statutes. The statutes assign responsibility for the administration of the system to a seven A-4

25 member Board of Trustees. PSRS and PEERS issue a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to: The Public School Retirement System of Missouri, P.O. Box 268, Jefferson City, Missouri 65102, or by calling For additional information regarding PSRS, see the notes to the District s audited financial statements in APPENDIX B hereto. Sources of Revenue FINANCIAL INFORMATION CONCERNING THE DISTRICT State school districts finance their operations through the local property tax levy, State sales tax, state aid, federal grant programs and miscellaneous sources including State Aid for Transportation, a State sales tax on cigarettes ( fair share revenues) and a pro rata share of interest income from the counties in which each school district operates. 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 aid amounts rather than local taxes. 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, 2013, other than revenues attributable to the Debt Service Fund: Revenue Source Revenues % of Total Local Revenue $ 99,799, % County Revenue 2,515, State Revenue 54,672, Federal Revenue 5,192, Other Revenue (1) 301, Total $162,482, % Source: Annual Secretary of the Board Report for Fiscal Year ended June 30, (1) Excludes proceeds from sale of the District s $43,755,000 General Obligation Refunding Bonds (Missouri Direct Deposit Program), Series 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 under the caption PROPERTY TAX INFORMATION, (2) fines and forfeitures collected as a result of violations within a district s boundaries, (3) a district s allocable portion of state assessed railroad and utility property taxes collected and distributed by the county or counties in which it is located, and (4) receipts from a 1% state sales tax (commonly referred to as Proposition C revenues ). 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 enrollment in each district and in part on the taxes levied by each district. A-5

26 Proposition C revenues are generated by a 1-cent state sales tax that was approved by the voters in The sales tax proceeds are deemed to be local revenues for school district accounting purposes. Such revenues are distributed under the provisions of a State Aid formula using weighted average daily attendance (see the section below captioned State Revenue ). The following table shows the amounts of Proposition C revenue per pupil distributed for each of the Fiscal Years shown below: Fiscal Year Ended June 30 Proposition C Revenue 2009 $ Source: Missouri Department of Elementary and Secondary Education. Under Proposition C, after determining its budget and the levy rate needed to produce required revenues to fund the budget, a school district must reduce the operating levy by an amount sufficient to decrease the revenues it would have received therefrom by an amount equal to approximately one-half of the estimated revenues to be received through Proposition C during the year. School districts may submit propositions to voters to forego some or all of the reduction in the operating levy that is otherwise required under the terms of Proposition C. In June 1997, the voters within the District approved the elimination of the Proposition C reduction in the operating levy, resulting in an additional tax levy for the District of approximately $0.32 to $0.40 per year. State Revenue. The amount of State Aid for school districts in Missouri has typically been calculated using a complex formula. Senate Bill 287 passed by the Missouri General Assembly in its 2005 regular session is intended to transition the State away from a local tax rate based formula to a formula that is primarily student-needs based. The formula was phased in over a seven-year period that started with the Fiscal Year. During the phase-in period, State Aid for each school district was based on a percentage of both the old local tax rate based formula (determined as a percentage of the State Aid Payments), and the student-needs based formula. State Aid was calculated using the following percentages of the old and new formulas: Phase-In Year Percentage of State Aid Payment Percentage of SB 287 Formula % 15% The Fiscal Years , and basic formula appropriations approved by the Missouri General Assembly and signed by the Governor were approximately 95% of the amount needed to fully fund the phase-in described above. To lessen the impact of the funding shortfall, the General Assembly approved an amendment to Chapter 163 of the Revised Statutes of Missouri, which provided that in Fiscal Years , and , if the State s basic formula appropriation was less than the amount needed to fully fund the phased-in formula, or the appropriation for transportation is funded at a level that provides less than 75% of the allowable transportation-related costs, school districts would be excused from A-6

27 compliance with certain spending requirements for professional development, as well as certain fund placement and expenditure requirements, described below under the caption Mandatory Deposit and Expenditures of Certain Amounts in the Teachers Fund. School districts were also excused from complying with these requirements if the Governor withheld funds appropriated for funding the basic formula in any of the same three years. 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 or an SB 711 rollback (see the caption Tax Limitation Provisions 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 ( ADA ) by the state adequacy target (discussed below). This figure may be adjusted upward by a dollar value modifier, which is an index of the relative purchasing power of a dollar, calculated as one plus 15% of the difference of the regional wage ratio minus one. The product of the weighted ADA multiplied by the state adequacy target is then reduced by a district s local effort (discussed below) to calculate a district s final State Aid amount. 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 free and reduced lunch, receive special education services, or possess limited English language proficiency. Students receive additional weighted treatment if, categorically, they exceed certain thresholds (based on the percentage of students in each of the categories in Performance Districts, as defined below). Currently, additional weight is assigned to students above the following thresholds: above 38.8% for students who qualify for free or reduced lunch, above 13.2% for students receiving special education services, and above 1.8% for students possessing limited English language proficiency. 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 students eligible for free and reduced lunch, special education students, or students with limited English language proficiency. 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 will be based upon amounts spent, excluding federal and state transportation revenues, by certain high performing districts (known as 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 previous state adequacy target amount. Based on this calculation, the state adequacy target for Fiscal Year 2014 would be $6,423 per student; however DESE decided to hold the state adequacy target at its Fiscal Year 2012 level ($6,131) until the funding shortfall is closed. Local Effort. For the Fiscal Year, the local effort figure utilized in a district s State Aid calculation is 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 subsequent years, a district s local effort amount will be 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. A-7

28 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 of the state treasury containing a portion of the State s gambling revenues. This money is distributed to school districts on the basis of average daily attendance (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. 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. 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 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. In fiscal years , and , under certain circumstances described above under State Aid, school districts were excused from compliance with certain spending requirements for professional development, as well as certain of these fund placement and expenditure requirements. School districts were excused from complying with these requirements if the Governor withheld funds appropriated for funding the basic formula in any of the same three years. A school board may transfer any portion of the unrestricted balance remaining in the Incidental Fund to the Teachers Fund. Any school district that uses a transfer from the Incidental Fund to pay for more than 25% of the annual certificated compensation obligation of the school 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 (which are repaid from a Debt Service Fund levy); (2) revenue from the school district s local property tax levy for the Capital Projects Fund; (3) certain permitted transfers from the Teachers and Incidental Funds; 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 A-8

29 Teachers and Incidental Funds to an amount below $2.75. The District s local property tax levy for the Capital Projects Fund, including the $0.30 portion of the District s Capital Projects Fund levy that the District plans to budget for payment on the Lease Participation Certificates, Series 2011 (the Series 2011 Certificates ) and Lease Participation Certificates, Series 2012 (the Series 2012 Certificates ), does not result in a reduction of the equalized combined tax rates for the Teachers and Incidental Funds to an amount below $2.75 (see FINANCIAL INFORMATION CONCERNING THE DISTRICT - Tax Rates and DEBT STRUCTURE OF THE DISTRICT - Lease Obligations below). Transfers from Incidental Fund to 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 under the following limited circumstances: (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) Current year obligations for lease-purchase obligations entered into prior to January 1, 1997; (3) 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 (4) 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 (currently, $6,131) times the school district s weighted ADA. 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 (as discussed above) and is not making payments on lease purchases pursuant to Section of the Revised Statutes of Missouri, as amended, 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 and capital projects 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 (currently, $6,131) times the school district s weighted ADA. Federal Revenue. School districts receive certain grants and other revenue from the federal government, which are usually required to be used for the specified purposes of the grant or funding program. The federal No Child Left Behind law requires that every public school student must score at a proficient level or higher in math and reading by Each state establishes its own proficiency levels. Federal sanctions for school districts that fail to meet established proficiency standards include providing parents and students from underperforming schools within a district the right to request a transfer to a school within the district that meets proficiency standards. In addition, schools that continue to fail to meet A-9

30 proficiency standards must, in addition to transfers and tutoring, make additional changes in staffing, curriculum and management. Federal sanctions apply only to public schools that receive Title I federal money. The District has been notified that several of its schools have failed to meet the established proficiency standards. In July of 2012, the State earned a waiver from the No Child Left Behind law when the United States Department of Education approved the State s proposed accountability system aimed at replacing the existing accountability measures of the No Child Left Behind law. The State s proposed system, Top 10 by 20, outlines a plan for Missouri to be in the top 10 states by 2020, with a focus on having students be college and career ready by graduation. Tax Limitation Provisions The operating levy of a school district (consisting of all ad valorem taxes levied except the debt service levy) cannot exceed the tax rate ceiling for the current year without voter approval. The tax rate ceiling, determined annually, is the rate of levy which, when charged against the district s assessed valuation for the current year, excluding new construction and improvements, will produce an amount of tax revenues equal to tax revenues for the previous year increased by the lesser of actual assessment growth, 5% or the Consumer Price Index. Without the required percentage of voter approval, the tax rate ceiling cannot at any time exceed the greater of the tax rate in effect in 1980 or the most recent voter-approved tax rate (as adjusted pursuant to the provisions of the Hancock Amendment, more fully explained below). Under Article X, Section 11(b) of the Missouri Constitution, a school district may increase its operating levy up to $2.75 per $100 assessed valuation without voter approval. Any increase above $2.75, however, must be approved by a majority of the voters voting on the proposition. Further, pursuant to Article X, Section 11(c) of the Missouri Constitution, any increase above $6.00 must be approved by twothirds of the voters voting on the proposition. The tax levy for debt service on a school district s general obligation bonds is exempt from these limitations upon the tax rate ceiling. Article X, Section 22(a) of the Missouri Constitution (popularly known as the Hancock Amendment ), approved in 1980, places limitations on total state revenues and the levying or increasing of taxes without voter approval. The Missouri Supreme Court has interpreted the definition of total state revenues to exclude voter-approved tax increases. The Hancock Amendment also includes provisions for rolling back tax rates. If the assessed valuation of property, excluding the value of new construction and improvements, increases by a larger percentage than the increase in the Consumer Price Index from the previous year (or 5%, if greater), the maximum authorized current levy must be reduced to yield the same gross revenue from existing property, adjusted for changes in the Consumer Price Index, as could have been collected at the existing authorized levy on the prior assessed value. This reduction is often referred to as a Hancock rollback. The limitation on local governmental units does not apply to taxes levied in the Debt Service Fund for the payment of principal and interest on general obligation bonds. In 2008, through the enactment of Senate Bill 711 ( SB 711 ), the Missouri General Assembly approved further limitations on the amount of property taxes that can be imposed by a local governmental unit. Prior to the enactment of SB 711, a Hancock rollback would not necessarily result in a reduction of a school district s actual operating tax levy if its current tax levy was less than its current tax levy ceiling, due to the school district s voluntary rollback from the maximum authorized tax levy. Under SB 711, in reassessment years (odd-numbered years), the Hancock rollback is applied to a school district s actual operating tax levy, regardless of whether that levy is at the school district s tax levy ceiling. This further reduction is sometimes referred to as an SB 711 rollback. In non-reassessment years (even-numbered years), the operating levy may be increased to the school district s tax levy ceiling (as adjusted by the Hancock rollback), only after a public hearing and adoption of a resolution or policy statement justifying the action. Further pursuant to SB 711, governing bodies of political subdivisions, including school districts, are required to informally project nonbinding tax rate levies and provide the projected levies to the County Clerk by April 8 th of each year. A-10

31 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 noncertified 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 cash 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. 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 Mueller, Walla & A-11

32 Albertson, P.C. 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 Shown below is a summary of revenues, expenditures and fund balances for the General (Incidental) Fund, Special Revenue (Teachers ) Fund, Debt Service Fund and the Capital Projects (Building) Fund for the years shown below. A copy of the audited financial statements of the District for the Fiscal Year ended June 30, 2013 is located in APPENDIX B herein. Copies of the audited financial statements of the District for the prior years shown on the table are available upon request from the District s Chief Financial Officer. [Remainder of Page Intentionally Left Blank.] A-12

33 SUMMARY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES Fiscal Years Ended June General (Incidental) Fund Balance--Beginning of Year $20,051,707 $26,402,730 (1) $30,734,212 $36,592,757 Cash Receipts 50,445,773 52,246,805 55,408,003 59,084,109 Cash Disbursement (45,301,593) (47,901,075) (49,533,990) (50,560,117) Transfers In (Out) (43,484) (14,248) (15,468) (56,980) Balance--End of Year $25,152,403 $30,734,212 $36,592,757 $45,059,769 Special Revenue (Teachers ) Fund Balance--Beginning of Year $ 2,636,103 $ 2,334,558 $ 3,195,381 $ 3,751,806 Cash Receipts 61,956,126 68,765,418 71,900,050 76,730,370 Cash Disbursement (62,257,671) (67,904,595) (71,343,625) (76,358,151) Transfers In (Out) Balance--End of Year $ 2,334,558 $ 3,195,381 $ 3,751,806 $ 4,124,025 Debt Service Fund Balance--Beginning of Year $11,231,367 $11,731,681 $11,638,730 $10,874,608 Cash Receipts 22,762,376 20,513,502 64,881,712 (2) 60,200,880 (3) Cash Disbursement (22,262,063) (20,606,453) (65,645,835) (2) (60,823,172) (3) Transfers In (Out) Balance--End of Year $11,731,681 $11,638,730 $10,874,608 $10,252,316 Capital Projects (Building) Fund Balance--Beginning of Year $ 8,409,674 $ 21,246,639 (1) $ 9,178,289 $ 3,643,454 Cash Receipts 48,843,809 4,596,500 9,562,132 10,222,082 Cash Disbursement (34,800,001) (16,679,099) (15,112,435) (7,597,782) Transfers In (Out) 43,484 14,248 15,468 56,980 Balance--End of Year $22,496,966 $ 9,178,289 $ 3,643,454 $ 6,324,734 Total Funds Balance--Beginning of Year $ 42,328,851 $ 61,715,607 $ 54,746,612 $ 54,862,625 Cash Receipts 184,008, ,122, ,751,898 (2) 206,237,441 (3) Cash Disbursement (164,621,328) (153,091,220) (201,635,885) (2) (195,339,222) (3) Transfers In (Out) Balance--End of Year $ 61,715,607 $ 54,746,612 $ 54,862,625 $ 65,760,844 Source: Annual Secretary of the Board Reports for the fiscal years ended June 30, 2010 June 30, (1) The discrepancy between the Fiscal Year 2010 end of the year balance and the Fiscal Year 2011 beginning of the year balance is due to the conversion of an expiring bus lease to a lease-purchase which required the entire lease ($1,250,327) to be expensed out of the Capital Projects Fund instead of the General Fund. (2) Includes proceeds from the sale of $49,495,000 original principal amount of general obligation refunding bonds of the District. (3) Includes proceeds from the sale of $43,755,000 original principal amount of general obligation refunding bonds of the District. A-13

34 Historic Assessed Valuation The table below shows the assessed valuation of property in the District as of January 1, as adjusted through December 31, for each of the years shown: Year Real Estate Personal Property Total Assessed Valuation (1) Change 2009 $1,285,407,489 $220,471,143 $1,505,878,632 N/A ,303,594, ,305,996 1,519,900, % ,243,173, ,850,579 1,476,024, ,251,101, ,566,342 1,492,667, (2) 1,203,234, ,893,599 1,451,128, Source: Annual Audited Financial Statements of the District ( ) and the St. Charles County Assessor s Office (2013). (1) Does not include assessed valuation in the portion of the District that is included in a tax increment financing district. See the section below captioned Tax Abatement and Tax Increment Financing. (2) As adjusted by the Board of Equalization (August 21, 2013). Assessed Valuation The following table shows the total assessed valuation and the estimated actual value by category, of all taxable tangible property (excluding State assessed railroad and utility property) situated in the District as adjusted by the Board of Equalization (August 21, 2013): Total Assessed Valuation (1) Assessment Rate Total Estimated Actual Valuation Real Estate Residential $ 932,594,513 19% $4,908,392,174 Commercial 257,037, ,241,306 Agricultural 7,424, ,867,475 Locally Assessed Railroad & Utility 6,178, ,308,991 Total Real Estate $1,203,234,705 $5,792,809,946 Personal Property $ 245,260, /3 $ 735,781,228 Locally Assessed Railroad & Utility 2,633, /3 7,900,193 Total Personal Property $ 247,893,559 $ 743,681,421 TOTAL $1,451,128,264 $6,536,491,366 Source: St. Charles County Assessor s Office. (1) Does not include assessed valuation in the portion of the District that is included in a tax increment financing district. See the section below captioned Tax Abatement and Tax Increment Financing. Tax Assessments and Collections Not later than September 30 of each year, the Board sets the rate of tax for the District and files the tax rate with St. Charles County by October 1. Taxes are levied at the District s tax rate per $100 of assessed valuation. The Missouri State Auditor is responsible for reviewing the rate of tax to insure that it does not exceed constitutional rate limits. A-14

35 Taxes are levied on all taxable real and personal property owned as of January 1 in each year. Certain properties, such as those used for charitable, education, and religious purposes, are excluded from ad valorem taxes for both real and personal property. Real property within the District is assessed by the St. Charles County Assessor. The St. Charles County Assessor is responsible for preparing the tax rolls each year and for submitting tax rolls to the St. Charles County Board of Equalization. The Board of Equalization has the authority to question and determine the proper value of property and then adjust and equalize individual properties appearing on the tax rolls. After local appeal procedures have been completed, the books are finalized and sent to the St. Charles County Collector who prepares and mails the tax statements. By statute, tax bills are to be mailed in October; however, the volume of assessment complaints required to be reviewed by the Board of Equalization can affect the date on which bills are actually mailed. Taxes for real and personal property are due by December 31 after which date they become delinquent and accrue a penalty of one percent per month. The County Collector of Revenue deducts a commission equal to 1.5% of the taxes collected for his services. After such collections and deductions of commission, taxes are distributed according to the taxing body s pro-rata share. The St. Charles County Collector is required to make disbursements of collected taxes to the District each month. Because of the tax collection procedure described above, the District receives the bulk of its moneys from local property taxes in December and in January and February of the subsequent year. Property Assessed by State The State is responsible for the assessment of the distributable property of railroads, railroad cars, rolling stock, street railroads, bridges, telegraph, telephone, electric power and light companies, electric transmission lines, pipeline companies, express companies and other similar public utility corporations, companies and firms, and of the aircraft of airline companies ( Distributable Property ). Presently for school taxation purposes, Distributable Property is assessed and taxed uniformly on a county-wide basis. The state is responsible for apportioning the aggregate value of all Distributable Property. No determination is made of the assessed value of such property that is located within the bounds of a school district. Valuation apportioned for taxation on behalf of school districts is the same as that apportioned for each county and the valuation is taxed by averaging the tax rate of all school districts in the county. Taxes collected against Distributable Property are distributed to the school districts within the county according to a formula based in part on total district student enrollment and in part on taxes levied by each school district. 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 Fiscal Year is $ per $100 of assessed valuation. A-15

36 The following table shows the District s adjusted tax levies (per $100 of assessed valuation) for each of the following Fiscal Years: Fiscal Year Ended June 30 General (Incidental) Fund Special Revenue (Teachers ) Fund Debt Service Fund Capital Projects (Building) Fund Total Levy 2014 $ $ $ $ $ Tax Collection Record The following table sets forth tax collection information for the District for the last five tax years: Current Taxes Current & Back Taxes Levy Total Taxes Percent Percent Year Levied (1) Collected Collected Collected Collected (1) 2008 $68,955,813 $62,657, % $68,539, % ,014,418 61,932, ,722, ,720,862 63,446, ,357, ,640,327 69,288, ,414, ,886,932 70,323, ,338, Source: Annual Secretary of the Board Reports for the fiscal years ended June 30, (1) Total Taxes Levied are based on assessed valuation as of December 31 of each year. Taxes are levied based on the assessed valuation following Board of Equalization review, which typically occurs in August. As a result of resolution of tax cases, the addition of undeclared personal property and other changes in assessment following Board of Equalization review, tax bills may be changed following the original levy and some taxpayers may be obligated to pay additional taxes or pay less taxes. [Remainder of Page Intentionally Left Blank.] A-16

37 Major Taxpayers The following table sets forth information regarding the top ten taxpayers in the District based on the 2013 assessed valuation of real and personal property. % of Total Assessed Assessed Taxpayer Business or Service Valuation Valuation General Motors Wentzville Assembly Center Automotive Mfg. $ 39,857, % Union Electric Utility 16,687, Meadows Trust Retail 12,053, Centurytel of Missouri Utility 11,298, Lila Inc. Retail 10,034, WalMart Real Estate Business Trust Real Estate Development 9,184, Cuivre River Electric Cooperative Utility 7,262, MasterCard Intl (1) Credit Card Business Offices 6,188, Dierbergs Wentzville LLC Real Estate Land 5,593, Covington Dardenne Acquisition Retail 5,287, TOTAL $123,447, % Source: Office of the St. Charles County Assessor. (1) Subject to Chapter 100 exemption from taxes, see Tax Abatement and Tax Increment Financing below. Tax Abatement and Tax Increment Financing Under State 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 of the 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 of the 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 of the 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, certain portions of the District are located in tax increment financing districts. 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 ( TIF Increment ) until the tax increment financing obligations issued are repaid and the tax abatement period terminates. According to the St. Charles County Assessor s office, the TIF Increment attributable to property within the District is $970,188 for the 2013 tax year. 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 produce a bid equal to the delinquent taxes plus interest, penalty, and costs, the property is offered for sale again the A-17

38 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. Commerce, Industry and Employment ECONOMIC INFORMATION CONCERNING THE DISTRICT Major Employers. Listed below are the major employers located within the District and the approximate number of employees employed by each in the District: Name Product or Service Number of Full-time Employees General Motors Wentzville Assembly Center Motor vehicle assembly 2,000 MasterCard International Global Technology Headquarters 1,960 Wentzville R-IV School District Education 1,888 SSM St. Joseph Hospital West Hospital 843 WalMart Retail 718 Crider Center for Mental Health Healthcare 400 National Information Systems Co. Information technology 380 Schnucks Retail 270 RK Stratman Company Inc. Silk screening 244 Lowes Retail 235 Source: City of Wentzville, Missouri; City of Lake St. Louis, Missouri; City of O Fallon, Missouri; and telephone interviews. Unemployment. The following tables set forth employment statistics for St. Charles County, the State and the United States: St. Charles County Labor Force Year Employed Unemployed Total Unemployment Rates St. Charles State of County Missouri United States ,133 17, , % 9.4% 9.3% ,618 16, , ,369 14, , ,374 11, , (1) 187,848 11, , Source: U.S. Department of Labor; Bureau of Labor Statistics. (1) Figures for 2013 are preliminary and are for the month of August; not an annualized calculation. A-18

39 Population and Other Statistics The District s population in 2010 was 71,390 compared to 32,342 in The following table shows historical population statistics for the incorporated municipalities with a population of more than 1,000 that overlap the District: Lake St. Louis 3,843 7,400 10,169 14,545 O Fallon 8,586 17,427 46,169 79,329 Wentzville 3,193 4,640 6,896 29,070 Source: U.S. Census Bureau. State: The following table shows the median age of the populations of the District, St. Charles County and the Source: U.S. Census Bureau District St. Charles County State of Missouri The following table presents per capita personal income for St. Charles County and the State for the years 2007 through 2011, the latest date for which information is available: Year St. Charles County Per Capita Personal Income State of Missouri Per Capita Personal Income Source: Bureau of Economic Analysis $37,929 $35, ,150 37, ,546 35, ,159 36, ,257 37,969 The median value of owner-occupied housing units in the District, St. Charles County and the State was, according to the 2010 Census, as follows: Source: U.S. Census Bureau. Median Home Value District $219,900 St. Charles County 185,500 State of Missouri 136,900 A-19

40 Recreational Facilities The District s residents enjoy the cultural and recreational opportunities available from the entire metropolitan St. Louis Area as well as several recreational attractions within and near the District s boundaries. There are numerous parks owned and operated by the cities located within the District. Near the District s boundaries is the August A. Busch Memorial Conservation Area which is a 6,987 acre area that includes Weldon Spring, Howell Island and Busch Wildlife Areas. Facilities are available for fishing at the park s 32 lakes and for hunting, hiking, and picnicking. Approximately 15 miles from the District, in the City of St. Charles, is a casino development, an outdoor theatre, and an arena where sporting events are held. Municipal Services and Utilities Utilities. Stormwater drainage and sewage collection and disposal within the District are provided by the Duckett Creek Sewer District and by the City of Wentzville. Gas service is provided by AmerenUE and electric service is provided by AmerenUE and Cuivre River Cooperative. Water is provided by St. Charles County Water District #2 and by the City of Wentzville. Communications and Media. Telecommunication services are provided by CenturyTel, Inc. There are three radio stations in St. Charles County. Residents of the District also receive all St. Louis radio stations and television channels. There are three newspapers circulated in the District: The Wentzville Journal, The St. Charles Post-Dispatch (in conjunction with the St. Louis Post-Dispatch) and a weekly local newspaper. The St. Charles City-County Library District, a special service district governed by a Board of Trustees and operated with a separate tax levy, has library facilities located throughout St. Charles County including a branch in the City of Wentzville which was built in The Wentzville branch has over 60,000 volumes, 1,500 books on tape, over 250 magazines, and newspapers, government documents, and videocassettes. Medical. The Wentzville area is a home for health services. Medical facilities include St. Joseph Hospital West, SSM St. Joseph Health Center-Wentzville, St. Luke s Urgent Care Center, Wentzville Regional Radiation Therapy Services and the Crider Center for Mental Health Services, Inc., the headquarters for community mental health for individuals in Franklin, Lincoln, Warren and St. Charles Counties. SSM St. Joseph Health Center-Wentzville, constructed in 1986, is located within the City of Wentzville. The hospital is an acute care facility with 74 beds and admissions totaling over 2,200 annually. This full service hospital has physical therapy and laboratory services, a cardiopulmonary department, complete radiology department including CT scanner and low-dose mammography, nutritional counseling with registered dietitians and an intensive care unit. In addition, the hospital offers a fully staffed and equipped emergency room, open 24 hours a day, along with 24 hour obstetric care featuring four birthing rooms. The hospital is locally and regionally recognized for its laparoscopic (hernia) surgery. SSM St. Joseph Health Center-Wentzville also has a skilled nursing unit, home health department and hospice care. The outpatient department features same day surgery, laser surgery, dental and oral surgery and ophthalmology. St. Luke s Emergency Health Care Center, on the southern edge of Wentzville, provides acute emergency care and has facilities for doctor s offices and a pharmacy. St. Joseph Hospital West, located in the City of Lake St. Louis, is a member of the SSM Health Care System. The hospital is a full service hospital with approximately 127 beds and offering primary and certain secondary level services, including emergency, outpatient, medical, surgical, obstetric, pediatric and intensive care services. In addition, the hospital offers 24 hour obstetric care with traditional delivery rooms and birthing suites and cardiovascular services. A-20

41 Higher Education. Higher education is provided by St. Charles County Community College, located approximately 15 miles east of the District, by Lindenwood University located in the City of St. Charles approximately 20 miles east of the District and by the numerous institutions of higher education located in the St. Louis metropolitan area including St. Louis University, Washington University and the University of Missouri-St. Louis. St. Charles Community College, established following an election in 1986, is one of only two public institutions of higher education established in the State since The Community College provides a combination of two year vocational programs appropriate to the needs of business and industry, the first two years of basic college courses, and adult education programs which allow St. Charles County residents to improve job skills and which retrain displaced workers and homemakers. Lindenwood University is a private four-year, liberal arts institution offering over 120 undergraduate and graduate degree programs to approximately 15,000 students. Continuing adult education at Lindenwood University includes not-for-credit courses, workshops and seminars. Public Safety. Police protection is provided by police departments of the cities located in the District and by the St. Charles County Sheriff s Department in unincorporated areas. Fire protection within the District is provided by four fire protection districts which are: O Fallon Fire Protection District #11; Wentzville Fire Protection District #13; Lake St. Louis Fire Protection District #15; and New Melle Fire Protection District #17. Debt Ratios and Related Information DEBT STRUCTURE OF THE DISTRICT District Population, ,390 Assessed Valuation, 2013 $1,451,128,264 Estimated Actual Value, 2013 $6,536,491,366 Outstanding General Obligation Debt $186,083,677 Overlapping General Obligation Debt $24,704,315 Total Direct and Overlapping General Obligation Debt $210,787,992 Per Capita Direct General Obligation Debt $2,607 Per Capita Direct and Overlapping General Obligation Debt $2,953 Ratio of Direct General Obligation Debt to Assessed Valuation 12.82% Ratio of Direct General Obligation Debt to Estimated Actual Value 2.85% Ratio of Direct and Overlapping General Obligation Debt to Assessed Valuation 14.53% Ratio of Direct and Overlapping General Obligation Debt to Estimated Actual Value 3.22% Source: Wentzville R-IV School District; St. Charles County Department of Revenue, Collection Division, St. Charles County Assessor. General Under State law, refunding bonds and obligations payable from annual appropriations do not require voter approval. Any general obligation bonds, other than refunding bonds, require voter approval for issuance. Pursuant to the Missouri Constitution, the District is authorized to issue general obligation bonds payable from unlimited ad valorem taxes upon a two-thirds or, at elections held on general municipal election days or state primary or general election days, a four-sevenths majority vote of the qualified voters voting on the specific proposition. A-21

42 General Obligation Bonds Outstanding The following table sets forth the general obligation indebtedness of the District expected to be outstanding upon the issuance of the Bonds (excluding the Refunded Bonds): Description of Indebtedness Bond Series Amount Outstanding General Obligation Refunding and Improvement Bonds 2005A $ 3,330,000 General Obligation Bonds ,540,000 General Obligation Improvement and Refunding Bonds 2009A 30,623,677 Taxable General Obligation Bonds 2009B 14,250,000 General Obligation Qualified School Construction Bonds 2009C 9,185,000 General Obligation Refunding Bonds ,900,000 General Obligation Refunding Bonds 2011A 42,535,000 Taxable General Obligation Refunding Bonds 2011B 5,310,000 General Obligation Refunding Bonds ,755,000 The Bonds ,655,000 TOTAL $186,083,677 History of General Obligation Indebtedness The following table sets forth debt information pertaining to the District as of the end of each of the last five Fiscal Years: As of June 30 Total Outstanding Debt Assessed Value Debt as % of Assessed Value 2013 $190,063,677 $1,492,667, % ,083,677 1,476,024, ,898,677 1,519,900, ,398,676 1,505,878, ,260,000 1,587,161, The District has never defaulted on the payment of any of its debt obligations. [Remainder of Page Intentionally Left Blank.] A-22

43 General Obligation Debt Service Requirements The following schedule shows the principal and interest requirements for the District s outstanding general obligation bonds upon the issuance of the Bonds: Year Ending December 31 Outstanding Bonds Total Debt Service (1) The Bonds Principal Interest Total Total Debt Service 2014 $ 11,761, $ 402, $ 402, $ 12,163, ,527, $ 1,905, , ,523, ,051, ,362, ,960, , ,535, ,897, ,265, ,995, , ,489, ,755, ,166, ,115, , ,488, ,655, ,600, ,250, , ,491, ,092, ,497, ,430, , ,517, ,014, ,660, ,660, ,627, ,627, ,066, ,066, ,194, ,194, ,358, ,358, ,427, ,427, ,967, ,967, ,078, ,078, ,547, ,547, Totals $247,109, $20,655, $2,793, $23,448, $270,558, (1) Outstanding Bonds Total Debt Service does not include the Refunded Bonds or the 35% interest subsidy payments that the District expects to receive from the U.S. Treasury pursuant to the American Recovery and Reinvestment Act in connection with its Taxable General Obligation Bonds, Series 2009B. Presently, the interest subsidy payments made by the U.S. Treasury are reduced by 7.2% under the provisions of the Budget Control Act of 2011 and the austerity measures enacted thereunder (commonly known as Sequestration ). The amount of future interest subsidy payments the District will receive is unknown at this time. Debt Limitation and Debt Capacity The total principal amount of indebtedness in the District cannot exceed 15% of the value of taxable tangible property in the District according to the last completed assessment for state and county purposes at the time such bonds are approved by the voters. Based on the current assessed valuation ($1,451,128,264), the current legal debt limit of the District is approximately $217,669,240 (the limit would be higher if the valuation of State assessed railroad and utility property were included, as explained below). The total indebtedness of the District expected to be outstanding upon the issuance of the Bonds (excluding the Refunded Bonds) is $186,083,677, resulting in a legal debt margin of the District of $31,585,563. 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 ), 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 A-23

44 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. Overlapping Indebtedness (1) (As of January 1, 2013) Taxing Body General Obligation Debt Approx. Percent Applicable Amount of Overlapping Debt St. Charles County Ambulance District $ 8,050, % $ 1,433,705 St. Charles County Community College 34,075, ,099,425 City of O Fallon 23,515, ,346,185 City of Lake St. Louis 13,825, ,825,000 TOTAL $79,465,000 $24,704,315 Source: Taxing jurisdiction s records. (1) Overlapping bonded indebtedness excludes neighborhood improvement district general obligation bonds which are paid from special assessments. 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. Lease Obligations In addition to its general obligation bonds, since 1992 the District has annually entered into lease agreements for school buses. In Fiscal Year 2013, the District entered into a seven-year lease with Daimler/Benz for 16 buses and a four-year lease for 87 copiers. For additional information regarding the terms of the leases, see Note V to the financial statements included in APPENDIX B to this Official Statement. In August 2011, the District entered into a lease agreement (the Lease ) with the Cooperating School Districts of Greater St. Louis, Inc., a nonprofit corporation duly organized and existing under Chapter 355 of the Revised Statutes of Missouri, as amended ( CSD ), to deliver the Series 2011 Certificates in an aggregate principal amount of $30,765,000. The Series 2011 Certificates were delivered to pay the costs of (1) expanding elementary schools to support full-day kindergarten and to accommodate enrollment growth, (2) expanding middle schools to accommodate enrollment growth and (3) site preparation and initial construction of a third high school for the District. In August 2012, the District and CSD amended the Lease to deliver the Series 2012 Certificates in an aggregate principal amount of $32,050,000. The Series 2012 Certificates were delivered to pay the costs of constructing a third high school for the District. The Series 2011 Certificates and the Series 2012 Certificates are secured by annually appropriated funds, which do not constitute an indebtedness for purposes of any Missouri statutory or constitutional debt limit. The Series 2011 Certificates and the Series 2012 Certificates are payable solely from annually appropriated funds of the District available therefor and neither taxes nor a specific source of revenues can be pledged to make payments on the Series 2011 Certificates and the Series 2012 Certificates. Any increase in taxes required to generate sufficient funds with which to make payments on the Series 2011 Certificates and Series 2012 Certificates are subject to voter approval. The amount of Series 2011 Certificates currently outstanding is $28,325,000. The Series 2012 Certificates are currently outstanding in the amount of $31,000,000. A-24

45 The following schedule shows the yearly Rental Payments required to pay the principal and interest components with respect to the Series 2011 Certificates and the Series 2012 Certificates. Such payments are payable from moneys in the District s Capital Projects Fund. The Series 2011 Certificates and the Series 2012 Certificates are not payable from any money in the District s Debt Service Fund which is available solely to make payments on any general obligation bonds of the District. Year Ending December 31 Annual Rental Payments 2014 $ 3,866, ,944, ,021, ,100, ,184, ,284, ,351, ,441, ,531, ,620, ,713, ,807, ,900, ,001, ,099, ,199, ,303, ,412,101 Totals $82,783,386 Future Plans The District anticipates issuing bonds within the next two years to fund the construction of new school buildings and/or additions to existing school buildings to accommodate enrollment growth. * * * * * A-25

46 THIS PAGE INTENTIONALLY LEFT BLANK

47 APPENDIX B AUDITED FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR S REPORT OF THE DISTRICT FOR THE FISCAL YEAR ENDED JUNE 30, 2013

48 THIS PAGE INTENTIONALLY LEFT BLANK

49

50

51

52

53

54

55

56

57

58

59

60

61

62

63

64

65

66

67

68

69

70

71

72

73

74

75

76

77

78

79

80

81

82

83

84

85

86

87

88

89

90

91

92

93

94

95

96