AMENDED OFFICIAL STATEMENT DATED FEBRUARY 15, 2013

Transcription

1 AMENDED OFFICIAL STATEMENT DATED FEBRUARY 15, 2013 SOUTH WAYNE COUNTY WATER AND SEWER AUTHORITY Wayne County, Pennsylvania Water and Sewer Revenue Bonds, Series of 2013 The following is an amended final official statement reflecting changes on the following pages: Cover: Replacement of the last sentence in the last paragraph. Page ii: Replacement the table under the heading of MATURITY SCHEDULE. Page 5: Replacement of the table under the heading of SOURCES AND USES OF FUNDS. Page 17: Replacement of the paragraph under the heading of Underwriting. Replacement of APPENDIX D Form of Bond Counsel Opinion. APPENDIX F, Page F-1: Replacement of the amortization table.

2 New Issue Book Entry Only OFFICIAL STATEMENT Rating: S&P A (stable) In the opinion of Bond Counsel, assuming continuing compliance by the Authority with certain covenants to comply with provisions of the Internal Revenue Code of 1986, as amended (the Code ) and any applicable regulations thereunder, interest on the Bonds is not includible in the gross income under Section 103(a) of the Code and interest on the Bonds is not an item of tax preference for purposes of the federal individual and corporate alternative minimum taxes, except as set forth under the heading Tax Exemption in this Official Statement. Other provisions of the Code may affect the purchasers of the Bonds. See TAX MATTERS - Federal Tax Laws herein for a brief description of these provisions. Under the laws of the Commonwealth of Pennsylvania, the Bonds and interest on the Bonds shall be free from taxation for State and local purposes within the Commonwealth of Pennsylvania, but this exemption does not extend to gift, estate, succession or inheritance taxes or any other taxes not levied or assessed directly on the Bonds or the interest thereon. Under the laws of the Commonwealth of Pennsylvania, profits, gains or income derived from the sale, exchange or other disposition of the Bonds shall be subject to State and local taxation within the Commonwealth of Pennsylvania. $25,000,000 SOUTH WAYNE COUNTY WATER AND SEWER AUTHORITY Wayne County, Pennsylvania Water and Sewer Revenue Bonds, Series of 2013 Dated: Date of Delivery Interest Payable: February 15 and August 15 Due: November 15, as on inside front cover First Interest Payment: August 15, 2013 Denominations: Integral multiples of $5,000 Form: Book- Entry Only MATURITY SCHEDULE (See inside front cover) Legal Investment for Fiduciaries in Pennsylvania: The Bonds (hereinafter defined) are legal investment for fiduciaries in the Commonwealth of Pennsylvania under the Probate, Estate and Fiduciaries Code, Act of June 30, 1972, No. 164, P.L. 508 as amended and supplemented. Payable: The Water and Sewer Revenue Bonds, Series of 2013 (the Bonds or 2013 Bonds ) are being issued by the South Wayne County Water and Sewer Authority, Wayne County, Pennsylvania (the Authority ), pursuant to the Pennsylvania Municipality Authorities Act 53 Pa. C.S. Ch. 56 (the Act ), as amended, and under a Resolution adopted by the Authority Board on February 15, 2013 (the Resolution ). The Bonds will be dated the date of delivery and will bear interest from the date of delivery payable semiannually on February 15 and August 15 of each year, commencing August 15, 2013, at the interest rates set forth on the inside front cover hereof. The Bonds will be issued as fully registered bonds without coupons, and, when issued, will be registered in the name of CEDE & CO., as nominee for The Depository Trust Company, New York, New York ( DTC ), which will act as securities depository for the Bonds. Beneficial ownership interests in the Bonds will be recorded in book-entry only form in denominations of $5,000, or any integral multiple thereof. Principal of and interest on the Bonds are payable directly to CEDE & CO. for redistribution to DTC Participants and in turn to Beneficial Owners as described herein. Purchasers will not receive physical delivery of certificates representing their ownership interests in the Bonds purchased. For so long as any purchaser is the Beneficial Owner of a Bond, such purchaser must maintain an account with a broker or dealer who is, or acts through, a DTC Participant to receive payment of the principal of and interest on such Bonds. See Book-Entry Only System herein. Redemption: The Bonds are subject to redemption prior to their stated maturity dates, as provided herein. Purpose: Proceeds of the 2013 Bonds, together with other available funds of the Authority, will be used to: (1) finance certain capital improvements to the Authority s facilities; (2) fund a debt service reserve fund for the 2013 Bonds, if necessary; and (3) pay the costs of issuing the 2013 Bonds. Security: The 2013 Bonds are being issued pursuant to a Trust Indenture, dated as of March 1, 2013 (the Indenture ), between the Authority and The Fidelity Deposit and Discount Bank, Dunmore, Pennsylvania, as trustee thereunder (the Trustee). The Bonds will be payable and secured under the Indenture by an assignment and pledge to the Trustee of Receipts and Revenues from the Water and Sewer Systems as such term is defined in the Indenture and by certain funds held under the Indenture. THE BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY, PAYABLE SOLELY FROM THE RECEIPTS AND REVENUES FROM THE WATER AND SEWER SYSTEMS. THE BONDS DO NOT PLEDGE THE CREDIT OR TAXING POWER AND ARE NOT OBLIGATIONS OF THE COMMONWEALTH OF PENNSYLVANIA OR ANY POLITICAL SUBDIVISION THEREOF. THE AUTHORITY HAS NO TAXING POWER. The Bonds are offered for delivery when, as and if issued by the Authority and received by the Underwriter, subject to the approving legal opinion of Abrahamsen, Conaboy & Abrahamsen, P.C., Scranton, Pennsylvania, Bond Counsel, to be furnished upon delivery of the Bonds. Certain legal matters will be passed upon for the Authority by Jeffrey J. Belardi, Esquire, Scranton, Pennsylvania, Solicitor for the Authority. It is expected that the Bonds will be available for delivery, through the facilities of DTC, on or about March 4, The date of this Official Statement is February 15, 2013.

3 $25,000,000 SOUTH WAYNE COUNTY WATER AND SEWER AUTHORITY Wayne County, Pennsylvania Water and Sewer Revenue Bonds, Series of 2013 Dated: Date of Delivery Interest Payable: February 15 and August 15 Due: February 15, as shown below First Interest Payment: August 15, 2013 Denominations: Integral multiples of $5,000 Form: Book- Entry Only MATURITY SCHEDULE Year Amount Rate Price 2014 $ 715, % % , , , , , , , , , (1) , (1) , (2) 3,185, (1) 2032 (2) 4,835, (2) 7,120, (1) Price to first optional redemption date. (2) Term bonds. ii

4 No dealer, broker, salesperson or other person has been authorized by South Wayne County Water and Sewer Authority, Wayne County, Pennsylvania (the Authority ), or the Underwriter to give any information or make any representations with respect to the Bonds other than those contained in this Official Statement and if given or made, such information or representations must not be relied upon. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, and there shall not be any sale of the Bonds, by any person in any state or jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale prior to registration or qualification of the Bonds pursuant to the applicable securities laws of any such state or jurisdiction. The information set forth herein has been obtained from the Authority and other sources that are believed to be reliable, but the Underwriter does not guarantee the accuracy or completeness of such information and such information is not to be construed as a representation by the Underwriter. Any statements herein involving matters of opinion or forecasts of the occurrence of future events or circumstances, whether or not expressly so stated, are intended as such and not as representation of fact. 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 have been no changes in the affairs of the Authority since the date hereof. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE ORDER AND PLACEMENT OF MATERIALS IN THIS OFFICIAL STATEMENT, INCLUDING THE APPENDICES, ARE NOT TO BE DEEMED A DETERMINATION OF RELEVANCE, MATERIALITY OR IMPORTANCE, AND THIS OFFICIAL STATEMENT, INCLUDING THE APPENDICIES MUST BE CONSIDERED IN ITS ENTIRETY. THE OFFERING OF THE BONDS IS MADE ONLY BY THE MEANS OF THIS ENTIRE OFFICIAL STATEMENT. THE UNDERWRITER HAS PROVIDED THE FOLLOWING SENTENCE FOR INCLUSION IN THIS OFFICIAL STATEMENT. THE UNDERWRITER HAS REVIEWED THE INFORMATION IN THIS OFFICIAL STATEMENT PURSUANT TO ITS RESPONSIBILITIES TO INVESTORS UNDER THE FEDERAL SECURITIES LAWS, BUT THE UNDERWRITER DOES NOT GUARANTEE THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION. Summary Page... v Introduction... 1 The Authority... 2 Roamingwood Sewer and Water Association... 2 Summary of Lease Agreement Between South Wayne County Water and Sewer Authority (Lessor) and Roamingwood Sewer and Water Association (Lessee)... 3 Previous Authority Financing... 4 Purpose of the Issue... 5 Sources and Uses of Funds... 5 The Capital Project... 5 Description of the Bonds... 5 TABLE OF CONTENTS Redemption of Bonds... 6 Book-Entry Only System... 8 Security for the Bonds...10 Certain Provisions of the Indenture...11 Tax Matters...14 Litigation...15 Legal Matters...16 Legality for Investment...16 Continuing Disclosure Undertaking...16 Miscellaneous...17 Certain Matters...18 Appendix A Description and Summaries of Financial Factors of the System Facilities...A 1 Appendix B Description of the Municipalities...B 1 Appendix C Audited Financial Statements of the South Wayne County Water and Sewer Authority Fiscal Year Ending December 31, C 1 Appendix D Form of Bond Counsel Opinion... D 1 Appendix E The Lease Agreement...E 1 Appendix F Bond Amortization Schedule... F 1 iii

5 SOUTH WAYNE COUNTY WATER AND SEWER AUTHORITY (Wayne County, Pennsylvania) P.O. Box 6 Lake Ariel, PA Authority Board Charles A Dunn, Jr....Chairman Anthony Sabia... Vice Chairman John Gearing....Treasurer Joan Murphy...Secretary Marian Menapace...Assistant Secretary CONSULTING ENGINEER Cardno BCM Engineers Plymouth Meeting, Pennsylvania AUTHORITY SOLICITOR Jeffrey J. Belardi, Esquire Scranton, Pennsylvania BOND COUNSEL Abrahamsen, Conaboy & Abrahamsen, P.C. Scranton, Pennsylvania TRUSTEE The Fidelity Deposit and Discount Bank Dunmore, Pennsylvania UNDERWRITER RBC Capital Markets, LLC Philadelphia, Pennsylvania iv

6 SUMMARY STATEMENT This Summary Statement is subject in all respects to more complete information in this Official Statement. No person is authorized to detach this Summary Statement from this Official Statement or otherwise use it without the entire Official Statement. Issuer... South Wayne County Water and Sewer Authority, Wayne County, Pennsylvania. Bonds... $25,000,000 principal amount of Water and Sewer Revenue Bonds, Series of 2013, dated the date of delivery, maturing in various principal amounts (as herein described) on February 15 of the years 2014 through and including Interest is payable on February 15 and August 15, of each year beginning August 15, Redemption Provisions... In the manner and upon the terms and conditions in the Indenture, the Bonds maturing on or after February 15, 2023 shall be subject to optional redemption in whole or in part, in any order of maturity or portion of a maturity as selected by the Authority, prior to maturity on February 15, 2022, or any date thereafter. The Bonds are subject to mandatory redemption as set forth herein. Form... Application of Proceeds... Security... Rating... Book-entry. Proceeds of the 2013 Bonds, together with other available funds of the Authority, will be used to: (1) finance certain capital improvements to the Authority s facilities; (2) fund a debt service reserve fund for the 2013 Bonds, if necessary; and (3) pay the costs of issuing the 2013 Bonds. The Bonds are limited obligations of the Authority, payable solely from the Receipts and Revenues from the Water and Sewer Systems (as such terms are defined in the Indenture) and by certain funds held under the Indenture. See Rating herein. v

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8 OFFICIAL STATEMENT $25,000,000 SOUTH WAYNE COUNTY WATER AND SEWER AUTHORITY Wayne County, Pennsylvania Water and Sewer Revenue Bonds, Series of 2013 INTRODUCTION This Official Statement is furnished by South Wayne County Water and Sewer Authority (the Authority ), in connection with the offering of its Water and Sewer Revenue Bonds, Series of 2013, in the aggregate principal amount of $25,000,000 (the Bonds or 2013 Bonds ). The 2013 Bonds are being issued under and are secured by a Trust Indenture (the Indenture ), between the Authority and The Fidelity Deposit and Discount Bank, Dunmore, Pennsylvania, as trustee thereunder (the Trustee ), dated as of March 1, The Bonds will be payable from and secured by an assignment and pledge to the Trustee of the Receipts and Revenues from the Water and Sewer Systems, as such term is defined in the Indenture and by certain funds held under the Indenture. Pursuant to an Agreement of Lease dated April 10, 2012, as amended (the Lease or Lease Agreement ), between the Authority (the Lessor ) and Roamingwood Sewer and Water Association ( Roamingwood, the Association or the Lessee ), the Authority, as owner of its water distribution system and sanitary sewer system (the Water and Sewer Systems ) leased the Water and Sewer Systems to the Lessee for operation and use by the Lessor. See The Lease Agreement in Appendix E. THE BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY, PAYABLE SOLELY FROM THE RECEIPTS AND REVENUES FROM THE SEWER AND WATER SYSTEMS AND CERTAIN FUNDS HELD UNDER THE INDENTURE. THE BONDS DO NOT PLEDGE THE CREDIT OR TAXING POWER AND ARE NOT OBLIGATIONS OF THE COMMONWEALTH OF PENNSYLVANIA OR ANY POLITICAL SUBDIVISION THEREOF. THE AUTHORITY HAS NO TAXING POWER. The 2013 Bonds are being issued pursuant to the Pennsylvania Municipality Authorities Act, 53 Pa. C.S. Ch. 56 (the Act ), as amended, the Indenture and a resolution adopted by the Board of Authority on February 15, The 2013 Bonds shall each be issued in fully registered form, without coupons, in the denomination of $5,000 or any integral multiple thereof. Interest on the Bonds is payable semiannually on February 15 and August 15 of each year, commencing August 15, Interest on any Bond is payable by check mailed to the registered owner at the address as it appears on the registration books on the appropriate Record Date (hereinafter defined). The principal of the Bonds is payable at the Dunmore, Pennsylvania, corporate trust office of the Trustee. The Bonds are only transferable on the registration books maintained by the Trustee upon presentation and surrender thereof (see DESCRIPTION OF THE BONDS herein). When issued, the 2013 Bonds will be registered in the name of Cede & Co., as nominee for The Depository Trust Company ( DTC ), New York, New York. Purchasers of the Bonds (the Beneficial Owners ) will not receive any physical delivery of bond certificates and beneficial ownership of the Bonds will be evidenced only by book entries. See BOOK-ENTRY ONLY SYSTEM herein. The information which follows contains summaries of the Indenture, and the Authority s Budgets and Financial Statements. Such summaries do not purport to be complete and reference is made to the Indenture, the Authority s Budgets and Financial Statements, copies of which are on file and available for examination at the office of the Authority. 1

9 THE AUTHORITY The Authority is a body corporate and politic, incorporated on November 12, 1980, under the Act, pursuant to an ordinance enacted by the Board of County Commissioners of the County of Wayne, Pennsylvania (the County ). The Authority is empowered, among other things, to acquire, hold, construct, improve, maintain, own, operated and lease, as lessor or lessee, sewers, sewer systems, or parts thereof, and sewage treatment works, including necessary and related buildings, sites, and rights-of-way. The Board of the Authority is comprised of five (5) members appointed by the County s Board of Commissioners. The terms of the members of the authority Board are staggered so that the term of at least one member expires each year. Members of the Authority Board may be reappointed. The Authority Board is comprised of the members listed below, whose terms expire in the years listed. Authority Members and Officers Member or Officer Title Term Expires Charlie Dunn Chairman December 31, 2015 Anthony Sabia Vice Chairman December 31, 2013 John Gearing Treasurer December 31, 2016 Joan Murphy Secretary December 31, 2014 Marian Menapace Assistant Secretary December 31, 2017 ROAMINGWOOD SEWER AND WATER ASSOCIATION Roamingwood Sewer and Water Association is a Pennsylvania not-for-profit corporation founded in 1980 for the purpose of purchasing, owning, leasing, operating and maintaining the existing water and sewer system (collectively, the "System") serving those portions of Lake and Salem Townships, in Wayne County, Pennsylvania, within the area known as The Hideout, a residential housing development. The Hideout was established in 1970 and is one of the oldest private communities in the Pocono Mountain Region. On June 25, 1980, the Association of Property Owners of The Hideout, Inc., a Pennsylvania not-for-profit corporation (the POA ), entered into a Purchase and Settlement Agreement with Pocono Water Company and Pocono Sewer Company, pursuant to which Roamingwood, as the POA ' s assignee, purchased the System. On May 11, 2009, Roamingwood sold the System to the Authority. At that time, the Authority entered into an operating agreement with Roamingwood wherein Roamingwood would continue to operate the System for the benefit of the Authority and the residents of The Hideout. Subsequently, to satisfy the concerns of legal counsel and auditors within PennVest (hereinafter defined) the operating agreement was replaced by a lease dated April 10, 2012 (the Lease or Lease Agreement ). As Lessee, and in addition to paying semi-annual sewer revenue rental rates sufficient to cover any and all debt service to the Authority, the Association leases from the Authority certain lands, interest lands, rights, property, franchises and easements, with all buildings equipment, fixtures and facilities now or hereafter to be erected, constructed and situated thereon; tanks, piping, interceptors, laterals, sewage collection system, sewer lines, pumping stations, wells, water lines, and treatment facilities, and all rights, powers, easements, licenses and rights-of-way, and all property and interests in property, real, personal or mixed, now owned or hereafter acquired by the Authority and appurtenant to or used or useful in connection with the existing sewer and water facilities, and those now proposed to be constructed, in and for the Association, along with all additions, extensions, retrofitted replacements and improvements which may be hereafter made thereto, all of which, including the land and all interests therein, are herein generally referred to as the Water and Sewer Systems. Roamingwood will operate and maintain the Water and Sewer Systems, bill and collect sewer rates, rental rates, tapping fees and any other fees imposed by Authority resolutions and maintain accurate financial records of revenues and expenses. To date, there is no other sewer or water system under the purview and control of the Authority. Further descriptions of the Association, the Water and Sewer Systems may be found in Appendix A. 2

10 SUMMARY OF LEASE AGREEMENT BETWEEN SOUTH WAYNE COUNTY WATER AND SEWER AUTHORITY (LESSOR) AND ROAMINGWOOD SEWER AND WATER ASSOCIATION (LESSEE) The term of the Lease extends to April 1, 2062 or to and including the date on which all PennVest (hereinafter defined) loans (the PennVest loans ) have been paid and the date on which all bonds secured by any indenture shall have been paid, or provision shall have been made for the payment thereof. The Association shall pay to the Authority as minimum rental, in addition to the expenses of the Authority payable thereupon, not less than 110% of the annual fixed charges (principal and interest) over the life of the PennVest loans and the water and sewer revenue bonds pursuant to any indenture and bond issuance that may come about at the direction of the Board of Directors of the Authority. The lease rentals shall be payable out the current revenues of the Association and shall be annually included in the budget of the Association. The term current revenues for the purposes of the Lease Agreement includes, but is not limited to, all current receipts of the Association, including all connection and/or tapping fees, dues, rentals as well as the receipts from the operation of the Water and Sewer Systems collected and deposited. Water Service, Sewer Service and Other Charges The Association covenants that it has enacted and will keep in full force and effect during the term of the Lease Agreement a policy or policies imposing certain annual water service charges and certain annual sewer service charges and other charges upon the users of the Water and Sewer Systems. Such charges, to the extent required by law and other necessities, have been determined by the Authority after reasonable investigation by it and upon consultation with and advice by its contracted consulting engineer. Such annual water service and sanitary sewer service charges and other charges made for the use of the Water and Sewer Systems, together with any state subsidy(-ies) and any other revenues, shall be such that the amounts which may reasonably be collected will be sufficient to provide funds for the following purposes: (a) for the payment of the annual expenses for the operation of the Water and Sewer Systems, including any payments due under any agreements entered into for the transportation and treatment of sewage, for the Water and Sewer Systems maintenance (including insurance, if any), repair, alteration, inspection and other expenses in relation to such water and sewer systems for making necessary renewals and replacements and ordinary improvements thereto, in order to maintain adequate service, and including income, profits, property or franchise taxes, if any, payable by the Association in relation to the Water and Sewer Systems; and (b) for the payment of or paying over of revenues payable in that year to the Authority or on the Authority s behalf under the Lease Agreement or any supplement thereto, including taxes and assessments payable thereunder. Operation, Maintenance and Repair The Association shall, out of the revenues of the Water and Sewer Systems, or out of any other moneys which may be available for the purpose, maintain the Sewer System and every part thereof in good repair, working order and condition, continuously operate the same in a proper and economical manner, and make all needful and proper repairs, renewals and replacements and all ordinary improvements thereto in order to maintain adequate service. Records and Audits The Association covenants that it will keep accurate records of the revenues which it receives from, or in connection with, the Water and Sewer Systems and of the expenses of the operation and maintenance thereof. No Expansion without Agreement The Authority and the Association covenant and agree that during the term of the Lease, they will not expand, or allow expansion to, either the existing water system or the sanitary sewer system beyond the delineated service known as those portions of Lake and Salem Townships that comprise the gated residential community of The Hideout without both agreeing to expansion in writing and amending the Lease. Insurance The Association, from the revenues of the Water and Sewer Systems and other funds legally available for such purpose, and at no cost to the Authority, will maintain from time to time for the period of the Lease, insurance, not otherwise provided for, upon or with respect to, the Water and Sewer Systems. 3

11 Pledge of the Lease The Authority will assign, transfer and pledge the Lease Agreement, and the revenues collected thereunder and payable thereunder to the Bondholders and PennVest, to secure payment of the loan obligation to be issued under any subsequent supplemental indenture. Redelivery of Possession Upon termination of the Lease Agreement, the Association covenants it will deliver the Water and Sewer Systems, without any delay upon any demand made therefore by the Authority. Supplemental Lease If the Authority issues bonds, the Association shall, upon request of the Authority, execute an appropriate supplemental lease providing for an extended term, of necessary for rental payments. The supplemental lease and any additional lease payments thereunder to be made by the Association shall be pledged under the Indenture or any supplemental indenture securing such additional bonds. The proceeds received from the sale of any such bonds shall be held and disbursed only in accordance with the provisions of the Indenture and such supplemental indenture. Additional Leased Property All repairs, renewals, replacements, improvements, additions, extensions, enlargements and betterments which shall hereafter be made or acquired by the Authority or the Association in connection with the Water and Sewer Systems facilities leased thereunder, including any real estate, easements or rights-of-way which may hereafter be acquired or condemned which the Lease Agreement is in effect for or in connection with the water and sewer facilities shall forthwith become the property of the Authority and shall become part of the water and/or sewer facilities leased thereby. PREVIOUS AUTHORITY FINANCING History of Financing In 1980, the Authority, on behalf of Roamingwood, issued $3,025,000 of Water and Sewer Revenue Bonds (the 1980 Bonds ); the proceeds were used to provide funds to purchase the System and to make certain improvements and repairs to the System. On June 1, 1988, the Authority issued its Sewer Revenue Bonds, Series of 1988 (the 1988 Bonds ) in the original principal amount of $11,250,000, which refunded the 1980 Bonds and funded improvements to the Sewer System. On April 1, 1992, the Authority issued the Series of 1992 Bonds (the 1992 Bonds ) in the total principal amount of $12,690,000, which advanced refunded the 1988 Bonds. On January 15, 2002, the Authority issued the Series of 2002 Bonds (the 2002 Bonds ) in the total principal amount of $9,180,000, which refunded the 1992 Bonds. On May 28, 2009, the Authority issued its Sewer Revenue Note, Series of 2009 (the 2009 Note ) in the original principal amount of $4,610,000, which refunded the 2002 Bonds. The 2002 Bonds are no longer outstanding obligations of the Authority, having been defeased, and the Indenture under which they were issued has been discharged and released. There is currently $975,000 outstanding on the 2009 Note. PennVest In July 2009, the Pennsylvania Infrastructure Investment Authority ( PennVest ), an instrumentality of the Commonwealth of Pennsylvania established to provide subsidized loans and grants to municipalities and municipality authorities for water and sewer projects, approved the Authority for a $1,152,000 loan (the 2009 PennVest Loan ) to replace waterlines in those portions of Lake and Salem Townships that are within The Hideout. The term of the 2009 PennVest Loan is 20 years, with payments beginning on October 1, 2010 at an interest rate of 1.559% and increasing to 2.69%. There is currently $901,423 outstanding on the 2009 PennVest Loan. 4

12 In July 2010, PennVest approved the Authority for a $3,037,000 loan (the 2010 PennVest Loan ) to replace two pump stations, gravity sewer mains and associated laterals, and for main and associated piping at the pump stations in those portions of Lake and Salem Townships that are within The Hideout. The term of the 2010 PennVest Loan is years, with payments beginning on March 1, 2011 at an interest rate of 1.278% and increasing to 1.772%. There is currently $2,364,728 outstanding on the 2010 PennVest Loan. On October 23, 2012, PennVest approved the Authority for a $10,000,000 sewer improvement project, which includes the construction of 103,000 feet of low pressure sewage collection lines and the installation or rehabilitation of the associated grinder pumps along with the abandonment of 16 pump stations. PennVest also approved the Authority for a $9,862,151 water improvement project, which will replace approximately 103,000 feet of water mains and associated fire hydrants. The funds for these new projects are not scheduled to be disbursed until PURPOSE OF THE ISSUE Proceeds of the 2013 Bonds, together with other available funds of the Authority, will be used to (1) finance certain capital improvements to the Authority s facilities (See THE CAPITAL PROJECT herein); (2) fund a debt service reserve fund for the 2013 Bonds, if necessary; and (3) pay the costs of issuing the 2013 Bonds. SOURCES AND USES OF FUNDS Sources of Funds Proceeds of Series of 2013 Bonds... $25,000, Plus: Net Original Issue Premium , Total Sources of Funds... $25,269, Uses of Funds Capital Projects Fund... $23,442, Debt Service Reserve Fund... 1,564, Costs of Issuance (1) , Total Uses of Funds... $25,269, (1) Includes legal fees, underwriter s discount, trustee fees, rating fee, consulting engineer fee, printing costs and other miscellaneous fees. THE CAPITAL PROJECT In concert with the Pennsylvania Department of Environmental Protection, the Authority is under a Corrective Action Plan to repair its systems failing infrastructure. The consulting engineer for Roamingwood has advised that the existing gravity sewers and manholes be replaced with a modern pressure sewer system. The pressure sewer system has been recommended because it is considerably less expensive than replacing the existing gravity system. Because pressure sewer systems are under pressure (similar to water mains), they can be installed at minimum depths (about 5 feet) and track the hilly terrain of the service area. Gravity sewers must be installed at a deeper depth and the greater depth results in higher intallation and maintenance costs. After a pressure system is fully installed, most of the 29 external pumping stations could be decommissioned, as they will no longer be required. Eliminating the external pumping stations will eliminate the associated power and maintenance costs, which would be a significant reduction from current operating expenditures. DESCRIPTION OF THE BONDS General Description The 2013 Bonds are being issued in fully registered form, without coupons, in the aggregate principal amount of $25,000,000 and will be dated the date of delivery. The 2013 Bonds will bear interest payable on February 15 and August 15 (each an Interest Payment Date ), commencing on August 15, 2013, as set forth on the inside front cover page hereof and are issuable in denominations of $5,000 or any integral multiple thereof. The 2013 Bonds will bear interest at the rates and mature on the dates and in the amounts shown on the inside cover page hereof. 5

13 The 2013 Bonds will be issued initially in book-entry only form as described under the caption BOOK-ENTRY ONLY SYSTEM below. If the book-entry only system for the 2013 Bonds is ever discontinued, purchasers will acquire an ownership interest in 2013 Bonds through the issuance of bond certificates ( Certificated 2013 Bonds ), and the payment, transfer and exchange procedures described below will apply. Payment of Principal and Interest Interest is payable to the registered owner of a Bond from the interest payment date next preceding the date of registration and authentication of the Bond, unless: (a) such Bond is registered and authenticated as of an interest payment date, in which event such Bond shall bear interest from said interest payment date, or (b) such Bond is registered and authenticated after a Record Date (hereinafter defined) and before the next succeeding interest payment date, in which event such Bond shall bear interest from such interest payment date, or (c) such Bond is registered and authenticated on or prior to the Record Date next preceding August 15, 2013, in which event such Bond shall bear interest from the date of delivery, or (d) as shown by the records of the Trustee, interest on such Bond shall be in default, in which event such Bond shall bear interest from the date to which interest was last paid on such Bond. Interest shall be paid semiannually on February 15 and August 15 of each year, beginning August 15, 2013, until the principal sum is paid. Interest on each Bond is payable by check drawn on the Trustee, which shall be mailed to the registered owner whose name and address shall appear, at the close of business on the fifteenth (15th) day next preceding each interest payment date (the Record Date ), on the registration books maintained by the Trustee, irrespective of any transfer or exchange of the Bond subsequent to such Record Date and prior to such interest payment date, unless the Authority shall be in default in payment of interest due on such interest payment date. In the event of any such default, such defaulted interest shall be payable to the person in whose name the Bond is registered at the close of business on a special record date for the payment of such defaulted interest established by notice mailed by the Trustee to the registered owner of a Bond not less than fifteen (15) days preceding such special record date. Such notice shall be mailed to the person in whose name the Bond is registered at the close of business on the fifth (5th) day preceding the date of mailing. Transfer and Exchange The Authority and the Trustee shall not be required to register the transfer of or exchange any Bonds then considered for redemption during the period beginning at the close of business on the fifteenth (15th) day next preceding any date of selection of Bonds to be redeemed and ending at the close of business on the day of mailing of the notice of redemption or to register the transfer of or exchange any portion of any Bond selected for redemption until after the redemption date. Bonds may be exchanged for a like aggregate principal amount of Bonds of other authorized denominations, of the same maturity. Bonds are transferable or exchangeable by the registered owner thereof upon surrender of any of the Bonds to the Trustee, at its principal corporate trust office, accompanied by a written instrument or instruments in form, with instruction, and with guaranty of signature satisfactory to the Trustee, duly executed by the registered owner of such Bond or his attorney-in-fact or legal representative. The Trustee shall enter any transfer of ownership of Bonds in the registration books and shall authenticate and deliver at the earliest practicable time in the name of the transferee or transferees a new fully registered bond of bonds of authorized denominations of the same maturity and interest rate for the aggregate principal amount which the registered owner is entitled to receive. The Authority and the Trustee may deem and treat the registered owner of any Bond as the absolute owner thereof (whether or not a Bond shall be overdue) for purpose of receiving payment of or on account of principal and interest and for all other purposes, and the Authority and the Trustee shall not be affected by any notice to the contrary. REDEMPTION OF BONDS Optional Redemption The Bonds maturing on and after February 15, 2023 are subject to redemption prior to maturity, at the option of the Authority, in whole or in part (and if in part, as selected by the Authority, in authorized denominations), on February 15, 2022 or on any date thereafter, upon payment of 100% of the principal amount of the Bonds to be redeemed, together with unpaid accrued interest to the date fixed for redemption. 6

14 Mandatory Redemption The Bonds maturing on February 15, 2028, February 15, 2032 and February 15, 2037, are term bonds subject to mandatory redemption prior to maturity, drawn by lot by the Trustee, at a redemption price equal to 100% of the principal amount thereof together with accrued interest thereon to the date fixed for redemption, on February 15 of each of the years and in the principal amounts as follows: *Principal maturity Term Bonds Maturing February 15, 2028 Term Bonds Maturing February 15, $ 1,020, $ 1,145, $ 1,060, $ 1,185, * $ 1,105, $ 1,230, * $ 1,275,000 Term Bonds Maturing February 15, $ 1,320, $ 1,370, $ 1,420, $ 1,475, * $ 1,535,000 Notice of Redemption Notice of any redemption of 2013 Bonds shall be given by depositing a copy of the redemption notice in first class mail not more than sixty (60) days and not less than thirty (30) days prior to the date fixed for redemption, addressed to each of the registered owners of 2013 Bonds to be redeemed, at the addresses shown on the registration books kept by the Trustee as of the date such 2013 Bonds are selected for redemption; provided, however, that failure to give such notice by mailing, or any defect therein or in the mailing thereof, shall not affect the validity of any proceeding for redemption of other 2013 Bonds so called for redemption as to which proper notice has been given. If at the time of mailing of such notice of redemption, the Authority shall not have deposited with the Trustee funds sufficient to redeem all of the 2013 Bonds called for redemption, such notice may state that it is conditional and subject to the deposit of redemption moneys with the Trustee not later than the redemption date and that such notice will be of no effect unless such moneys are so deposited. On the date designated for redemption, notice having been provided as aforesaid, and money for payment of the principal and interest being held by the Trustee, interest on the 2013 Bonds or portions thereof so called for redemption shall cease to accrue and such 2013 Bonds or portions thereof shall cease to be entitled to any benefit or security under the Resolution, and owners of such 2013 Bonds or portions thereof so called for redemption shall have no rights with respect thereto, except to receive payment of the principal to be redeemed and accrued interest thereon to the date fixed for redemption. Manner of Redemption If a 2013 Bond is of a denomination larger than $5,000, a portion of such 2013 Bond may be redeemed. For the purposes of redemption, a 2013 Bond shall be treated as representing that number of Bonds which is obtained by dividing the principal amount thereof by $5,000, each $5,000 portion of such 2013 Bond being subject to redemption. In the case of partial redemption of a 2013 Bond payment of the redemption price shall be made only upon surrender of such Bond in exchange for Bonds of the same maturity and of authorized denominations in aggregate principal amount equal to the unredeemed portion of the principal amount thereof. If at the time of mailing of such notice of redemption, the Authority shall not have deposited with the Trustee funds sufficient to redeem all of the 2013 Bonds called for redemption, such notice may state that it is conditional and subject to the deposit of redemption moneys with the Trustee not later than the redemption date and that such notice will be of no effect unless such moneys are so deposited. 7

15 BOOK-ENTRY ONLY SYSTEM The information in this section has been obtained from materials provided by DTC for such purpose. The Authority (herein referred to as the Issuer ) and the Underwriters do not guaranty the accuracy or completeness of such information and such information is not to be construed as a representation of the Authority or the Underwriters. The Depository Trust Company ( DTC ), New York, New York, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or in such other name as may be requested by an authorized representative of DTC. One fully-registered certificate for the Bonds of each maturity will be issued in principal amount equal to the aggregate principal amount of such maturity, and will be deposited with DTC. DTC, the world s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code, and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-u.s. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC s participants (the 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 (the Indirect Participants ). DTC has 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 and Purchases of the 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 (the 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 Owners 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 the 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. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the security 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 of Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Trustee and request that copies of the notices be provided directly to them. 8

16 Redemption notices shall be sent to DTC. If less than all of the Bonds (or all Bonds of a particular maturity) are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such issue (or maturity) to be redeemed. Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC s Procedures. Under its usual procedures, DTC mails on Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). So long as the Bonds are held by DTC under a book-entry system, payments of the principal of and interest on the Bonds and, if applicable, any premium payable upon redemption thereof, 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 Issuer or the Trustee on the payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such Participants and not of DTC, the Trustee or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of the principal of and interest on Bonds and, if applicable, any premium payable upon redemption thereof to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Issuer or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue its services as a securities depository for the Bonds at any time by giving reasonable notice to the Issuer or the Trustee. Under such circumstances, in the event that a successor securities depository is not obtained, Bonds are required to be printed and delivered. The Issuer may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered. The Authority and the Trustee will have no responsibility or obligation to any Securities Depository, any Participants in the book-entry system, or the Beneficial Owners with respect to (i) the accuracy of any records maintained by the Securities Depository or any Participant; (ii) the payment by the Securities Depository or by any Participant of any amount due to any Participant or Beneficial Owner, respectively, in respect of the principal amount or redemption price of, or interest on, any 2013 Bonds; (iii) the delivery of any notice by the Securities Depository or any Participant; (iv) the selection of the Beneficial Owners to receive payment in the event of any partial redemption of the 2013 Bonds; or (v) any other action taken by the Securities Depository or any Participant. In the event of the discontinuance of the book-entry system for the 2013 Bonds, Bond certificates will be printed and delivered and the following provisions of the Trust Indenture will apply: (i) principal or redemption price of the 2013 Bonds will be payable upon surrender of the 2013 Bonds at the corporate trust office of the Trustee located in Dunmore, Pennsylvania or as provided in the Trust Indenture; (ii) 2013 Bonds may be transferred or exchanged for other 2013 Bonds of authorized denominations at the designated office of the registrar of the 2013 Bonds, without cost to the owner thereof except for any tax or other governmental charge; and (iii) 2013 Bonds will be issued in denominations as described above under "DESCRIPTION OF THE 2013 Bonds. THE AUTHORITY AND THE TRUSTEE CANNOT AND DO NOT GIVE ANY ASSURANCES THAT DTC, THE DTC PARTICIPANTS OR THE INDIRECT PARTICIPANTS WILL DISTRIBUTE TO THE BENEFICIAL OWNERS (1) PAYMENTS OF PRINCIPAL OR REDEMPTION PRICE OF OR INTEREST ON THE 2013 BONDS, (2) CERTIFICATES REPRESENTING AN OWNERSHIP INTEREST OR OTHER CONFIRMATION OF BENEFICIAL OWNERSHIP INTERESTS IN THE 2013 BONDS, OR (3) REDEMPTION OR OTHER NOTICES SENT TO DTC OR CEDE & CO., ITS NOMINEE, AS THE REGISTERED OWNER OF THE 2013 BONDS, OR THAT THEY WILL DO SO ON A TIMELY BASIS OR THAT DTC, DTC PARTICIPANTS OR INDIRECT PARTICIPANTS WILL SERVE AND ACT IN THE MANNER DESCRIBED IN THIS OFFICIAL STATEMENT. THE CURRENT "RULES" APPLICABLE TO DTC ARE ON FILE WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE CURRENT "PROCEDURES" OF DTC TO BE FOLLOWED IN DEALING WITH DTC PARTICIPANTS ARE ON FILE WITH DTC. THE AUTHORITY AND THE TRUSTEE WILL HAVE NO RESPONSIBILITY OR OBLIGATION TO ANY DTC PARTICIPANT, INDIRECT PARTICIPANT OR BENEFICIAL OWNER OR ANY OTHER PERSON WITH 9

17 RESPECT TO: (1) THE 2013 BONDS; (2) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT; (3) THE PAYMENT BY DTC OR ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL OR REDEMPTION PRICE OF OR INTEREST ON THE 2013 BONDS; (4) THE DELIVERY BY DTC OR ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE INDENTURE TO BE GIVEN TO BONDHOLDERS; (5) IF APPLICABLE, THE SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE 2013 BONDS; OR (6) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS BONDHOLDER. SECURITY FOR THE 2013 BONDS Pledge of the Receipts and Revenues from the Water and Sewer Systems The Bonds are secured under the Indenture, together with any Additional Bonds, as such term is defined in the Indenture, issued under the Indenture by the Authority, by the assignment and pledge to the Trustee of the Receipts and Revenues from the Water and Sewer Systems, as such phrase is defined in the Indenture, and by funds held by the Trustee under the Indenture. The Receipts and Revenues from the Water and Sewer Systems include income from all water service charges, sewer rental, rates and other charges imposed and collected by the Lessee on behalf of the Authority from customers connected to the Water and Sewer Systems. THE AUTHORITY HAS NO TAXING POWER. Capitalized terms and phrases not otherwise defined herein shall have the meanings ascribed to them in the Indenture. Rate Covenant Under the Rate Covenant, as described in the Indenture and Lease, the Authority has imposed rates and charges for services rendered by the Authority upon the users of the Water and Sewer Systems such that the total amounts to be collected therefrom, and together with (i) any other amounts received from, or in connection with, the Water and Sewer Systems or otherwise, and (ii) money on deposit in the Bond Redemption and Improvement Fund, Debt Service Fund and Clearing Fund available for the purposes, together with the income expected to be credited to such Funds pursuant to the Indenture, will be sufficient to: (a) in each Fiscal Year, to pay the reasonable administration expenses of the Authority in connection with the Water and Sewer Systems, including the reasonable compensation and expenses of the Trustee under the Indenture; (b) in each Fiscal Year, to pay the reasonable expenses of the Authority of operating, maintaining and repairing (including insuring) the Water and Sewer System and making renewals and replacements thereto and all ordinary repairs and improvements which may be necessary or proper to maintain adequate service as determined by the Consulting Engineer; (c) in each Fiscal Year, so long as the Bonds are outstanding, to provide an amount equal to at least 110% of the Debt Service Requirements on the Bonds for such Fiscal Year; and (d) in each Fiscal Year in which Additional Bonds are outstanding, to provide an amount equal to at least 110% of Debt Service Requirements on such Additional Bonds for such Fiscal Year, plus any mandatory payments required to be made in such Fiscal Year to any Fund created under the Indenture. The Authority covenants that it will at all times keep on file with the Trustee a budget of rates and charges for services rendered by the Authority currently in effect and payable to the Authority by users of the Authority s Water and Sewer Systems, together with the resolution or resolutions adopting the same and a Consulting Engineer s Certificate stating that in the opinion of the signers, the rates and charges then in effect are sufficient to meet the foregoing requirements. The Authority covenants that it will continue to cause to be filed with the Trustee, as of January 1 of each year, a Consulting Engineer s Certificate to such effect. 10

18 Debt Service Reserve Fund A Debt Service Reserve Fund has been established pursuant to the Indenture and an amount equal to the Debt Service Requirement on the 2013 Bonds deposited and maintained therein. The Debt Service Reserve Requirement for the 2013 Bonds is equal to the lesser of: (a) the maximum debt service requirement on the 2013 Bonds; (b) 125% of the average annual debt service on the 2013 Bonds; or (c) 10% of the proceeds of the 2013 Bonds. This Fund will be held by the Trustee and will be irrevocably pledged to the payment of the principal of and interest on the 2013 Bonds to the extent that the amount in the Debt Service Fund is insufficient for such purposes. In the event that money in the Debt Service Reserve Fund is applied to pay the principal of and interest on the 2013 Bonds, the same shall be replenished by the Authority over the twelve (12) month period immediately following any such transfer. CERTAIN PROVISIONS OF THE INDENTURE The 2013 Bonds will be issued under and secured pursuant to the provisions of the Indenture. Under the Indenture, a number of special funds are created and provisions are made for the deposit, investment and withdrawal of money in said funds. The Indenture also provides for the issuance of Additional Bonds of the Authority, to be secured on a parity basis with the 2013 Bonds, and defines certain rights of holders of the 2013 Bonds in the event of a default on the part of the Authority. A summary of certain provisions of the Indenture follows. Such summary is not a comprehensive description of the Indenture and is qualified in all respects by specific reference to the full text of the Indenture, a copy of which may be reviewed at the offices of the Authority or the Trustee. Capitalized terms and phrases not otherwise defined herein shall have the meaning ascribed to them in the Indenture. Collection and Disposition of Receipts and Revenues from the Water and Sewer Systems: Operating Account and Clearing Fund Under the Indenture, the Authority has agreed to deposit all Receipts and Revenues from the Water and Sewer Systems collected by the Lessee, in the Operating Account by daily deposit so far as practicable and statements indicating the amount of such deposits shall be forwarded to the Trustee by the Authority. The Operating Account will be established by the Authority with a bank or trust company and will not be a Trustee held fund under the Indenture. The moneys from time to time on deposit therein shall be used by the Authority solely for the payment of Administrative Expenses and Operating Expenses and proper capital and repair costs as set forth in the annual report of the Consulting Engineer. On or before the fifteenth day of January and June in each year, the lessee, on behalf of the Authority, shall transfer funds from the Operating Account to the Trustee for deposit in the Clearing Fund so long as said funds are not required to be maintained in the Operating Account to pay or provide for Operating Expenses of the Water and Sewer Systems. Any moneys held by the Authority in the Operating Account at the end of any Fiscal Year not required to pay accrued expenses for such Fiscal Year and not required to be retained as a reserve in such amount as the Authority my deem prudent, but not in excess of the estimated amount of the Operating Expenses and Administrative Expenses contained in the annual report of the Consulting Engineer for the following Fiscal Year, shall be transferred to the Trustee and deposited by the Trustee in the Clearing Fund. The Authority, from time to time, in addition to the foregoing, may make deposits into the Clearing Fund from any other legally available funds. Money from time to time in the Clearing Fund shall be held by the Trustee, in trust, shall be secured as provided in the Indenture and shall be applied for purposes set forth in the Indenture; and, pending such application, such money shall be subject to a lien and charge in favor of holders of the Bonds. Debt Service Fund The Trustee shall transfer, without direction from the Authority, or its agent, the Lessee, from the Clearing Fund to the Debt Service Fund: (a) an amount which, together with any other available amounts then in the Debt Service Fund, for such purpose, will be equal to the interest becoming due on the Bonds on each February 15 and August 15; (b) an amount equal to the principal amount of the Bonds maturing on each February 15 or subject to mandatory redemption on each February 15. Moneys in the Debt Service Fund shall be used to pay principal of and interest on all Bonds from time to time 11

19 outstanding under the Indenture. Debt Service Reserve Fund A Debt Service Reserve Fund has been established pursuant to the Indenture and an amount is required to be maintained in such Fund equal to the maximum annual Debt Service Requirements on all Bonds outstanding under the Indenture. This Fund is held by the Trustee and will be irrevocably pledged to the payment of the principal of and interest on all Bonds outstanding under the Indenture, to the extent that the amount in the Debt Service Fund is insufficient for such purposes. Bond Redemption and Improvement Fund Any balance remaining in the Clearing Fund after payments have been made in full to the Debt Service Fund and Debt Service Reserve Fund, as provided in the Indenture, shall be transferred annually by the Trustee, without further direction from the Authority, to the Bond Redemption and Improvement Fund. Until applied as provided in the Indenture, such Fund shall be further held by the Trustee as additional security for all water and sewer revenue bonds. Whenever there is a deficiency in the Debt Service Fund or Debt Service Reserve Fund and there is insufficient money in the Clearing Fund to make up such deficiency, the Trustee shall transfer money from the Bond Redemption and Improvement Fund to make up such deficiency. If there are no deficiencies in any of the Funds provided for in the Indenture and the Authority is not in default, the Authority may, but only to the extent of the money available therein, use the moneys in the Bond Redemption and Improvement Fund, upon written requests as provided for in and subject to the terms of the Indenture for any of the following purposes: (a) For or toward the cost of such repairs, renewals, replacements or alterations to the Water and Sewer Systems. (b) For or toward the Costs of Capital Additions. (c) To pay debts, liabilities and obligations of the Authority required to be paid under the Indenture and for the payment of which provision shall not have otherwise been made. (d) For the payment or redemption of Bonds subject to the provisions of the Indenture, all of which Bonds shall thereupon be cancelled. (e) For any other lawful purpose of the Authority. Investment of and Security for Funds Moneys in all Funds created under the Indenture shall be insured or secured as required by law, and may be invested as provided in the Indenture and by law in investments having maturity dates or, in lieu of such maturity dates, being subject to redemption at the option of the holder at a price not less than the principal amount thereof or the cost of acquisition thereof, whichever is lesser, no later than such maturity dates, as restricted in the Indenture. Moneys in the Clearing Fund, Construction Fund, Debt Service Fund, Debt Service Reserve Fund, and the Bond Redemption and Improvement Fund to the fullest possible extent shall be wholly or partially deposited and redeposited by the Trustee in interest bearing deposit accounts in the banking department of the Trustee or of such other depositary as may be approved, from time to time in writing by the Authority, insured or secured as required by the Indenture and by law, or upon request of the Authority shall be wholly or partially invested or reinvested by the Trustee in investments permitted by the Indenture, all subject to respective limitations provided in the Indenture. Any income derived from the investment of moneys in any Fund created under the Indenture, shall be credited to the Clearing Fund by the Trustee upon receipt thereof. Additional (Parity) Bonds Under the Indenture, Additional Bonds may be issued for the purposes authorized therein, including paying the cost of Capital Additions as provided for in the Indenture. However, no bonds shall be issued for such purpose unless the estimated revenues of the Authority shall be sufficient to meet the provisions of the Rate Covenant (discussed hereinbefore), taking into account all bonds to be outstanding. Additional Bonds secured by the Indenture may be issued for the purpose of refunding all or any part of any series of Bonds issued under the Indenture. The PennVest loans constitute parity debt and are subject to the provisions of the Rate Covenant. 12

20 Defaults and Remedies The Indenture defines events which may constitute an Event of Default and such events include, among other events, the failure to pay the principal of any Bond when due and the failure to pay an installment of interest on any Bond when due. The Act and Indenture provide remedies to the holders of Bonds upon Event of Default. For a more complete statement of rights and remedies of holders of the Bonds and of the limitations thereon, reference is made to the Indenture. Annual Audit The Authority will employ a certified public accountant to perform the accounting functions and duties required by the Act. Said accountant shall make an annual audit of the operations, records, and accounts of the Authority, including those held by the Trustee. The Authority shall forthwith furnish copies of each annual audit to such holders of the Bonds as make written request therefore. Modifications and Amendments The Authority and the Trustee, as applicable and appropriate, may enter into supplemental indentures, among others, in connection with the issuance of Additional Bonds (see Additional Bonds ), to cure ambiguities, formal defects or omissions in the Indenture, or to grant additional rights, powers, and security for the benefit of the holders of the Bonds, or to permit any other amendment which is not materially adverse to the interests of the Trustee or the holders of the Bonds, without consent of the holders of the Bonds. All other supplemental indentures or any amendments or modifications to the Indenture require the consent and approval of the holders of not less than 51% of the aggregate principal amount of all bonds then outstanding, but no such supplemental indenture shall, except as provided in the Indenture, (1) change the maturity, interest or redemption provisions on any Bond; (2) permit creation by the Authority of any lien or encumbrance prior to or on a parity with the lien described herein; or (3) amend the provision of the Indenture relating to amendments. Covenants of Authority The Authority covenants, among other things, through the Lessee, that it will at all times: (a) Maintain the Water and Sewer Systems and every part thereof in good repair, working order and condition; (b) Continuously operate the same; and (c) Make all necessary and proper repairs, renewals, replacements and improvements thereto in order to maintain adequate service. The Authority also covenants, through the Lessee, that it will keep the Water and Sewer Systems insured against such risks, including public liability and property damage, and in such amounts as are usually carried on or with respect to like properties. Discharge of the Indenture The lien of the Indenture may be terminated by the Authority by depositing with the Trustee funds sufficient for payment or redemption of the Bonds and interest thereon to the date of maturity or redemption. Such requirements may be satisfied by placement with the Trustee of either a sum of money, together with interest earned thereon in investments which constitute direct obligations of the United States of America or certificates of deposit, fully insured, or to the extent not insured, fully collateralized by direct obligations of the United States of America as to both principal and interest in the manner provided by law. Such direct obligations of the United States of America or such certificates of deposit shall mature as to principal and interest in such amounts, at such times and upon such other terms as shall assure the availability of sufficient money to provide the required sum as stated above. 13

21 Federal Tax Laws TAX MATTERS Numerous provisions of the Internal Revenue Code of 1986, as amended (the Code ), affect the issuers of state and local government unit bonds, such as the Authority, and impair or restrict the ability of the Authority to finance projects on a tax exempt basis. Failure on the part of the Authority to comply with any one or more of such provisions of the Code, or any regulations under the Code, could render interest on the Bonds includable in the gross income of the owners thereof for purposes of federal income tax retroactively to the date of issuance of the Bonds. Among these provisions are more restrictive rules relating to: (a) investment of funds treated as proceeds of the Bonds; (b) the advance refunding of taxexempt bonds; and (c) the use of proceeds of the Bonds to benefit private activities. In addition, under the Code, the Authority is required to file an information return with respect to the Bonds and, if applicable, to rebate to the federal government certain arbitrage profits on an ongoing basis throughout the term of the issue constituting the Bonds. Bond Counsel has not undertaken to determine (or to inform any person) whether any action taken (or not taken) or events occurring (or not occurring) after the date of issuance of the Bonds may affect the tax status of interest on the Bonds. Other provisions of the Code affect the purchasers and holders of certain state and local government bonds such as the Bonds. Prospective purchasers of the Bonds should be aware that: (i) Section 265 of the Code denies a deduction for interest on (a) indebtedness incurred or continued to purchase or carry certain state or local government bonds, such as the Bonds, or, (b) in the case of a financial institution, that portion of a financial institution s interest expense allocated to interest on certain state or local government bonds, such as the Bonds, unless the issuer of the state or local government bonds designates the bonds as qualified tax-exempt obligations for the purpose and effect contemplated by Section 265(b)(3)(B) of the Code (the Authority has not designated the Bonds as qualified tax exempt obligations under Section 265(b)(3)(B) of the Code, as such phrase is defined in the Code); (ii) certain corporations must take into account interest on certain state or local government bonds, such as the 2013 Bonds, in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on such corporations; (iii) with respect to insurance companies subject to the tax imposed by Section 831 of the Code, Section 832(b)(5)(B)(1) reduces the deduction for loss reserves by 15% of the sum of certain items, including interest and amounts treated as such on certain state or local government bonds such as the Bonds; (iv) interest on certain state or local government bonds, such as the Bonds, earned by certain foreign corporations doing business in the United States could be subject to a branch profits tax imposed by Section 884 of the Code; (v) if a Subchapter S corporation has passive investment income (which passive investment income will include interest on state and local government bonds such as the Bonds) exceeding 25% of such Subchapter S corporation s gross receipts and if such Subchapter S corporation has Subchapter C earnings and profits, then interest income derived from state and local government bonds, such as the Bonds, may be subject to federal income tax under Section 1375 of the Code; and (vi) Section 86 of the Code requires recipients of certain Social Security and certain Railroad Retirement benefits to take into account, in determining gross income receipts or accruals of interest on certain state or local government bonds such as the Bonds. Proposals to alter or eliminate the exclusion of interest on tax-exempt bonds from gross income for some or all taxpayers have been made in the past and may be made again in the future. Future legislation, if enacted into law, or clarification of the Code may cause interest on the Bonds to be subject, directly or indirectly, to federal income taxation, or otherwise prevent Beneficial Owners from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such future legislation or clarification of the Code may also affect the market price for, or marketability of, the Bonds. PROSPECTIVE PURCHASERS OF THE BONDS SHOULD CONSULT THEIR OWN TAX ADVISERS REGARDING ANY PROPOSED FEDERAL TAX LEGISLATION, AS TO WHICH BOND COUNSEL EXPRESSES NO OPINION. The opinion of Bond Counsel is based on current legal authority, covers certain matters not directly addressed by such authorities, and represents Bond Counsel s judgment as to the proper treatment of the Bonds for federal income tax purposes. It is not binding on the IRS or the courts. Bond Counsel s engagement with respect to the Bonds ends with the issuance of the Bonds. 14

22 Tax Exemption In the opinion of Bond Counsel, assuming continuing compliance by the Authority with certain certifications and agreements relating to the use of Bond proceeds and covenants to comply with provisions of the Code and any applicable regulations thereunder, now or hereafter enacted, interest on the Bonds is not includable in the gross income of the holders of the Bonds under Section 103(a) of the Code and interest on the Bonds is not an item of tax preference for purposes of the federal individual and corporate alternative minimum taxes, except as described above under the caption Federal Tax Laws above. The tax exemption described above does not extend to corporations required to include interest on the Bonds in the calculation of alternative minimum taxable income within the meaning provided in Section 56 of the Code. Other provisions of the Code will affect certain purchasers and holders of the Bonds. See Federal Tax Laws above. The Authority has not designated and determined under and for purposes of Section 265(b)(3)(B) of the Code to qualify each of the Bonds as a qualified tax-exempt obligation as such phrase is defined in the Code. In the opinion of Bond Counsel under the laws of the Commonwealth, the Bonds and interest on the Bonds shall at all times be free from taxation for State and local purposes within the Commonwealth, but this exemption shall not extend to gift, estate, succession or inheritance taxes or any other taxes not levied directly on the Bonds or the interest thereon. Under the laws of the Commonwealth, profits, gains or income derived from the sale, exchange or other disposition of the Bonds are subject to State and local taxation within the Commonwealth of Pennsylvania. The Authority will issue its certificate regarding the facts, estimates and circumstances in existence on the date of delivery of the Bonds and regarding the anticipated use of the proceeds of the Bonds. The Authority will certify that, on the basis of the facts, estimates and circumstances in existence on the date of issuance of the Bonds, the Authority does not reasonably expect to use the proceeds of the Bonds in a manner that would cause the Bonds to be or become arbitrage bonds or private activity bonds as those terms are defined in Section 148 and Section 141 of the Code. THE ABOVE SUMMARY OF POSSIBLE TAX CONSEQUENCES IS NOT EXHAUSTIVE. ALL PURCHASERS OF THE BONDS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE POSSIBLE FEDERAL INCOME TAX CONSEQUENCES OF OWNERSHIP OF THE BONDS. ANY STATEMENTS REGARDING TAX MATTERS HEREIN CANNOT BE RELIED UPON BY ANY PERSON TO AVIOD TAX PENALTIES. Regulations, Future Legislation Under the provisions of the Code the Treasury Department is authorized and empowered to promulgate regulations implementing the intent of Congress under the Code, which could affect the tax-exemption and/or tax consequences of holding tax-exempt obligations, such as the Bonds. In addition, legislation may be introduced and enacted in the future which could change the provisions of the Code relating to tax-exempt bonds of a state or local government unit, such as the Authority, or the taxability of interest in general. No representation is made or can be made by the Authority, or any other party associated with the issuance of the Bonds as to whether or not any other legislation now or hereafter introduced and enacted will be applied retroactively so as to subject interest on the Bonds to federal income taxes or so as to otherwise affect the marketability or market value of the Bonds. EACH PURCHASER OF THE BONDS SHOULD CONSULT HIS OR HER OWN TAX ADVISOR REGARDING ANY CHANGES IN THE STATUS OF PENDING OR PROPOSED FEDERAL TAX LEGISLATION. LITIGATION There is no litigation of any nature pending or, to the knowledge of Authority officials, threatened against the Authority at the date of this Official Statement seeking to restrain or enjoin the issuance, sale, execution or delivery of the Bonds, or, in any way contesting or affecting the validity of the Bonds or any proceedings of the Authority taken with respect to the issuance of the sale thereof, or the pledge or application of any moneys or security provided for the payment of the Bonds, or the existence or powers of the Authority. 15

23 LEGAL MATTERS Certain legal matters incident to the authorization, issuance and sale of the Bonds will be passed upon by Abrahamsen, Conaboy & Abrahamsen, P.C., Scranton, Pennsylvania, Bond Counsel. Certain legal matters will be passed upon for the Authority by Jeffrey J. Belardi, Esquire, Scranton, Pennsylvania, Authority Solicitor. Bond Counsel states in its opinion issued with respect to the Bonds that (i) they have not been engaged to verify nor have they independently verified, the accuracy, completeness or truthfulness of any statements, certifications, information or financial statements set forth in the Preliminary Official Statement, dated February 11, 2013 (the Preliminary Official Statement ), or the Official Statement, dated February 15, 2013 (the Official Statement ), or otherwise used in connection with the offer and sale of the Bonds or set forth in or delivered by Authority officials and (ii) they express no opinion with respect to whether the Authority in connection with the sale of the Bonds or the preparation of the Preliminary Official Statement or Official Statement, have made any untrue statement of a material fact necessary in order to make any statement made therein not misleading. 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. In rendering a legal opinion, the attorney does not become an insurer or guarantor of that expression of professional judgment of the transaction opined upon, or the future performance of the parties to the transaction. Nor does rendering a legal opinion guarantee the outcome of any legal dispute that may arise out of the transaction. LEGALITY FOR INVESTMENT Applicable laws of the Commonwealth of Pennsylvania provide that the Bonds are legal investments for funds held by, among others, banks, savings banks, trust companies, insurance companies or associations and fiduciaries. The 2013 Bonds are authorized security for deposits of funds of the Commonwealth of Pennsylvania and any political subdivision thereof. CONTINUING DISCLOSURE UNDERTAKING In accordance with the requirements of Rule 15c2-12 (the Rule ), promulgated by the Securities and Exchange Commission, the Authority, will agree to file: (i) with the Municipal Securities Rulemaking Board (MSRB) through its Electronic Municipal Market Access (EMMA) system and the state information depository, if any, of the Commonwealth of Pennsylvania ( SID ), recognized by the SEC pursuant to the Rule, within 275 days after the end of each fiscal year, beginning with the Fiscal Year ending December 31, 2013, a copy of the Association s audited financial statements, prepared in accordance with the guidelines adopted by the Government Accounting Standards Board and the American Institute of Certified Public Accountants Audit Guide, Audits of State and Local Government and such other information and data, if any, as may be fully described in the Disclosure Certificate; and (ii) in a timely manner, to file with the MSRB through its EMMA system, and to the SID, notice of the occurrence of any of the following events with respect to the Bonds, if such event is material: (1) principal and interest payment delinquencies of the Bonds; (2) non-payment related defaults with respect to the Bonds; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax-exempt status of the Bonds, or other material events affecting the tax-exempt status of the Bonds; (7) modifications to rights of holders of the Bonds; (8) Bond calls; (9) defeasances; (10) release, substitution, or sale of property securing payment of the Bonds; (11) rating changes; 16

24 (12) bankruptcy, insolvency, receivership or similar event of the Association or the Authority; (13) the consummation of a merger, consolidation, or acquisition involving the Authority and/or Association or the sale of all or substantially all of the assets of the Authority and/or Association, 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; (14) appointment of a successor or additional trustee or the change of name of a trustee, if material.; (15) failure to provide annual financial information as required; and (iii) in a timely manner, to file with the MSRB notice of a failure to provide the required annual financial information specified above, on or before the date specified above. The Authority may from time to time choose to provide notice of the occurrence of certain other events, in addition to those listed above, but the Authority does not commit to provide notice of the occurrence of any events except those specifically listed above. The obligations of the Authority described above will remain in effect only for such period that (i) the 2013 Bonds are outstanding in accordance with their express terms, and (ii) the Authority remains obligated persons with respect to the 2013 Bonds within the meaning of the Rule. The Authority reserves the right to terminate their obligations to provide the Annual Information and notices of material events, as set forth above, if and when the Authority is no longer obligated persons with respect to the 2013 Bonds within the meaning of the Rule. The Authority acknowledges that its undertaking pursuant to the Rule described under this heading are intended to be for the benefit of the holders of the 2013 Bonds (including holders of beneficial interest in the 2013 Bonds). Each Bondholder may enforce the continuing disclosure undertaking of the Authority; provided that, the right to enforce the provisions of such undertaking will be limited to a right to obtain specific enforcement of the Authority s obligations under the continuing disclosure undertaking. Any failure by the Authority to comply with the provisions of said continuing disclosure undertaking will not constitute an Event of Default with respect to the 2013 Bonds. The obligations of the Authority described above may be amended without the consent of the Bondholders, to the extent permitted by the Rule, as from time to time amended. The Authority is not currently under continuing disclosure obligation, but with this issue the Authority will undertake the annual continuing disclosure requirements described above. MISCELLANEOUS Rating Standard and Poor s Corporation ( S&P ) has assigned their municipal bond rating of A (stable outlook) to the Bonds. Any explanation of the significance of such rating may only be obtained from the rating agency. The Authority furnished to such rating agency certain information and material respecting the Bonds and itself. Generally, rating agencies base their rating on such information, material, investigations, studies and assumptions by the rating agency. There is no assurance that such a rating will remain for any given period of time or that it may not be lowered or withdrawn entirely by the rating agency that such rating will not be revised downward or withdrawn entirely by the rating agency, if in the judgment of such rating agency, circumstances so warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the Bonds. Underwriting The underwriter of the Bonds is RBC Capital Markets. LLC (the Underwriter ). The Underwriter has agreed to purchase the Bonds from the Authority, subject to certain conditions precedent, at an aggregate price of $25,094, (representing the principal amount of $25,000,000.00, less an underwriter s discount of $175,000.00, plus a net original issue premium of $269,788.00). The Underwriter may offer and sell the Bonds to certain dealers (including dealers depositing Bonds into investment trusts) and others at prices lower than the initial public offering prices stated on the inside cover page hereof. After the Bonds are released, the public offering prices and other selling terms may be changed from time to time by the Underwriter 17

25 CERTAIN MATTERS The execution and delivery of this Official Statement has been duly authorized by the Authority. Certain information contained in this Official Statement has been obtained from sources other than the Authority. All of the summaries and references of the provisions of the 2013 Bonds contained in this Official Statement and all other summaries and references to the Act and to other materials not purporting to be quoted in full, are only brief outlines of certain provisions thereof, and do not constitute complete statements. This Official Statement is not to be construed as a contract or agreement between the Authority and the Underwriter or the purchasers or holders of any of the 2013 Bonds. Any statements made in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended merely as opinions and not as representations of fact. 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 affairs of the Authority since the date hereof. The information contained in the Official Statement that has been obtained from sources other than the Authority is not guaranteed as to accuracy or completeness. SOUTH WAYNE COUNTY WATER AND SEWER AUTHORITY Wayne County, Pennsylvania By: /s/ Anthony Sabia Vice Chairman 18

26 APPENDIX A Description and Summaries of Financial Factors of the System Facilities

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28 The Authority THE SYSTEM FACILITIES The Authority is a body corporate and politic organized on November 12, 1980 by the County Commissioners of Wayne County (the County ), under the Act. The Board of the Authority consists of five members appointed by the County Commissioners for five year terms which are staggered so that one Authority member is appointed each year. Under the Act, the Authority is empowered to acquire, hold, constrict, finance, improve, maintain, operate, and lease (as lessor or lessee), sewer systems, and treatment facilities within its service area (see "The Hideout"). Roamingwood Sewer and Water Association is also a Potable Water Supplier. The Authority derives its power to issue the Bonds from the Act. Roamingwood Sewer and Water Association Roamingwood is a Pennsylvania nonprofit corporation founded in 1980 for the purpose of purchasing, owning, leasing, operating and maintaining the water and sewer system (collectively, the System ) serving the Hideout (described under heading " The Hideout"). On May 11, 2009, Roamingwood sold the System to the Authority. At that time, the Authority entered into an operating agreement, and subsequently the Lease, with Roamingwood wherein Roamingwood would continue to operate the System for the benefit of the Authority and the residents of The Hideout. Roamingwood is separate and distinct from the Association of Property Owners of the Hideout (the "POA") (described below under the heading "The Hideout"), but all members of the POA are also members of Roamingwood and vice-versa. Membership by lot owners in Roamingwood is automatic by virtue of lot ownership, Roamginwood s Bylaws and the Declaration of Protective Covenants for the Hideout dated May 11, 1970, and recorded June 25, 1970 in Wayne County Deed Book 258, at Page 51 as supplemented and amended from time to time. Said covenants running with the land and contained in each and every deed within The Hideout. The present Board of Directors and Officers of Roamingwood are: Roamingwood Members and Officers Member or Officer Title Term Expires Betty Sullivan President October, 2014 John M. Egan Chairman October, 2013 John N. Rockman Vice Chairman October, 2015 Kevin M. Clancy Treasurer October, 2014 John Schesny Secretary October, 2015 Betty Sullivan, President and Director: Ms. Sullivan has been a member in good standing for over 23 years. She has served as President of the Property Owners Association as well as Roamingwood. John M. Egan, Chairman and Director: Mr. Egan has been a property owner in the Hideout since He is a graduate of the University of Scranton with a Master s Degree in Business Administration. For 20 years he was Senior Vice- President and Branch Manager for Morgan Stanley in Scranton, Pennsylvania and currently is Senior Vice-President and Wealth Advisor. He has served our country as a U.S Marine Corps Officer as a platoon leader and company commander. Mr. Egan has diligently served on the Roamingwood Board for over 20 years.. John N. Rockman, Vice Chairman and Director: Mr. Rockman is a retired Biology and Science Education Professor of 36 years from William Patterson University of New Jersey. He has been involved as a community volunteer since moving to The Hideout 15 years ago. Kevin Clancy, Treasurer and Director: Mr. Clancy is a retired engineer of 32 years with CH2M Hill, where he was Vice President and Project Manager. Mr. Clancy has been involved with Roamingwood as a Director for almost 6 years. John Schesny, Secretary and Director: Mr. Schesny is a graduate of New York University with a Bachelor of Science in Mechanical Engineering. He is retired from Westchester County as Director of Operations for the Department of Public Works. Mr. Schesny and his wife moved to the community full time 7 years ago and was newly elected this year to serve on the Board of Directors for Roamingwood. John J. Lennox, General Manager: Mr. Lennox has been employed by Roamingwood since He has a degree in Business Management from Wilkes University. Mr. Lennox has over 25 years experience in Water and Wastewater management. A-1

29 Joining Mr. Lennox on his management team are: James Carroll (23 years), Chief Treatment Plant Operator and Environmental Specialist, Gary Dennis (30 years), acting Field Services Supervisor, and Janet Bell, Assistant Secretary/Administrative Assistant. James Carroll is Pennsylvania State Certified/licensed to operate the treatment plant, sewer conveyance system, and the potable water distribution system. Additionally, Roamingwood presently employs, full time, another certified treatment plant operator and two additional certified water distribution system operators. Gary Dennis has been employed by Roamingwood since its inception in The Sewer System The Authority s sanitary sewer collection system consists of over 42 miles of 8-inch diameter pipe, plus 6-inch diameter service laterals, approximately 1,000 manholes, and 29 pump-lift stations. The System's wastewater treatment plant, built in 1988, employs the extended aeration type process and has an additional tertiary treatment capability. All of the plant components, with the exception of the chlorine contact tank and carrousel units have been constructed above ground. The wastewater treatment plant operates under a Pennsylvania Department of Environmental Resources Water Quality Management Permit for authorization to discharge under the National Pollutant Discharge Elimination System ("NPDES " ) (permit PA ). The plant design capacity and the capacity permitted under the NPDES is 1,755,000 gallons per day (a daily average over a 1 month period). The Water System The water system, as originally designed and built, has six wells. As of this date, the sixth well has not been put into production, and it is not expected to be needed in the near future. There are 45 miles of interconnected distribution mains and 113 fire hydrants on the water system. Five of the well locations have well houses on site that contain storage tanks, including the two water towers holding 340,000 gallon each. The total storage capacity of the system is 908,000 gallons. Two of the wells are actively servicing the area with water 24 hours per day by use of a Pressure Booster system. Three other well houses supply water to the system when required during high use periods. These three wells are operated via a telemetry system that connects the two water storage tanks and the wells by phone line circuits. The system constantly monitors the level of the water in the tanks. The average monthly water usage is typically 12 to 14 million gallons per month (pumped from the wells). The Hideout The Hideout is a private development of single family homes initiated in 1970 by Boise Cascade Home and Land Corporation. It is one of the first such developments in the Pocono Mountain Region. It covers 4.5 square miles and contains 4,100 plotted properties. Presently, 3886 of the lots or accounts are billed to individuals or businesses. Approximately 200 have been deemed un-billable due to the inability to collect charges due to governmental wetland regulations and other issues. It is expected that few, if any, additional lots will be affected by wetland regulations and other issues. The remaining lots are owned by Roamingwood or the POA as public areas such as well houses, parks, ski hill, POA public buildings and parking lots, etc. As of January 1, 2012 the community comprises 3,237 homes, of which approximately 25% are occupied yearround. The common amenities include 450 acres of land, lakes which cover over 200 acres, a nine hole golf course, two beaches, two swimming pools, several tennis courts, a ski lift, and other outdoor recreation facilities. In addition, there are 22 community buildings, including a recreation lodge, clubhouse, indoor sports complex, arts and crafts center, and administrative offices. The Hideout is located in portions of Lake and Salem Townships in Wayne County. This area of Pennsylvania is known as the Pocono Mountains. It is situated approximately 8 miles west of the Borough of Hawley and 15 miles southwest of the City of Honesdale, the county seat of Wayne County. New York City is about two hours away by automobile (90 miles east) via Interstate Routes 80, 84 and 380. Philadelphia, via the Northeast Extension of the Pennsylvania Turnpike, is less than three hours away by automobile (125 miles south). Scranton is 20 miles to the west. Three miles south of The Hideout is Lake Wallenpaupack, one of the largest man-made lakes in Pennsylvania. Should the owner of an unimproved lot fail to pay the availability charges, the Declaration allows Roamingwood to bring an action at law or in equity to collect such charges. As with any litigation, there can be no assurance that any such action would be successful. However, every action undertaken to date has been successful. A-2

30 The Authority has the power to impose charges on the owners of improved lots in The Hideout for water and sewer service. The Authority has the power to enforce the collection of judgments obtained for its charges through applicable execution proceedings in jurisdictions where such judgments are obtained. In addition, the Authority has the power to cease providing water and sewer service as a penalty for nonpayment of user charges. The Authority has the power via statutory authority to terminate service to improved lots. The Authority has the power via statutory authority to place municipal liens against improved lots. New Homes Constructed The treatment plant expansion in 1988, ordered by Pennsylvania Department of Environmental Protection, was engineered and built to adequately and effectively treat all sewerage for total build out. At that time, total build out was considered to be 80% of the 4,100 lots, or 3,280 lots. Some homeowners have purchased two or more lots for one house while others have purchased a lot solely for the use of the amenities. Some of the lots at that time were recognized as unbuildable. With the advent of wetland regulations, further lots have been deemed un-buildable. No future need for expansion of the treatment plant or sewer system is anticipated at this time. Currently, new home construction is estimated, based on permits issued, at 10 to 15 homes per year, based on a 10- year estimate. Operating History As of January 1, 2012, the Water and Sewer System serves 3,237 residential customers and the POA, which owns the common buildings and is the only commercial customer. In addition, owners of 718 unimproved lots will be charged availability charges as the System extends to all lots in The Hideout. Since 1989, the number of developed properties, 2,164, has substantially increased, as shown in the following table: Number of Customers Billed Year Residential Unimproved Commercial Total ,857 1, , ,897 1, , , , , , , , , , , , , , , , , , (Projected) 3, ,054 Source: Roamingwood Management s Historical Records Employees There are four employees assigned to the wastewater treatment plant, while ten employees are assigned to maintain the distribution and collection system. Tasks include water and sewer main repair, meter reading, simple laboratory work, motor repair and other associated jobs. Five employees are office staff. Pension Plans The Association has one retirement pension plan, which is a 401(k) plan. The employer contributes 5% of the employees gross income. The employees may contribute as much as allowable per IRS regulations. A-3

31 SYSTEM FINANCES Billings and Collections Roamingwood has a very aggressive collection policy and has achieved favorable collection results: Water and Sewer Sewer & Water Service Billed $ 2,752,952 $ 2,764,299 $ 3,048,804 $ 2,923,372 $ 3,419,289 Late/Interest Charges Billed: 196,412 73,024 91,652 80,993 79,084 Total Billed: 2,949,364 2,837,323 3,140,456 3,004,365 3,498,373 Total Actual Collections: 2,752,952 2,748,388 2,867,882 2,986,171 3,284,034 Total Interest Collected: 45,468 34,225 52,635 40,907 79,084 Total Collections 2,798,420 2,782,613 2,920,517 3,027,078 3,363,118 Percent Billed Sewer & Water Service Collected 100.0% 99.4% 94.1% 102.1% 96% Percent Total Billed Collected 94.9% 98.1% 93.0% 100.8% Source: Roamingwood Management s Historical Records Water and Sewer Rates The Association has been proactive in raising its rates in anticipation of the 2013 bond issue. Beginning in 2010, rates were increase by 15%, and by 15% and 10% each year for 2010 through The Authority has adopted resolutions to increase rates 15% in 2014, 15% in 2015 and 10% in Developed Lot Undeveloped Lot Developed Lot Undeveloped Lot Annual $888 $566 $ 976 $ 624 Quarter Month Source: Association Master Plan. The POA, as the commercial customer, is billed one charge combining all of the locations where there is water and/or sewer service. Some of their facilities are not used year round; such as swimming pools, the ski hill, and ski lodge. They are permitted a combined volume of three million gallons usage per year. Any usage beyond that is charged at an excess rate that is to be determined at that time. Any saleable, undeveloped lots that are owned by the POA are billed at the current undeveloped rate and are not included in the combined billing. In addition, Roamingwood charges a Tapping Fee of $1,000 per lot, which is billed as a permit fee when a residence is constructed to cover the cost of the water meter, associated hardware, locating the connection, and inspection. A-4

32 Account Procedures Audit Beginning in fiscal year 2011, the financial statements are under the name of the Authority. As an agent of the Authority, the Association had no audited financial statements for 2011 as it had no assets, liabilities or operating activities. Financial statements of the Association and Authority are prepared using an accrual basis of accounting. The financial statements of the Authority are currently audited by Timothy P. Farrell, Certified Public Accountant and Consultant, Dunmore, Pennsylvania. ROAMINGWOOD SEWER AND WATER ASSOCIATION/ SOUTH WAYNE COUNTY WATER AND SEWER AUTHORITY Statement of Assets, Liabilities and Equity Fiscal Year Ending December 31, South Wayne County Roamingwood Water & Sewer Assn. Water & Sewer Auth ASSETS Current Assets: Cash $ 49,659 $ 28,062 $ 349,390 $ 151,214 Accounts & Accrued Receivables, net 856, , , ,990 Prepaid Expenses 2,162 28,025 1,807 0 Interest Receivable 7,227 1,240 1,006 0 Total Current Assets 915, ,591 1,088, ,204 Restricted Assets Receivable 2,409,028 1,569,121 1,082,015 0 Investments ,559 Total Restricted Assets 2,409,028 1,569,121 1,082, ,559 Utility Plant & Equipment/Capital Assets 6,355,442 6,012,433 9,475,117 10,277,898 TOTAL ASSETS $ 9,680,398 $ 8,376,145 $ 11,645,711 $ 11,415,661 LIABILITIES & RETAINED EQUITY Current Liabilities Payable from Current Assets: Accounts Payable and Accrued Expenses $ 45,604 $ 54,865 $ 82,366 $ 329,419 Payroll Taxes Withheld and Accrued 2,357 3,770 31,695 0 Payable from Restricted Assets: Bonds and Notes Payable 870, ,000 3,812, ,000 Accrued Interest Payable 60,740 27,292 20,556 27,292 Total Current Liabilities 978, ,927 3,946, ,927 Long-Term Debt Bond and Notes Payable 4,030,000 2,835,000 2,461,822 4,019,664 Bond Discount, net (18,582) (14,129) (9,676) (5,223) Deferred Financing Costs, net (397,581) (866,570) (641,755) (416,940) Total Long-Term Debt, net 3,613,837 1,954,301 1,810,391 3,597,501 Total Liabilities 4,592,538 2,920,228 5,757,062 5,092,201 Retained Equity Unreserved 5,056,319 5,424,376 5,857,108 0 Reserved 31,541 31,541 31,541 0 Invested in Capital Assets (net of related debt) ,515,116 Restricted for Debt Service ,559 Unrestricted ,785 Total Retained Equity 5,807,860 5,455,917 5,888,649 6,323,460 TOTAL LIABILITIES & RETAINED EQUITY $ 9,680,398 $ 8,376,145 $ 11,645,711 $ 11,415,661 Source: Association financial statements ; 2011 Authority financial statements. A-5

33 ROAMINGWOOD SEWER AND WATER ASSOCIATION/ SOUTH WAYNE COUNTY WATER AND SEWER AUTHORITY Statement of Operating Revenues and Expenses Roamingwood Water & Sewer Assn. Fiscal Year Ending December 31, South Wayne County Water & Sewer Auth. Fiscal Year Ending December 31, Audited 2008 Audited 2009 Audited 2010 Audited 2011 Operating Revenues: Operating Revenues: Sewer and Water Service $ 2,753,080 $ 2,957,228 $ 2,930,111 Late Charges 86,546 88,100 76,651 Sewer and Water Service $ 3,319,273 Other Operating Revenues Other Operating Revenues 124,830 Total Operating Revenues 2,839,626 3,045,328 3,006,762 Total Operating Revenues 3,444,103 Operating Expenses: Operating Expenses: Depreciation Expense 635, , ,475 Depreciation Expense 1,007,690 Salaries and Wages 549, , ,273 General Salaries 734,012 Utilities and Telephone 241, , ,833 Employee Benefits 201,265 Employee Benefits 155, , ,772 Electric 254,435 Provision for Bad Debts 90, ,408 75,336 Repairs 66,018 General Maintenance and Repairs 92, , ,702 Bad Debt Expense 103,073 Professional Fees 53,822 68,840 70,978 Employer Payroll Taxes 71,335 System Maintenance 34,103 50,034 55,630 Insurance 43,796 Insurance 47,698 45,056 40,238 Fuel 43,716 Payroll Taxes 48,975 56,464 61,662 Chemicals 45,439 Vehicle Maintenance and Fuel 37,584 36,757 41,246 Lab Analysis 24,960 Chemicals 17,337 35,256 30,298 Sludge Removal 5,880 Water Analysis 9,391 10,940 9,500 Patching & Paving 39,478 Office Supplies and Expense 24,649 21,505 15,746 Legal & Professional Services 30,100 Postage and Billing 10,687 9,778 12,401 General Maintenance 31,751 Election Expense (Board) 3,014 2,692 0 Contracted Services 24,456 Travel Expense 4,817 1, Equipment Maintenance 18,738 License and Permits 1,715 3,136 6,360 Office Supplies 17,890 Other 0 0 1,376 Vehicle Maintenance 16,339 Licenses/Permits/Dues 11,371 Total Operating Expenses 2,057,891 2,424,987 2,334,540 Telephone 13,053 Postage & Billing expense 11,688 Income from Operations 781, , ,222 Tools & Small Equipment 10,659 Employee Travel & Recognition 5,778 Other Revenue (Expense): Heating 5,354 Interest Income 79,932 28,299 13,680 Safety Expense 4,353 Investment Expense (330,412) (173,555 (125,106) Safety Training & Education 4,045 Amort. of Deferred Bond Issue (88,154) (170,471) (229,268) Trustee Fees Charges 3,574 Other Income/ Reimbursed Expenses 89,635 57, ,204 Collections Costs 3,374 Grant Income 51, Refunds 1,321 Grant Expenses Other Expenses 1,045 Gain on Sale of Equipment 0 5,500 0 Total Operating Expenses 2,855,986 Total Other Income (Expense) (197,422) (252,284) (239,490) Income from Operations 588,117 Net Income 584, , ,732 Other Revenue (Expense): Investment Income 7,241 Retained Equity, Beginning of Year 4,472,006 5,056,319 5,424,376 Interest Expense (131,306) Gain on Sale of Asses 2,300 Retained Equity, End of Year $ 5,056,319 $ 5,424,376 $ 5,857,108 Total Other Income (Expense) (121,765) Source: Association financial statements ; 2011 Authority financial statements. A-6 Change in Net Assets 466,352 Net Assets, Beginning 5,857,108 Net Assets, Ending $ 6,323,460

34 SOUTH WAYNE COUNTY WATER AND SEWER AUTHORITY 2012 AND 2013 OPERATING BUDGETS REVENUES Billable Sewer and Water Charges $3,598,074 $3,970,208 Tapping Fees 10,000 25,000 Property Transfer Income 40,000 45,000 Interest on Invested Funds 10,000 2,000 TOTAL REVENUES 3,658,074 4,042,208 EXPENSES Operating Salaries and Wages 805, ,300 Payroll Taxes 72,450 80,000 Employee Benefits 286, ,000 Patching/Paving 70,000 70,000 Infiltration Work 0 0 Water and Waste Water Analysis 15,000 25,000 General Maintenance 60,000 60,000 Water Main and Break Repairs 80,000 90,000 Vehicle Maintenance 15,000 20,000 Vehicle Fuel 60,000 60,000 Equipment Maintenance 25,000 25,000 Chemicals 40,000 40,000 Sludge Removal 15,000 20,000 Heating Fuel 8,000 8,000 Safety Costs 6,000 6,000 Tools and Equipment 10,000 10,000 Contracted Services 30,000 40,000 Electricity 250, ,000 Total Operating Expenses 1,847,450 2,024,300 Administration Accounting/Audit 20,000 30,000 Telephone 14,000 12,000 Office Supplies/Equipment Maintenance 15,000 25,000 Postage/Billing 11,000 15,000 Collection 12,000 12,000 Insurance/Workman s Comp. 50,000 50,000 Training and Education 17,000 20,000 Licenses/Permits 5,000 10,000 Trustee/Authority Expense 5,000 5,000 Employee Travel 10,000 5,000 Legal Expense 8,000 10,000 Employee Recognition. 4,000 5,000 Board Elections 4,000 5,000 Total Administration 175, ,000 TOTAL EXPENSES 2,022,450 2,228,300 DEBT SERVICE Debt Service 1,252,008 1,252,008 TOTAL DEBT SERVICE 1,252,008 1,252,008 TOTAL DISBURSEMENTS 3,274,458 3,480,308 OPERATIONAL RESERVE $ 404,116 $ 557,400 A-7

35 Summary of Operating Revenues Available for Debt Service (1) The Authority implemented rate increases of 15% in 2010, 10% in 2011, 10% in 2012 and 10% in Fiscal Year Ending December 31, (2) 2013 (2) Operating Activity Revenues $ 2,839,626 $ 3,045,328 $ 3,006,762 $ 3,444,103 $ 3,678,574 $ 4,042,708 Operating Activity Expenditures (1,422,733) (1,771,344) (1,688,795) (1,848,296) 2,022,450 2,233,300 Operating Revenues Available for Debt Service 1,416,893 1,273,984 1,317,967 1,595,807 1,656,124 1,809,408 Debt Service Requirements: 2002 Bonds 1,165, , Note 0 956,227 1,009,654 1,013,942 1,012,008 1,012, PennVest Note (3) ,778 67,112 60,000 74, PennVest Note (4) , , ,678 Total Debt Service Requirement $ 1,165,638 $ 1,102,002 $ 1,026,432 $ 1,226,141 1,252,008 1,247,226 Debt Service Coverage 1.22x (5) 1.16x 1.28x 1.30x 1.33x 1.45x The Authority will implement rate increases of 15% in 2014, 15% in 2015 and 10% in % Rate Increase 15% Rate Increase 10% Rate Increase Operating Activity Revenues $4,649,114 $5,346,481 $5,881,129 Operating Activity Expenses (6) (2,300,299) (2,369,307) (2,440,387) Operating Revenues Available for Debt Service 2,348,815 2,977,174 3,440,742 Debt Service Requirements 2013 Bonds 1,587,000 1,587,000 1,587, Penn Vest Note 74,540 74,540 74, Penn Vest Note 160, , , Penn Vest Note 0 710,000 1,217,000 (7) Total Debt Service Requirement 1,821,640 2,563,540 3,070,540 Debt Service Coverage 1.29% 1.16x 1.12x (1) Debt service on the 2013 Bonds does not begin until August 15, (2) Budget. (3) Debt service on the 2009 PennVest Note began on October 1, (4) Debt service on the 2010 PennVest Note began March 1, (5) The Authority raised its rates in 2008 to comply with debt service coverage ratio covenant. (6) Expenses increase 3% per year. (7) Increases to $1,270,000, Source: Roamingwood S&W Association Engineer. A-8

36 APPENDIX B Description of the Municipalities Lake Township and Salem Township Wayne County, Pennsylvania

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38 DESCRIPTION OF THE MUNICIPALITIES The Townships of Lake and Salem, Wayne County (collectively, the Municipalities or the Townships ) are all second class townships located in an area of Northeastern Pennsylvania know as the Pocono Mountain Region. Covering a total area of approximately 60 square miles, the Municipalities are situated in southern Wayne County. Demographic Characteristics Population The Municipalities populations increased by 29.0% from 1990 to 2000 and increased by an estimated 8.6% from 2000 to The table below shows population comparisons for the Municipalities, Wayne County, Pennsylvania and the United States Percentage Increase/(Decrease) 1990 to to 2010 The Municipalities 6,220 8,025 9, % 18.9% Lake Township 3,287 4,361 5, Salem Township 2,933 3,664 4, Wayne County 39,944 47,722 52, Pennsylvania 11,881,643 12,281,054 12,702, U.S. 248,709, ,421, ,745, Source: Pennsylvania State Data Center; U.S. Bureau of Census. Age Composition (2010) Municipality Median Age Percent Under 18 Percent Percent 65 and Over The Municipalities % 59.0% 22.0% Lake Township Salem Township Wayne County Pennsylvania U.S Source: Pennsylvania State Data Center; U.S. Bureau of Census. (1) Weighted average of the Municipalities. B-1

39 Income (2010) Per Capita Income Household Median Family Median Percentage of Families in Poverty The Municipalities $ 22,799 $ 49,144 $ 53, % Lake Township 24,483 49,625 52, Salem Township 20,721 48,551 54, Wayne County 22,755 47,902 56, Pennsylvania 26,374 49,288 61, U.S. 26,059 50,046 60, Source: U.S. Bureau of Census, American Community Survey estimates. (1) Weighted average of the Municipalities. Housing Characteristics (2010) Total Housing Units Percent Occupied Percent Vacant (1) Median Value Owner Occupied (2) The Municipalities 7, % 44.1% $ 176,571 (3) Lake Township 4, ,600 Salem Township 3, ,900 Wayne County 30, ,100 Pennsylvania 5,249, ,000 U.S. 115,904, ,600 Source: Pennsylvania State Data Center; U.S. Bureau of Census. (1) Includes seasonal, recreational or occasional use housing units: Lake Township at 4.29%; Salem Township at 36.9%; and Wayne County at 29.6%. (2) U.S. Census, American Community Survey estimates. (3) Weighted average of the Municipalities. Occupied Housing (2010) Total Occupied Housing Total Owner Occupied Total Renter Occupied Units Units % of Total Units % of Total The Municipalities 3,926 3, % % Lake Township 2,156 1, Salem Township 1,770 1, Wayne County 20,625 16, , Pennsylvania 5,018,904 3,491, ,527, U.S. 116,706,292 75,986, ,730, Source: Pennsylvania State Data Center; U.S. Bureau of Census B-2

40 Medical facilities There are one general acute care hospital and one psychiatric hospital that serve Wayne County. Residents of the area are also served by medical facilities in neighboring Lackawanna County, which include 5 general acute care hospitals (especially Marion Community Hospital in nearby Carbondale), one rehabilitation hospital and one psychiatric hospital. These hospitals, their licensed bed capacities and number of full-time and part-time employees are as follows: Institution Location Licensed Beds Staff Wayne County Full-Time Part-Time SCI-Waymart Forensic Treatment Center (Psychiatric)... Waymart Wayne Memorial Hospital... Honesdale Lackawanna County Allied Services Institute of Rehabilitation Medicine... Scranton Clarks Summit State Hospital (Psychiatric)... Clarks Summit Community Medical Center (1)... Scranton Marian Community Hospital (2)... Carbondale Mid-Valley Hospital... Peckville Moses Taylor Hospital... Scranton Regional Hospital of Scranton (3)... Scranton 198 1, Source: Pennsylvania Department of Health, Bureau of Health Statistics; reporting period. (1) Became part of the Geisinger Health System effective February 1, 2012 and is now known as Geisinger - Community Medical Center. (2) Marian Community Hospital closed February 28, (3) Community Health System acquired Scranton-based Mercy Health Partners in May 2011, including Mercy Hospital in Scranton, which was renamed Regional Hospital of Scranton. Transportation Highways. I-81 which connects Binghamton, New York, and Scranton and Harrisburg, Pennsylvania; and I-84 which connects Scranton to Port Jervis, New York. The Northeast Extension of the Pennsylvania Turnpike is also in close proximity to the area, lying within 30 miles to the southwest. U.S. Route 6 connecting Hawley with Scranton further services the area, and State Routes 590, 507 and 390, provide access to the major Interstate highways. Rail Service. Railroad service is limited to freight service via Norfolk Southern Rail Corporation. Air Service. The Wilkes-Barre/Scranton International Airport is located approximately 40 miles to the south of the Municipalities, providing passenger and freight service to all parts of the United States, plus many international destinations. Utilities Water and Sewer. Most residents of the Municipalities that are not served by Roamingwood have their water and sewer service provided by on-site well and septic systems. Electricity and Gas. Electricity is provided to residents of the Municipalities by PPL. Gas is provided by UGI Penn Gas. Telephone. Telephone service is provided to area residents by South Canaan Telephone Company, Verizon and by other telephone companies. Education Public Schools The Municipalities are served by the Western Wayne School District. The Western Wayne School District administration offices are located in South Canaan. The current enrollment of Western Wayne School District is approximately 2,300 students. Higher Education B-3

41 Most of institutions of higher learning closest to the Municipalities are located in neighboring Lackawanna County. The two larger, private institutions offering undergraduate and graduate degrees in the Lackawanna County are the University of Scranton and Marywood University in Scranton, which currently report approximate enrollments of 5,000, and over 3,000 respectively. Keystone College in LaPlume, with an enrollment of approximately 1,200, was given formal approval to offer 4- year degree programs in Lackawanna College, which offers 2-year degree programs, operates from its main campus in Scranton, with over 1,000 students attending classes there and at its off-campus sites, including its Honesdale site in Wayne County, Hazleton, and Towanda. Johnson College, located in Scranton, which offers clinical and technological associate degrees, estimates its student enrollment at 400. Pennsylvania State University Worthington Campus, is located in Dunmore Recreation Tourism and recreation constitutes one of the area s major industries. There are over 200 hotels, motels and camps in Wayne County and more than half are open year-round. Among the several factors contributing to the continuing growth in Wayne County s tourism and recreation industries are: (1) the sizeable population concentrations of the eastern seaboard megalopolis, (2) the development of high-speed, limited access highways serving the area, (3) the development of a fourseason industry pattern as a result of the growth of convention business and the increasing popularity of skiing as a winter sport, and (4) the development of the Delaware Water Gap National Recreation Area. Some of the larger resorts in the area include Buck Hills Inn & Golf Club, Mt. Airy Lodge, Pocono Manor, Tamiment, Fernwood, Shawnee on the Delaware, and Sky Top. ECONOMY Trends in Wayne County Employment and Unemployment Civilian Labor Force Total Employment Percentage Unemployed (1) Year Wayne Wayne Wayne Pennsylvania U.S (Dec.) 26,300 24, % 7.9% 7.6% ,500 23, ,600 23, ,700 23, ,700 24, ,600 24, ,300 24, ,900 23, ,000 22, ,500 22, ,900 22, ,000 21, ,600 21, Source: Pennsylvania Department of Labor & Industry. (1) Not seasonally adjusted. B-4

42 Classification of Employment by Industry The following is a breakdown of employment in Wayne County for 2010 from the Pennsylvania Department of Labor & Industry. Average annual earnings for workers are included. Wayne County Percent Total Percent Change Average Percent Change Average Average Change From Wages From Previous Annual From Previous Units Employment Previous Year (in 1000s) Year Wage Year Total (Excludes Federal) 1,454 14, % $469, % $31, % Agriculture, forestry, fishing and hunting % $1, % $42, % Mining % $3, % $33, % Utilities % $1, % $45, % Construction 188 1, % $55, % $44, % Manufacturing % $20, % $37, % Food Manufacturing % $ % $18, % Beverage and Tobacco Product Manufacturing * * * * * * * Textile Product Mills * * * * * * * Apparel Manufacturing * * * * * * * Wood Product Manufacturing % $2, % $31, % Printing and Related Support Activities % $6, % $40, % Plastics and Rubber Manufacturing * * * * * * * Nonmetallic Mineral Product Manufacturing % $ % $34, % Primary Metal Manufacturing * * * * * * * Fabricated Metal Product Manufacturing % $ % $28, % Machinery Manufacturing % $5, % $46, % Computer and Electronic Product Manufacturing * * * * * * * Furniture and Related Product Manufacturing % $1, % $30, % Miscellaneous Manufacturing % $ % $20, % Wholesale trade % $10, % $38, % Retail trade 209 2, % $61, % $23, % Transportation and warehousing % $7, % $24, % Information % $12, % $46, % Finance and insurance % $22, % $45, % Real estate and rental and leasing % $2, % $25, % Professional and technical services % $9, % $32, % Management of companies and enterprises % $3, % $57, % Administrative and waste services % $10, % $19, % Educational services % $2, % $15, % Health care and social assistance 225 2, % $84, % $31, % Arts, entertainment, and recreation % $3, % $19, % Accommodation and food services 151 1, % $33, % $18, % Other services, except public administration % $13, % $20, % Federal Government (not included in Totals) % $29, % $54, % Local Government 59 1, % $62, % $36, % State Government % $49, % $52, % Source: Pennsylvania Department of Labor & Industry, report completed May * Data that might be identified with an individual employer and/or data involving fewer than twenty-five employees are not published. B-5

43 Non-Farm Employment Wayne County comprises the Wayne County Labor Market Area. The following table shows the latest non-farm employment statistics available from the Pennsylvania Department of Labor and Industry. Industry Number Employed (1) Percent Number Employed Total Non-Farm 16,100 Total Private 12,900 Goods Producing Industries Mining, Logging and Construction 1,700 Total Goods Producing Industries 2, % Service Producing Industries Trade, Transportation & Utilities 3,300 Professional & Business Service 900 Educational & Health Service 3,000 Leisure & Hospitality Service 1,700 Government 3,200 Total Service Producing Industries 13, % Source: Pennsylvania Department of Labor and Industry, November 2012 data. (1) Data changes of 100 may be due to rounding % B-6

44 Major Employers in Wayne County Employer Service/Product Wayne Memorial Hospital Inc.... Health Care Wayne County Courthouse Annex... County Government Wayne Highlands School District... Public Education Western Wayne School District... Public Education Wal-Mart Associates Inc... Retail Human Resources Center Inc.... Health Care Caesar s Cove Haven Resort... Resort/Entertainment Weis Markets Inc... Retail Grocery Stores The Jupiter Group Inc... Electronic Security/Uniformed Guard Service Leeward Construction Inc..... Construction Source: Center for Workforce Information and Analysis L & I, 1st Quarter L & I does not report employee numbers due to employer privacy. B-7

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46 APPENDIX C Audited Financial Statements South Wayne County Water and Sewer Authority Fiscal Year Ending December 31, 2011

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