$6,035,000* TOWNSHIP OF LIMERICK Montgomery County, Pennsylvania General Obligation Bonds, Series of 2015

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1 PRELIMINARY OFFICIAL STATEMENT DATED: DECEMBER 10, 2014 This Preliminary Official Statement and the information contained herein are subject to completion, amendment or other change without notice. The Bonds may not be sold nor may offers to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the applicable securities laws of any such jurisdiction. New Issue Book-Entry Only Rating: Standard & Poor's: "AAA" (Stable Outlook) (See Rating herein) In the opinion of Bond Counsel, interest on the Bonds is not includable in gross income for purposes of federal income taxation under existing statutes, regulations, rulings and court decisions, subject to the condition described in "TAX MATTERS" herein and interest on the Bonds is not treated as an item of tax preference under Section 57 of the Internal Revenue Code of 1986, as amended (the "Code") for purposes of the individual and corporate alternative minimum taxes. However, under the Code, such interest may be subject to certain other taxes affecting corporate holders of the Bonds. Under the laws of the Commonwealth of Pennsylvania, the Bonds are exempt from personal property taxes in Pennsylvania, and interest on the Bonds is exempt from Pennsylvania personal income tax and the Pennsylvania corporate net income tax. For a more complete discussion, see "TAX MATTERS" herein. The Township has designated the Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code. For a more complete discussion, see "TAX MATTERS - Deduction for Interest Paid by Financial Institutions to Purchase or Carry Tax-Exempt Obligations" herein. $6,035,000* TOWNSHIP OF LIMERICK Montgomery County, Pennsylvania General Obligation Bonds, Series of 2015 Dated: Date of Delivery Due: June 15, as shown on inside cover Interest Due: June 15 and December 15 First Interest Payment: June 15, 2015 The General Obligation Bonds, Series of 2015, in the aggregate principal amount of $6,035,000* (the Bonds ), will be issued in registered book-entry only form in the denomination of $5,000 or integral multiples thereof. The Bonds will be registered in the name of Cede & Co., as the registered owner and nominee of The Depository Trust Company ( DTC ), New York, New York. Beneficial ownership of the Bonds may be acquired in denominations of $5,000 or any integral multiple thereof only under the book-entry system maintained by DTC through its brokers and dealers who are, or act through, DTC Participants. The purchasers of the Bonds will not receive physical delivery of the Bonds. For so long as any purchaser is the beneficial owner of a Bond, that purchaser must maintain an account with a broker or a dealer who is, or acts through, a DTC Participant to receive payment of principal of and interest on the Bonds. See BOOK-ENTRY ONLY SYSTEM herein. If, under the circumstances described herein, Bonds are ever issued in certificate form, the Bonds will be subject to registration or transfer, exchange and payment as described herein. The principal of the Bonds will be paid to the registered owners or assigns, when due, upon presentation and surrender of the Bonds to Wells Fargo Bank, N.A., Philadelphia, Pennsylvania, as Paying Agent, Registrar and Sinking Fund Depository (the Paying Agent ). Interest on the Bonds is payable semiannually on June 15 and December 15 of each year, commencing June 15, 2015, until the principal sum thereof is paid. DTC Participants and Indirect Participants will be responsible for remitting such payments to Beneficial Owners of the Bonds. The Bonds are subject to redemption prior to maturity as more fully described herein. The Bonds are general obligations of the Township, payable from the tax and other general revenues which presently include unlimited ad valorem taxes levied on all taxable property within the Township for the purpose of paying debt service on the Bonds. The Township has covenanted that it will include the amount of debt service for the Bonds in its budget for each fiscal year, that it will appropriate such amounts from its general revenues for the payment of such debt service in each fiscal year and that it will duly and punctually pay or cause to be paid the principal of every Bond and the interest thereon at the dates and place and in the manner stated in the Bonds, and for such budgeting, appropriation and payment, the Township irrevocably has pledged its full faith, credit and taxing power. The proceeds of the Bonds will be used to: (1) advance refund the Township s General Obligation Bonds, Series of 2010 (the "2010 Bonds"), currently outstanding in the aggregate principal amount of $5,820,000; and (2) pay the costs of issuing the Bonds. MATURITIES, AMOUNTS, RATES, PRICES AND CUSIPS* (See Inside Cover) The Bonds are offered when, as and if issued by the Township and received by the Underwriter and subject to the receipt of the approving legal opinion of Saul Ewing LLP, Bond Counsel, Philadelphia, Pennsylvania to be furnished upon delivery of the Bonds. Certain legal matters pertaining to the Township will be passed upon by Hamburg, Rubin, Mullin, Maxwell & Lupin, Lansdale, Pennsylvania, Solicitor to the Township. It is expected that the Bonds will be available for delivery in New York, New York on or about January 15, Dated:, 2014 * Estimated, subject to change.

2 $6,035,000* TOWNSHIP OF LIMERICK Montgomery County, Pennsylvania General Obligation Bonds, Series of 2015 Dated: Date of Delivery Principal Due: June 15, as shown below Interest Payable: June 15 and December 15 First Interest Payment: June 15, 2015 Maturity Schedule* Year Principal Amount Interest Rate Yield Price Cusip * Estimated, subject to change. The CUSIP numbers shown have been assigned to the Bonds by the CUSIP Service Bureau, an organization not affiliated with the Township, and are included solely for the convenience of the holders of the Bonds. The Township is not responsible for the selection of the CUSIP numbers, nor are any representations made as to their correctness on the Bonds or as indicated herein.

3 TOWNSHIP OF LIMERICK Montgomery County, Pennsylvania BOARD OF SUPERVISORS NAME OFFICE TERM EXPIRATION D. Elaine DeWan Chairman 12/31/2019 Kenneth W. Sperring, Jr. Vice-Chairman 12/31/2019 Kara Shuler Member 12/31/2015 Thomas J. Neafcy, Jr. Member 12/31/2015 Joseph St. Pedro Member 12/31/2017 TOWNSHIP OFFICIALS Daniel K. Kerr... Beth F. DiPrete... Township Manager Assistant Township Manager/Treasurer SOLICITOR HAMBURG, RUBIN, MULLIN, MAXWELL & LUPIN Lansdale, Pennsylvania BOND COUNSEL SAUL EWING LLP Philadelphia, Pennsylvania PAYING AGENT, REGISTRAR AND SINKING FUND DEPOSITORY WELLS FARGO BANK, N.A. Philadelphia, Pennsylvania FINANCIAL ADVISOR PUBLIC FINANCIAL MANAGEMENT, INC. Malvern, Pennsylvania UNDERWRITER TOWNSHIP ADDRESS 646 West Ridge Pike Limerick, Pennsylvania i

4 IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS 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 ON THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME WITHOUT PRIOR NOTICE. No dealer, broker, salesman or other person has been authorized by the Township or the Underwriters 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 other 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 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 such jurisdiction. The information set forth herein has been obtained from the Township and other sources that are deemed to be reliable, but the Underwriters do not guarantee the accuracy or completeness of such information and such information is not to be construed a representation by the Underwriters. 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 Township since the date hereof, or the dates specified herein. TABLE OF CONTENTS INTRODUCTION... 1 PURPOSE OF ISSUE... 1 THE REFUNDING PROGRAM... 1 SOURCES AND USES OF FUNDS... 1 THE BONDS... 2 REDEMPTION PROVISIONS... 3 SECURITY FOR THE BONDS... 3 BOOK-ENTRY ONLY SYSTEM... 4 DESCRIPTION OF THE TOWNSHIP... 5 TOWNSHIP FINANCES... 6 SUMMARY OF FINANCIAL FACTORS... 6 SUMMARY OF GENERAL FUND... 8 GENERAL FUND BUDGET... 9 TAXING POWER OF THE TOWNSHIP... 9 FUTURE FINANCING DEBT SUMMARY DESCRIPTION OF THE SEWER SYSTEM TOWNSHIP PENSION PLANS LITIGATION THE ORDINANCE DEFAULTS AND REMEDIES TAX MATTERS SECONDARY MARKET DISCLOSURE MUNICIPAL BANKRUPTCY RATING LEGALITY LEGALITY FOR INVESTMENT UNDERWRITING FINANCIAL ADVISOR CERTAIN MATTERS APPENDIX A - DESCRIPTION OF THE TOWNSHIP... A-1 APPENDIX B - FORM OF BOND COUNSEL OPINION... B-1 APPENDIX C - BOND AMORTIZATION SCHEDULE... C-1 APPENDIX D - AUDITED FINANCIAL STATEMENTS OF THE TOWNSHIP... D-1 This Table of Contents is for convenience of reference only and does not list all of the subjects in this Official Statement. In all instances, reference should be made to the complete Official Statement to determine the subjects discussed in it. The order and placement of material in this Official Statement, including the Appendices, are not to be deemed to be a determination of relevance, materiality or importance, and this Official Statement, including the Appendices, must be considered in its entirety. ii

5 OFFICIAL STATEMENT for $6,035,000* TOWNSHIP OF LIMERICK Montgomery County, Pennsylvania General Obligation Bonds, Series of 2015 INTRODUCTION This Official Statement, including the cover page, inside cover page and the Appendices, is furnished in connection with the offering by the Township of Limerick, Montgomery County, Pennsylvania (the Township ) of $6,035,000* General Obligation Bonds, Series of 2015 (the "Bonds ), dated the Date of Delivery. The Bonds are being issued pursuant to an ordinance of the Township enacted on December 16, 2014 (the Ordinance ). Wells Fargo Bank, N.A., Philadelphia, Pennsylvania, will act as the Paying Agent, Registrar and Sinking Fund Depository (the Paying Agent ) for the Bonds. The Bonds are general obligations of the Township payable from the tax and other general revenues of the Township. The Bonds do not pledge the credit or taxing power of the Commonwealth of Pennsylvania (the Commonwealth ) or any political subdivision other than the Township; nor shall the Bonds be deemed to be obligations of the Commonwealth or any political subdivision other than the Township; nor shall the Commonwealth or any political subdivision other than the Township be liable for the payment of principal of, or interest on, the Bonds; nor are the members of the Board of Supervisors personally liable for the Township s obligations. The Township is a municipality existing under the laws of the Commonwealth. The Township is a township of the second class, and is a local government unit as such term is defined under the Local Government Unit Debt Act, 53 Pa. Cons. Stat 8001 et seq., as amended (the Act ). Neither the delivery of this Official Statement nor any sale of the Bonds made hereunder shall, under any circumstances, create any implication that thereafter there have been no changes in the affairs of the Township since the date of this Official Statement or the earliest date as of which certain information contained herein is given. PURPOSE OF ISSUE The proceeds of the Bonds will be used to: (1) advance refund all of the Township s outstanding General Obligation Bonds, Series of 2010 (the "2010 Bonds"), currently outstanding in the aggregate principal amount of $5,820,000; and (2) pay the costs of issuing the Bonds. THE REFUNDING PROGRAM Upon issuance of the Bonds, a portion of the proceeds of the Bonds will be irrevocably deposited with Wells Fargo Bank, National Association, Philadelphia, Pennsylvania, as the paying agent for the 2010 Bonds, in an amount sufficient to pay at maturity or redeem and pay, at par, on June 15, 2015, or such other date not in excess of 90 days following settlement of the Bonds, the principal and interest on all outstanding 2010 Bonds. SOURCES AND USES OF FUNDS The proceeds of the Bonds will be applied as shown below: Sewer System General Fund Sources of Funds Portion Portion Total Par Amount of Bonds Plus/Less: Original Issue Premium/Discount Total Sources Uses of Funds Amount Required to Refund 2010 Bonds Cost of Issuance (1) Miscellaneous Expenses/Rounding Total Uses (1) Consists of Underwriter's discount; legal fees; Financial Advisor s fee; rating fee; CUSIP fees; internet auction fee; verification report; printing of Preliminary Official Statement and Final Official Statement; and Paying Agent fee. * Estimated, subject to change. 1

6 THE BONDS Description The Bonds will be issued only in fully registered book-entry-only form in the denomination of $5,000 or integral multiples thereof. The Bonds will be issued as one fully registered Bond for each maturity of the Bonds, in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ( DTC ), as registered owner of all Bonds. See BOOK-ENTRY ONLY SYSTEM herein. The Bonds will be dated the Date of Delivery, and will bear interest at the rates and mature in the amounts and on the dates set forth on the inside cover of this Official Statement. Interest on the Bonds will be payable semiannually on June 15 and December 15 of each year, commencing June 15, 2015 (each an "Interest Payment date") until the principal sum thereof is paid. Interest will be calculated on the basis of a 360-day year and 30-day months. Payment of Principal and Interest So long as Cede & Co., as nominee of DTC, is the registered owner of the Bonds, payments of principal of, redemption premium, if any, and interest on the Bonds, when due, are to be made to DTC and all such payments shall be valid and effective to satisfy fully and to discharge the obligations of the Township with respect to, and to the extent of, principal, redemption premium, if any, and interest so paid. If the use of the Book-Entry Only System for the Bonds is discontinued for any reason, Bond certificates will be issued to the Beneficial Owners of the Bonds and payment of principal, redemption premium, if any, and interest on the Bonds shall be made as described in the following paragraphs: The principal of the Bonds, when due upon maturity or upon any earlier redemption, will be paid to the registered owners of the Bonds, or registered assigns, upon surrender of the Bonds to the Paying Agent at its specified corporate trust office in Philadelphia, Pennsylvania (or to any successor paying agent at its designated office(s)). Interest on the Bonds will be paid on each Interest Payment Date by check mailed to the person in whose name the Bond is registered on the registration books of the Township maintained by the Paying Agent, as bond registrar, at the address appearing, thereon at the close of business on the fifteenth (15 th ) day (whether or not a day on which the Paying Agent is open for business) next preceding such Interest Payment Date (the "Regular Record Date"). Any such interest not so timely paid or duly provided for will cease to be payable to the person who is the registered owner of the Bonds as of the Regular Record Date, and will be payable to the person who is the registered owner of the Bond at the close of business on a Special Record Date for the payment of such defaulted interest. Such Special Record Date will be fixed by the Paying Agent whenever monies become available for payment of the defaulted interest, and notice of the Special Record Date and payment date for such interest will be given by first class mail to the registered owners of the Bonds not less than fifteen (15) days prior to the Special Record Date. Such notice will be mailed to the persons in whose names the Bonds are registered at the close of business on the fifth (5 th ) day preceding the date of mailing. If the date for payment of the principal of or interest on any Bonds shall be a Saturday, Sunday, legal holiday or a day on which banking institutions in the jurisdiction in which the corporate trust payment office of the Paying Agent is located are authorized or directed by law or executive order to close, then the date for payment of such principal or interest shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized to close, and payment on such date shall have the same force and effect as if made on the nominal date of such payment. Transfer, Exchange and Registration of Bonds Subject to the provisions described below under BOOK-ENTRY-ONLY SYSTEM herein, Bonds are transferable or exchangeable by the registered owners thereof upon surrender of Bonds to the Paying Agent, accompanied by a written instrument or instruments in form, with instructions and with guaranty of signature satisfactory to the Paying Agent, duly executed by the registered owner of such Bonds or his attorney-in-fact or legal representative. The Paying Agent 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 Bonds or 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 Township and the Paying Agent may deem and treat the registered owner of any Bond as the absolute owner thereof (whether or not a Bond shall be overdue) for the purpose of receiving payment of or on account of principal and interest and for all other purposes and the Township and the Paying Agent shall not be affected by any notice to the contrary. The Paying Agent will not be required: (i) to issue, transfer or exchange any of the Bonds during a period beginning at the close of business on the fifth (5 th ) day next preceding the day of selection of Bonds to be redeemed and ending at the close of business on the day on which such notice is given, or (ii) to transfer or exchange any Bond selected for redemption in whole or in part. Bonds may be exchanged for a like aggregate principal amount of Bonds of other authorized denominations of the same maturity and interest rate. 2

7 REDEMPTION PROVISIONS Optional Redemption The Bonds stated to mature on or after June 15, 2021 are subject to redemption prior to maturity, at the option of the Township, in whole or, from time to time, in part (and if in part, in such order of maturity or portion of a maturity as selected by the Township and within a maturity by lot), at any time on or after June 15, 2020, at the redemption price of 100% of the principal amount of Bonds to be redeemed, plus accrued interest to the date set for redemption. Mandatory Redemption The Bonds maturing on June 15,, (the Term Bonds ), are subject to mandatory sinking fund redemption prior to their stated maturity dates by lot in direct order of maturity at a redemption price equal to 100% of the principal amount of Bonds to be redeemed, plus accrued interest to the date fixed for redemption, on June 15 of each year indicated on the following schedules in the principal amounts shown for each year (to the extent such Term Bonds shall not have been previously purchased by the Township): Term Bonds Due June 15, Year Amount *Principal Maturity Notice of Redemption Any redemption, as hereinbefore authorized, shall be made after notice of redemption is given by the Paying Agent by mailing a copy of such notice of redemption by first class United States mail, postage prepaid, or by another method of giving notice which is acceptable to the Paying Agent and customarily used by fiduciaries for similar notices at the time such notice is given, not less than twenty (20) nor more than sixty (60) days prior to the date fixed for redemption to the registered owners of the Bonds to be redeemed in whole or in part at the addresses shown on the registration books held by the Paying Agent; provided however, that failure to give such notice by mailing to the registered owners, or any defect therein, shall not affect the validity of any proceeding for redemption of Bonds so called for redemption. If at the time of mailing of any notice of optional redemption the Township shall not have deposited with the Paying Agent moneys sufficient to redeem all the Bonds called for redemption, such notice shall state that it is conditional, that is, subject to the deposit or transfer of the redemption moneys with the Paying Agent not later than the redemption date, and that such notice shall be of no effect unless such moneys are so deposited. In the case of partial redemption of any of the Bonds, the registered owner shall surrender his Bond in exchange for one or more new Bonds in aggregate amount equal to the unredeemed portion of the principal amount thereof. If the redemption date for any Bonds shall be a Saturday, Sunday, legal holiday or a day on which banking institutions in the jurisdiction in which the corporate trust payment office of the Paying Agent is located are authorized or directed by law or executive order to close, then the date for payment of the principal, premium, if any, and interest upon such redemption shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized or directed by law or executive order to close, and payment on such date shall have the same force and effect as if made on the nominal date of redemption. On the date designated for redemption, notice having been given as aforesaid and moneys for payment of the principal and accrued interest being held by the Paying Agent, interest on the Bonds or portions thereof shall cease to accrue and such Bonds or portions thereof shall cease to be entitled to any benefit or security under the Ordinance, except to receive payment of the principal of and accrued interest on such Bonds or portions thereof to the date fixed for redemption. Manner of Redemption If a Bond is of a denomination larger than $5,000, a portion of such Bond may be redeemed. For the purposes of redemption, a 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 Bond being subject to redemption. In the case of partial redemption of a Bond, payment of the redemption price shall be made only upon surrender of such Bond in exchange for Bonds of authorized denominations of the same maturity in aggregate principal amount equal to the unredeemed portion of the principal amount thereof. General Obligations SECURITY FOR THE BONDS The Bonds are general obligations of the Township, payable from its tax and other general revenues which presently include ad valorem taxes levied on all taxable property within the Township without limitation as to rate or amount. The Township covenants in the Ordinance that it will provide in its budget for each year, and will appropriate from its general revenues in each such year, the amount of the debt service on the Bonds for such year, and will duly and punctually pay or cause to be paid from its Sinking Fund, as hereinafter 3

8 defined, or any other of its revenues or funds, the principal of every Bond and the interest thereon at the dates and place and in the manner stated in the Bonds, and for such budgeting, appropriation, and payment the Township irrevocably has pledged its full faith, credit and taxing power. Sinking Fund A sinking fund for the Bonds designated as Sinking Fund Township of Limerick, General Obligation Bonds, Series of 2015 shall be created under the Ordinance and shall be held by the Paying Agent as the Sinking Fund Depository. The Township shall deposit in such Sinking Fund not later than the date when interest or principal is to become due on the Bonds, a sufficient sum so that on each payment date such Sinking Fund will contain, together with any other available funds therein, sufficient money to pay in full interest and principal then due on such Bonds. The Sinking Fund shall be secured and invested by the Sinking Fund Depository in securities or deposits authorized by law, upon direction of the Township. Such deposits and securities shall be in the name of the Township but subject to withdrawal only by the Sinking Fund Depository, and such deposits and securities, together with interest thereon shall be a part of such Sinking Fund. The Paying Agent as the Sinking Fund Depository is authorized without further order from the Township to pay from the Sinking Fund the principal of and interest on the related series of Bonds when due and payable. BOOK-ENTRY ONLY SYSTEM The information in this section has been obtained from materials provided by DTC for such purpose. The Township (referred to in this section as the Issuer ) and the Underwriter do not guaranty the accuracy or completeness of such information, and such information is not to be construed as a representation of the Township or the Underwriter. 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 1934, as amended. DTC holds and provides asset servicing for over 3.6 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 a Standard & Poor s rating, AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. 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 Bond documents. For example, Beneficial Owners to Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Paying Agent and request that copies of the notices be provided directly to them. 4

9 Redemption notices shall be sent to DTC. If less than all of the Bonds within a series and maturity are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such issue and maturity to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC s MMI Procedures. Under its usual procedures, DTC mails 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). 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 Paying Agent 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 Paying Agent 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 Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue its services as a securities depository for the Bonds at any time by giving reasonable notice to the Issuer or the Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, Bonds certificates are required to be printed and delivered. The Issuer may decide to discontinue use of the system of book-entry only transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered. So long as a nominee of DTC is the registered owner of the Bonds, references herein to the Bondholders or the holders or owners of the Bonds shall mean DTC and shall not mean the Beneficial Owners of the Bonds. The Issuer and the Paying Agent will recognize DTC or its nominee as the holder of all of the Bonds for all purposes, including the payment of the principal or redemption price of and interest on the Bonds, as well as the giving of notices and any consent or direction required or permitted to be given to or on behalf of the Bondholders under the Ordinance. Neither the Issuer nor the Paying Agent will have any responsibility or obligation to Participants or Beneficial Owners with respect to payments or notices to Bondholders. The information in this section concerning DTC and DTC s book-entry system has been obtained from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility, for the accuracy thereof. NEITHER THE ISSUER NOR THE PAYING AGENT WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO ANY DTC PARTICIPANT, INDIRECT PARTICIPANT OR BENEFICIAL OWNER OR ANY OTHER PERSON WITH RESPECT TO: (1) THE BONDS; (2) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT; (3) THE PAYMENT BY DTC OR ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL OR REDEMPTION PRICE OF OR INTEREST ON THE BONDS; (4) THE DELIVERY TO ANY BENEFICIAL OWNER BY DTC OR ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT OF ANY NOTICE WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE ORDINANCE TO BE GIVEN TO BONDHOLDERS; (5) THE SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE BONDS; OR (6) ANY OTHER ACTION TAKEN BY DTC AS BONDHOLDER. The Issuer and the Paying Agent cannot give any assurances that DTC or the Participants will distribute payments of the principal or redemption price of and interest on the Bonds paid to DTC or its nominee, as the registered owner of the Bonds, or any redemption or other notices, to the Beneficial Owners or that they will do so on a timely basis, or that DTC will serve and act in the manner described in this Official Statement. Introduction DESCRIPTION OF THE TOWNSHIP Limerick Township, Montgomery County, Pennsylvania is a Township of the second class governed by the Second Class Township Code of the Commonwealth of Pennsylvania. The Township is governed by a Board of Supervisors (the Supervisors ). There are five Supervisors elected for 5 year staggered terms. As the governing body, the Board of Supervisors is responsible for establishing policy, appointing boards and commissions, and enacting ordinances. The daily operations of the Township are administered by the Township Manager. The major services provided by the Township include public safety, public works, sewer operations, building inspection, parks and recreation, and general administration. The Township has 63 full-time employees. 5

10 Financial Reporting TOWNSHIP FINANCES The basic financial statements of the Township are prepared in accordance with the generally accepted accounting principles ("GAAP"). The Governmental Accounting Standards Board ("GASB") is responsible for establishing GAAP for state and local governments through its pronouncements (Statements and Interpretations). Governments are also required to follow the pronouncements of the Financial Account Standards Board ("FASB") issued through November 30, 1989 (when applicable) that do not conflict with or contradict GASB pronouncements. The Township Proprietary Fund has elected to follow Financial Accounting Standards Board pronouncements issued before November 30, 1989 and all pronouncements of the GASB. The Township s financial statements are audited annually by a firm of independent certified public accountants, as required by Commonwealth law. The independent auditing firm of Maillie LLP, Certified Public Accountants, serves as Township auditor. Financial History The Township has not defaulted on the payment of interest or principal on any Township s obligations, or on any lease rental obligations nor has the Township, at any time, issued refunding obligations in order to avoid a default on an existing obligation. SUMMARY OF FINANCIAL FACTORS Population: 2010 Population 18, Census 13, Census 6,691 Market Valuation of Real Property, 2014 $2,230,366,168 Assessed Valuation of Real Property, 2014 $1,411,624,157 Ratio of Assessed and Market Valuation to Population: 2014 Market Valuation Per Capita (based on 2010 population) $123, Assessed Valuation Per Capita (based on 2010 population) $78,102 Source: U.S. Census; Pennsylvania State Tax Equalization Board. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 6

11 TOWNSHIP OF LIMERICK BALANCE SHEETS (YEAR ENDED DECEMBER 31) Assets: Cash and Cash Equivalents $6,182,390 $6,510,609 $4,722,192 $4,698,840 $5,833,252 Investments 0 0 2,000,090 2,009,000 2,628,040 Receivables, Taxes and Other 1,126, , , , ,145 Prepaid Expenses 12,885 2,872 11, ,532 Due from Other Funds ,000 0 Total Assets: $7,321,753 $7,418,578 $7,212,698 $7,542,639 $8,692,969 Liabilities Accounts Payable and Accrued Expenses $259,675 $267,936 $210,673 $171,051 $239,012 Deferred Revenue 708, , , ,239 91,743 Developer Escrows and Deposits Due to Other Funds Total Liabilities $968,431 $730,562 $466,001 $322,290 $330,755 FUND BALANCES Unreserved: 6,353,322 6,688,016 5,734,866 6,110,049 5,167,682 Reserved: 0 0 1,011,831 1,110,300 3,194,532 Total Fund Balances $6,353,322 $6,688,016 $6,746,697 $7,220,349 $8,362,214 Total Liabilities and Fund Balances $7,321,753 $7,418,578 $7,212,698 $7,542,639 $8,692,969 Source: Township Audits. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 7

12 TOWNSHIP OF LIMERICK SUMMARY OF GENERAL FUND FOR YEARS 2009 THROUGH Revenues: Taxes $4,582,159 $4,725,217 $4,673,102 $5,375,604 $6,692,207 Fees, Licenses and Permits 1,010, , , , ,912 Interest and Rents 47,888 15,090 22,739 38,886 31,586 Intergovernmental Revenues 395, , , , ,498 Fines, Forfeits and Costs 103,969 97,005 74,460 66,220 62,731 Contributions/Waivers 935, Other 0 575, , , ,918 Total Revenues $7,075,224 $6,775,803 $6,525,275 $7,050,465 $8,316,852 Expenditures: General Government $1,406,184 $1,379,459 $1,358,846 $1,248,976 $1,356,932 Public Safety 3,212,638 3,398,285 3,566,991 3,719,156 4,033,021 Public Works 1,273,224 1,344,036 1,333,440 1,470,793 1,545,799 Culture & Recreation Health and Human Services Miscellaneous Expenditures 136, , , , ,323 Capital Projects Total Expenditures $6,028,732 $6,254,611 $6,400,664 $6,641,174 $7,163,075 Excess of revenues over (under) expenditures $1,046,492 $521,192 $124,611 $409,291 $1,153,777 Other Financing Sources Operating Transfers In $122,440 $279,037 $360,516 $560,000 $500,000 Operating Transfers Out (1,045,602) (465,535) (426,446) (495,639) (511,912) Total Other Financing Sources (uses) (923,162) (186,498) (65,930) 64,361 (11,912) Net Change in Fund Balances $123, ,694 58, ,652 1,141,865 Fund balance - beginning of year $6,229,992 $6,353,322 $6,688,016 $6,746,697 $7,220,349 Fund balance - end of year $6,353,322 $6,688,016 $6,746,697 $7,220,349 $8,362,214 Source Township Audits. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 8

13 TOWNSHIP OF LIMERICK GENERAL FUND BUDGET Budget 2014 Balance Forward - Operating Capital $0 Revenues: Real Estate Taxes $2,030,000 Act 511 Taxes 4,600,000 Business License 413,320 Fines and Forfeits 65,500 Interest, Rents and Royalties 36,000 Grants and Inter-Gov't Revenue 424,050 PILOT Fees 80,746 General Government 41,388 Public Safety 398,670 Other Miscellaneous Revenues 68,900 Transfers from Other Funds 600,000 Total Revenues $8,758,574 Total Revenues and Cash $8,758,574 Expenditures: General Government $1,249,139 Police 3,462,146 Code Enforcement & Zoning 718,026 Public Safety 6,600 Public Works 1,758,194 Miscellaneous 11,000 Pension Contributions 552,153 Insurance 134,816 Post Retirement Contribution 50,000 Interfund Transfers 603,854 Total Expenditures $8,545,928 Net Revenues Over/Under Expenditures $212,646 Source: Budget as adopted on December 17, 2013, as amended July 15, Maximum Allowable Township Real Property Taxes TAXING POWER OF THE TOWNSHIP The following summarizes total taxing power available to the Township under present law: The Township may levy ad valorem taxes for general purposes on the assessed value of taxable real estate up to 14 mills (up to 5 mills additional with permission of the Court of Common Pleas for the County of Montgomery) and unlimited for the payment of any indebtedness incurred under the Act, including the Bonds. Other specific millages are permitted under the Second Class Township Code and under other laws for certain specific purposes as follows: An annual tax not exceeding 5 mills to light the highways, roads and other public places in the Township; An annual tax not exceeding 50% of the rate of assessment for the general Township tax to procure land and erect public buildings thereon and for the payment of indebtedness incurred in connection therewith; An annual tax not exceeding 3 mills to purchase and maintain fire apparatus and fire house, etc. (higher than 3 mills with consent of electorate); 9

14 An annual tax not exceeding 2 mills to establish and maintain fire hydrant water service; A tax to acquire, maintain and operate parks, playgrounds, playfields, gymnasiums, swimming pools and recreation centers; An annual tax not to exceed 5 mills to create a revolving fund for permanent improvements to street, sidewalk, sewer and water facilities (project must be assessed and fund reimbursed, if expended); An annual tax not exceeding 2 mills for road equipment fund; and An annual tax of ½ mill for supporting ambulance and rescue squads serving the Township (higher with consent of electorate). UNDER ACT OF DECEMBER 31, 1965, P.L. 1257, EFFECTIVE JANUARY 1, 1986 (THE LOCAL TAX ENABLING ACT), WHICH REPLACED AND REPEALED ACT 481 OF JUNE 25, 1947, P.L , ADDITIONAL TAXES MAY BE LEVIED (SUBJECT TO DIVISION WITH OTHER POLITICAL SUBDIVISIONS AUTHORIZED TO LEVY SIMILAR TAXES ON THE SAME PERSON, SUBJECT, BUSINESS, TRANSACTION OR PRIVILEGE), SUBJECT TO THE FOLLOWING LIMITATIONS: Tax on Occupations: No rate limit set by the Local Tax Enabling Act if a millage or percentage of the assessed valuation of occupations is used as a base. Per Capita Tax $10.00 Wages, salaries, commissions and other earned income of individuals 1% Transfer of title of real property 1% Local Services Tax $52.00 Admissions (except Motion Picture Theaters) 10% The aggregate amount of taxes under the Local Tax Enabling Act shall not, in the case of any political subdivision, including townships of the second, third and fourth classes, exceed an amount equal to the product of 12 mills on the latest total market value of real estate as determined by the board for the assessment and revision of taxes or any similar board established by the assessment laws which determine market values of real estate within the political subdivision, or if no such board has determines such values, then the values as certified by the State Tax Equalization Board shall be used. TAX LEVIES Residents of the Township are subject to the following real estate property taxes: Taxing Entity Millage Rates Township (2014) Montgomery County (2014) Spring-Ford Area School District ( ) Total Source: Township Officials. The Township levies an earned income tax of 1% which is shared equally with the School District. COMPARATIVE REAL PROPERTY TAX RATES (Mills on Assessed Value) Limerick Township Spring-Ford Area School District Montgomery County Source: Pennsylvania Department of Community & Economic Development. Municipal Statistics Reports. 10

15 REAL PROPERTY ASSESSMENT BY MUNICIPALITY Market Assessed Market Assessed Value Value Value Value Township $2,190,849,325 $1,381,674,107 $2,251,011,336 $1,398,143,687 School District 5,191,285,447 3,554,000,996 5,403,317,420 3,568,456,832 Montgomery County 85,658,232,754 56,882,089,039 86,259,732,333 57,239,915,406 Source: Pennsylvania State Tax Equalization Board. ASSESSED AND MARKET VALUATION TRENDS Assessed and market valuations of real property of the Township for the past eleven years are shown below: Market Assessed Year Value Value Ratio 2004 $1,189,468,900 $1,130,074, % ,232,798,600 1,160,763, % ,445,287,100 1,199,393, % ,493,433,100 1,229,444, % ,741,235,900 1,303,531, % ,793,165,946 1,342,364, % ,086,468,193 1,355,954, % ,110,661,135 1,369,238, % ,190,849,325 1,381,674, % ,251,011,336 1,398,143, % ,230,366,168 1,411,624, % Source: Pennsylvania State Tax Equalization Board TOWNSHIP ASSESSMENT BY LAND USE Residential $906,443,080 $916,067,380 $924,799,590 $930,227,340 $941,271,330 Lots 8,840,370 7,874,300 7,172,730 6,996,680 6,356,030 Industrial 78,665,512 77,417,892 76,856,612 77,213,262 76,522,982 Commercial 330,927, ,362, ,584, ,288, ,020,185 Agriculture 16,354,190 17,182,910 16,937,950 17,088,080 18,113,300 Land 1,133,690 1,049, , , ,860 Total $1,342,364,027 $1,355,954,807 $1,369,238,037 $1,381,674,107 $1,398,143,687 Source: Pennsylvania State Tax Equalization Board. 11

16 REAL ESTATE TAX COLLECTIONS General Fund Real estate tax collections for the Township for the past ten years are shown below: Total Percent Assessed Tax Rate Adjusted Current Current Year Valuation (Mills) Levy Collections Collections 2004 $1,239,588, $663,180 $643, % ,160,763,274 (1) , , % ,199,393, , , % ,229,444, , , % ,303,531, , , % ,353,531, , , % ,355,954, , , % ,369,238, , , % ,381,674, ,300,155 1,266, % ,398,143, ,845,550 1,797, % (1) The 2005 Township Assessed Valuation was $2,053,333,274 which included Exelon Assessed Valuation of $912,570,000. Per a court stipulation, this assessed valuation was reduced to $20,000,000. TEN LARGEST TAXPAYERS The largest taxpayers within the Township, ranked by assessed valuation of real estate for 2014, are shown on the table below. The aggregate assessed value of these taxpayers totals approximately percent of total Township assessed value. Taxpayer 2014 Assessed Valuations Chelsea Limerick Hldgs LLC $56,018,930 Exelon Generation Co.* 20,000,000 Walnut Crossing Associates 15,390,000 TR Limerick Corp 14,232,760 Chestnut Pointe Assoc. 12,420,000 Limerick Shopping Center LP 11,078,650 Royersford Center LP 11,021,680 Phoenixville Hospital Co. LLC 9,245,560 Costco Wholesale Corp. 9,142,550 K/H - KOP LP 7,211,750 TOTAL $165,761,880 * The assessment of the Limerick Nuclear Generating Station was reduced in 2005 to $20,000,000 per a Stipulation and Agreement between PECO Energy Co., Exelon Generation Co., Limerick Township, Spring Ford Area School District, County of Montgomery and the Montgomery County Board of Assessment Appeals. FUTURE FINANCING The Township reviewed a feasibility study for the construction of a new fire and police station. The estimated cost of the Project could be between approximately $8,000,000 and $10,000,

17 DEBT SUMMARY Debt Statement The table below shows the debt of the Township of Limerick as of November 1, 2014, including the Bonds but excluding the debt being refunded by this issue. TOWNSHIP OF LIMERICK STATEMENT OF INDEBTEDNESS (As of November 1, 2014) Outstanding Electoral Debt $0 Nonelectoral Debt General Obligation Bonds, Series of 2015 (last maturity 2025) - The Bonds $6,035,000 General Obligation Note, Series of ,000,000 TOTAL ELECTORAL AND NONELECTORAL DEBT $10,035,000 * Lease Rental Debt Delaware Valley Note - Series A of 2001 (last maturity 2015) $540,000 Delaware Valley Note - Series B of 2001 (last maturity 2026) 3,701,000 TOTAL LEASE RENTAL DEBT $4,241,000 Less: Self-Liquidating debt (1) (8,371,000) TOTAL DIRECT DEBT $5,905,000 OVERLAPPING DEBT Spring-Ford Area School District (2) $47,028,504 Montgomery County (3) 10,085,663 Total Overlapping Debt $57,114,167 TOTAL DIRECT AND OVERLAPPING DEBT $63,019,167 * Estimated, subject to change. (1) Includes a portion of the Bonds offered through this Official Statement. Following the sale of the Bonds the Township expects to submit proceedings to deem a portion of the Bonds excluded from the outstanding debt of the Township due to the sewer revenues of the Township cover the expenses of the sewer system. (2) Township s proportional share (39.2%) of the estimated $112,030,000 general obligation debt of the Spring-Ford Area School District as of October 1, (3) Township's proportional share (2.4%) of the $412,906,401 general obligation debt of Montgomery County as of October 1, Debt Ratios Direct Direct & Overlapping Per Capita (2010 population) (18,074) $327 $3,487 Percent 2014 Assessed Value ($1,411,624,157) 0.42% 4.46% Percent 2014 Market Value ($2,230,366,168) 0.26% 2.83% Types of Indebtedness under the Act The Act establishes three forms of debt for a local government unit: (i) electoral debt (debt incurred with the approval of the electors for which there is no limitation on the amount that may be so incurred), (ii) nonelectoral debt (debt of a local government unit not being electoral or lease rental debt for which the limitation on all such net debt which may be incurred is 250 percent of the borrowing base for the Township), and (iii) lease rental debt (the principal amount of municipal authority debt or debt of another local government unit to be repaid by the local government unit pursuant to a lease, subsidy contract guarantee or other form of agreement where such debt is or may be payable out of the tax revenues and other general revenues; the limitation on all such net lease rental debt which may be incurred, including any net nonelectoral debt incurred, is 350 percent of the borrowing base for the Township). Any debt which is approved by the Pennsylvania Department of Community and Economic Development as subsidized or self-liquidating may be deducted or excluded from the determination of any such debt incurred in determining the net debt of the local governmental unit to which such limitations are applicable. Certain other deductions are allowed in determining net debt. 13

18 Debt Limit and Remaining Borrowing Capacity The statutory borrowing limit of the Township under the Act is computed as a percentage of the Township s Borrowing Base. The Borrowing Base is defined as the annual arithmetic average of total Revenues (as defined by the Act), for the three full fiscal years ended next preceding the date of incurring debt. The Township calculates its present borrowing base and borrowing capacity as follows: A calculation of the Borrowing Base and Borrowing Capacity of the Township is shown below: Calculation of Borrowing Base Total Revenues Received $9,981,900 $10,540,522 $11,992,695 Less: 1. State and Federal subsidies $0 $0 $0 2. Revenues pledged for self-liquidating debt (3,409,209) (3,598,432) (3,639,710) 3. Interest in moneys in sinking funds for debt Grants and gift-in-aid (89,816) (87,311) (125,448) 5. Non-recurring receipts (400,000) (57,500) (108,500) Sub-total $6,082,875 $6,797,279 $8,119,037 Total Net Revenues $20,999,191 Borrowing Base (total net revenues divided by 3) $6,999,730 Applicable Debt Limitations a. Nonelectoral (250% of borrowing base) $17,499,326 b. Nonelectoral plus lease rental (350% of borrowing base) $24,499,056 Calculation of Debt Capacity A. Electoral Debt $0 B. Non-electoral Debt 1. Computation of Non-electoral Debt a. Outstanding Principal $10,035,000 * b. Less: Deductions (Qualified as Self-liquidating) (4,130,000) c. Net Non-electoral Debt $5,905, Computation of Non-electoral Borrowing Capacity a. Debt Limitations 250% of Borrowing Base $18,332,659 b. Less: Outstanding Net Non-electoral Debt 5,905,000 c. Remaining Non-electoral Borrowing Capacity $12,427,659 C. Lease Rental Debt 1. Computation of Lease Rental Debt a. Outstanding Principal (The Bonds) $4,241,000 b. Less: Deductions (Qualified as Self-liquidating) (4,241,000) c. Net Lease Rental Debt $0 2. Computation of Lease Rental and Non-electoral Borrowing Capacity a. Debt Limitation 350% of Borrowing Capacity $25,665,723 b. Less: Outstanding Lease Rental and Net Non-electoral Debt 5,905,000 c. Remaining Lease Rental and Non-electoral Borrowing Capacity $19,760,723 * Estimated, subject to change. Includes the Bonds. 14

19 DESCRIPTION OF THE SEWER SYSTEM The Township owns, operates and maintains a sewage collection and transmission system, as well as two (2) wastewater treatment facilities, which currently service large portions of Limerick Township. The original collection system was constructed in 1974 to service a portion of the Township adjacent to Royersford Borough known as Orchard Terrace. In 1988, the Limerick Township Municipal Authority began operation of its King Road Wastewater Treatment Plant and collection system. This system has grown significantly since that time and currently includes approximately 84 miles of gravity sewers ranging in size from 8 inches to 36 inches. The King Road service area also includes thirteen (13) dedicated pump stations ranging in capacity from 90 gpm to 2,225 gpm. The King Road Wastewater Treatment Plant was recently expanded and upgraded and now has a permitted capacity of 1.7 MGD. In 2003, the Limerick Township Municipal Authority began operation of its Possum Hollow Wastewater Treatment Plant and collection system. This system includes approximately 22 miles of gravity sewers ranging in size from 8 inches to 15 inches. The Possum Hollow system also includes four (4) dedicated pump stations with capacities ranging from 142 gpm to 1,213 gpm. The Possum Hollow Wastewater Treatment Plant has a permitted capacity of 0.7 MGD. In 2008, Limerick Township took over ownership and operational responsibility for the sewer system from the Authority. The Township s total wastewater treatment capacity is 2.4 MGD. Both treatment plants utilize a variation of the extended aeration biological treatment process known as the Aeromod Process. Treated effluent from each is discharged directly to the Schuylkill River. Sludge is thickened and then periodically removed from each plant for off-site disposal. The treatment plants produce consistently high quality effluents well below the maximum concentration limits allowed by their operating permits. NUMBER OF SEWER CUSTOMERS AND SEWER RATES AND CHARGES Existing number of EDUs connected to the System (as of 12/31/13) 8,209 Existing Sewer Rates and Charges are as follows: Average Annual Residential Sewer Charge (1) $460 Tapping Fee/EDU $4,826 (1) Customers are billed a quarterly minimum of $84.30 plus consumption. (Effective 1/1/14) Source: Township Officials TOWNSHIP PENSION PLANS The Township has two defined benefit pension plans, one covering all full-time police officers and one covering all full-time non-uniformed employees hired prior to January 1, Both plans are financed by contributions from the Township and state aid, as well as contributions from the employees. The Police Pension Plan had total assets of $3,582,567 as of January 1, The Non- Uniform Pension Plan had total assets of $2,209,551 as of January 1, The Police Plan is 80% funded and the Non-Uniform Plan is 93% funded. Other Post-Employment Benefits (OPEB) The Township provides medical, prescription and dental insurance benefits to eligible retired employees and spouses. The Township currently contributes enough money to the plan to satisfy current obligations on a pay-as-you-go basis. The costs of administering the plan are paid by the Township. The Township s annual other post-employment benefit ( OPEB ) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years. The following table shows the components of the Township s annual OPEB cost for the year, the amount actually contributed to the plan and changes in the Township s net OPEB obligation to the plan: 15

20 Normal Cost $93,467 Interest on normal cost 8,537 Amortization of unfunded actuarial accrued liability 119,959 ANNUAL REQUIRED CONSTRIBUTION (ARC') 221,963 Net OPEB contributions during the year 0 INCREASE IN NET OPEB OBLIGATION 221,963 Net OPEB Obligation Beginning of Year 756,476 NET OPEB OBLIGATION AT END OF YEAR $978,439 Source: Township audit. Percentage Annual of Annual OPEB OPEB Cost Net OPEB Year Cost Contributed Obligation 2011 $178, % $534, , % 756, , % 978,439 Source: Township audit. LITIGATION Upon delivery of the Bonds, the Township shall furnish, or cause to be furnished, a certificate, in form satisfactory to Bond Counsel and the Underwriter, to the effect that, among other things, there is no litigation pending in any court to restrain or enjoin the issuance or delivery of the Bonds, or the proceedings of the Township taken in connection therewith, or the application of any moneys provided for their payment, or contesting the powers of the Township with respect to the foregoing or the consummation of the transactions contemplated by this Official Statement. THE ORDINANCE the Act. Pursuant to the Ordinance, the Board of Supervisors has authorized and directed the issuance of the Bonds, in accordance with The Bonds shall be issued as nonelectoral debt of the Township for the purposes hereinabove set forth. The terms, form, transferability, redemption provisions, date and interest payment dates, as applicable, for the Bonds are set forth in the Ordinance and hereinabove described. Under the Ordinance, the Township covenants with the registered owners of the Bonds that the Township shall include the amount of the debt service for each fiscal year of the Township in which sums are payable in its budget for that fiscal year, shall appropriate such amounts to the payment of such debt service and duly and punctually pay or cause to be paid the principal of and the interest thereon, as applicable, on the dates and at the places and in the manner stated therein, according to the true intent and meaning thereof; and, for such budgeting, appropriation and payment, the Township pledges its full faith credit and taxing power. As provided in the Act, the foregoing covenant of the Township shall be enforceable specifically. In the Ordinance, the Township covenants that it will make no use of the proceeds of the Bonds, which would cause the Bonds to be arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code 1986, as amended (the Code ), and that it will comply with the requirements of all Code Sections necessary to ensure that the Bonds are described in Section 103(a) during the term of the Bonds. The Ordinance authorizes filings of appropriate documents with the Pennsylvania Department of Community and Economic Development ( DCED ) in order to obtain DCED approval of the incurrence of debt by the Township, and authorizes and directs the Township officials to take all other necessary actions in connection with the issuance of the Bonds and the incurrence of non-electoral debt as evidenced thereby. DEFAULTS AND REMEDIES In the event of failure of the Township to pay or cause to be paid the interest on or principal of the Bonds, the holders of the Bonds shall be entitled to certain remedies provided by the Act. If the failure to pay shall continue for 30 days, holders of the Bonds shall have the right (subject to certain priorities created under the Act) to recover the amount due by bringing an action in assumpsit in the Court of Common Pleas of Montgomery County; any judgment shall have an appropriate priority upon the moneys next coming into 16

21 the treasury of the Township. The Act also provides that upon a default of at least 30 days, holders of at least 25 percent of the Bonds may appoint a trustee to represent them. The Act sets forth the powers and duties of such trustee to enforce the rights of the holders of the Bonds. Tax Exemption-Opinion of Bond Counsel TAX MATTERS The Internal Revenue Code of 1986, as amended (the "Code") contains provisions relating to the tax-exempt status of interest on obligations issued by governmental entities which apply to the Bonds. These provisions include, but are not limited to, requirements relating to the use and investment of the proceeds of the Bonds and the rebate of certain investment earnings derived from such proceeds to the United States Treasury Department on a periodic basis. These and other requirements of the Code must be met by the Township subsequent to the issuance and delivery of the Bonds in order for interest thereon to be and remain excludable from gross income for purposes of federal income taxation. The Township has made covenants to comply with such requirements. In the opinion of Bond Counsel, interest (including accrued original issue discount) on the Bonds is not includable in gross income for purposes of federal income taxation under existing statutes, regulations, rulings and court decisions. The opinion of Bond Counsel is subject to the condition that the Township comply with all applicable federal income tax law requirements that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon continues to be excluded from gross income. Failure to comply with certain of such requirements could cause the interest on the Bonds to be so includable in gross income retroactive to the date of issuance of the Bonds. The Township has covenanted to comply with all such requirements. Interest on the Bonds is not treated as an item of tax preference under Section 57 of the Code for purposes of the individual and corporate alternative minimum taxes; however, under the Code, to the extent that interest on bonds is a component of a corporate holder's "adjusted current earnings," a portion of that interest may be subject to the corporate alternative minimum tax. Based on the representations made by the Township, it is the opinion of Bond Counsel, that banks, thrift institutions and other financial institutions which purchase the Bonds may deduct eighty percent (80%) of their interest expense on indebtedness incurred to purchase or carry the Bonds pursuant to Sections 265(b) and 291(e)(1)(B) of the Code. Bond Counsel expresses no opinion regarding other federal tax consequences relating to the Bonds or the receipt of interest thereon. See discussion of "Alternative Minimum Tax," "Branch Profits Tax," "S Corporations with Passive Investment Income," "Social Security and Railroad Retirement Benefits," "Deduction for Interest Paid by Financial Institutions to Purchase or Carry Tax- Exempt Obligations," "Property or Casualty Insurance Company," "Reportable Payments and Backup Withholding" and "Accounting Treatment of Original Issue Discount and Amortizable Bond Premium" below. In the opinion of Bond Counsel, under the laws of the Commonwealth of Pennsylvania as enacted and construed on the date hereof, the Bonds, and the interest thereon are free from taxation for state and local purposes within the Commonwealth of Pennsylvania, but such 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. 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. Specifically, the Bonds are exempt from personal property taxes in Pennsylvania and interest on the Bonds is exempt from the Pennsylvania personal income tax and the Pennsylvania corporate net income tax. Alternative Minimum Tax The Code includes, for purposes of the corporate alternative minimum tax, a preference item consisting of, generally, seventyfive percent of the excess of a corporation's "adjusted current earnings" over its "alternative minimum taxable income" (computed without regard to this particular preference item and the alternative tax net operating loss deduction). Thus, to the extent that tax-exempt interest (including interest on the Bonds) is a component of a corporate holder's "adjusted current earnings," a portion of that interest may be subject to the alternative minimum tax. Branch Profits Tax Under the Code, foreign corporations engaged in a trade or business in the United States will be subject to a "branch profits tax" equal to thirty percent (30%) of the corporation's "dividend equivalent amount" for the taxable year. The term "dividend equivalent amount" includes interest on tax-exempt obligations. S Corporations with Passive Investment Income Section 1375 of the Code imposes a tax on the income of certain small business corporations for which an S Corporation election is in effect, and that have "passive investment income." For purposes of Section 1375 of the Code, the term "passive investment income" includes interest on the Bonds. This tax applies to an S Corporation for a taxable year if the S Corporation has Subchapter C earnings and profits at the close of the taxable year and has gross receipts, more than twenty-five percent (25%) of which are "passive investment income." Thus, interest on the Bonds may be subject to federal income taxation under Section 1375 of the Code if the requirements of that provision are met. 17

22 Social Security and Railroad Retirement Benefits Under Section 86 of the Code, certain Social Security and Railroad Retirement benefits (the "benefits") may be includable in gross income. The Code provides that interest on tax-exempt obligations (including interest on the Bonds) is included in the calculation of "modified adjusted gross income" in determining whether a portion of the benefits received are to be includable in gross income of individuals. Deduction for Interest Paid by Financial Institutions to Purchase or Carry Tax-Exempt Obligations The Code, subject to limited exceptions discussed below, denies the interest deduction for indebtedness incurred or continued to purchase or carry tax-exempt obligations, such as the Bonds. With respect to banks, thrift institutions and other financial institutions, the denial to such institutions is one hundred percent (100%) for interest paid on funds allocable to the Bonds and any other tax-exempt obligations acquired after August 7, An exception to the complete denial to financial institutions for interest paid on funds allocable to purchase or carry tax-exempt obligations applies if such obligations are "qualified tax-exempt obligations." Under Section 265(b)(3) of the Code, an obligation is a "qualified tax-exempt obligation" if: (i) the obligation is not a "private activity bond"; (ii) the Township and all entities that must be aggregated with it pursuant to the Code ("Other Issuers") do not reasonably anticipate issuing during the calendar year tax-exempt obligations (other than private activity bonds) in excess of $10 million (other than certain obligations not required to be taken into account under the Code); and (iii) the Township designates the tax-exempt obligations as "qualified tax-exempt obligations." For purposes of this exception, a qualified 501(c)(3) bond is not included within the definition of a private activity bond. If the tax-exempt obligation is a "qualified tax-exempt obligation," then eighty percent (80%) of the interest deduction for indebtedness incurred by banks, thrift institutions and other financial institutions to purchase or carry such obligations will be allowed under Sections 265(b) and 291(e)(1)(B) of the Code. The Township has represented that the Bonds are not private activity bonds. The Township has designated the Bonds as "qualified tax-exempt obligations" pursuant to Section 265(b)(3) of the Code, and has represented that neither it nor any Other Issuers has issued or expects to issue more than $10,000,000 of "tax-exempt obligations" (other than certain obligations not required to be taken into account for purposes of that Section of the Code) in the calendar year Based on such representations, it is Bond Counsel's opinion, that banks, thrift institutions and other financial institutions which purchase the Bonds may deduct eighty percent (80%) of their interest expense on indebtedness incurred to purchase or carry the Bonds pursuant to Sections 265(b) and 291(e)(1)(B) of the Code. Property or Casualty Insurance Company The Code also provides that a property or casualty insurance company may also incur a reduction, by a specified portion of its tax-exempt interest income, of its deduction for losses incurred. Reportable Payments and Backup Withholding Under 2006 amendments to the Internal Revenue Code, payments of interest on the Bonds will be reported to the Internal Revenue Service by the payor on Form 1099 unless the Bondholder is an exempt person under Section 6049 of the Code. A Bondholder who is not an exempt person may be subject to backup withholding at a specified rate prescribed in the Code if the Bondholder does not file Form W-9 with the payor advising the payor of the Bondholder s taxpayer identification number. Bondholders should consult with their brokers regarding this matter. The Paying Agent will report to the Bondholders and to the Internal Revenue Service for each calendar year the amount of any reportable payments during such year and the amount of tax, if any, with respect to payments made on the Bonds. Accounting Treatment of Original Issue Discount and Amortizable Bond Premium The Bonds maturing June 15,, are herein referred to as the "Discount Bonds." In the opinion of Bond Counsel, the difference between the initial public offering price of the Discount Bonds set forth on the inside cover page and the stated redemption price at maturity of each such Bond constitutes "original issue discount," all or a portion of which will, on the disposition or payment of such Bonds, be treated as tax-exempt interest for federal income tax purposes. Original issue discount will be apportioned to an owner of the Discount Bonds under a "constant interest method," which utilizes a periodic compounding of accrued interest. If an owner of a Discount Bond who purchases it in the original offering at the initial public offering price owns that Discount Bond to maturity, that Bondholder will not realize taxable gain for federal income tax purposes upon payment of the Discount Bond at maturity. An owner of a Discount Bond who purchases it in the original offering at the initial public offering price and who later disposes of the Discount Bond prior to maturity will be deemed to have accrued tax-exempt income in a manner described above; amounts realized in excess of the sum of the original offering price of such Discount Bond and the amount of accrued original issue discount will be taxable gain. Purchasers of Discount Bonds should consider possible state and local income, excise or franchise tax consequences arising from original issue discount on the Discount Bonds. Prospective purchasers of the Discount Bonds should consult their tax advisors regarding the Pennsylvania tax treatment of original issue discount. The Bonds maturing on June 15, are hereinafter referred to as the Premium Bonds. An amount equal to the excess of the initial public offering price of a Premium Bond set forth on the inside front cover page over its stated redemption price at maturity constitutes premium on such Premium Bond. A purchaser of a Premium Bond must amortize any premium over such Premium Bond s 18

23 term using constant yield principles, based on the purchaser s yield to maturity. As premium is amortized, the purchase s basis in such Premium Bond is reduced by a corresponding amount, resulting in an increase in the gain (or decrease in the loss) to be recognized for federal income tax purposes upon a sale or disposition of such Premium Bond prior to its maturity. Even though the purchaser s basis is reduced, no federal income tax deduction is allowed. Purchasers of any Premium Bonds, whether at the time of initial issuance or subsequent thereto, should consult their own tax advisors with respect to the determination and treatment of premium for federal income tax purposes and with respect to state and local tax consequences of owning Premium Bonds. SECONDARY MARKET DISCLOSURE General. The Township has covenanted for the benefit of the Holders of the Bonds in a Continuing Disclosure Agreement dated, 2015 (the "Disclosure Agreement") to (a) provide notices of the occurrence of certain enumerated events; and (b) provide certain financial information and operating data relating to the Township by not later than the first day of the eighth calendar month immediately following the end of the Township's fiscal year, e.g., by not later than August 1 of each year, commencing August 1, 2016 (the "Annual Report"). The Annual Report and the notices of significant events, both summarized below, will be filed by the Township with the Electronic Municipal Market Access System ("EMMA") maintained by the Municipal Securities Rulemaking Board. The specific nature of the information to be contained in the Annual Report or the notices of significant events is summarized below. These covenants have been made in order to assist the Underwriter in complying with S.E.C. Rule 15c2-12, as amended (the "Rule"). Annual Reports. The Township's Annual Report filed with EMMA shall contain or incorporate by reference the following information with respect to the relevant fiscal year (i) audited financial statements; (ii) an updated of the following types of financial and operating information included in this Official Statement; under the headings Assessed and Market Valuation Trends, Real Estate Tax Collections, DEBT SUMMARY Debt Limit and Remaining Borrowing Capacity. Notices of Significant Events. Upon the occurrence of any of the following notice events, the Township shall in a timely manner not in excess of ten (10) business days after the occurrence of any of the following events, file with EMMA notice of such occurrence: (1) principal and interest payment delinquencies; (2) non payment-related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions or events affecting the tax status of the Bonds; (7) modifications to rights of Holder, if material; (8) Bond calls (other than mandatory sinking fund redemptions), if material, and tender offers; (9) defeasances of Bonds; (10) release, substitution, or sale of property securing repayment of any Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the Township; (13) the consummation of a merger, consolidation, or acquisition involving the Township or the sale of all or substantially all of the assets of the Township, 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, if material; (14) appointment of a successor or additional trustee or the change of name of a trustee, if material; or (15) failure to provide annual financial information as required. Accounting Standards. The financial statements described above shall be audited in accordance with generally accepted accounting principles applicable in the preparation of financial statements of the Township as such principles are from time to time promulgated by the Financial Accounting Standards Board, the Governmental Accounting Standards Board, or such other body recognized as authoritative by the American Institute of Certified Public Accountants or any successor body ("GAAP"), and shall also comply with applicable federal and state auditing statutes, regulations, standards and/or guidelines. The Township may from time to time modify its accounting principles to the extent necessary or desirable to comply with changes in either GAAP or applicable federal and state statutes, regulations, standards and/or guidelines. Audited financial statements of the Township not submitted as part of the Annual Report shall be provided to EMMA if and when available to the Township, and in any event not more than thirty (30) days after receipt thereof from the Township's auditors. In the event that audited financial statements are not submitted as part of the Annual Report, the Township shall provide in lieu thereof unaudited financial statements meeting the description set forth above. Termination of Reporting Obligation. The Township's obligations under the Disclosure Agreement shall terminate upon (a) the legal defeasance, prior redemption or payment in full of all of the Bonds or (b) the assumption by a successor Obligated Person of all of the obligations of the prior Obligated Person both under the Disclosure Agreement and under the Bonds. Amendments. Notwithstanding any other provision of the Disclosure Agreement, the Township may modify or amend the Disclosure Agreement. Under the current SEC interpretation of the Rule, the following preconditions must be satisfied: (a) the amendment is being made in connection with a change of circumstances that arises from a change in legal requirements, change in law, change in the identity, nature or status of the Township, or change in the type of business conducted by the Township; (b) the Disclosure Agreement, as amended, would have complied with the requirements of the Rule as of the date of issuance of the relevant Bonds, after taking into account any amendment or interpretations of the Rule, as well as any change in circumstances; and (c) the amendment does not materially adversely effect the interests of Holder as determined either by a party unaffiliated with the Township (such as the Paying Agent or nationally recognized bond counsel) or by an approving vote of a majority of Holders. To the extent required by the Rule, the Township shall disclose in the next Annual Report the amendment and its impact on the information being provided. Defaults. In the event of a failure of the Township to comply with any provision of the Disclosure Agreement, the Paying Agent, any Participating Underwriter or any Holder may take such actions as may be necessary and appropriate, including seeking a writ of mandamus or specific performance by court order to cause the Township to comply with its obligations under the Disclosure 19

24 Agreement. A default under the Disclosure Agreement shall not be deemed an Event of Default under the Ordinance or the Bonds, and the sole remedy under the Disclosure Agreement in the event of any failure of the Township to comply with the Disclosure Agreement shall be an action to compel performance, provided, however, that nothing in the Disclosure Agreement shall limit any Holder's rights under applicable federal securities law. In March, 2014, the U.S. Securities and Exchange Commission (the SEC ) announced a Municipalities Continuing disclosure Cooperation Initiative (the Initiative ) to address representations made by issuers in official statement about past compliance with continuing disclosure undertakings made pursuant to the Rule. The Initiative invites underwriters and issuers, respectively, to review official statements for certain prior offerings and, based upon such review, if deemed appropriate, to self-report to the SEC possible violations of the federal securities laws involving materially inaccurate statements relating to prior compliance with the continuing disclosure obligations specified in the Rule by identifying official statements that may contain such statements. Underwriters participating in the Initiative were required to submit a report to the SEC no later than September 9, Issuers who choose to participate in the Initiative were required to submit a report to the SEC no later than 5:00 p.m. EST on December 1, Pursuant to the Initiative, an underwriter for a previous offering of municipal securities by the Township identified an official statement of the Township in its report to the SEC. In conducting its review, the Township discovered, in connection with its undertakings to provide continuing disclosure in connection with prior bond issues, that it: (i) failed to file its audit on time for fiscal years ; (ii) failed to file certain operating data with the audits; and (iii) failed to provide notice of certain material events, including rating changes on its bonds caused by bond insurer downgrades or notice of its failure to timely file its annual financial information. The Township determined to self-report these actions under the Initiative. The Township has adopted policies and procedures for its continuing disclosure obligations. The Township s obligations with respect to continuing disclosure described herein shall terminate upon the prior redemption or payment in full of all of the Bonds or if and when the Township is no longer an obligated person with respect to the Bonds, within the meaning of the Rule. Existing Continuing Disclosure Requirements The Township has previously entered into Continuing Disclosure Agreements with respect to each one of its previously issued bond issues that are currently outstanding. A summary of these outstanding agreements is shown below. Bonds Filing Deadline Financial Statements Budget Operating Data Operating Data Type (see below for definitions) 2010 (1) August 1 Yes No Yes Assessed and Market Valuation Trends Real Estate Tax Collections Debt Summary Debt Limit and Remaining Borrowing Capacity Operating Data Definitions Assessed & market values - the assessed value and market value of all taxable real estate for the current fiscal year Tax collection results - the real property tax collection results for the most recent fiscal year, including (1) the real estate levy imposed (expressed both as a millage rate and an aggregate dollar amount), (2) the dollar amount of real estate taxes collected that represented current collections (expressed both as a percentage of such fiscal year s levy and as an aggregate dollar amount), (3) the amount of real estate taxes collected that represented taxes levied in prior years (expressed as an aggregate dollar amount), and (4) the total amount of real estate taxes collected (expressed both as a percentage of the current year s levy and as an aggregate dollar amount) Notes: [1] To be refunded with the issuance of the Series of 2015 Bonds on January 15, 2015 [2] Estimated; subject to change. Filing requirements to commence starting August 1,

25 Continuing Disclosure Filing History The Township s filing history of its annual financial and operating information during the past five (5) years is outlined in the table below. Fiscal Year Filing Financial Statements Budget Operating Data Ending Deadline [1] Filing Date EMMA ID [2] Filing Date EMMA ID [2] Filing Date EMMA ID [2] 12/31/2009 8/1/ /27/2013 ER /9/2014 EP /24/2014 EA /31/2010 8/1/ /27/2013 ER /4/2014 EP /4/2014 ER /31/2011 8/1/ /27/2013 ER /4/2014 EP /4/2014 ER /31/2012 8/1/ /27/2013 ER /4/2014 EP /4/2014 ER /31/2013 8/1/2014 6/30/2014 EA /4/2014 EP /4/2014 ER Notes [1] For these purposes, assumes the shortest filing deadline of the Township s previous Continuing Disclosure Agreements as outlined in the Continuing Disclosure Requirements table above [2] Submission ID is the EMMA Submission ID for each filing. To access a filing, insert the Submission ID to the end of the web address below: [ Based on the information above, the Township s annual financial and operating filing history over the past five (5) years can be summarized as follows: For fiscal year ending December 31, 2009, the Township filed its Annual Financial Report on December 27, 2013, its Budget and operating data on December 9, For fiscal year ending December 31, 2010, the Township filed its Annual Financial Report on December 27, 2013, its Budget and operating data on November 4, For fiscal year ending December 31, 2011, the Township filed its Annual Financial Report on December 27, 2013, its Budget and other operating data on November 4, For fiscal year ending December 31, 2012, the Township filed its Annual Financial Report on December 27, 2013, its Budget and operating data on November 4, For fiscal year ending December 31, 2013, the Township filed its Annual Financial Report on June 30, 2014, its Budget and other operating data on November 4, As detailed above, the Township has conducted a thorough review of its continuing disclosure obligations and corresponding submissions. Upon discovering any inadvertent omissions with respect to these filings, the Township has brought its continuing disclosure filings current and has disclosed those omissions above. Currently, the Township is not aware of any outstanding past-due material continuing disclosure filings. Future Continuing Disclosure Compliance In an effort to augment the Township s procedures and policies to maintain future compliance, the Township has taken additional steps intended to assure future compliance with its Continuing Disclosure Agreements. These steps include implementing the MSRB s EMMA s internal notification system whereby the Township will receive timely reminders a month in advance for all of the Township s annual disclosure filings and coordinating with the Township s financial advisor to ensure all disclosure obligations have been made on a timely basis and in all material respects. A member of the Township s business office will be responsible for ensuring ongoing continuing disclosure compliance. Members of the Township s business office will make an effort to participate in any ongoing continuing education regarding continuing disclosure undertaking if offered by local groups or affiliated organizations. The Township may communicate with its financial advisor, underwriter(s), bond counsel, or solicitor regarding any questions or concerns regarding ongoing continuing disclosure compliance. The Township will also communicate with its local auditor and advise of the Township s need for financial statements in a timely manner. Some of the operating data requirements may be found contained within the Township s financial statements or budget filing and may not be filed explicitly by themselves. MUNICIPAL BANKRUPTCY The undertakings of the Township should be considered with reference to Chapter 9 of the federal Bankruptcy Code and other bankruptcy laws affecting creditors rights and municipalities. Chapter 9 permits an insolvent municipality which is specifically authorized by Pennsylvania law to do so, to file a petition in a court of bankruptcy for the purpose of effecting a plan to adjust its debts; directs such a petitioner to file with the court a list of petitioner s creditors; provides that a petition filed under this Chapter shall operate 21

26 as a stay of the commencement or continuation of any judicial or other proceeding against the petitioner; grants priority to debts owed for service or materials actually provided within three months of the filing of the petition; directs a petitioner to file a plan for the adjustment of its debts. Act No of the Commonwealth (as amended, "Act 47" or the "Municipalities Financial Recovery Act") governs the ability of the Township to declare bankruptcy under Federal law. Act 47 provides that no municipality may apply to the Department of Community and Economic Development (the "Department") to file a municipal debt adjustment action pursuant to the Bankruptcy Code unless one of the following conditions exists: (1) there is imminent jeopardy of an action by a creditor, claimant or supplier of goods or services which is likely to substantially interrupt or restrict the continued ability of the Municipality to provide health or safety services; (2) one or more creditors of the Municipality have rejected the proposed or adopted plan and unsuccessful negotiations have continued for ten (10) days; (3) a condition of financial distress is potentially soluble only by using a remedy exclusively available through the Bankruptcy Code; or (4) a majority of the current or immediately preceding governing body of a municipality determined by the Department to be financially distressed has failed to adopt a plan or carry out the recommendations of such a plan coordinator. This authority may be exercised only upon the vote by a majority of the Municipality's governing body. Upon application as described above, the secretary shall, within 30 days, determine whether to approve or deny the application. Failure of the Department to act within the time period shall be deemed a denial of the application. Act 47 also contains provisions and circumstances under which a municipality may be declared to be in "financial distress", making it eligible for interest-free loans, grants and/or administrative assistance through adoption of a financial plan and appointment of a plan coordinator. Such coordinator, appointed by the Department, would have the authority to recommend a plan increasing taxes or other sources of revenues, reducing services, rescheduling obligations or merging municipalities. The above reference to the Bankruptcy Code or Act 47 is not to be construed as an indication that the Township expects to resort to the provisions of such laws or that, if it did, any proposed plan or plans would include a dilution of the sources of payment of and the security for the payment of the Bonds. RATING Standard and Poor's Rating Group ("S&P") has assigned an underlying rating to the Bonds of "AAA," (Stable Outlook) subject to their issuance. Such rating reflects only the view of such organization and any desired explanation of the significance of such ratings should be obtained from the rating agency furnishing the same, at the following address Standard and Poor's Rating Group, 55 Water Street, New York, New York Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance that any such rating will continue for any given period of time or that it will not be revised downward or withdrawn entirely by the rating agency, if circumstances so warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the Bonds. LEGALITY The issuance and delivery of the Bonds are subject to approval as to legality by Saul Ewing LLP, Philadelphia, Pennsylvania, Bond Counsel. Certain legal matters will be passed upon for the Township by Hamburg, Rubin, Mullin, & Lupin, Lansdale, Pennsylvania, Solicitor to the Township. LEGALITY FOR INVESTMENT Applicable laws of the Commonwealth provide that the Bonds are legal investments for funds held by, among others, banks, savings banks, trust companies or associations and fiduciaries. The Bonds are authorized security for deposits of funds of the Commonwealth and any political subdivision thereof. UNDERWRITING The Bonds are being purchased by, at a price of $, (which consists of the par amount of the Bonds less Underwriter discount of $ and plus/less original issue premium/discount of $ ) from the face value of the Bonds. The Bond Purchase Agreement provides that the Underwriter will purchase all the Bonds, if any are purchased, and that the obligation to make such purchase is subject to certain terms and conditions set forth in the Bond Purchase Agreement. The Underwriter may over-allot or effect transactions which might otherwise prevail in the open market; such stabilizing, if commenced, may be discontinued at any time without prior notice. FINANCIAL ADVISOR The Township has retained Public Financial Management, Inc., Malvern, Pennsylvania as financial advisor (the "Financial Advisor") in connection with the preparation, authorization and issuance of the Bonds. The Financial Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume responsibility for the accuracy, completeness, or fairness of the information contained in the Official Statement. Public Financial Management, Inc., is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities. The Financial Advisor's contract with the Township prohibits it from participating in the underwriting of any of the Township's debt. 22

27 CHANGES IN FEDERAL LAW From time to time, there are presidential proposals, proposals by various federal committees and legislative proposals in Congress that, if enacted, could alter or amend the tax matters referred to herein or adversely affect the marketability or market value of the Bonds or otherwise prevent holders of the Bonds from realizing the full benefit of the tax exemption of interest on the Bonds. Further, such proposals may impact the marketability or market value of the Bonds simply by being proposed. It cannot be predicted whether or in what form any such proposals may be enacted or whether if enacted such proposals would apply to bonds issued prior to enactment. In addition, regulatory or other actions are from time to time announced or proposed which, if implemented or concluded in a particular manner, could adversely affect the market value, marketability or tax status of the Bonds. It cannot be predicted whether any such regulatory or other actions will be implemented or whether the Bonds would be impacted thereby. Purchasers of the Bonds should consult their tax advisors regarding any pending or proposed legislation, regulations or other potential changes in law. The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of issuance and delivery of the Bonds, and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any proposed or pending legislation, regulations or other potential changes in law. CERTAIN MATTERS The execution and delivery of the Official Statement has been duly authorized by the Township. Concurrently with the delivery of the Bonds, the Township will furnish a certificate to the effect that nothing has come to the Township s attention that would lead the Township to believe that the Official Statement, in final form, contains an untrue statement of a material fact or omits to state any information required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. Certain information contained in the Official Statement has been obtained from sources other than the Township. All of the summaries of and referenced to the provisions of the 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 Township and Underwriter or holder of any of the 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 Township since the date hereof. The information contained in the Official Statement is not guaranteed as to accuracy or completeness. TOWNSHP OF LIMERICK Montgomery County, Pennsylvania By: Chairman Township Board of Supervisors 23

28 APPENDIX A DESCRIPTION OF THE TOWNSHIP

29 General TOWNSHIP OF LIMERICK The Township of Limerick, Montgomery County, Pennsylvania (the Township ) is situated along PA State Route 422 Corridor and is approximately 30 miles west of Philadelphia and 25 miles east of Reading. The Township encompasses 23+ square miles with approximately 100 miles of public roadways. The Township is one of four communities within the Spring-Ford Area School District. Population The Township's historical population statistics and the comparable statistics for Montgomery County and the Commonwealth of Pennsylvania are shown below: Township 6,691 13,534 18,074 Montgomery County 678, , ,881 Pennsylvania 11,881,643 12,281,054 12,702,379 Source: U.S. Census Bureau, 2010 Census. AGE COMPOSITION Persons Per Years Years Years Household Limerick Township Montgomery County Pennsylvania Source: U.S. Census Bureau. Housing Approximately 81.3% of the current dwelling units in the Township were single family houses. Housing units are predominantly owner-occupied (78.1%). Approximately 60% of housing units in the Township were constructed since (Source U.S. Department of Commerce, Bureau of the Census). The Township has been experiencing a pattern of continuous growth in residential construction. Income The data below shows recent trends in per capita income for Township, Montgomery County and Pennsylvania during the period. RECENT TRENDS IN PER CAPITA INCOME* Limerick Township $17,274 $27,305 $34,672 Montgomery County 21,990 30,898 38,792 Pennsylvania 14,068 20,880 26,374 Source: U.S. Census Bureau. *Income is defined by the Bureau of the Census as the sum of wage and salary income, non-farm selfemployment income, net self-employment income, Social Security and Railroad retirement income, public assistance income, interest, dividends, pensions, etc. before deductions for personal income taxes, Social Security, etc. A-1

30 EMPLOYMENT The largest private employers located in the Township are listed below: Approximate Name Product/Service Employees Exelon Generation Co. LLC Electricity 789 Philadelphia Freedom Valley YMCA YMCA 460 Spring Ford Area School District Educational 426 Iron Mountain Information Document Management 409 John Middleton Co. Tobacco Marketer 379 Venezia Hauling Inc. Trucking Company 348 Stone & Webster Construction Construction 267 Costco Wholesale Corp. Department Store 185 Micro Coax Inc. Auto Repair/Bus Service 182 Exelon Nuclear Security LLC Security 173 TFX Marine Medical Supplier 171 Source: Township Officials. The following table shows the 10 largest employers in the County. Company Location Industry Merck & Company, Inc. West Point Pharmaceuticals Abington Memorial Hospital Abington Health Care & Social Assistance State Government Various Government Main Line Hospitals Lower Merion Health Care & Social Assistance Giant Food Stores Various Retail Grocery Montgomery County Norristown Public Administration SmithKline Beecham King of Prussia Pharmaceuticals Federal Government Various Government United Parcel Service Inc. Various Package Delivery Lockheed Martin Corporation Upper Merion Professional & Technical Services Source: Pennsylvania Department of Labor and Industry. 4 th quarter [REMAINDER OF PAGE INTENTIONALLY LETFT BLANK] A-2

31 INDUSTRY OF EMPLOYMENT Philadelphia, PA-NJ Primary Metropolitan Statistical Area * Title Employment Employment Employment Employment Employment Total Nonfarm 2,730,600 2,705,900 2,725,000 2,748,600 2,765,800 Total Private 2,378,100 2,366,100 2,385,200 2,410,500 2,440,500 Goods Producing 287, , , , ,600 Service-Providing 2,443,500 2,418,700 2,443,100 2,466,100 2,473,200 Private Service Providing 2,091,000 2,078,900 2,103,300 2,128,000 2,147,900 Mining, Logging, and Construction 100, ,100 99, , ,100 Manufacturing 186, , , , ,500 Durable Goods 97,900 97,700 96,200 95,100 94,300 Non-Durable Goods 88,500 88,400 86,200 84,800 85,200 Trade 517, , , , ,300 Wholesale Trade 122, , , , ,100 Retail Trade 301, , , , ,700 Transportation 94,100 90,400 90,500 92,500 97,500 Information 50,800 49,700 49,400 47,800 45,900 Financial Activities 200, , , , ,400 Professional and Business Services 409, , , , ,600 Education and Health Services 568, , , , ,900 Leisure and Hospitality 223, , , , ,900 Other Services 120, , , , ,900 Government 352, , , , ,300 Source: Center for Workforce and Information Analysis * As of September, The table below shows trends in labor force, employment and unemployment for Montgomery County and the Commonwealth. RECENT TRENDS IN LABOR FORCE, EMPLOYMENT AND UNEMPLOYMENT* Montgomery County (1) Civilian Labor Force (000) Employment (000) Unemployment (000) Unemployment Rate 7.40% 6.70% 6.80% 6.30% 5.10% Pennsylvania Civilian Labor Force (000) 6, , , , , Employment (000) 5, , , , , Unemployment (000) Unemployment Rate 8.70% 7.60% 7.90% 7.40% 5.80% (1) As of August, Source: Center for Workforce and Information Analysis A-3

32 Commercial Activity The table below shows trends for retail sales in Montgomery County, the PMSA (the Philadelphia Metropolitan Statistical Area) and the Commonwealth. TOTAL RETAIL SALES (Millions of Dollars) Montgomery County $16,278,763 $15,650,734 $16,723,717 $16,716,583 $ 17,023,843 PMSA 94,687,876 89,183,335 94,935,061 94,890,513 89,309,763 Pennsylvania 180,948, ,483, ,193, ,149, ,412,600 Source: Sales and Marketing Management Magazine Transportation Facilities The residents of the Township have access to U.S. Route 422 which passes through the Township in a north-south direction, connecting the area with Valley Forge to the south and Pottstown to the north. Utilities Residents of the Township are provided with sewer service by the Township. Both electricity and natural gas are provided to the Township by PECO, and telephone service is provided by Verizon and Comcast. Education Institutions The School District currently operates twelve school building facilities not including an administrative building or the students currently enrolled in the Western Center for Technical Studies. These facilities are comprised of seven elementary schools which house grades K-4, one intermediate/middle school for grades 5,6 and 7, one middle school for grade 8, one 9th grade center, and one senior high school which houses grades The residents of the Township have access to a number of higher education facilities. These include Ursinus College and Montgomery County Community College Pottstown Campus. Medical Facilities Major hospital facilities servicing residents of the Township include Pottstown Memorial Medical Center, Rothman Institute and Phoenixville Hospital. A-4

33 APPENDIX B FORM OF BOND COUNSEL OPINION

34 [PROPOSED FORM OF OPINION OF BOND COUNSEL] TOWNSHIP OF LIMERICK (Montgomery County, Pennsylvania) $ General Obligation Bonds, Series of 2015 OPINION TO THE PURCHASERS OF THE ABOVE-CAPTIONED BONDS:, 2015 We have acted as Bond counsel to the Township of Limerick, Montgomery County, Pennsylvania (the Township ) in connection with the issuance of its $ General Obligation Bonds, Series of 2015 (the Bonds ). The Bonds are being issued for the purpose of financing the: (i) advance refunding of the Township s outstanding General Obligation Bonds, Series of 2010 (the Prior Bonds ), and (ii) payment of the costs of issuing the Bonds. In such capacity, we have examined such law and such certified proceedings, certifications, and other documents as we have deemed necessary to render this opinion. Regarding questions of fact material to our opinion, we have relied on the certified proceedings and other certifications of public officials and others furnished to us without undertaking to verify the same by independent investigation. Based on the foregoing, we are of the opinion that, under existing law: 1. The Bonds have been duly authorized and executed by the Township, and are valid, binding and enforceable general obligations of the Township. 2. The Bonds are payable from general revenues of the Township, presently including ad valorem taxes which may be levied on all property taxable for township purposes within the Township without limitation as to rate or amount. Centre Square West 1500 Market Street, 38 th Floor Philadelphia, PA Phone: (215) Fax: (215) /02/2014 DELAWARE MARYLAND MASSACHUSETTS NEW JERSEY NEW YORK PENNSYLVANIA WASHINGTON, DC A DELAWARE LIMITED LIABILITY PARTNERSHIP B-1

35 , 2015 Page 2 3. The Township has made provision for the payment and redemption of the Prior Bonds in accordance with the terms of the Pledge and Escrow Agreement dated as of the date of delivery of the Bonds which constitutes a valid and binding obligation of the Township enforceable in accordance with its terms, except as enforcement may be limited by the exercise of judicial discretion and by bankruptcy, insolvency, moratorium and other laws or equitable principles affecting the rights and remedies of creditors generally. 4. Interest (including accrued original issue discount) on the Bonds is not includable in gross income for purposes of federal income taxation under existing statutes, regulations, rulings, and court decisions. The opinion set forth in the preceding sentence is subject to the condition that the Township comply with all applicable federal income tax law requirements that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon continues to be excluded from gross income for purposes of federal income taxation. Failure to comply with certain of such requirements could cause the interest on the Bonds to be includable in gross income retroactive to the date of issuance of the Bonds. The Township has covenanted to comply with all such requirements. Interest on the Bonds is not treated as an item of tax preference under Section 57 of the Internal Revenue Code of 1986, as amended (the Code ) for purposes of the individual and corporate alternative minimum taxes; however, we call to your attention that under the Code, to the extent that interest on the Bonds is a component of a corporate holder s adjusted current earnings, a portion of that interest may be subject to the corporate alternative minimum tax. We further call to your attention that the Code, subject to limited exceptions, denies the interest deduction for indebtedness incurred by banks, thrift institutions and other financial institutions to purchase or carry tax-exempt obligations, such as the Bonds. The denial to such institutions of one hundred percent (100%) of the deduction for interest paid on funds allocable to tax-exempt obligations generally applies to those tax-exempt obligations acquired after August 7, In the case of qualified tax-exempt obligations, however, a denial of twenty percent (20%) of the deduction will apply in lieu of the denial of one hundred percent (100%). A qualified tax-exempt obligation is a tax-exempt obligation which is designated as such by the issuer and is not a private activity bond (other than a qualified 501(c)(3) bond). An issuer and all other entities that must be aggregated with it pursuant to the Code ( Other Issuers ) may not designate or issue more than $10,000,000 of tax-exempt obligations during any calendar year. The Township has designated the Bonds as qualified tax-exempt obligations, and has represented to us that neither it nor any Other Issuers has issued or expects to issue more than $10,000,000 of tax-exempt obligations (other than certain obligations not required to be taken into account under the Code) in the calendar year Based on such representations, it is our opinion that banks, thrift institutions and other financial institutions which purchase the Bonds may deduct eighty percent (80%) of their interest expense on indebtedness incurred to purchase or carry the Bonds pursuant to Sections 265(b) and 291(e)(1)(B) of the Code. We express no opinion regarding other federal tax consequences relating to the Bonds or the receipt of interest thereon. 5. Under the laws of the Commonwealth of Pennsylvania, as enacted and construed on the date hereof, the Bonds, and the interest thereon are free from taxation for state and local /02/2014 B-2

36 , 2015 Page 3 purposes within the Commonwealth of Pennsylvania, but such exemption does not extend to gift, inheritance, succession or estate taxes or any other taxes not levied or assessed directly on the Bonds or the interest thereon. The rights of the owners of the Bonds and the enforceability of the Bonds are limited by bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors rights generally, and by equitable principles, whether considered at law or in equity. We express no opinion herein regarding the accuracy, adequacy, or completeness of the Official Statement dated, 2014, relating to the Bonds. This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur. Very truly yours, /02/2014 B-3

37 APPENDIX C BOND AMORTIZATION SCHEDULE

38 BOND AMORTIZATION SCHEDULE $6,035,000* GENERAL OBLIGATION BONDS, SERIES OF 2015 Dated: Date of Delivery Due: June 15, as shown below Sinking Annual Principal Fund Interest Debt Date Maturities Redemptions Rates Interest Service 6/15/ /15/2015 6/15/ /15/2016 6/15/ /15/2017 6/15/ /15/2018 6/15/ /15/2019 6/15/ /15/2020 6/15/ /15/2021 6/15/ /15/2022 6/15/ /15/2023 6/15/ /15/2024 6/15/ /15/2025 TOTAL * Estimated, subject to change. C-1

39 APPENDIX D AUDITED FINANCIAL STATEMENTS OF THE TOWNSHIP

40 LIMERICK TOWNSHIP ANNUAL FINANCIAL REPORT Year Ended December 31, 2013

41 INTRODUCTORY SECTION

42 TABLE OF CONTENTS Page No. INTRODUCTORY SECTION Table of Contents FINANCIAL SECTION Independent Auditors' Report... 3 Management's Discussion and Analysis (Unaudited)... 5 Basic Financial Statements Government-Wide Financial Statements Statement of Net Position Statement of Activities Fund Financial Statements Governmental Funds Balance Sheet Reconciliation of Total Governmental Funds Balances to Net Position of Governmental Activities Statement of Revenues, Expenditures and Changes in Fund Balances Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities Proprietary Fund Statement of Net Position Statement of Revenues, Expenses and Changes in Net Position Statement of Cash Flows

43 TABLE OF CONTENTS Page No. Fiduciary Funds Statement of Fiduciary Net Position Statement of Changes in Fiduciary Net Position Notes to the Basic Financial Statements Required Supplementary Information Budgetary Comparison Schedule Note to the Budgetary Comparison Schedule Pension Plan Funding Progress Note to the Pension Plan Funding Progress Postemployment Benefits Other Than Pension Funding Progress SUPPLEMENTARY INFORMATION SECTION Other Governmental Funds Combining Balance Sheet Combining Schedule of Revenues, Expenditures and Changes in Fund Balances Fiduciary Funds (Pension Trust Funds) Combining Schedule of Fiduciary Net Position Combining Schedule of Changes in Fiduciary Net Position

44 financial SECTION

45 r Maillie P.O.Box680,0aks,PA I I Fax: P.O. Box 3068, West Chester, PA I Fax: ~ >pe;<i"b'yppdth,npmhen Independent Auditors' Report To the Board of Supervisors Limerick Township Limerick, Pennsylvania We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of Limerick Township as of and for the year ended December 31, 2013, and the related notes to the financial statements, which collectively comprise Limerick Township's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Limerick Township's management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of Limerick Township as of December 31, 2013, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America (GAAP). -3- Certified Public Accountants and Business Consultants

46 To the Board of Supervisors Limerick Township Limerick, Pennsylvania Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that management's discussion and analysis on pages 5 through 17, budgetary comparison information on pages 50 and 51, pension plan funding progress on pages 52 through 54 and postemployment benefits other than pension funding progress on page 55 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with evidence sufficient to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Limerick Township's basic financial statements. The supplementary information listed in the table of contents is presented for purposes of additional analysis and is not a required part of the basic financial statements. The supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. Oaks, Pennsylvania June 16,

47 LIMERICK TOWNSHIP MANAGEMENT'S DISCUSSION AND ANALYSIS (Unaudited) Year Ended December 31, 2013 As management of Limerick Township, we offer readers of the Township's financial statements this narrative overview and analysis of the financial activities of Limerick Township for the fiscal year ended December 31, We encourage readers to consider the information presented here in conjunction with the Township's financial statements, which begin with the statement of net position on page 18. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the Township's 2013 financial statements. The Township's 2013 financial statements comprise five components: (1) independent auditors' report, (2) management's discussion and analysis, (3) government-wide financial statements, (4) fund financial statements and (5) notes to the basic financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Independent Auditors' Report The independent auditors' report briefly describes the audit engagement and also renders an opinion as to the material components of the Township's financial position. Management's Discussion and Analysis CMD&AJ Management's discussion and analysis, prepared by Township management, provides a narrative introduction and overview that users of the financial statements need to interpret the basic financial statements. The MD&A also provides analysis of some key data that is presented in the basic financial statements. It also addresses any other currently known facts, decisions, or conditions that are expected to have a significant effect on financial position or results of operations. Government-Wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of the Township's finances in a manner similar to a private-sector business. The government-wide financial statements include the statement of net position found on page 18 and the statement of activities found on page 19 of this report. The government-wide financial statements divide the Township into two types of activities: Governmental Activities - Functions of the Township that are principally supported by taxes and intergovernmental revenues. The governmental activities of the Township include general government, public safety (police, fire and codes), public works, highways and streets, planning and land development and culture and recreation. Business-Type Activities - Functions of the Township that attempt to recover all or a significant portion of its costs through user fees and charges. The Sewer Operating and Sewer Capital Funds are reported here. The statement of net position presents information on all of the Township's assets and liabilities, with the difference between the two reported as net position. Over time, increases and decreases in net position may serve as a useful indicator of whether the financial position of the Township is improving or deteriorating. -5-

48 LIMERICK TOWNSHIP MANAGEMENT'S DISCUSSION AND ANALYSIS (Unaudited) Year Ended December31, 2013 The statement of activities presents information showing how the Township's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and eamed but unused sick leave). Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Township, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the Township can be divided into three categories: Governmental Funds, Proprietary Funds and Fiduciary Funds. Governmental Funds - Governmental Funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, Governmental Funds financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information is useful in evaluating the Township's near-term financing requirements. Because the focus of Governmental Funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for Governmental Funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the Township's near-term financing decisions. Both the Governmental Funds balance sheet and the Governmental Funds statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between Governmental Funds and governmental activities. The Township maintains ten individual Governmental Funds. Information is presented separately in the Governmental Funds balance sheet and in the Governmental Funds statement of revenues, expenditures and changes in fund balances for the General Fund, Capital Reserve Fund, Road Improvement Fund, Lewis Road Fund and the Recreation Fund, which are all considered to be major funds. The remaining five funds are aggregated into one column and are labeled "Other Governmental Funds." ("Other Governmental Funds" are detailed on pages 56 and 57 in the Supplementary Information Section of this report.) The basic Governmental Funds financial statements can be found on pages 20 through 23 of this report. Proprietary Fund- Services for which the Township charges a fee are generally reported in the Proprietary Fund. The Proprietary Fund is reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities. The Proprietary Fund is the same as the business-type activities reported in the government-wide statements but provide more detail and additional information, such as cash flows. The Proprietary Fund financial statements can be found on pages 24 through 26 of this report. -6-

49 LIMERICK TOWNSHIP MANAGEMENT'S DISCUSSION AND ANALYSIS (Unaudited) Year Ended December 31, 2013 Fiduciary Funds- Fiduciary Funds are used to account for resources held for the benefit of parties outside the government. Fiduciary Funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the Township's own programs. The Township's Fiduciary Funds include two Pension Trust Funds (the Police Pension Fund and the Non-Uniform Employees Pension Fund) and two Agency Funds. The Fiduciary Funds financial statements can be found on pages 27 and 28 of this report. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 29 through 49 of this report. Other Information In addition to the financial statements and accompanying notes, this report also presents certain required supplementary information for the Township. The Township's budget policy and budgetary comparison statement for the General Fund can be found under required supplementary information. The budgetary comparison statement for the General Fund demonstrates compliance of the budget. Required supplementary information can be found on pages 50 through 55 of this report. Additional information that management has determined useful for the readers of this report can be found in the Supplementary Information Section found on pages 56 through 59. GOVERNMENT-WIDE FINANCIAL ANALYSIS As noted earlier, the summary of net position (as shown on the next page) may serve over time as a useful indicator of the Township's financial position. The Township's total net position was $67,901,414 at the close of December 31, 2013, which represents an increase of $368,198 from the previous year. Current and other assets increased by $1,321,548, primarily the result of higher than anticipated income taxes and reduced departmental expenses. Capital assets, net, decreased by $2,159,020 as a result of the annual depreciation costs. There were no dedications of public improvements in The Township's investment in capital assets, $50,225,738 or 7 4% of total net position, reflects the current book value (cost less accumulated depreciation) of land, buildings, machinery and equipment and infrastructure, less any related debt used to acquire those assets that is still outstanding. The Township uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the Township's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. -7-

50 LIMERICK TOWNSHIP MANAGEMENT'S DISCUSSION AND ANALYSIS (Unaudited) Year Ended December 31, 2013 The other portion of the Township's net position, $17,350,027 or 26% is unrestricted net position and may be used to meet the Township's ongoing obligations to citizens and creditors. A large portion of these assets has been earmarked for future capital improvements. The Board determines the amounts designated for capital improvements through the budget process. They may at any time, through a process outlined in the Second Class Township Code, reclassify these assets for other uses. The final portion of the Township's net position, $325,649, represents resources that are subject to external restrictions on how they may be used. This includes net position of the Highway Aid Fund and Community Development Block Grant Fund as well as sewer debt service accounts and developer deposits. At December 31, 2013, the Township is able to report positive balances in all three categories of net position for the Township as a whole and also in the activities of its primary component unit. Summary of Net Position Governmental Activities ASSETS Current and other assets Capital assets TOTAL ASSETS $ 13,465,721 $ 12,665,048 23,711,102 24,401,975 37,176,823 37,067,023 DEFERRED OUTFLOWS OF RESOURCES LIABILITIES Other liabilities Long-term liabilities TOTAL LIABILITIES 427,975 2,929,718 3,357, ,455 2,852,587 3,756,042 NET POSITION Net investment in capital assets Restricted Unrestricted 21,729, ,649 11,763,990 22,287, ,545 10,717,447 TOTAL NET POSITION $ 33,819,130 $ 33,310,981

51 Business-Type Activities Totals 2012 Total Percentage Change $ 5,617,379 $ 5,096,504 $ 37,195,290 38,663,437 42,812,669 43,759,941 19,083,100 $ 60,906,392 79,989,492 17,761,552 63,065,412 80,826, % -3.42% -1.04% 71,519 77,563 71,519 77, % 1,002, ,433 7,799,043 8,701,836 8,801,904 9,615,269 1,430,836 10,728,761 12,159,597 1,816,888 11,554,423 13,371, % -7.15% -9.06% 28,496,247 29,103,601 5,586,037 5,118,634 50,225, ,649 17,350,027 51,391, ,545 15,836, % 6.58% 9.56% $ 34,082,284 $ 34,222,235 $ 67,901,414 $ 67,533, % -8-

52 LIMERICK TOWNSHIP MANAGEMENT'S DISCUSSION AND ANALYSIS (Unaudited) Year Ended December 31, 2013 The Township's statement of activities shows how the net position changed during the fiscal year The statement of activities can be found on page 19 of this report (also see table below). The table below helps to explain the changes in net position from January 1, 2013 to December 31, 2013 and from January 1, 2012 to December31, Changes in Net Position Governmental Activities REVENUES Program revenues Charges for services Operating grants and contributions Capital grants and contributions General revenues Taxes, levied for general purposes Other TOTAL REVENUES EXPENSES General government Public safety Public works Culture and recreation Conservation and development Interest on long-term debt Miscellaneous Water, sewer and parking TOTAL EXPENSES TRANSFERS CHANGE IN NET POSITION BEFORE TRANSFERS CHANGE IN NET POSITION NET POSITION AT BEGINNING OF YEAR, as restated in 2012 NET POSITION AT END OF YEAR $ 1,247,317 1,256, ,500 7,488, ,715 10,464,323 1,464,619 5,149,850 2,353, , ,858 72, ,220 10,456,174 8, , ,149 33,310,981 $ 33,819,130 $ 1,125,119 1,147,454 57,500 6,112, ,241 9,061,100 1,360,157 4,883,590 4,640, , ,582 77, ,865 12,286,963 (3,225, 863) 560,000 (2,665,863) 35,976,844 $ 33,310,981 As shown above, the Township's net position increased by $368,198 and decreased by $2,735,523 from January 1, 2013 and January 1, 2012, respectively.

53 Business-Type Activities Totals 2012 Total Percentage Change $ 3,810,008 $ 3,667,260 $ 5,057,325 23,292 1,256, , ,500 7,488,052 46,495 53, ,210 3,856,503 3,909,617 14,320,826 $ 4,792,379 1,170, ,376 6,112, ,430 12,970, % 7.35% % 22.50% % 10.41% 1,464,619 5,149,850 2,353, , , , , , ,220 3,271,408 3, 166,163 3,271,408 3,496,454 3,419,277 13,952,628 1,360,157 4,883,590 4,640, , , , ,865 3, 166,163 15,706, % 5.45% % 2.64% 24.32% % 11.80% 3.32% % 360, , ,198 (500,000) (560,000) (139,951) (69,660) 368,198 34,222,235 34,291,895 67,533,216 $ 34,082,284 $ 34,222,235 $ 67,901,414 (2,735,523) {2, 735,523) 70,268,739 $ 67,533, % 0.00% % -3.89% 0.55% -9-

54 LIMERICK TOWNSHIP MANAGEMENT'S DISCUSSION AND ANALYSIS (Unaudited) Year Ended December 31, 2013 Governmental Activities To understand how the net position changed in the governmental activities, you must look at the "Statement of Revenues, Expenditures and Changes in Fund Balances" (page 22) along with the "Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities" (page 23). On page 22, the Governmental Funds are broken down individually to show the "Net Change in Fund Balances" for each fund. The total of these individual changes is $1,339,106 and it increases the fund balances from January 1, 2013 to December 31, The total fund balances at December 31, 2013, are $13,083,989. The reconciliation on page 23 explains how the Township arrived at the decrease in net position of $508,149 of the governmental activities from the Governmental Funds, starting with an increase in fund balances of $1,339, 106. Below is a table showing the percent of program revenues to expenditures for all the governmental activities. Expenses and Program Revenues Expenses 2013 Program Revenues %of Program Revenues to Expenses General government Public safety Public works Culture and recreation Conservation and development Miscellaneous Interest $ 1,464,619 5,149,850 2,353, , , ,220 72,489 $ 395,375 1,765, , ,633 0% 8% 75% 26% 97% 0% 0% $ 10,456,174 $ 2,612,556 25% The Township's governmental activities' program revenues (charges for services, operating grants and contributions) for each governmental department cover 25% or $2,612,556 of the expenses in 2013, slightly more than 2012.

55 2012 %of Program Program Revenues to Expenses Revenues Expenses $ 1,360,157 $ 0% 4,883, ,083 7% 4,640,770 1,592,228 34% 944, ,940 24% 165, , % 214,865 0% 77,585 0% $ 12,286,963 $ 2,330,073 19% - 10-

56 LIMERICK TOWNSHIP MANAGEMENT'S DISCUSSION AND ANALYSIS (Unaudited) Year Ended December 31, 2013 GENERAL FUND BUDGETARY HIGHLIGHTS The original 2013 budget adopted in December 2012 was amended twice during the year--in June (Resolution ) and again in December (Resolution )--resulting in anticipated General Fund expenditures equaling revenues, or no use of reserves, as compared to $464,257 originally budgeted. As of year-end, revenues exceeded budgetary estimates by $1,141,865. Revenues exceeded the amended budget by $720,709 and expenditures were under the amended budget estimates by $421,156. A comparison of budget to actual numbers for the General Fund can be found on page 50 in the Required Supplementary Information Section of this report. In general, the Township has taken a conservative budgeting approach, which entails estimating revenues on the low side and expenses on the high side of acceptable ranges. It would not be cost-effective to hire experts that can predict more accurately the amount of revenues the Township will collect. By budgeting conservatively, the Township can better manage unexpected events that may arise, such as a sudden drop in the housing market or a catastrophic weather event. Surpluses remaining at the end of the year are either held in cash reserve to be considered part of subsequent budgets or transferred to a capital reserve account for future capital purchases. Significant budgetary variances between budget and actual results are as follows: Revenues Taxes: The tax line item consists of Real Estate Taxes, Real Estate Transfer Taxes, Earned Income Taxes and Local Services Taxes. Overall, taxes collected exceeded the amount budgeted by $646,707. The Township collected $532,153 in Real Estate Transfer Taxes, $107,153 more than the budgeted amount of $425,000. Real Estate Transfer Taxes are based on the dollar volume of real estate sales transacted during the year, which varies greatly from year to year. The current economy has had a great impact on real estate sales. Revenues earned from this tax in exceeded $950,000 each year, while years averaged $523,000. The commercial real estate market is hard to predict on a small scale (Township vs. county wide). Sales of large commercial tracts of land, developed or undeveloped, dramatically impact transfer taxes and many times are not known in advance. For these reasons, the Township has taken the approach to budget this line item conservatively. Three commercial properties were sold in 2013 resulting in approximately $72,000 in transfer taxes. On the residential side, the average home sale increased about $10,000 over the prior year and there were about 60 more sales than the prior year. The actual collection in 2012 was $433,839 and the 2013 original budget was $375,000. Earned I nco me Tax is levied at 1% for residents and is shared with the Spring-Ford Area School District collections were $3,848,269 about $548,000 more than budgeted; and about $602,000 more than that collected in There are two reasons for the increased revenues in first, timing of collections; the 'd quarter was not processed until January 2013 while the 3'd quarter of 2013 was also processed in 2013, and second and more importantly, the efficiencies realized as a result of the adoption of Act 32. In keeping with the policy of conservative budgeting, the next year's budget typically approximates the prior year's actual revenues; however 2014 budget will be based on 2012 collections

57 LIMERICK TOWNSHIP MANAGEMENT'S DISCUSSION AND ANALYSIS (Unaudited) Year Ended December31, 2013 Expenses The Local Services Tax is a flat rate of $52 charged to all persons working in Limerick who earn in excess of $12,000 annually. Collections in 2013 exceeded the budgeted amount by about $11,000 and were approximately $56,000 more than the 2012 collections. Fees, Licenses and Permits: This category includes Cable Franchise fees and licenses, fees and permits related to construction. The 2013 original budget was $769,045, the amended budget was $796,019 and actual revenues were $863,912, an increase of $67,893. The increase is due to a large commercial project coming in late in the 4th quarter, not expected until Also, a slight increase in residential permits, a sign the economy is becoming stable. In addition, cable franchise fees exceeded the budget by $20,000 or 6% due to the demand for cable and internet services. General Government The General Government category includes Township Administration, Tax Collection, Legal, Engineering, Technology and Facilities Management. Expenses for the General Government category were right in line with budgeted amounts. Public Safety: The Public Safety category includes Police, Community Planning, Code Enforcement and Zoning account groups. This category accounts for 56% of the General Fund budget. Combined expenses in these groups were $126,222 below the amount budgeted, mostly attributed to the Police Department which saw a savings of $124,000 or 4% of budget. The majority of the savings were personnel costs related. Two officers were hired mid-year although budgeted to be hired at the beginning of the year. Public Works: The work accounted for in the Public Works Department includes snow removal, recycling, traffic signal maintenance, electricity for streetlights, repairs and maintenance to trucks and equipment, highway reconstruction and maintenance and repair of roads. Overall, public works expenditures were $112,920 less than the 2013 budget. Due to a mild winter, the department saw reduced overtime, heating fuel and diesel costs. The scope of the annual internal in 2013 was reduced by $40,000 due to the timing of other required projects. Miscellaneous: Miscellaneous expenditures include Property and Liability Insurances and Contributions expenses of $227,323 were about $47,000 less than budgeted amounts. The annual budget includes a contribution to the post retirement reserve of $50,000 however this is not an expenditure for GAAP purposes, so not reflected in the actual amounts. SEWER FUND BUDGETARY HIGHLIGHTS The Sewer Operating Fund provides for the day-to-day operations of the sewer facilities. The sewer system includes two plants, 17 operating pump stations and 103 miles of sewer lines servicing approximately 5,300 customers. Staffing includes seven operators and two administrative personnel. The Sewer Capital Fund collects the sewer connection fees paid by developers to be used for future capital projects. The connection fees can vary widely from year to year depending on the amount of development activity in the service area. Together, these funds are reported as the Proprietary Fund

58 LIMERICK TOWNSHIP MANAGEMENT'S DISCUSSION AND ANALYSIS (Unaudited) Year Ended December 31, 2013 Operating Revenues Charges for services total $3,810,008 as compared to the budget of $3,790,626. Of this total, sewer rental charges were $3,659,557 representing 101% of the budgeted amount. The sewer usage is billed on water consumption, so as consumption increases, the rents increase. There were 53 new sewer connections in Approximately $150,000 of sewer tapping fees was received as compared to the budget of $145,626. Operating Expenses Total operating expenses were $3,271, % or $1,580,675 of the expenses is depreciation expense. The operations of the two plants were approximately $51,000 under budget due to the reduction in, odor control, sludge removal and reductions in general maintenance. Nonoperating Revenues (Expenses) Nonoperating revenues (expenses) include interest and investment revenue and debt interest expense. Interest rates remain at all-time lows; actual interest income approximated the budgeted. These same low interest rates help to reduce the debt interest expense via the 2010 bond issued to refinance older debt with higher rates. Portions of the debt are at a variable rate and actual expense was approximately $5,000 less than budgeted. Capital Contributions There were no sewer lines dedicated in CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets The Township's capital assets as of December 31, 2013, were $60,906,392 (net of accumulated depreciation), a decrease of $2,159,020 from This includes land, buildings and improvements, furniture and equipment, automobiles and trucks, land improvements and infrastructure. Infrastructure includes roads, sewer systems and traffic signals. No roads were dedicated in 2013 or The decrease in net assets is primarily related to increased depreciation costs. Current Year Major Additions Sewer System and Utility Plant - The original treatment tanks at King Road, constructed in 1984, were demolished in These tanks went offline when the King Road Plant was expanded in Engineering for the Graterford Road Pump Station continues with an expected construction date of Approximately $41,000 of upgrades were made to Pump Station #5. Lastly, peroxide tanks at Pump Stations #6 and #7 were replaced at a cost of about $46,

59 LIMERICK TOWNSHIP MANAGEMENT'S DISCUSSION AND ANALYSIS (Unaudited) Year Ended December 31, 2013 Office Furniture & Fixtures -A new phone system was installed at a cost of $25,000. Building and Improvements- No major improvements were completed in 2013, however $95,000 of minor improvements including a new parking lot lighting and design work for a new public works facility to be built in Machinery and Equipment Replacement vehicles - 3 (police)... $97,420 Replacement mowers - 3 (parks)... $27,087 The Finance Department maintains a detailed listing of all capital assets and depreciation schedules. Long-Term Debt In 2010, Limerick again realized an additional benefit of the 2008 Sewer Authority consolidation. To ascertain Limerick's ability to refinance existing debt, the Township underwent a financial analysis through Standard and Poor's, a worldwide leader of financial market intelligence and credit ratings. Because of the Township's strong financial and business plan, Limerick received an AA+ rating. To take advantage of the rating, the Board approved a new bond to refinance approximately six million dollars of sewer bonds. The refinancing netted a savings of $205,000 over the term of the former bonds. As part of this new bond, the Board approved refinancing general debt to acquire much needed active open space; a ten-year-old, 1.5 million dollar loan for the expansion of the Township Community Park was refinanced. By keeping the current debt payments at the same level, an additional one million dollars of new money was available. With these additional funds, the Board authorized the purchase of the 17-acre Linfield Sportsman Property on Longview Road, which was acquired as active recreational open space and without the need of additional taxes. No new debt was issued in 2013 or At December 31, 2013, the Township's long-term debt was $10,636,000. Of that total, $8,666,000 or 82% represents sewer debt assumed by the Township in September In April2014, the Township issued a General Obligation Bond in the amount of $4,000,000. The proceeds will be used to construct and equip a new public facility, replace the HVAC system for the Township's municipal building and other Township capital projects. ECONOMIC FACTORS AND NEXT YEAR'S BUDGET AND RATES Economic Factors The Township services an area of square miles and a community of 18,000 residents. The Township is located in the southwestern part of Montgomery County, approximately 30 miles from Philadelphia. Two main road arteries, Route 422 and Ridge Pike, run through Limerick Township, making the Township a desirable and convenient place to reside. As of December 31, 2013, there were 7,850 connections to the sewer system as compared to 7,797 in The Township was notified in early 2013 that Standard and Poor's has re-confirmed its AA+ rating

60 LIMERICK TOWNSHIP MANAGEMENT'S DISCUSSION AND ANALYSIS (Unaudited) Year Ended December 31, 2013 Next Year's Budget As has been done for many years, the administration presented the Board a look at the cost of operations for 2014 at the "status-quo" 20131evel. All departments reported that they can provide current levels of service for 2014 without the need for additional manpower. The only exception was the park maintenance crew within the Public Works department. Over the past number of years the responsibility of this crew has increased significantly with the demand for more park, playing fields, trails, and open space. In particular, the acquisition of Linfield Sports Park in 2010 added a great deal to their normal maintenance duties. To address the manpower shortage, the Board approved a request to change one of the two seasonal part time positions to full time. Even with this change, the administration was able to provide the Board a balanced General Fund Budget without the need to utilize reserve funds, which is the first time since 2010 this has occurred. Also built into the budget is a change to the personnel structure within the code department. In 2009 with the Township facing dwindling permit revenues due to the economic downturn, a change from in-house inspectors to third party service was initiated. At that time this was a significant cost savings to Limerick because of the low permit volume. However, over the past two years construction permit requests have risen significantly and an analysis of projected manpower needs showed that the cost of in-house inspectors would be more economical that third party services. It is also recognized that in-house inspectors will provide greater operational efficiencies. Toward this initiative the hiring of a full time Building Code Official (BCO) and Code Enforcement Officer (CEO) was approved. The administration was able to present to the Board that this is a budget neutral move based on the monies which were allocated to cover third party services. The most significant program discussed was the borrowing costs for the construction of the new public works building. Design has been underway during 2013 and bids are scheduled to be on the street by the end of March. It is estimated that the cost of construction will be in the $2 million dollar range. Also needed are HVAC upgrades to the administration building, and the possibility of added recreation space for the park and recreation department. The Board reviewed the costs of borrowing between $3 and $4 million dollars and annual debt service was placed at approximately $125,000 for 2014 and After that time frame and based on the total draw on the loan, future year debt payments are estimated to be $200,000 to $266,000. Limerick is fortunate that because of the strong financial foundation of the Township which includes the AA+ bond rating, interest rates on this loan are very favorable and below the average other communities would have to bear. The residents are reminded that all capital projects are designed for the long term and will assist in providing the needed services in the most cost effective manner as possible. This annual debt cost was not shown to be covered within the General Fund and in turn did represent a deficit and reserve funds would need to be transferred to cover the costs. To again maintain their objective to protect the reserve funds, the Board instead approved a modest real estate tax increase to begin in Even with this increase, Limerick's RE Tax Rate remains in the bottom third of all taxing agencies within Montgomery County. The Board also tackled the rising cost of health care benefits to the 62 Township employees. National health care impacts including the Affordable Care Act (ACA) are placing significant demands on our health care premiums. While the shift to Delaware Valley Insurance Trust several years ago continues to provide major benefits, costs for 2014 were projected to be approximately 13% higher than This represented a $163,000 budgetary impact. Future years "Luxury Tax" charges based on the ACA are expected to range in the $300,000 range if the plan was not altered. The Board reviewed several options to reduce this obligation while keeping in mind a desire to continue to provide a high quality plan to the employees. The Board decided on a new hybrid approach which maintains the quality of the health plan but changes the initial deductible. This high deductible plan will pass onto the employee the initial $1,500 in costs for a single plan coverage and $3,000 for family coverage. The Township was agreeable to cover the first 50% of this deductible and even with this cost requirement, the Township not only reduced the entire amount of the 13% increase, but realized a $22,000 reduction in premium cost from

61 LIMERICK TOWNSHIP MANAGEMENT'S DISCUSSION AND ANALYSIS (Unaudited) Year Ended December 31, 2013 Another major undertaking will be the implementation of a Geographic Information System. The responsibility of this project will be placed within the newly reorganized Community Planning and Zoning Department. Beginning in 2014, these duties are being separated from the building and code and fire inspection department. While many issues need to be properly communicated between both departments, the pending growth of the township can be served in a more efficient manner if each can focus solely on their respective responsibilities. With over 500 new residential housing units approved or nearing approval, the Township can expect a significant upswing in permit activity over the next several years. With this added growth comes additional data and files which need to be stored for many years. Along with current road, parcel, and sewer files, the burden on the Township in managing these records must be addressed. Over the years GIS systems have become more users friendly and more cost effective to purchase. In additional, the long term cost savings in storing and managing files is significant. The implementation of the GIS system will begin in 2014 with the purchase of the hardware and software needed to establish the initial structure. The first department for which the GIS will be implemented will be the Public Works department. Other departments will be brought into the system over the next three to five years. It is expected that first year costs will be in the $50,000 range with a total expenditure over five years of approximately $166,000. Also proposed is a part-time position which will assist with data implementation and scanning. Once fully up and running, the GIS system will provide cost savings in terms of lower personnel hours with data and file storage and retrieval. Savings will also be realized with a major reduction in hard copy storage costs such as files and storage space. Mentioned above is the separation of the Code duties from Planning and Zoning. The new BCO and CEO positions will work within the new framework of the newly formed Fire Safety Department. When the Director of Fire Safety was hired in 2013, an objective was to analyze and recommend how the building and code arm of the Township could be structured to assist the growing needs of the volunteer fire companies which have been mentioned previously within this budget message. For discussion with the 2014 Budget, the new Fire Safety Director proposed merging all code, building construction, fire codes under one department. This would insure that all phases of building code requirements are properly synced with each other. Whether it is a new building or a structure under construction, the inspectors and code standards will be consistent. This department and the new code personnel will also be tasked with the establishment of a fire and life safety inspection program of all non-residential buildings. With all codes coordinated properly, pre-planning to assist the emergency response agencies can be achieved. The department personnel will also look to establish a program by which day time drivers can assist both volunteer fire companies. It is expected that personnel from this and other township departments will be able to supply personnel for this endeavor. While these are the major programs to be undertaken within 2014, the following is additional initiatives which have been funded: The Board commitment to the integrity of the road infrastructure continues with an approval of $466,000 of roadway surface improvement projects. All funding from these projects will come from the State's Liquid Fuel Fund. The preventive maintenance Oil and Chip Sealing Program will again be utilized in 2014 with $130,000 allocated from the General Fund. By maintaining this pro-active policy, the life expectancy of the roads is increased by approximately seven years. Three new police cruisers will be purchased to ensure the fleet remains modernized and ready for any emergency. However, with the elimination of the historic Crown Vic model, the Township will now be moving to SUV's. The Taurus cruisers purchased in 2013 are proving to be too small in terms of space for prisoner transport. The purchase of a new SUV for the Director of Fire Safety was also approved

62 LIMERICK TOWNSHIP MANAGEMENT'S DISCUSSION AND ANALYSIS (Unaudited) Year Ended December 31, 2013 After a year of stabilization, the newly constructed multi-playing fields at Linfield Park will be ready for use this season. A plan to begin to reconstruct the turf and surface of two multi-playing fields at Limerick Community Park will also be placed on hold for one season. The demand for these fields became too great and instead of taking the fields off-line, the $30,000 in projected costs will be used to construct a new playing field to the rear of the community park. Lands are available and have been sitting vacant for several years. Once this field is ready for use which we hope will be in 2015, a reevaluation of the main fields at the Community Park will take place. The Township has allocated engineering funds for the final easements, design and construction inspection services to construct the Graterford Road Pump Station Project. While the project will be built with private developer monies, the Township is responsible for these costs. To ensure the stability of the reserve funds for the sewer system, a 4% increase in sewage rates for just excess usage above the base rate, was approved for The extra funds will be used to cover cost increases with the system and also to fund the annual contribution to the reserve accounts. With the current value of the entire collection and treatment system at approximately $45 million, adequate reserves are needed to ensure upgrades and emergencies can be handled accordingly. The second phase of the Township complex beautification along Ridge Pike has been funded with $21,000 which will be used for the sidewalk and plantings. Once completed, the Township property will be in line with the Board's beautification standards envisioned for the entire Ridge Pike corridor. REQUESTS FOR INFORMATION This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors with a general overview of the Township's finances and to show the Township's accountability for the funds it receives and disburses. If you have questions about this report or to request additional financial information, please contact the Finance Director at the Limerick Township Municipal Building, 646 West Ridge Pike or by phone at , extension

63 LIMERICK TOWNSHIP STATEMENT OF NET POSITION December 31, 2013 Governmental Business-Type Activities Activities Totals ASSETS Cash and cash equivalents $ 9,396,174 $ 4,675,895 $ 14,072,069 Investments 3,828,025 3,828,025 Receivables, taxes and other 226, ,521 1,164,511 Prepaid expenses and other assets 14,532 3,963 18,495 Capital assets, at cost Land and improvements 5,372,818 1,048,383 6,421,201 Buildings and building improvements 4,915,287 57,233,745 62,149,032 Machinery and equipment 2,910, ,497 3,286,378 Infrastructure 17,400,247 17,400,247 Construction in progress 113, ,454 Accumulated depreciation (6,888, 131) (21,575, 789) (28,463,920) TOTAL ASSETS 37,176,823 42,812,669 79,989,492 DEFERRED OUTFLOWS OF RESOURCES Deferred charges on refunding, net 71,519 71,519 LIABILITIES Accounts payable 289,989 79, ,354 Accrued expenses 4,179 4,179 Accrued interest 2,986 11,066 14,052 Developer escrows and deposits 8,251 8,251 Long-term liabilities Portion due or payable within one year Bonds and notes payable 135, ,000 1,035,000 Portion due or payable after one year Bonds and notes payable, net of unamortized premium 1,846,611 7,799,043 9,645,654 Net OPEB obligation 978, ,439 Compensated absences 104, ,668 TOTAL LIABILITIES 3,357,693 8,801,904 12,159,597 NET POSITION Net investment in capital assets 21,729,491 28,496,247 50,225,738 Restricted 325, ,649 Unrestricted 11,763,990 5,586,037 17,350,027 TOTAL NET POSITION $ 33,819,130 $ 34,082,284 $ 67,901,414 See accompanying notes to the basic financial statements

64 LIMERICK TOWNSHIP STATEMENT OF ACTIVITIES Year Ended December 31, 2013 Functions/Programs Program Revenues Operating Charges for Grants and Expenses Services Contributions Capital Grants and Contributions GOVERNMENTAL ACTIVITIES General government Public safety Public works Culture and recreation Conservation and development Miscellaneous Debt service TOTAL GOVERNMENTAL ACTIVITIES $ 1,464,619 $ $ $ 5,149,850 35, ,020 2,353, , , , , , , ,220 72,489 10,456,174 1,247,317 1,256, , ,500 BUSINESS-TYPE ACTIVITIES Sewer Fund 3,496,454 3,810,008 TOTAL TOWNSHIP ACTIVITIES $ 13,952,628 $ 5,057,325 $ 1,256,739 $ 108,500 GENERAL REVENUES Real estate taxes Earned income taxes Fire protection taxes Per capita and emergency and municipal services taxes Real estate transfer taxes Interest and rents Fines, forfeits and costs Other TOTAL GENERAL REVENUES INTERFUND TRANSFERS, net CHANGE IN NET POSITION NET POSITION AT BEGINNING OF YEAR NET POSITION AT END OF YEAR See accompanying notes to the basic financial statements.

65 Net (Expense) Revenue and Changes in Net Position Governmental Business-Type Activities Activities Totals $ (1,464,619) $ $ (1,464,619) (4,754,475) (4,754,475) (588,614) (588,614) (717,976) (717,976) (5,225) (5,225) (240,220) (240,220) (72,489) (72,489) (7,843,618) (7,843,618) 313, ,554 (7,843,618) 313,554 (7,530,064) 2,176,577 2,176,577 3,848,269 3,848, , , , , , ,153 48,530 17,560 66,090 62,731 62, ,454 28, ,389 7,851,767 46,495 7,898, ,000 (500,000) 508,149 (139,951) 368,198 33,310,981 34,222,235 67,533,216 $ $ 34,082,284 $ 67,901,

66 LIMERICK TOWNSHIP BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2013 Capital Road General Reserve Improvement Fund Fund Fund ASSETS Cash and cash equivalents $ 5,833,252 $ 1,187,194 $ 1,084,759 Investments 2,628, , ,979 Receivables, taxes and other 217,145 Prepaid expenses 14,532 TOTAL ASSETS $ 8,692,969 $ 1,560,200 $ 1,911,738 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES LIABILITIES Accounts payable and accrued expenses $ 239,012 $ 3,500 $ DEFERRED INFLOWS OF RESOURCES Unavailable revenues, property taxes 91,743 FUND BALANCES Nonspendable Prepaid expenses 14,532 Restricted for Road and street improvements CDBG grants Water hydrant maintenance Debt service Committed Post retirement health reserve 150,000 Canine fund 30,000 Assigned to Capital projects 1,000,000 1,556,700 Capital equipment 1,000,000 Road improvements 1,911,738 Recreation activities Future road improvements 1,000,000 Unassigned 5,167,682 TOTAL FUND BALANCES 8,362,214 1,556,700 1,911,738 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES $ 8,692,969 $ 1,560,200 $ 1,911,738 See accompanying notes to the basic financial statements.

67 Other Total Lewis Recreation Governmental Governmental Road Fund Fund Funds Funds $ $ 934,215 $ 356,754 $ 9,396,174 3,828,025 3,768 6, ,990 14,532 $ $ 937,983 $ 362,831 $ 13,465,721 $ $ 1:..::;0,;::,2.:..:95:.._ $ ;3:..:.7-'...:, 1..::.:82=-- $..=;28=-=9.:.:, 9..:c89:,_ 91,743 14, , ,977 (4, 103) {4, 103) 9,137 9, , , ,000 30,000 2,556,700 1,000,000 1,911, , ,688 1,000,000 5,167, , ,649 13,083,989 $==== $ =====93=7=,9=83= $====36=2=,8=31= $ 13,465,

68 LIMERICK TOWNSHIP RECONCILIATION OF TOTAL GOVERNMENTAL FUNDS BALANCES TO NET POSITION OF GOVERNMENTAL ACTIVITIES December31, 2013 TOTAL GOVERNMENTAL FUNDS BALANCES Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. These assets consist of: Land and improvements Buildings and building improvements Machinery and equipment Infrastructure Accumulated depreciation Some liabilities are not due and payable in the current period and therefore are not reported in the funds. Those liabilities consist of: Accrued interest Bonds and notes payable Net OPEB obligation Compensated absences Some of the Township's revenues will be collected after year-end but are not available soon enough to pay for the current period's expenditures and therefore are deferred in the funds. NET POSITION OF GOVERNMENTAL ACTIVITIES $ 13,083,989 5,372,818 4,915,287 2,910,881 17,400,247 (6,888, 131) (2,986) (1,981,611) (978,439) (104,668) 91,743 $ 33,819,130 See accompanying notes to the basic financial statements

69 LIMERICK TOWNSHIP STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS Year Ended December 31, 2013 Capital Road General Reserve Improvement Fund Fund Fund REVENUES Taxes $ 6,692,207 $ $ Fees, licenses and permits 863, ,003 Interest and rents 31,586 8,275 2,845 Intergovernmental revenues 458,498 Fines, forfeits and costs 62,731 Program revenues Other 207,918 25, ,326 TOTAL REVENUES 8,316,852 33, ,174 EXPENDITURES General government 1,356,932 Public safety 4,033,021 Public works 1,545,799 Culture and recreation Conservation and development Miscellaneous 227,323 Debt service Capital projects 190,613 TOTAL EXPENDITURES 7,163, ,613 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 1,153,777 (157,338) 257,174 OTHER FINANCING SOURCES (USES) Sale of capital assets 7,266 Operating transfers in 500, ,072 Operating transfers out (511,912) (78,926) TOTAL OTHER FINANCING SOURCES (USES) (11,912) 157,338 (78,926) NET CHANGE IN FUND BALANCES 1,141, ,248 FUND BALANCES AT BEGINNING OF YEAR 7,220,349 1,556,700 1,733,490 FUND BALANCES AT END OF YEAR $ 8,362,214 $ 1,556,700 $ 1,911,738 See accompanying notes to the basic financial statements.

70 Other Total Lewis Recreation Governmental Governmental Road Fund Fund Funds Funds $ $ 98,820 $ 756,521 $ 7,547,548 12,000 1,007,915 4,447 1,377 48, ,241 1,256,739 62, , , , ,672 1,556,139 10,518, ,039 1,367, ,920 4,759,941 78, ,418 2,011, , , , ,858 12, , , , ,613 78, ,513 1,547,145 9,686,272 (78,926) (351,841) 8, ,840 7,266 78, ,840 10,000 1,090,838 (590,838) 78, ,840 10, ,266 ( 1) 18,994 1,339, , ,655 11,744,883 $ $ 927,688 $ 325,649 $ 13,083,

71 LIMERICK TOWNSHIP RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES Year Ended December 31, 2013 NET CHANGE IN FUND BALANCES- TOTAL GOVERNMENTAL FUNDS Capital outlays are reported in the Governmental Funds as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which depreciation exceeds capital outlays in the period. Because some property taxes will not be collected for several months after the Township's fiscal year ends, they are not considered as "available" revenues in the Governmental Funds. Deferred tax revenues decreased by this amount this year. Some expenses reported in the statement of activities do not require the use of current financial resources and are not reported as expenditures in the Governmental Funds: Accrued interest not reflected in Governmental Funds In the statement of activities, certain operating expenses--compensated absences (vacations and sick leave )--and other postemployment benefits are measured by the amounts earned during the year. In the Governmental Funds, however, expenditures for these items are measured by the amount of financial resources used (essentially, the amounts actually paid). Repayment of note principal is an expenditure in the Governmental Funds, but the repayment reduces long-term liabilities in the statement of net position. Gross proceeds on the sale of assets are revenue on the fund financial statements, but only the gain or loss is reported in the statement of net position. CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES $ 1,339,106 (689,314) (59,496) 149 (213, 112) 132,375 (1,559) $ =,;;50;;;8~, 1,;;49;;., See accompanying notes to the basic financial statements. -23-

72 LIMERICK TOWNSHIP STATEMENT OF NET POSITION PROPRIETARY FUND December 31, 2013 Sewer Fund ASSETS Cash and cash equivalents $ 4,675,895 Accounts receivable, net of allowance of $54, ,521 Other assets 3,963 TOTAL CURRENT ASSETS 5,617,379 PROPERTY AND EQUIPMENT, net 37,195,290 TOTAL ASSETS 42,812,669 DEFERRED OUTFLOWS OF RESOURCES Deferred charges on refunding, net 71,519 CURRENT LIABILITIES Accounts payable 79,365 Accrued salaries and benefits 4,179 Accrued interest 11,066 Developer escrows and deposits 8,251 Bonds and notes payable 900,000 TOTAL CURRENT LIABILITIES 1,002,861 NONCURRENT LIABILITIES Bonds and notes payable 7,799,043 TOTAL LIABILITIES 8,801,904 NET POSITION Net investment in capital assets 28,496,247 Unrestricted 5,586,037 TOTAL NET POSITION $ 34,082,284 See accompanying notes to the basic financial statements. -24-

73 LIMERICK TOWNSHIP STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUND Year Ended December 31, 2013 Sewer Fund OPERATING REVENUES Charges for services OPERATING EXPENSES King Road Plant Possum Hollow Plant General and administrative General operating Contractual and professional services Depreciation TOTAL OPERATING EXPENSES OPERATING INCOME NONOPERATING REVENUES (EXPENSES) Interest and investment revenue Gain on sale of capital asset Miscellaneous Interest expense TOTAL NONOPERATING REVENUES (EXPENSES) INCOME BEFORE CONTRIBUTIONS AND TRANSFERS CONTRIBUTIONS AND TRANSFERS Transfers out CHANGE IN NET POSITION NET POSITION AT BEGINNING OF YEAR NET POSITION AT END OF YEAR $ 3,810, , , , ,252 78,170 1,580,675 3,271, ,600 17, ,335 (225,046) (178,551) 360,049 (500,000) (139,951) 34,222,235 $ 34,082,284 See accompanying notes to the basic financial statements. -25-

74 LIMERICK TOWNSHIP STATEMENT OF CASH FLOWS PROPRIETARY FUND Year Ended December 31, 2013 Sewer Fund CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers Cash payments to suppliers for goods and services Cash payments to employees for services Other operating cash receipts NET CASH PROVIDED BY OPERATING ACTIVITIES CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and construction of property and equipment Principal paid on revenue bonds Interest paid on revenue bonds Proceeds from the sale of assets Transfers to other funds NET CASH USED BY CAPITAL AND RELATED FINANCING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Interest received on investments NET DECREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR CASH AND CASH EQUIVALENTS AT END OF YEAR $ 3,822,149 (1,440,972) (762,338) 28,335 1,647,174 (112,528) (858,000) (221,795) 600 (500,000) (1,691 '723) 17,560 (26,989) 4,702,884 $ 4,675,895 RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income Adjustments to reconcile operating income to net cash provided by operating activities Depreciation Miscellaneous income (Increase) decrease in Accounts receivable Other assets Increase (decrease) in Accounts payable and accrued expenses Due to other funds NET CASH PROVIDED BY OPERATING ACTIVITIES $ 538,600 1,580,675 28,335 12,141 (5) 47,428 (560,000) $ 1,647,174 See accompanying notes to the basic financial statements. -26-

75 LIMERICK TOWNSHIP STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS December 31, 2013 ASSETS Cash, restricted Investments, restricted TOTAL ASSETS LIABILITIES Accounts payable Developers' escrow NET POSITION Held in trust for pension benefits Pension Trust Funds $ 308,928 6,627,554 6,936, $ 6,935,528 Agency Funds $ 382,364 75,629 $ 457,993 $ 457,993 See accompanying notes to the basic financial statements. -27-

76 LIMERICK TOWNSHIP STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS Year Ended December 31, 2013 Pension Trust Funds ADDITIONS Contributions Employer Employee State allocation TOTAL CONTRIBUTIONS Income from investments Net appreciation in fair value of investments Net investment income TOTAL INCOME FROM INVESTMENTS Investment expense INVESTMENT INCOME, net DEDUCTIONS Benefits TOTAL ADDITIONS CHANGE IN NET POSITION NET POSITION AT BEGINNING OF YEAR $ 154,006 19, , , , , ,548 (66, 160) 834,388 1,249, ,756 1,143,410 5,792,118 NET POSITION AT END OF YEAR $ 6,935,528 See accompanying notes to the basic financial statements. -28-

77 LIMERICK TOWNSHIP NOTES TO THE BASIC FINANCIAL STATEMENTS Year Ended December31, 2013 NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entitv Limerick Township (the "Township") is governed by an elected five-member board. The financial statements of the Township include the departments and other organizational units over which the Board of Supervisors exercises oversight responsibility, including general government, public safety, parks and recreation and public works. Until September 1, 2008, the Limerick Township Municipal Authority (the "Authority") was a component unit of the Township and was reported discretely in the Township's financial statements. Subsequently, the Authority was absorbed as a department of the Township and is operated as a Proprietary Fund. In reviewing the criteria for inclusion in the financial statements, the Township considered the following: Two fire departments receive a contribution from the Township. However, the majority of revenues generated are through private fund-raisers under the direction of a separate independent board not appointed by the Supervisors. The departments are organized under a separate charter and, therefore, are not included in the financial statements. Measurement Focus, Basis of Accounting and Financial Statement Presentation Basis of Financial Statement Presentation- The basic financial statements of the Township have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as prescribed by the Governmental Accounting Standards Board (GASB). In June 1999, the GASB issued Statement No. 34, Basic Financial Statements-and Management's Discussion and Analysis-for State and Local Governments. Government-Wide Financial Statements - The statement of net position and statement of activities display information about the reporting government as a whole. They include all funds of the reporting entity except for Fiduciary Funds. The statements distinguish between governmental and business-type activities. Governmental activities generally are financed through taxes, intergovernmental revenues and other nonexchange revenues. Business-type activities are financed in whole or in part by fees charged to parties for goods or services. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. The Township does not allocate indirect expenses to functions in the statement of activities. Program revenues include (1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. -29-

78 LIMERICK TOWNSHIP NOTES TO THE BASIC FINANCIAL STATEMENTS December31, 2013 Separate financial statements are provided for Governmental Funds, the Proprietary Fund and Fiduciary Funds, even though the latter are excluded from the government-wide financial statements. Major individual Governmental Funds and major individual Enterprise Funds are reported as separate columns in the fund financial statements. Amounts reported as program revenues include (1) charges to customers or applicants for goods, services, or privileges provided, (2) operating grants and contributions and (3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. The Proprietary Fund distinguishes operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a Proprietary Fund's principal ongoing operations. The principal operating revenues of the Sewer Fund are charges to customers for sales and services. Operating expenses for the Sewer Fund include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Fund Financial Statements - Fund financial statements report detailed information about the Township. The focus of Governmental Funds financial statements is on major funds rather than reporting funds by type. Each major fund is presented in a separate column. Other nonmajor Governmental Funds are aggregated and presented in a single column (Other Governmental Funds). The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All Governmental Funds are accounted for using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Township considers revenues to be available if they are collected within 60 days of the end of the fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, and claims and judgments are recorded only when payment is due. The financial statements for Governmental Funds are a balance sheet, which generally includes only current assets and current liabilities, and a statement of revenues, expenditures and changes in fund balances, which reports on the sources (i.e., revenues and other financing sources) and uses (i.e., expenditures and other financing uses) of current financial resources. Property taxes, franchise taxes, licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the Township. -30-