$30,085,000 DUBLIN UNIFIED SCHOOL DISTRICT (Alameda County, California) 2012 General Obligation Refunding Bonds

Transcription

1 NEW ISSUE -- FULL BOOK-ENTRY RATINGS: Moody s: Aa2 S&P: AA- See RATINGS In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however to certain qualifications described herein, under existing law, the interest on the Refunding Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, although for the purpose of computing the alternative minimum tax imposed on certain corporations, such interest is taken into account in determining certain income and earnings. In the further opinion of Bond Counsel, such interest is exempt from California personal income taxes. See TAX MATTERS. $30,085,000 DUBLIN UNIFIED SCHOOL DISTRICT (Alameda County, California) 2012 General Obligation Refunding Bonds Dated: Date of Delivery Due: August 1, as shown below Authority. The Dublin Unified School District (Alameda County, California) 2012 General Obligation Refunding Bonds (the Refunding Bonds ) are being issued by the Dublin Unified School District (the District ) pursuant to certain provisions of the California Government Code and a resolution of the Board of Trustees of the District adopted on August 28, 2012 (the Bond Resolution ). The Refunding Bonds are being issued to refund a series of general obligation bonds of the District. See THE REFUNDING BONDS Authority for Issuance and -Refinancing Plan. Security. The Refunding Bonds are general obligations of the District. The Board of Supervisors of Alameda County has the power and is obligated to annually levy ad valorem taxes upon all property subject to taxation by the District without limitation of rate or amount (except certain personal property which is taxable at limited rates) for the payment of principal of and interest on the Refunding Bonds. There are currently other series of general obligation bonds of the District that are similarly secured by tax levies. All general obligation bonds are issued on a parity basis with one another. See The REFUNDING BONDS-Security for the Refunding Bonds. Redemption. The Refunding Bonds are subject to redemption prior to maturity, as described herein. REFUNDING BONDS Redemption. See THE Book-Entry Only. The Refunding Bonds will be issued in book-entry form only, and will be initially issued and registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York ( DTC ). Purchasers will not receive physical certificates representing their interests in the Refunding Bonds. See APPENDIX F - Book-Entry-Only System. Payments. Interest on the Refunding Bonds accrues from the date of delivery and is payable semiannually on February 1 and August 1 of each year, commencing February 1, 2013, by check mailed to the person in whose name the Refunding Bond is registered. Payments of principal and interest on the Refunding Bonds will be paid by U.S. Bank National Association, San Francisco, California, as Paying Agent, to DTC for subsequent disbursement to DTC Participants who will remit such payments to the beneficial owners of the Refunding Bonds. See THE REFUNDING BONDS Description of the Refunding Bonds. The following firm, serving as financial advisor to the District, has structured this financing: MATURITY SCHEDULE (See Inside Cover) This cover page contains information for general reference only. It is not a summary of all the provisions of the Refunding Bonds. Investors must read the entire official statement to obtain information essential in making an informed investment decision. The Refunding Bonds were sold and awarded by competitive bid held October 3, 2012 as set forth in the Official Notice of Sale. The Refunding Bonds are offered when, as and if issued, subject to the approval as to their legality by Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel. Jones Hall is also serving as Disclosure Counsel to the District. It is anticipated that the Refunding Bonds in book-entry form will be available for delivery through the facilities of DTC on or about November 2, Dated: October 3, 2012

2 MATURITY SCHEDULE Base CUSIP : 26362V Maturity (August 1) Principal Amount Interest Rate Yield CUSIP 2013 $ 670, % 0.270% FR , FS , FT ,400, FU ,605, FV ,725, FW ,775, FX ,855, FY ,890, FZ ,950, GA ,030, C GB ,110, C GC ,195, C GD ,245, GE ,240, GF ,295, C GH ,275, C GG7 C: Yield to par call on August 1, Copyright 2012, American Bankers Association. CUSIP data are provided by Standard & Poor's CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc., and are provided for convenience of reference only. Neither the District nor the Underwriter assumes any responsibility for the accuracy of these CUSIP data.

3 GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT Use of Official Statement. This Official Statement is submitted in connection with the sale of the Refunding Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement is not a contract between any bond owner and the District or the Underwriter. No Offering Except by This Official Statement. No dealer, broker, salesperson or other person has been authorized by the District or the Underwriter to give any information or to make any representations other than those contained in this Official Statement and, if given or made, such other information or representation must not be relied upon as having been authorized by the District or the Underwriter. No Unlawful Offers or Solicitations. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor may there be any sale of the Refunding Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale. Information in Official Statement. The information set forth in this Official Statement has been furnished by the District and other sources which are believed to be reliable, but it is not guaranteed as to accuracy or completeness. Document Summaries. All summaries of the Bond Resolution or other documents referred to in this Official Statement are made subject to the provisions of such documents and qualified in their entirety to reference to such documents, and do not purport to be complete statements of any or all of such provisions. No Securities Laws Registration. The Refunding Bonds have not been registered under the Securities Act of 1933, as amended, in reliance upon exceptions therein for the issuance and sale of municipal securities. The Refunding Bonds have not been registered or qualified under the securities laws of any state. Effective Date. This Official Statement speaks only as of its date, and the information and expressions of opinion contained in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale of the Refunding Bonds will, under any circumstances, give rise to any implication that there has been no change in the affairs of the District, the County, the other parties described in this Official Statement, or the condition of the property within the District since the date of this Official Statement. The Refunding Bonds have not been registered under the Securities Act of 1933, as amended, in reliance upon an exception from the registration requirements contained in such act. The Refunding Bonds have not been registered or qualified under the securities laws of any state. Website. The District maintains a website. However, the information presented on the website is not a part of this Official Statement and should not be relied upon in making an investment decision with respect to the Refunding Bonds.

4 DUBLIN UNIFIED SCHOOL DISTRICT BOARD OF TRUSTEES Greg Tomlinson, President Amy Miller, Vice President Dan Cunningham, Trustee David Haubert, Trustee Sean Kenney, Trustee DISTRICT ADMINISTRATION Dr. Stephen L. Hanke, Superintendent Beverly Heironimus, CPA, Assistant Superintendent, Business Services PROFESSIONAL SERVICES BOND COUNSEL AND DISCLOSURE COUNSEL Jones Hall, A Professional Law Corporation San Francisco, California PAYING AGENT U.S. Bank National Association San Francisco, California FINANCIAL ADVISOR KNN Public Finance A Division of Zions First National Bank Oakland, California VERIFICATION AGENT Causey Demgen & Moore PC, Denver, Colorado

5 TABLE OF CONTENTS INTRODUCTION... 1 THE REFUNDING BONDS... 3 Authority for Issuance... 3 Purpose of Issue... 3 Security... 3 Description of the Refunding Bonds... 4 Paying Agent... 4 Redemption... 5 Defeasance... 5 Registration, Transfer and Exchange of Bonds... 6 THE REFUNDING PLAN... 7 SOURCES AND USES OF FUNDS... 8 DEBT SERVICE SCHEDULES... 8 SECURITY FOR THE REFUNDING BONDS General Ad Valorem Property Taxation Assessed Valuations Appeals of Assessed Value Alternative Method of Tax Apportionment Largest Secured Property Taxpayers in District Assessed Valuation of Land Uses in District Overlapping Debt Obligations TAX MATTERS CERTAIN LEGAL MATTERS Continuing Disclosure Absence of Material Litigation UNDERWRITING RATINGS ADDITIONAL INFORMATION Page APPENDIX A - Excerpts from the Audited Financial Statements of the District for Fiscal Year Ended June 30, A-1 APPENDIX B - General and Financial Information About the District... B-1 APPENDIX C - General Information About Alameda County... C-1 APPENDIX D - Form of Opinion of Bond Counsel... D-1 APPENDIX E - Form of Continuing Disclosure Certificate... E-1 APPENDIX F - The Book-Entry System... F-1 -i-

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7 OFFICIAL STATEMENT $30,085,000 DUBLIN UNIFIED SCHOOL DISTRICT (Alameda County, California) 2012 General Obligation Refunding Bonds The purpose of this Official Statement, which includes the cover page, inside cover page and attached appendices, is to set forth certain information concerning the sale and delivery of the Refunding Bonds captioned above (the Refunding Bonds ) by the Dublin Unified School District (the District ). INTRODUCTION This Introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement, including the cover page and appendices hereto, and the documents summarized or described herein. A full review should be made of the entire Official Statement. The offering of the Refunding Bonds to potential investors is made only by means of the entire Official Statement. The District. The Dublin Unified School District is located in the City of Dublin in the County of Alameda, California. The District was established in 1988 and comprises an area of approximately 15 square miles. The District operates six elementary schools, two middle schools, one high school, a continuation high school, an independent study program and an adult education program. Enrollment in the District for the school year is estimated to be 7,198 students. For general and financial information about the District, see APPENDIX B. Purpose of Issue. The net proceeds of the Refunding Bonds will be used to refund the District s outstanding 2005 General Obligation Bonds, Election of 2004, Series A, originally issued in the aggregate principal amount of $39,500,000, and currently outstanding in the aggregate principal amount of $32,035,000 (the 2005 Bonds ). See THE REFUNDING BONDS -- Purpose of Issue and SOURCES AND USES OF FUNDS. The Refunding Bonds are issued on parity with other general obligation bonds of the District which are currently outstanding. Authority for Issuance of the Refunding Bonds. The Refunding Bonds will be issued under the provisions of Articles 9 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the Bond Law ) and under a resolution adopted by the Board of Trustees of the District on August 28, 2012 (the Bond Resolution ). See THE REFUNDING BONDS - Authority for Issuance herein. 1

8 Description of the Refunding Bonds. The Refunding Bonds are issued pursuant to a resolution of the Board of Trustees of the District adopted on August 28, 2012 (the Resolution ). The Refunding Bonds will be dated their date of delivery (the Closing Date ) and will be issued as fully registered bonds, without coupons, in the denominations of $5,000 or any integral multiple thereof, registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York ( DTC ), and will be available under the bookentry system maintained by DTC, only through brokers and dealers who are or act through DTC Participants as described herein. Beneficial Owners will not be entitled to receive physical delivery of the Refunding Bonds. See APPENDIX F The Book-Entry System. Redemption. The Refunding Bonds are subject to optional redemption [and mandatory sinking fund redemption] prior to maturity, as described herein. See THE REFUNDING BONDS Redemption. Sources of Payment for the Refunding Bonds. The Board of Supervisors of the County has the power and is obligated to annually levy ad valorem taxes for the payment of the Refunding Bonds and the interest thereon, upon all property within the District subject to taxation, without limitation of rate or amount (except certain personal property which is taxable at limited rates). The Refunding Bonds are not a debt of the County. See THE REFUNDING BONDS Security. Legal Matters. Issuance of the Refunding Bonds is subject to the approving opinion of Jones Hall, A Professional Law Corporation, San Francisco, California ( Bond Counsel ), to be delivered in substantially the form attached hereto as Appendix D. Jones Hall, A Professional Law Corporation, San Francisco, California, will serve as Disclosure Counsel to the District. Jones Hall, A Professional Law Corporation is also serving as disclosure counsel to the District. Payment of the fees of Bond Counsel and Disclosure Counsel is contingent upon issuance of the Refunding Bonds. The Refunding Bonds are not a Debt of the County. The Refunding Bonds are not a debt of the County. The County of Alameda, including its Board of Supervisors, officers, officials, agents and other employees, shall be required only to the extent required by law to: (i) levy and collect ad valorem taxes for payment of the Refunding Bonds in accordance with the law; and (ii) transmit the proceeds of such taxes to the Paying Agent for the payment of the principal of and interest on the Refunding Bonds at the time such payment is due. Professionals Involved in the Offering. All proceedings in connection with the issuance of the Refunding Bonds are subject to the approval of Jones Hall, A Professional Law Corporation, San Francisco, California, as Bond Counsel. Jones Hall is also acting as disclosure counsel to the District. KNN Public Finance, A Division of Zions First National Bank, Oakland, California is serving as the District s financial advisor. Payment of the fees and expenses of Bond Counsel, disclosure counsel and the underwriter is contingent upon issuance of the Refunding Bonds. Other Information. This Official Statement speaks only as of its date, and the information contained herein is subject to change. For limiting factors about this Official Statement, see GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT inside the cover hereof. Copies of documents referred to herein and information concerning the Refunding Bonds are available from the Superintendent, Dublin Unified School District, 7471 Larkdale 2

9 Avenue, Dublin, California 94568; telephone (925) The District may impose a charge for copying, mailing and handling. Authority for Issuance THE REFUNDING BONDS The Refunding Bonds are being issued pursuant to the provisions of Articles 9 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code (collectively, the Bond Law ) and are authenticated and delivered pursuant to the Resolution. Pursuant to the Government Code, bonds issued for the purpose of refunding outstanding bonds previously authorized by voter approval, and that reduce the debt service obligation of taxpayers, do not require voter approval, either for issuance or the levy of ad valorem property tax sufficient to pay principal and interest due on the refunding bonds. Purpose of Issue The net proceeds of Refunding Bonds will be used to refund all or a portion of the 2005 Bonds, as described under THE REFUNDING PLAN. The 2005 Bonds were issued in April of 2005 to finance projects specified in the ballot measure approved by the District s voters on November 2, 2004, including the acquisition, construction, and rehabilitation of school facilities in the District. Security The Board of Supervisors of the County has the power and is obligated to levy ad valorem taxes for the payment of the Refunding Bonds and the interest thereon upon all property within the District subject to taxation by the District without limitation of rate or amount (except certain personal property which is taxable at limited rates). Such taxes are required to be levied annually, in addition to all other taxes, during the period that the Refunding Bonds are outstanding in an amount sufficient to pay the principal of and interest on the Refunding Bonds when due. Such taxes, when collected, will be deposited into a debt service fund for the Refunding Bonds (the Debt Service Fund ), which is maintained by the County Treasurer-Tax Collector in an amount sufficient for the payment of principal of and interest on the Refunding Bonds when due. Although the County is obligated to levy an ad valorem tax for the payment of the Refunding Bonds, the Refunding Bonds are not a debt of the County. The moneys in the Debt Service Fund, to the extent necessary to pay the principal and interest on the Refunding Bonds as the same become due and payable, shall be transferred by the County to the Paying Agent, which, in turn, shall pay such moneys to DTC to pay the principal and interest on the Refunding Bonds. DTC will thereupon make payments of principal and interest on the Refunding Bonds to the DTC Participants who will thereupon make payments of principal and interest to the beneficial owners of the Refunding Bonds. See APPENDIX F The Book-Entry System. The amount of the annual ad valorem tax levied by the County to repay the Refunding Bonds will be determined by the relationship between the assessed valuation of taxable property in the District and the amount of debt service due on the Refunding Bonds. A reduction in the assessed valuation of taxable property in the District caused by economic factors beyond the District s control, such as economic recession, slower growth, or decrease in 3

10 land values, a relocation out of the District or change to tax-exempt status by one or more major property owners, or the complete or partial destruction of such property caused by, among other eventualities, an earthquake, flood or other natural disaster, could cause a reduction in the assessed value of the District and necessitate an unanticipated increase in the annual tax levy. For further information regarding the District s tax base, tax rates, overlapping debt and other matters concerning taxation, see SECURITY FOR THE REFUNDING BONDS. Description of the Refunding Bonds The Refunding Bonds shall be issued in fully registered form, in denominations of $5,000 or any integral multiple thereof, and shall be initially issued and registered in the name of Cede & Co., as nominee of DTC. Purchasers will not receive physical certificates representing their interest in the Refunding Bonds. See APPENDIX F The Book-Entry System. The Refunding Bonds mature on August 1, in the years and amounts set forth on the cover page hereof. Interest with respect to the Refunding Bonds accrues from the Closing Date, and is payable semiannually on February 1 and August 1 of each year (each, an Interest Payment Date ) commencing February 1, The Refunding Bonds will bear interest from the Interest Payment Date next preceding the date of authentication, unless (i) it is authenticated as of an Interest Payment Date, in which event it shall bear interest from such date, or (ii) it is authenticated prior to an Interest Payment Date and after the close of business on the fifteenth (15th) day of the month preceding an Interest Payment Date, whether or not such day is a business day (the Record Date ), in which event it shall bear interest from such Interest Payment Date, or (iii) it is authenticated on or before the first Record Date, in which event it shall bear interest from its dated date; provided, however, that if at the time of authentication of a Bond, interest is in default thereon, such Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon. Interest on the Refunding Bonds (including the final interest payment upon maturity or redemption) is payable by check of the Paying Agent mailed to the Owner thereof at such Owner s address as it appears on the Registration Books at the close of business on the preceding Record Date; provided that at the written request of the Owner of at least $1,000,000 aggregate principal amount of the Refunding Bonds, which written request is on file with the Paying Agent as of any Record Date, interest on such Refunding Bonds shall be paid on the succeeding Interest Payment Date to such account (within the United States) as shall be specified in such written request. Principal of and premium (if any) on the Refunding Bonds is payable in lawful money of the United States of America upon presentation and surrender at the Principal Office of the Paying Agent. Each Refunding Bond delivered under the Resolution upon transfer of or in exchange for or in lieu of any other Refunding Bond shall carry all the rights to interest accrued and unpaid, and to accrue, that were carried by such other Refunding Bond. Each such Refunding Bond shall bear interest from such date that neither loss nor gain in interest shall result from such transfer, exchange, or substitution. Paying Agent U.S. Bank National Association, San Francisco, California will initially act as the registrar, transfer agent, and paying agent for the Refunding Bonds. As long as DTC is the registered owner of the Refunding Bonds and DTC s book-entry method is used for the 4

11 Refunding Bonds, the Paying Agent will send any notice of redemption or other notices to owners only to DTC. Any failure of DTC to advise any DTC Participant, or of any DTC Participant to notify any Beneficial Owner, of any such notice and its content or effect will not affect the validity or sufficiency of the proceedings relating to the redemption of the Refunding Bonds called for redemption or of any other action premised on such notice. See APPENDIX F The Book-Entry System. The Paying Agent, the District, the County, the Underwriter and the Financial Advisor of the Refunding Bonds have no responsibility or liability for any aspects of the records relating to or payments made on account of beneficial ownership, or for maintaining, supervising or reviewing any records relating to beneficial ownership, of interests in the Refunding Bonds. Redemption Optional Redemption. The Bonds maturing on or before August 1, 2022 are not subject to redemption prior to their respective stated maturity dates. The Bonds maturing on or after August 1, 2023 are subject to redemption prior to their respective stated maturity dates, at the option of the District, from any source of available funds, in whole or in part, on any date on or after August 1, 2022, at a redemption price equal to the principal amount to be redeemed, plus accrued interest to the date fixed for redemption, without premium. For the purpose of selection for optional redemption, Bonds will be deemed to consist of $5,000 portions, and any such portion may be separately redeemed. Defeasance The Refunding Bonds may be paid by the District in any of the following ways: (i) by paying or causing to be paid the principal or redemption price of and interest on such Refunding Bonds, as and when the same become due and payable; (ii) by irrevocably depositing, in trust, at or before maturity, money or securities in the necessary amount (as provided in the Resolution, and described following, to pay such Refunding Bonds); or (iii) by delivering such Refunding Bonds to the Paying Agent for cancellation. If there will be deposited with or held in trust by the Paying Agent money or securities in the necessary amount to pay any Refunding Bonds, the money or securities so to be deposited or held may include money or securities held by the Paying Agent in the funds and accounts established pursuant to the Resolution and must be: (i) lawful money of the United States of America in an amount equal to the principal amount of such Refunding Bonds and all unpaid interest thereon to maturity; or (ii) Federal Securities (not callable by the issuer thereof prior to maturity) the principal of and interest on which when due, in the opinion of a certified public accountant delivered to the District, will provide money sufficient to pay the principal and all unpaid interest to maturity on the Refunding Bonds to be paid, as such principal and interest become due,. 5

12 The District may at any time surrender to the Paying Agent any Refunding Bonds previously issued and delivered for cancellation, which the District may have acquired in any manner whatsoever, and such Refunding Bonds, upon such surrender and cancellation, shall be deemed to be paid and retired. Registration, Transfer and Exchange of Bonds If the book-entry system is discontinued, the District shall cause the Paying Agent to maintain and keep at its principal corporate trust office all books and records necessary for the registration, exchange and transfer of the Refunding Bonds. If the book-entry system is discontinued, the person in whose name a Refunding Bond is registered on the Bond Register shall be regarded as the absolute owner of that Refunding Bond. Payment of the principal of and interest on any Refunding Bond shall be made only to or upon the order of that person; neither the District, the County nor the Paying Agent shall be affected by any notice to the contrary, but the registration may be changed as provided the Resolution. Any Refunding Bond may, in accordance with its terms, be transferred, upon the Registration Books, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Refunding Bond for cancellation at the Principal Office at the Paying Agent, accompanied by delivery of a written instrument of transfer in a form approved by the Paying Agent, duly executed. The District may charge a reasonable sum for each new Refunding Bond issued upon any transfer. Whenever any Refunding Bond or Bonds shall be surrendered for transfer, the District shall execute and the Paying Agent shall authenticate and deliver a new Refunding Bond or Bonds, for like aggregate principal amount. Refunding Bonds may be exchanged at the Principal Office of the Paying Agent for a like aggregate principal amount of Refunding Bonds of authorized denominations and of the same maturity. The District may charge a reasonable sum for each new Refunding Bond issued upon any exchange (except in the case of any exchange of temporary Refunding Bonds for definitive Refunding Bonds). 6

13 THE REFUNDING PLAN Refunding of 2005 Bonds. The net proceeds of the Refunding Bonds will be used to refund, on an advance basis, the District s outstanding 2005 General Obligation Bonds, Election of 2004, Series A issued in the original principal amount of $39,500,000 (the 2005 Bonds ) scheduled to mature on and after August 1, The August 1, 2013 maturity of the 2005 Bonds will remain outstanding until its due date. The 2005 Bonds are currently outstanding in the aggregate principal amount of $32,035,000. Escrow Fund. The District will deliver a portion of the proceeds of the Refunding Bonds to U.S. Bank, National Association, as escrow agent (the Escrow Bank ), for deposit in an escrow fund (the "Escrow Fund") established under an Escrow Deposit and Trust Agreement (the Escrow Agreement ), entered into by and between the District and the Escrow Bank. On the Closing Date, the Escrow Agent will invest funds on deposit in the Escrow Fund in federal securities, and will apply such funds to pay interest due on the Refunded Bonds through and including the August 1, 2013 redemption date, on which date the Refunded Bonds will be redeemed at a price equal to the principal amount thereof, without premium. Sufficiency of the deposits in the Escrow Fund for such purposes will be verified by Causey Demgen & Moore PC (the Verification Agent ). See ESCROW VERIFICATION herein. The amounts held by the Escrow Bank in the Escrow Fund are pledged solely to the payment of the Refunded Bonds. The funds deposited in the Escrow Fund will not be available for the payment of debt service with respect to the Refunding Bonds. The District has other series of general obligation bonds outstanding as of August 1, 2012 in the aggregate principal amount of $188,818,393 (not including the Refunding Bonds). See DISTRICT FINANCIAL INFORMATION General Obligation Bonds and DEBT SERVICE SCHEDULES. 7

14 SOURCES AND USES OF FUNDS The sources and uses of funds with respect to the Refunding Bonds are as follows: Sources of Funds: Principal Amount of Refunding Bonds $30,085, Net Premium 3,319, Total Sources $33,404, Uses of Funds: Refunding of 2005 Bonds $32,907, Total Costs of Issuance (1) 497, Total Uses $33,404, (1) Total Costs of Issuance include underwriter s discount, financial advisory fees, legal fees, printing costs and other miscellaneous expenses. DEBT SERVICE SCHEDULES The following table shows the debt service schedule with respect to the Refunding Bonds, assuming no optional redemptions. Period Ending (August 1) Principal Interest Debt Service 2013 $ 670,000 $ 803, $ 1,473, ,000 1,055, ,885, ,000 1,030, ,025, ,400, , ,390, ,605, , ,539, ,725, , ,595, ,775, , ,576, ,855, , ,585, ,890, , ,546, ,950, , ,530, ,030, , ,532, ,110, , ,531, ,195, , ,532, ,245, , ,494, ,240, , ,433, ,295, , ,432, ,275,000 68, ,343, Total $30,085,000 $10,362, $40,447,

15 The following table shows the debt service schedule with respect to all of the outstanding general obligation bonds of the District, including the Refunding Bonds, as of November 2, 2012, assuming no optional redemptions. Period Ending (Aug 1) 2005 Refunding Bonds 2010 Refunding Bonds 2011 QSCB BAN 2012 Refunding Bonds 2004 Election Series A 2004 Election Series B 2004 Election Series C 2004 Election Series D 2004 Election Series E Total 2013 $589,950 $2,687, $1,190, $1,387, $ 1,686, $1,190, $ 1,473, $ 10,204, ,675, , ,477, ,784, ,190, ,885, ,918, ,711, ,080, ,458, ,950, ,190, ,025, ,416, ,697, ,235, ,498, ,072, ,190, ,390, ,084, ,933, ,290, ,629, ,138, ,539, ,531, ,808, ,744, ,210, ,595, ,358, ,389, ,951, ,344, ,576, ,261, ,727, ,397, ,162, ,585, ,872, ,058, ,591, ,184, ,546, ,381, ,296, $225, $ 310, ,429, ,530, ,792, ,515, , , ,152, ,532, ,685, ,814, , ,531, ,755, ,098, , ,532, ,535, ,583, ,020, ,494, ,097, ,321, ,945, ,433, ,699, ,294, ,110, ,475, ,432, ,311, ,334, ,365, ,940, ,343, ,982, ,540, ,566, ,106, ,830, ,000, ,830, ,120, ,471, ,591, ,401, ,401, , ,434, ,934, ,937, ,937, ,936, ,936, ,937, ,937, ,935, ,935, ,935, ,935, ,937, ,937, ,934, ,934, ,935, ,935, ,935, ,935, ,935, ,935, Total 589,950 77,946, ,665, ,625, ,824, ,718, ,535, ,761, ,447, ,112,

16 SECURITY FOR THE REFUNDING BONDS General The Board of Supervisors of the County has the power and is obligated to levy ad valorem taxes for the payment of the Refunding Bonds and the interest thereon upon all property within the District subject to taxation by the District without limitation as to rate or amount (except certain personal property which is taxable at limited rates). Such taxes are required to be levied annually, in addition to all other taxes, during the period that the Refunding Bonds are outstanding in an amount sufficient to pay the principal and interest on the Refunding Bonds when due. Such taxes, when collected, will be deposited into the Debt Service Fund for the Refunding Bonds, which is maintained by the County and which is created by statute for the payment of principal of and interest on the Refunding Bonds when due. Although the County is obligated to levy an ad valorem tax for the payment of the Refunding Bonds, and the County will maintain the Debt Service Fund pledged to the repayment of the Refunding Bonds, the Refunding Bonds are not a debt of the County. The moneys in the Debt Service Fund, to the extent necessary to pay the principal and interest on the Refunding Bonds as the same become due and payable, shall be transferred by the County to the Paying Agent which, in turn, shall pay such moneys to DTC to pay the principal and interest on the Refunding Bonds. DTC will thereupon make payments of principal and interest on the Refunding Bonds to the DTC Participants who will thereupon make payments of principal and interest to the beneficial owners of the Refunding Bonds. See "APPENDIX F The Book-Entry System." The amount of the annual ad valorem tax levied by the County to repay the Refunding Bonds will be determined by the relationship between the assessed valuation of taxable property in the District and the amount of debt service due on the Refunding Bonds. A reduction in the assessed valuation of taxable property in the District caused by economic factors beyond the District's control, such as economic recession, slower growth, or decrease in land values, a relocation out of the District or change to tax-exempt status by one or more major property owners, or the complete or partial destruction of such property caused by, among other eventualities, an earthquake, flood or other natural disaster, could cause a reduction in the assessed value of the District and necessitate an unanticipated increase in the annual tax levy. Ad Valorem Property Taxation Taxes are levied by the County for each fiscal year on taxable real and personal property which is situated in the District as of the preceding January 1. For assessment and collection purposes, property is classified either as "secured" or "unsecured" and is listed accordingly on separate parts of the assessment roll. The "secured roll" is that part of the assessment roll containing State-assessed public utilities property and real property having a tax lien which is sufficient, in the opinion of the County Assessor, to secure payment of the taxes. Other property is assessed on the "unsecured roll." Property taxes on the secured roll are due in two installments, on November 1 and March 1 of each fiscal year. If unpaid, such taxes become delinquent on December 10 and April 10, respectively, and a 10% penalty attaches to any delinquent payment. Property on the secured roll with respect to which taxes are delinquent becomes tax defaulted on or about June 30 of the fiscal year. Such property may thereafter be redeemed by payment of a penalty of 10

17 1.5% per month to the time of redemption, plus costs and a redemption fee. If taxes are unpaid for a period of five years or more, the property is subject to sale by the Tax Collector/Treasurer. Property taxes on the unsecured roll are due as of the January 1 lien date and become delinquent, if unpaid, on August 31. A 10% penalty attaches to delinquent unsecured taxes. If unsecured taxes are unpaid at 5:00 p.m. on October 31, an additional penalty of 1.5% attaches to them on the first day of each month until paid. The taxing authority has four ways of collecting delinquent unsecured personal property taxes: (1) bringing a civil action against the taxpayer; (2) filing a certificate in the office of the County Clerk specifying certain facts in order to obtain a lien on certain property of the taxpayer; (3) filing a certificate of delinquency for record in the County Clerk and County Recorder's office in order to obtain a lien on certain property of the taxpayer; and (4) seizing and selling personal property, improvements, or possessory interests belonging or assessed to the assessee. Assessed Valuations The assessed valuation of property in the District is established by the County Assessor, except for public utility property which is assessed by the State Board of Equalization. Assessed valuations are reported at 100% of the "full value" of the property, as defined in Article XIIIA of the California Constitution. The full value may be adjusted annually to reflect inflation at a rate not to exceed 2% per year, or to reflect a reduction in the consumer price index or comparable data for the area, or to reflect declines in property value caused by substantial damage, destruction or other factors, including assessment appeals filed by property owners. For a discussion of how properties currently are assessed, see "CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING DISTRICT REVENUES AND APPROPRIATIONS" in Appendix B. Certain classes of property, such as churches, colleges, not-for-profit hospitals, and charitable institutions, are exempt from property taxation and do not appear on the tax rolls. No reimbursement is made by the State for such exemptions. Property within the District has a total taxable assessed valuation for fiscal year of $8,792,909,514. Shown in the following table are the assessed valuations for the District from through the fiscal year. Table No. 1 DUBLIN UNIFIED SCHOOL DISTRICT Assessed Valuation Fiscal Year through Fiscal Year Fiscal Year Local Secured Utility Unsecured Total $8,387,779,912 $1,016,256 $218,156,134 $8,606,952, ,128,979,090 1,016, ,691,584 8,345,686, ,990,405,147 1,019, ,289,798 8,194,714, ,179,919,846 1,019, ,764,835 8,365,703, ,582,663,895 1,019, ,226,467 8,792,909,514 Source: California Municipal Statistics, Inc. 11

18 The following table shows the average assessed value categories of single-family residential parcels in the District. Table No. 2 DUBLIN UNIFIED SCHOOL DISTRICT Summary of Per Parcel Assessed Valuation of Single Family Homes (1) No. of Average Median Parcels Assessed Valuation Assessed Valuation Assessed Valuation Single Family Residential 9,259 $4,516,100,442 $487,75 $460, No. of % of Cumulative Total % of Cumulative Assessed Valuation Parcels (1) Total % of Total Valuation Total % of Total $0 - $99, % 7.495% $ 47,823, % 1.059% $100,000 - $199, ,156, $200,000 - $299, ,558, $300,000 - $399,999 1, ,781, $400,000 - $499,999 1, ,600, $500,000 - $599,999 1, ,233, $600,000 - $699,999 1, ,047, $700,000 - $799, ,769, $800,000 - $899, ,480, $900,000 - $999, ,063, $1,000,000 - $1,099, ,529, $1,100,000 - $1,199, ,474, $1,200,000 - $1,299, ,610, $1,300,000 - $1,399, $1,400,000 - $1,499, ,400, $1,500,000 - $1,599, $1,600,000 - $1,699, $1,700,000 - $1,799, $1,800,000 - $1,899, $1,900,000 - $1,999, ,907, $2,000,000 and greater ,663, Total 9, % $4,516,100, % (1) Improved single family residential parcels. Excludes condominiums and parcels with multiple family units. Source: California Municipal Statistics, Inc. 12

19 The table below shows typical total tax rates per $100 of assessed valuation for fiscal years through Tax Rate Area covers approximately 34% of the assessed value in the District. The tax rate for is not yet available. Table No. 3 DUBLIN UNIFIED SCHOOL DISTRICT Typical Total Tax Rates per $100 of Assessed Valuation (TRA ) Fiscal Years through Countywide Dublin Unified School District Chabot-Las Positas Com. Coll. District Flood Zone 7 State Water Project Bay Area Rapid Transit East Bay Regional Park District Total Tax Rate ,1603 Source: California Municipal Statistics, Inc. Appeals of Assessed Value General. There are two types of appeals of assessed values that could adversely impact property tax revenues within the District. Appeals may be based on Proposition 8 of November 1978, which requires that for each January 1 lien date, the taxable value of real property must be the lesser of its base year value, annually adjusted by the inflation factor pursuant to Article XIIIA of the State Constitution, or its full cash value, taking into account reductions in value due to damage, destruction, depreciation, obsolescence, removal of property or other factors causing a decline in value. Under California law, property owners may apply for a reduction of their property tax assessment by filing a written application, in form prescribed by the State Board of Equalization, with the County board of equalization or assessment appeals board. In most cases, the appeal is filed because the applicant believes that present market conditions (such as residential home prices) cause the property to be worth less than its current assessed value. Proposition 8 reductions may also be unilaterally applied by the County Assessor. Any reduction in the assessment ultimately granted as a result of such appeal applies to the year for which application is made and during which the written application was filed. These reductions are subject to yearly reappraisals and are adjusted back to their original values when market conditions improve. Once the property has regained its prior value, adjusted for inflation, it once again is subject to the annual inflationary factor growth rate allowed under Article XIIIA. A second type of assessment appeal involves a challenge to the base year value of an assessed property. Appeals for reduction in the base year value of an assessment, if successful, reduce the assessment for the year in which the appeal is taken and prospectively thereafter. The base year is determined by the completion date of new construction or the date of change of ownership. Any base year appeal must be made within four years of the change of ownership or new construction date. 13

20 No assurance can be given that property tax appeals in the future will not significantly reduce the assessed valuation of property within the District. Alternative Method of Tax Apportionment - "Teeter Plan" The Board of Supervisors of the County, in 1994, adopted the Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds (the "Teeter Plan"), as provided for in Section 4701 et seq. of the State Revenue and Taxation Code. Pursuant to the Teeter Plan, the County establishes a tax losses reserve fund and a tax resources account and each entity levying property taxes in the County may draw on the amount of uncollected taxes and assessments credited to its fund, in the same manner as if the amount credited had been collected. The Teeter Plan is applicable to the collection of the District s share of general ad valorem property taxes, however, the Teeter Plan is not applicable to property taxes levied to pay the interest on and principal of the District s general obligation bonds, including the Refunding Bonds. Consequently, the District will receive ad valorem property taxes to pay debt service on the Refunding Bonds based on actual collections for that purpose rather than the amount levied. The County is responsible for determining the amount of the tax levy on each parcel in the taxing entity, which is entered onto the secured real property tax roll. Upon completion of the secured real property tax roll, the County's Auditor-Controller determines the total amount of taxes and assessments actually extended on the roll for each fund for which a tax levy has been included, and apportions 100% of the tax and assessment levies to that fund's credit. Such moneys may thereafter be drawn against the taxing agency in the same manner as if the amount credited had been collected. The County determines which moneys in the County treasury (including those credited to the tax losses reserve fund) shall be available to be drawn on to the extent of the amount if uncollected taxes credited to each fund for which a levy has been included. When amounts are received on the secured tax roll for the current year, or for redemption of tax-defaulted property, Teeter Plan moneys are distributed to the apportioned tax resources accounts. So long as the Teeter Plan remains in effect, the District s receipt of revenues with respect to the levy of general ad valorem property taxes will not be dependent upon actual collections of the ad valorem property taxes by the County, however the District s receipt of revenues with respect to the levy of property taxes for payment of debt service on the District s bonds will be dependent upon actual collections. Under the statute creating the Teeter Plan, the Board of Supervisors could under certain circumstances terminate the Teeter Plan in its entirety and, in addition, the Board of Supervisors could terminate the Teeter Plan if the delinquency rate for all ad valorem property taxes levied within the District in any year exceeds 3%. Historical secured tax levy collections and delinquencies in the District are summarized in the following table. Secured tax charges and delinquencies are not yet available for

21 Fiscal Year Table No. 4 DUBLIN UNIFIED SCHOOL DISTRICT Secured Tax Charges and Delinquencies Fiscal Years through Secured Tax Charge (1) Amount Delinquent June 30 % Delinquent June $6,323,956 $185, % ,792, , ,077, , ,544, , ,008, , (1) Bond debt service levy collected by the County within the District. Source: California Municipal Statistics, Inc. Largest Secured Property Taxpayers in District The following table shows the 20 largest secured property taxpayers in the District as determined by secured assessed valuation in fiscal year Table No. 5 DUBLIN UNIFIED SCHOOL DISTRICT Largest Secured Taxpayers Fiscal Year % of Property Owner Primary Land Use Assessed Valuation Total (1) 1. TRT NOIP Dublin LP Office Building $ 149,125, % Tassajara Road Apartments Investors Apartments 112,164, Avalon Dublin Station LP Apartments 87,066, Dublin Corporate Center 1, 2 & 3 LP Office Building 86,600, Bere Island Properties I LLC Apartments 85,520, Tishman Speyer Archstone Smith Emerald Apartments 79,711, BIT Holdings Sixth-Three Inc. Shopping Center 73,178, Standard Pacific Corp. Residential Development 72,829, Kaiser Foundation Hospitals Commercial Land 64,521, Ross Dress for Less Inc. Office Building 60,050, SR Structured Lot Options I LLC Residential Development 55,674, SVF Waterford Dublin Corporation Shopping Center 51,892, Park Sierra LLC Apartments 50,677, BJP ROF Jordan Ranch LLC Commercial 47,526, Ironhorse Dublin LP Apartments 46,585, Walton CWCA Sierra 18 LLC Light Industrial 43,199, PFRS Dublin Corp. Shopping Center 41,915, RT Dublin Properties LLC Light Industrial 39,565, Sorrento Dublin Ranch I LP Residential Development 37,037, Triad Dublin Gateway LP Medical Center 36,218, $1,321,062, % (1) Local Secured Assessed Valuation: $8,582,663,895. Source: California Municipal Statistics, Inc. 15

22 Assessed Valuation of Land Uses in District The following table shows the assessed valuation in fiscal year for each land use category, as shown on County records. Table No. 6 DUBLIN UNIFIED SCHOOL DISTRICT Assessed Valuation and Parcels by Land Use Fiscal Year % of No. of % of Assessed Valuation (1) Total Parcels Total Non-Residential: Agricultural/Rural $ 19,712, % % Commercial/Office 1,366,561, Vacant Commercial 196,623, Industrial 238,715, Vacant Industrial 1,268, Recreational 13,612, Government/Social/Institutional 24,731, Subtotal Non-Residential $1,861,225, % % Residential: Single Family Residence $4,516,100, % 9, % Condominium/Townhouse 1,188,322, , Residential Units 9,917, Residential Units/Apartments 579,896, Mobile Homes 1,229, Vacant Residential 425,971, , Subtotal Residential $6,721,438, % 15, % Total $8,582,663, % 16, % (1) Local Secured Assessed Valuation; excluding tax-exempt property. Overlapping Debt Obligations Set forth below is a direct and overlapping debt report (the "Debt Report") prepared by California Municipal Statistics, Inc. and dated September 1, The Debt Report is included for general information purposes only. The District has not reviewed the Debt Report for completeness or accuracy and makes no representation in connection therewith. The Debt Report generally includes long-term obligations sold in the public credit markets by public agencies whose boundaries overlap the boundaries of the District in whole or in part. Such long-term obligations generally are not payable from revenues of the District (except as indicated) nor are they necessarily obligations secured by land within the District. In many cases, long-term obligations issued by a public agency are payable only from the general fund or other revenues of such public agency. 16

23 Assessed Valuation: $8,792,909,514 Table No. 7 DUBLIN UNIFIED SCHOOL DISTRICT Statement of Direct and Overlapping Bonded Debt Dated as of September 1, 2012 DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable (1) Debt 9/1/12 Bay Area Rapid Transit District 1.918% $ 7,877,034 Chabot-Las Positas Community College District ,487,101 Dublin Unified School District ,818,392 (2) East Bay Regional Park District ,083,231 City of Dublin 1915 Act Bonds ,000 California Statewide Communities Development Authority 1915 Act Bonds ,059,545 TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $249,507,303 OVERLAPPING GENERAL FUND DEBT: Alameda County General Fund Obligations 4.954% $33,167,550 Alameda County Pension Obligations ,516,519 Alameda-Contra Costa Transit District Certificates of Participation ,066 Chabot-Las Positas Community College District Certificates of Participation ,945 City of Pleasanton Certificates of Participation TOTAL OVERLAPPING GENERAL FUND DEBT $40,163,962 COMBINED TOTAL DEBT $289,671,265 (3) (1) Based on ratios. (2) Excludes issue to be sold. (3) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease obligations. Ratios to Assessed Valuation: Direct Debt ($188,818,392) % Total Direct and Overlapping Tax and Assessment Debt % Combined Total Debt % STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/12: $0 Source: California Municipal Statistics, Inc. TAX MATTERS In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however to the qualifications set forth below, under existing law, the interest on the Refunding Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. The opinions set forth in the preceding paragraph are subject to the condition that the District comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Refunding Bonds in order that such interest be, or continue to be, excluded from gross income for federal income tax purposes. The District has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion 17

24 of such interest in gross income for federal income tax purposes to be retroactive to the date of issuance of the Refunding Bonds. If the initial offering price to the public (excluding bond houses and brokers) at which a Refunding Bond is sold is less than the amount payable at maturity thereof, then such difference constitutes "original issue discount" for purposes of federal income taxes and State of California personal income taxes. If the initial offering price to the public (excluding bond houses and brokers) at which each Bond is sold is greater than the amount payable at maturity thereof, then such difference constitutes "original issue premium" for purposes of federal income taxes and State of California personal income taxes. De minimis original issue discount is disregarded. Under the Code, original issue discount is treated as interest excluded from federal gross income and exempt from State of California personal income taxes to the extent properly allocable to each owner thereof subject to the limitations described in the first paragraph of this section. The original issue discount accrues over the term to maturity of the Refunding Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straightline interpolations between compounding dates). The amount of original issue discount accruing during each period is added to the adjusted basis of such Refunding Bonds to determine taxable gain upon disposition (including sale, redemption, or payment on maturity) of such Refunding Bond. The Code contains certain provisions relating to the accrual of original issue discount in the case of purchasers of the Refunding Bonds who purchase the Refunding Bonds after the initial offering of a substantial amount of such maturity. Owners of such Refunding Bonds should consult their own tax advisors with respect to the tax consequences of ownership of Refunding Bonds with original issue discount, including the treatment of purchasers who do not purchase in the original offering, the allowance of a deduction for any loss on a sale or other disposition, and the treatment of accrued original issue discount on such Refunding Bonds under federal individual and corporate alternative minimum taxes. Under the Code, original issue premium is amortized on an annual basis over the term of the Refunding Bond (said term being the shorter of the Refunding Bond's maturity date or its call date). The amount of original issue premium amortized each year reduces the adjusted basis of the owner of the Refunding Bond for purposes of determining taxable gain or loss upon disposition. The amount of original issue premium on a Refunding Bond is amortized each year over the term to maturity of the Refunding Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straightline interpolations between compounding dates). Amortized Bond premium is not deductible for federal income tax purposes. Owners of Premium Bonds, including purchasers who do not purchase in the original offering, should consult their own tax advisors with respect to State of California personal income tax and federal income tax consequences of owning such Refunding Bonds. In the further opinion of Bond Counsel, interest on the Refunding Bonds is exempt from California personal income taxes. Owners of the Refunding Bonds should also be aware that the ownership or disposition of, or the accrual or receipt of interest on, the Refunding Bonds may have federal or state tax consequences other than as described above. Bond Counsel expresses no opinion regarding any federal or state tax consequences arising with respect to the Refunding Bonds other than as expressly described above. 18

25 CERTAIN LEGAL MATTERS Continuing Disclosure The District will covenant for the benefit of owners of the Refunding Bonds to provide certain financial information and operating data relating to the District by not later than nine months after the end of the District s fiscal year (which date would be the March 31 following the current end of the District s fiscal year on June 30), commencing with the report for the fiscal year (the Annual Report ), and to provide notices of the occurrence of certain enumerated events, if material. The specific nature of the information to be contained in the Annual Report or the notices of material events is summarized in APPENDIX D - FORM OF CONTINUING DISCLOSURE CERTIFICATE, attached to this Official Statement. These covenants have been made in order to assist the Underwriter (as defined below) in complying with Securities Exchange Commission Rule 15c2-12(b)(5) (the Rule ). Prior to the preparation of this Official Statement, the District believed it had complied with all of its material obligations under existing continuing disclosure undertakings during the past five years. However, in connection with the issuance of the Refunding Bonds the District learned that its continuing disclosure undertaking with respect to one series of prior bonds required filing an annual report within eight months after the end of the fiscal year rather than the nine months required for its other bond issues. As a result, the filings for one series of bonds have been filed approximately 30 days late in the past. The District is now aware of the shorter filing requirement and has notified its filing representative to cause future compliance with the shorter requirement for that issue. Absence of Material Litigation No litigation is pending or threatened concerning the validity of the Refunding Bonds, and a certificate to that effect will be furnished to purchasers at the time of the original delivery of the Refunding Bonds. The District is not aware of any litigation pending or threatened that (i) questions the political existence of the District, (ii) contests the District s ability to receive ad valorem taxes or to collect other revenues or (iii) contests the District s ability to issue and retire the Refunding Bonds. UNDERWRITING The Refunding Bonds are being purchased by R. W. Baird (the Underwriter ) pursuant to a competitive sale. The Underwriter has agreed to purchase the Refunding Bonds at a price of $33,097, which is equal to the initial principal amount of the Refunding Bonds plus original issue premium of $3,319, less Underwriter s discount of $307, The notice of sale relating to the Refunding Bonds provides that the Underwriter will purchase all of the Refunding Bonds (if any are purchased), and provides that the Underwriter s obligation to purchase is subject to certain terms and conditions, including the approval of certain legal matters by counsel. The Underwriter may offer and sell the Refunding Bonds to certain dealers and others at prices lower than the offering prices stated on the cover page hereof. The offering prices may be changed by the Underwriter. 19

26 RATINGS Moody s Investors Service ( Moody s ) and Standard & Poor s Credit Markets Services, a Division of The McGraw-Hill Companies ( S&P ) have assigned ratings of Aa2 and AA-, respectively, to the Refunding Bonds. Such ratings reflect only the views of Moody s and S&P and any desired explanation of the significance of such ratings should be obtained from Moody s and S&P, at the following addresses: Moody s Investors Service, 99 Church Street, New York, NY and Standard & Poor s Rating Services, 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 credit rating given to the Refunding Bonds will be maintained for any period of time or that the rating may not be lowered or withdrawn entirely by a rating agency if, in its judgment, circumstances so warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the Refunding Bonds. ADDITIONAL INFORMATION The references herein to the Resolution and the Continuing Disclosure Certificate are brief outlines of certain provisions thereof. Such outlines do not purport to be complete and for full and complete statements of such provisions reference is made to said documents. Copies of the documents mentioned under this heading are available from the District. References are also made herein to certain documents and reports relating to the District; such references are brief summaries and do not purport to be complete or definitive. Copies of such documents are available from upon written request to the District. The District may impose a charge for copying, mailing and handling. Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement between the District and the purchasers or Owners of any of the Refunding Bonds. The execution and delivery of this Official Statement have been duly authorized by the District. DUBLIN UNIFIED SCHOOL DISTRICT By: /s/ Dr. Stephen L. Hanke Superintendent 20

27 APPENDIX A EXCERPTS FROM THE AUDITED FINANCIAL STATEMENTS OF THE DISTRICT FOR FISCAL YEAR ENDED JUNE 30, 2011

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29 DUBLIN UNIFIED SCHOOL DISTRICT Dublin, California FINANCIAL STATEMENTS June 30, 2011

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31 DUBLIN UNIFIED SCHOOL DISTRICT FINANCIAL STATEMENTS WITH SUPPLEMENTARY INFORMATION For the Year Ended June 30, 2011 TABLE OF CONTENTS Page Independent Auditors' Report Management's Discussion and Analysis Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Assets Statement of Activities Fund Financial Statements: Balance Sheet - Governmental Funds Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets Statement of Revenues, Expenditures and Change in Fund Balances - Governmental Funds Reconciliation of the Statement of Revenues, Expenditures and Change in Fund Balances - Governmental Funds - to the Statement of Activities Statement of Fiduciary Net Assets - Agency Funds Notes to Basic Financial Statements Required Supplementary Information: General Fund Budgetary Comparison Schedule Note to Required Supplementary Information Supplementary Information: Combining Balance Sheet - All Non-Major Funds Combining Statement of Revenues, Expenditures and Change in Fund Balances -All Non-Major Funds 36 37

32 DUBLIN UNIFIED SCHOOL DISTRICT FINANCIAL STATEMENTS WITH SUPPLEMENTARY INFORMATION For the Year Ended June 30, 2011 TABLE OF CONTENTS (Continued) Page Supplementary Information: (Continued) Combining Statement of Changes in Assets and Liabilities - Agency Funds Organization Schedule of Average Daily Attendance Schedule of Instructional Time Schedule of Expenditure of Federal Awards Reconciliation of Unaudited Actual Financial Report with Audited Financial Statements Schedule of Financial Trends and Analysis Schedule of Charter Schools Notes to Supplementary Information Independent Auditors' Report on Compliance with State Laws and Regulations Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Independent Auditors' Report on Compliance with Requirements That Could Have a Direct and Material Effect on Each Major Program and on Internal Control over Compliance in Accordance with OMB Circular A Findings and Recommendations: Schedule of Audit Findings and Questioned Costs Status of Prior Year Findings and Recommendations

33 Crowe Horwath. Crowe Horwath LLP Independent Member Crowe Horwath International INDEPENDENT AUDITORS' REPORT Governing Board Dublin Unified School District Dublin, California We have audited the accompanying financial statements of the governmental activities, each major fund and the aggregate remaining fund information of Dublin Unified School District, as of and for the year ended June 30, 2011, which collectively comprise Dublin Unified School District's basic financial statements as listed in the Table of Contents. These financial statements are the responsibility of the District's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund and the aggregate remaining fund information of Dublin Unified School District as of June 30, 2011, and the respective changes in financial position for the year then ended, in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated December 12, 2011 on our consideration of Dublin Unified School District's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.

34 INDEPENDENT AUDITORS' REPORT (Continued) Management's Discussion and Analysis and the Required Supplementary Information, such as the General Fund Budgetary Comparison Schedule, are not required parts of the financial statements, but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Dublin Unified School District's basic financial statements. The accompanying financial and statistical information listed in the Table of Contents, including the Schedule of Expenditure of Federal Awards, which is required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, is presented for purposes of additional analysis and is not a required part of the basic financial statements of Dublin Unified School District. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. Sacramento, California December 12, 2011 Crowe Horwath LLP

35 MANAGEMENT'S DISCUSSION AND ANALYSIS June 30, 2011 This section of Dublin Unified School District's annual fmancial report presents District management's discussion and analysis of the District's financial performance during the fiscal year that ended on June 30, Please read it in conjunction with the District's fmancial statements, which immediately follow this section. OVERVIEW OF THE FINANCIAL STATEMENTS The Financial Statements The financial statements presented herein include all of the activities of Dublin Unified School District (the District) using the integrated approach as prescribed by GASB Statement Number 34. The Government-Wide Financial Statements present the fmancial picture of the District from the economic resources measurement focus using the accrual basis of accounting. These statements include all assets of the District (including capital assets) as well as all liabilities (including long-term debt). Additionally, certain eliminations have occurred as prescribed by the statement in regards to interfund activity, payables and receivables. The Fund Financial Statements include statements for each of the two categories of activities: governmental and fiduciary. The Governmental Activities are prepared using the current financial resources measurement focus and modified accrual basis of accounting. The Fiduciary Activities are agency funds, which only report a balance sheet and do not have a measurement focus. Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements is provided to explain the differences created by the integrated approach. The Primary unit of the government is the Dublin Unified School District. FINANCIAL HIGHLIGHTS OF THE PAST YEAR The District's reserve for economic uncertainty has increased from 6.5% to 13.5% in spite of unprecedented state revenue reductions this past year. The enrollment growth at the medium level was 299 students at 5 % growth. The District's base revenue limit was reduced $1,302 per Average Daily Attendance, from $7,246 to $5,944.00, a loss of 18.36% of revenue limit income. The District's revenue loss from the state was $7.9 million this past year, or 19% of our revenue. 3

36 REPORTING THE DISTRICT AS A WHOLE The Statement o[net Assets and the Statement of Activities The Statement of Net Assets and the Statement of Activities report information about the District as a whole and about its activities. These statements include all assets and liabilities of the District using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. All of the current year's revenues and expenses are taken into account regardless of when cash is received or paid. These two statements report the District's net assets and changes in them. Net assets are the difference between assets and liabilities, one way to measure the District's financial health, or financial position. Over time, increases or decreases in the District's net assets are one indicator of whether its financial health is improving or deteriorating. Other factors to consider are changes in the District's property tax base and the condition of the District's facilities. The relationship between revenues and expenses is the District's operating results. Since the Board's responsibility is to provide services to our students and not to generate profit as commercial entities do, one must consider other factors when evaluating the overall health of the District. The quality of the education and the safety of our schools will likely be an important component in this evaluation. In the Statement of Net Assets and the Statement of Activities, the District activities are presented as follows: Governmental activities - Most of the District's services are reported in this category. This includes the education of kindergarten through grade twelve students, adult education students, the operation of child development activities, and the on-going effort to improve and maintain buildings and sites. Property taxes, state income taxes, user fees, interest income, Federal, State and local grants, as well as general obligation bonds, finance these activities. REPORTING THE DISTRICT'S MOST SIGNIFICANT FUNDS Fund Financial Statements The fund financial statements provide detailed information about the most significant funds - not the District as a whole. Some funds are required to be established by State law and by bond covenants. However, management establishes many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants, and other money that it receives from the Federal government and the State of California. THE DISTRICT AS TRUSTEE Reporting the District's Fiduciary Responsibilities The District is the trustee, or fiduciary, for funds held on behalf of others, like our funds for associated student body activities. The District's fiduciary activities are reported in separate Statements of Fiduciary Net Assets. We exclude these activities from the District's other fmancial statements because the District cannot use these assets to finance its operations. The District is responsible for ensuring that the assets reported in these funds are used for their intended purposes. 4

37 THE DISTRICT AS A WHOLE Net Assets The District's net assets were $314,855,693 and $277,870,169 for the fiscal years ended June 30,2011 and 2010, respectively. Of this amount, $32,137,876 and 2,510,344 were unrestricted for each respective year. Restricted net assets are reported separately to show legal constraints from debt covenants and enabling legislation that limit the School Board's ability to use those net assets for day-to-day operations. Our analysis below focuses on the net assets (Table 1) and change in net assets (Table 2) of the District's governmental activities. Table Governmental Governmental Activities Activities Current and other assets $ 110,799,684 $ 70,949,622 Capital assets 426,835, ,049,592 Total Assets 537,635, ,999,214 Current liabilities 18,058,993 15,117,842 Long-term debt 204,720, ,011,203 Total Liabilities 222,779, ,129,045 Net Assets Invested in capital assets, net of related debt 222,178, ,146,312 Restricted 60,539,799 53,213,513 Unrestricted 32,137,876 2,510,344 Total Net Assets $ 314,855,693 $ 277,870,169 Unrestricted net assets of governmental activities represents the accumulated results of all past years' operations. It means that if we had to pay off all of our bills today including all of our non-capital liabilities (compensated absences as an example). We will need to closely monitor our expenditures in the future and adhere strictly to the budget to increase the net assets. 5

38 Changes in Net Assets The results of this year's operations for the District as a whole are reported in the Statement of Activities. Table 2 takes the information from the Statement, rounds off the numbers, and rearranges them slightly so you can see our total revenues for the year. Table 2 Revenues: Program revenues Charges for services Operating grants and contributions Capital grants and contributions General Revenue: Federal and State aid Property taxes Other general revenues Total Revenues $ 2011 Governmental Activities 5,022,650 7,470,451 39,440,251 19,935,020 32,136,951 1,205, ,210,623 $ 2010 Governmental Activities 5,570,603 5,447,973 2,941 16,288,317 30,824, ,898 59,088,638 Expenses: Instruction and instruction related Student support services Administration Maintenance and operations Other Total Expenses Change in Net Assets $ 40,312,997 4,241,988 2,990,621 8,418,904 12,260,589 68,225,099 36,985,524 $ 38,836,548 4,254,632 3,282,468 7,568,518 7,178,656 61,120,822 (2,032,184) Governmental Activities The cost of all of our governmental activities was $68,225,099 and $61,120,822 for 2011 and 2010, respectively. However, the amount that our taxpayers ultimately fmanced for these activities through local taxes was only $32,136,951 and $30,824,906 for 2011 and 2010 because the cost was paid by those who benefited from the programs $5,022,650 and $5,570,603 for 2011 and 2010 or by other governments and organizations who subsidized certain programs with grants and contributions $7,470,451 and $5,447,973 for 2011 and We paid for the remaining "public benefit" portion of our governmental activities with State funds and with other revenues, like interest and general entitlements. In Table 3, we have presented the net cost (total cost less revenues generated by the activities) of each of the District's seven largest functions - regular program instruction, guidance and counseling, school administration, pupil transportation, administration, maintenance and operations, and other services as well as each program's net cost. As discussed above, net cost shows the financial burden that was placed on the District's taxpayers by each of these functions. Providing this information allows our citizens to consider the cost of each function in comparison to the benefits they believe are provided by that function. 6

39 Table 3 Instruction Guidance and counseling School Administration Pupil Transportation Administration Maintenance and operations Other Net Cost (Revenue) of Governmental Activities THE DISTRICT'S FUNDS 2011 Net Cost of Services $ (9,774,609) 1,056,498 3,491, ,731 2,762,947 8,145,886 10,180,875 $ 16,291, Net Cost of Services $ 30,249,523 1,103,692 3,359, ,679 3,049,071 3,653,657 8,292,936 $ 50,099,305 As the District completed this year, our governmental funds reported a combined fund balance of $94,927,043 which is an increase of$38,644,198. The primary reasons for this increase: 1. Our General Fund is our principal operating fund. The fund balance in the General Fund increased from $6,807,542 to $9,486,649. This decrease is due the planned expenditures of federal one time dollars received in the prior year. The activity of our Fund for Other Than Capital Outlay Projects (Special Reserve Fund) is included in the balance of the General Fund as a result of implementing Governmental, Accounting Board Standard (GASB) Our Building Fund balance increased from $39,581,155 to $50,276,219. This increase is due to the issuance of a federal qualified zone academy bond and issued as a bond anticipation note (BAN). 3. Our County Schools Facilities Fund balances increased from $399,356 to $25,517,350. This increase is due to OPSC releasing funds for new construction and modernization projects. 4. Our Bond Interest and Redemption Fund balance increased from $5,336,356 to $6,364,692. This increase is primarily due to increases in principal and interest payments made on General Obligation Bond debt. 5. Our aggregate non-major fund balances collectively increased from $9,494,792 to $$9,646,825. General Fund Budgetary Highlights Over the course of the year, the District revises its budget as it attempts to deal with unexpected changes in revenues and expenditures. The final amendment to the budget was adopted as the books were closed in September A schedule showing the District's original and fmal budget amounts compared with amounts actually paid and received is provided for the General Fund in our annual report. ~ Significant revenue revisions were made to the 2010/2011 Budget primarily due to federal, state and local changes. ~ Actual expenditures decreased from the original budget by $721,575 due to the state economic environment and conservative spending all year. School districts were advised there was the possibility of state budget cuts during the year. The cuts did not appear mid-year as anticipated. 7

40 CAPITAL ASSET & DEBT ADMINISTRATION Capital Assets At June 30, 2011, the District had $426,835,525 in a broad range of capital assets, including land, buildings, and furniture and equipment, net of accumulated depreciation. This amount represents a net increase (including additions, deductions and depreciation) of $26,785,933 or 6.7 percent from last year. Capital Assets of the District, net of accumulated depreciation are included in Table 4, below: Table 4 Land Construction in progress Building and improvements Equipment Total Capital Assets, net of depreciation $ $ ,622,043 45,977, ,876, , ,835,525 $ $ ,622,043 58,383, ,618, , ,049,592 Long-Term Obligations At the end of this year, the District had $204,657,507 million in bonds outstanding versus $177,903,280 million last year. Those bonds consisted of: Table General Obligation Bonds $ 195,200,908 $ 172,583,700 Accreted interest 7,250,024 2,990,418 Premium on refinancing 2,206,575 2,329,162 Total Long-Term Liabilities $ 204,657,507 $ 177,903,280 The District's general obligation bond rating was increased to "AA-". The State limits the amount of general obligation debt that Districts can issue to 2.5 percent of the assessed value of all taxable property within the District's boundaries. The District's outstanding general obligation debt of $204,657,507 million is below this $207,218,374 million statutorily-imposed limit. Other obligations include early retirement incentives. We present more detailed information regarding our longterm liabilities in Note 5 of the fmancial statements. SIGNIFICANT ACCOMPLISHMENTS OF FISCAL YEAR ARE NOTED BELOW: The District increased the state recommended 3% reserve to 4% in spite of unprecedented budget reductions from the State. State Budget uncertainty during the year prompted notable decreases in expenditures and assisted in generating a surplus at year end. 8

41 ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES In considering the District Budget for the 2011/2012 year, the District Board and management used the following criteria: The key assumptions in our revenue forecast are: 1. Average Daily attendance will grow by 327 ADA. 2. Developer Fee collections are based on approximate number of housing units to be constructed in Eastern Dublin. 3. Federal income updates will be approximately the same as current year. 4. State income is the same as prior year, at the reduced amounts from the state. 5. No further expenditure budget decreases beyond prior year reductions. 6. The District continued to utilize the flexibility transfers of Tier II and III categorical funding. Expenditures are based on the following forecasts: Enrollment Grades kindergarten through fifth Grades six through eight Grades nine through twelve 3,482 1,389 1,617 The new items specifically addressed in the budget are: 1. Step and column are implemented for all bargaining units. 2. There is not a cost of living allowance salary rate adjustment for bargaining units and leadership. CONTACTING THE DISTRICT'S FINANCIAL MANAGEMENT This fmancial report is designed to provide our citizens, taxpayers, students, and investors and creditors with a general overview of the District's fmances and to show the District's accountability for the money it receives. If you have questions about this report or need any additional fmancial information, contact the Assistant Superintendent, Business Services, at Dublin Unified School District, 7471 Larkdale Avenue, Dublin, California, , or at heironimusbeverly@dublinusd.org. 9

42 BASIC FINANCIAL STATEMENTS

43 DUBLIN UNIFIED SCHOOL DISTRICT STATEMENT OF NET ASSETS June 30, 2011 Governmental Activities ASSETS Cash and investments (Note 2) Receivables Prepaid expenses Stores inventory Non-depreciable capital assets (Note 4) Depreciable capital assets, net of accumulated depreciation (Note 4) Total assets $ 101,713,382 8,116, ,235 83, ,599, LIABILITIES Accounts payable Tax Revenue Anticipation Notes (TRANS) payable (Note 2) Deferred revenue Long-term liabilities (Note 5): Due within one year Due after one year Total liabilities 6,977,098 10,090, ,095 4,410, NET ASSETS Invested in capital assets, net of related debt Restricted (Note 6) Unrestricted Total net assets 222,178,018 60,539, $ The accompanying notes are an integral part of these financial statements. 10

44 DUBLIN UNIFIED SCHOOL DISTRICT STATEMENT OF ACTIVITIES For the Year Ended June 30, 2011 Program Revenues Charges Operating for Grants and Exeenses Services Contributions Capital Grants and Contributions Net (Expense) Revenues and Changes in Net Assets Governmental Activities Governmental activities (Note 4): Instruction Instruction-related services: Supervision of instruction Instructional library, media and technology School site administration Pupil services: Home-to-school transportation Food services All other pupil services General administration: Data processing All other general administration Plant services Ancillary services Interest on long-term liabilities Other outgo Total governmental activities $ 35,316,672 $ 5,651,030 1,053, , ,812 4,833 3,549,380 57, , ,792 1,425,612 $ 996, ,257 2,267, , ,022 2,223,599 31, ,842 8,418, ,900 40, , ,522, $ 68,225,099 ~ 5,022,650 ~ 7,470,451 General revenues: Taxes and subventions: Taxes levied for general purposes Taxes levied for debt service Taxes levied for other specific purposes Federal and state aid not restricted to specific purposes Interest and investment earnings Interagency revenues Miscellaneous Special and extraordinary items Total general revenues Change in net assets Net assets, July 1, 2010 Net assets, June 30, 2011 $ 39,440,251 $ 9,774,609 (667,519) (388,979) (3,491,419) (428,731) (74,311) (1,889,701) (767,022) (1,995,925) (8, 145,886) (264,723) (11,522,718) ~ 39,440,251 (16,291,74D 22,272,200 8,542,654 1,322,097 19,935,020 56,429 9, , ,271 36,985, ,870,169 ~ 314,855,693 The accompanying notes are an integral part of these financial statements. 11

45 DUBLIN UNIFIED SCHOOL DISTRICT BALANCE SHEET GOVERNMENTAL FUNDS June 30, 2011 County School General Building Facilities Fund Fund Fund All Non-Major Funds Total Governmental Funds ASSETS Cash and investments: Cash in County Treasury $ Cash in County Treasury - restricted for repayment of TRANs Cash on hand and in banks Cash in revolving fund Cash with Fiscal Agent Receivables Due from other funds Prepaid expenses Stores inventory Total assets $ LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ TRANS payable Deferred revenue Due to other funds Total liabilities Fund balances: Nonspendable Restricted Assigned Unassigned Total fund balances Total liabilities and fund balances $ 3,192,516 $ 50,900,334 $ 26,948,477 10,090, ,740 25,000 19,713 8,005,438 29,300 35, ,510 57, ,352,037 ~ 50,929,634 ~ 26, ,783,493 $ 653,415 $ 1,466,357 10,090, ,095 12,865, ,466, , ,373 50,276,219 25,517,350 2,073,465 6,888,491 9,486,649 50,276,219 25,517,350 22,352,037 ~ 50,929,634 ~ 26,983,707 $ 9,843,637 $ 90,884,964 10,090,800 8, ,905 25,000 19,713 46,118 8,116, ,510 57, ~ 9,943,951 ~ 110,209,329 $ 58,616 $ 3,961,881 10,090, , , , ,126 15,282,286 46, ,351 9,600,794 85,798,736 2,073,465 6,888,491 9,646,825 94,927,043 ~ 9,943,951 ~ 110,209,329 The accompanying notes are an integral part of these financial statements. 12

46 DUBLIN UNIFIED SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS June 30, 2011 Total fund balances- Governmental Funds $ 94,927,043 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used for governmental activities are not financial resources and, therefore, are not reported as assets in governmental funds. The cost of the assets is $455,952,100 and the accumulated depreciation is $29,116,575 (Note 4). Long-term liabilities are not due and payable in the current period and, therefore, are not reported as liabilities in the funds. Long-term liabilities at June 30, 2011 consisted of (Note 5): General Obligation Bonds Accreted interest Premium on refinancing Early retirement incentive In governmental funds, debt issuance costs are recognized as expenditures in the period they are incurred. In the government-wide statements, debt issuance costs are amortized over the life of the debt. Unmatured interest is not recognized until it is due and, therefore, is not accrued as a payable in governmental funds. Total net assets- governmental activities $ (195,200,908) (7,250,024) (2,206,575) (63.016) 426,835,525 (204, 720,523) 828,865 ( ) $ The accompanying notes are an integral part of these financial statements. 13

47 DUBLIN UNIFIED SCHOOL DISTRICT STATEMENT OF REVENUES, EXPENDITURES AND CHANGE IN FUND BALANCES GOVERNMENTAL FUNDS For the Year Ended June 30, 2011 County School General Building Facilities Fund Fund Fund All Non-Major Funds Total Governmental Funds Revenues: Revenue limit sources: State apportionment $ Local sources Total revenue limit Federal sources Other state sources Other local sources Total revenues Expenditures: Certificated salaries Classified salaries Employee benefits Books and supplies Contract services and operating expenditures Capital outlay Other outgo Debt service: Principal retirement Interest Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Operating transfers in Operating transfers out Proceeds from issuance of debt Total other financing sources (uses) Net change in fund balances Fund balances, July 1, 2010 Fund balances, June 30, 2011 ~ 14,678,289 22,172,200 36,850,489 2,568,567 5,864,596 $ 39,440,218 5,844,593 $ 185, ,128, ,500,303 28,022,032 7,521, ,210 6,540, ,799 1,338, ,981 3,201 4,575, ,399 55,564 11,564,026 18,323, ,865 48,433, ,382,309 2,694,306 (14,304,936) ,611 4,000,000 (80,810) 25,000,000 (15,199) 25,000,000 4,000,000 2,679,107 10,695,064 25,117, ,581, ,356 9,486,649 ~ 50,276,219 ~ 25,517,350 $ 14,678,289 22,172,200 36,850,489 $ 323,825 2,892, ,239 45,487,053 13,595,819 19,685, ,915,910 60,806 28,082, ,924 9,157, ,801 7,017, ,449 3,020, ,836 6,066,618 29,887,570 69, ,760 18,852,792 18,852,792 5,150, ,546 26,435, ,712 (12,333,166) (2,825,802) 80,810 4,146,421 (4,065,611) (4, 146,421) 16,470,000 41,470,000 12,485,199 41,470, ,033 38,644,198 9,494,792 56,282,845 ~ 9,646,825 ~ 94,927,043 The accompanying notes are an integral part of these financial statements. 14

48 DUBLIN UNIFIED SCHOOL DISTRICT RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGE IN FUND BALANCES- GOVERNMENTAL FUNDS- TO THE STATEMENT OF ACTIVITIES For the Year Ended June 30, 2011 Net change in fund balances -Total Governmental Funds $ 38,644,198 Amounts reported for governmental activities in the statement of activities are different because: Acquisition of capital assets is an expenditure in the governmental funds, but increases capital assets in the statement of net assets (Note 4). Depreciation of capital assets is an expense that is not recorded in the governmental funds (Note 4). Proceeds from the issuance of debt are reported as revenue, but in the statement of net assets they are recognized as increases in liabilities (Note 5). Debt issue costs are recognized as expenditures in the period they are incurred in the governmental funds, but are amortized over the life of the debt in the statement of net assets. Repayment of principal on long-term liabilities is an expenditure in the governmental funds, but decreases the long-term liabilities in the statement of net assets (Note 5). Unmatured interest on long-term liabilities is not recorded in the governmental funds until it becomes due, but increases the liabilities in the statement of net assets. Accreted interest is not recorded in the governmental funds until it becomes due, but increases the long-term liabilities in the statement of net assets (Note 5). Amortization of debt issuance premiums or discounts for the period are (Note 5): $ 30,418,034 (3,632, 101) (41,470,000) (46,048) 18,852,792 (1,689,239) (4,259,606) 122,587 In the statement of activities, expenses related to early retirement incentive are measured by the amounts earned during the year. In the governmental funds, expenditures are measured by the amount of financial resources used (Note 5). 4_,_4...,9=0;.:...7 ( ) Change in net assets of governmental activities $ The accompanying notes are an integral part of these financial statements. 15

49 DUBLIN UNIFIED SCHOOL DISTRICT STATEMENT OF FIDUCIARY NET ASSETS AGENCY FUNDS June 30, 2011 ASSETS Cash on hand and in banks (Note 2) $ LIABILITIES Due to student groups NET ASSETS Net assets $ The accompanying notes are an integral part of these financial statemetns. 16

50 DUBLIN UNIFIED SCHOOL DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Dublin Unified School District (the "District") accounts for its financial transactions in accordance with the policies and procedures of the California Department of Education's California School Accounting Manual. The accounting policies of the District conform to accounting principles generally accepted in the United States of America as prescribed by the Governmental Accounting Standards Board. The following is a summary of the more significant policies: Reporting Entity The Governing Board is the level of government which has governance responsibilities over all activities related to public school education in the District. The Board is not included in any other governmental "reporting entity" as defined by the Governmental Accounting Standards Board since Board members have decision-making authority, the power to designate management, the responsibility to significantly influence operations and primary accountability for fiscal matters. Basis of Presentation - Financial Statements The basic financial statements include a Management's Discussion and Analysis (MD & A) section providing an analysis of the District's overall financial position and results of operations, financial statements prepared using full accrual accounting for all of the District's activities, including infrastructure, and a focus on the major funds. Basis of Presentation - Government-Wide Financial Statements The Statement of Net Assets and the Statement of Activities display information about the reporting government as a whole. Fiduciary funds are not included in the government-wide financial statements. Fiduciary funds are reported only in the Statement of Fiduciary Net Assets at the fund financial statement level. The Statement of Net Assets and the Statement of Activities are prepared using the economic resources measurement focus and the accrual basis of accounting. Revenues, expenses, gains, losses, assets and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place. Revenues, expenses, gains, losses, assets and liabilities resulting from nonexchange transactions are recognized in accordance with the requirements of Governmental Accounting Standards Board Codification Section (GASB Cod. Sec.) N Program revenues: Program revenues included in the Statement of Activities derive directly from the program itself or from parties outside the District's taxpayers or citizenry, as a whole; program revenues reduce the cost of the function to be financed from the District's general revenues. 17

51 DUBLIN UNIFIED SCHOOL DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Basis of Presentation - Government-Wide Financial Statements (Continued) Allocation of indirect expenses: The District reports all direct expenses by function in the Statement of Activities. Direct expenses are those that are clearly identifiable with a function. Depreciation expense is specifically identified by function and is included in the direct expense of each function. Interest on general long-term liabilities is considered an indirect expense and is reported separately on the Statement of Activities. Basis of Presentation - Fund Accounting The accounts of the District are organized on the basis of funds or account groups, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses, as appropriate. District resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled. The District's accounts are organized into two broad categories which, in aggregate, include five fund types as follows: A Governmental Fund Types 1 - General Fund: The General Fund is the general operating fund of the District and accounts for all revenues and expenditures of the District, not encompassed within other funds. All general tax revenues and other receipts that are not allocated by law or contractual agreement to some other fund are accounted for in this fund. General operating expenditures and the capital improvement costs that are not paid through other funds are paid from the General Fund. For financial reporting purposes, the balance of the Special Reserve for Other Than Capital Outlay Projects Fund is included with the General Fund. 2 - Special Revenue Funds: The Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. This classification includes the Adult Education, Cafeteria, and Deferred Maintenance Funds. 3 - Capital Projects Funds: The Capital Projects Funds are used to account for resources used for the acquisition or construction of major capital facilities and equipment. This classification includes the Building, Capital Facilities and County School Facilities Funds. 18

52 DUBLIN UNIFIED SCHOOL DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Basis of Presentation - Fund Accounting (Continued) A Governmental Fund Types (Continued) 4 - Debt Service Fund: The Debt Service Fund is used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest, and related costs. This classification includes the Bond Interest and Redemption Fund. B Fiduciary Fund Type 1 - Agency Funds: Basis of Accounting The Agency Fund is used to account for assets of others for which the District has an agency relationship with the activity of the fund. This classification consists of the Student Body Fund. Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurement made, regardless of the measurement focus applied. Accrual Governmental activities in the government-wide financial statements and the fiduciary fund financial statements are presented on the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized when incurred. Modified Accrual The governmental funds financial statements are presented on the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual; i.e., both measurable and available. "Available" means collectible within the current period or within 60 days after year end. Expenditures are generally recognized under the modified accrual basis of accounting when the related liability is incurred. The exception to this general rule is that principal and interest on general obligation long-term liabilities, if any, is recognized when due. Budgets and Budgetary Accounting By state law, the Board of Education must adopt a final budget by July 1. A public hearing is conducted to receive comments prior to adoption. The Governing Board complied with these requirements. 19

53 DUBLIN UNIFIED SCHOOL DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Capital Assets Capital assets purchased or acquired, with an original cost of $5,000 or more, are recorded at historical cost or estimated historical cost. Contributed assets are reported at fair market value as of the date received. Additions, improvements and other capital outlay that significantly extend the useful life of an asset are capitalized. Other costs incurred for repairs and maintenance are expensed as incurred. Capital assets are depreciated using the straight-line method over 2-50 years depending on asset types. Accumulated Sick Leave Accumulated sick leave benefits are not recognized as liabilities of the District. The District's policy is to record sick leave as a operating expenditure or expense in the period taken since such benefits do not vest nor is payment probable; however, unused sick leave is added to the creditable service period for calculation of retirement benefits for all STRS employees and certain PERS employees, when the employee retires. Restricted Net Assets Restrictions of the ending net assets indicate the portions of net assets not appropriable for expenditure or amounts legally segregated for a specific future use. The restrictions for revolving cash, prepaid expenses and stores inventory reflect the portion of net assets represented by revolving fund cash, prepaid expenses and stores inventory, respectively. These amounts are not available for appropriation and expenditure at the balance sheet date. The restriction for unspent categorical program revenues represents the portion of net assets restricted to specific program expenditures. The restrictions for special revenues and capital projects represent the portion of net assets restricted for special purposes and capital outlay, respectively. The restriction for debt service represents the portion of net assets available for the retirement of long-term liabilities. Deferred Revenue Revenue from federal, state, and local special projects and programs is recognized when qualified expenditures have been incurred. Funds received but not earned are recorded as deferred revenue until earned. 20

54 DUBLIN UNIFIED SCHOOL DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Fund Balance Classifications Governmental Accounting Standards Board Codification Sections 1300 and 1800, Fund Balance Reporting and Governmental Fund Type Definitions (GASB Cod. Sec and 1800) implements a five-tier fund balance classification hierarchy that depicts the extent to which a government is bound by spending constraints imposed on the use of its resources. The five classifications, discussed in more detail below, are nonspendable, restricted, committed, assigned and unassigned. A - Nonspendable Fund Balance: The nonspendable fund balance classification reflects amounts that are not in spendable form, such as revolving fund cash, prepaid expenditures and stores inventory. B - Restricted Fund Balance: The restricted fund balance classification reflects amounts subject to externally imposed and legally enforceable constraints. Such constraints may be imposed by creditors, grantors, contributors, or laws or regulations of other governments, or may be imposed by law through constitutional provisions or enabling legislation. These are the same restrictions used to determine restricted net assets as reported in the government-wide and fiduciary trust fund statements. C - Committed Fund Balance: The committed fund balance classification reflects amounts subject to internal constraints self-imposed by formal action of the Governing Board. The constraints giving rise to committed fund balance must be imposed no later than the end of the reporting period. The actual amounts may be determined subsequent to that date but prior to the issuance of the financial statements. Formal action by the Governing Board is required to remove any commitment from any fund balance. At June 30, 2011, the District had no committed fund balances. D - Assigned Fund Balance: The assigned fund balance classification reflects amounts that the District's Governing Board has approved to be used for specific purposes, based on the District's intent related to those specific purposes. The Governing Board can designate personnel with the authority to assign fund balances, however, as of June 30, 2011, no such designation has occurred. E - Unassigned Fund Balance: In the General Fund only, the unassigned fund balance classification reflects the residual balance that has not been assigned to other funds and that is not restricted, committed, or assigned to specific purposes. 21

55 DUBLIN UNIFIED SCHOOL DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Fund Balance Classifications (Continued) E - Unassigned Fund Balance: (Continued) In any fund other than the General Fund, a positive unassigned fund balance is never reported because amounts in any other fund are assumed to have been assigned, at least, to the purpose of that fund. However, deficits in any fund, including the General Fund that cannot be eliminated by reducing or eliminating amounts assigned to other purposes are reported as negative unassigned fund balance. Fund Balance Policy The District has an expenditure policy relating to fund balances. For purposes of fund balance classifications, expenditures are to be spent from restricted fund balances first, followed in order by committed fund balances (if any), assigned fund balances and lastly unassigned fund balances. While GASB Cod. Sec and 1800 do not require Districts to establish a minimum fund balance policy or a stabilization arrangement, GASB Cod. Sec and 1800 do require the disclosure of a minimum fund balance policy and stabilization arrangements, if they have been adopted by the Governing Board. At June 30, 2011, the District has not established a minimum fund balance policy nor has it established a stabilization arrangement. Estimates The preparation of basic financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures during the reporting period. Accordingly, actual results may differ from those estimates. Property Taxes Secured property taxes are attached as an enforceable lien on property as of January 1. Taxes are due in two installments on or before December 10 and April10. Unsecured property taxes are due in one installment on or before August 31. The County of Alameda bills and collects taxes for the District. Tax revenues are recognized by the District when received. Encumbrances Encumbrance accounting is used in all budgeted funds to reserve portions of applicable appropriations for which commitments have been made. Encumbrances are recorded for purchase orders, contracts, and other commitments when they are written. All encumbrances are liquidated as of June

56 DUBLIN UNIFIED SCHOOL DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Elimination and Reclassifications In the process of aggregating data for the Statement of Net Assets and the Statement of Activities, some amounts reported as interfund activity and balances in the funds were eliminated or reclassified. lnterfund receivables and payables were eliminated to minimize the "grossing up" effect on assets and liabilities within the governmental activities column. 2. CASH AND INVESTMENTS Cash and investments at June 30, 2011 consisted of the following: Governmental Activities Fiduciary Activities Pooled Funds: Cash in County Treasury Cash in County Treasury - restricted for repayment of TRANs $ 90,884,964 10,090,800 Deposits: Cash on hand and in banks Cash in revolving fund 692,905 25,000 $ 478,853 Cash with Fiscal Agent Totals 101,713, ,853 Pooled Funds In accordance with Education Code Section 41001, the District maintains substantially all of its cash in the Alameda County Treasury. The County pools these funds with those of school districts in the County and invests the cash. These pooled funds are carried at cost which approximates fair value. Interest earned is deposited monthly into participating funds. Any investment losses are proportionately shared by all funds in the pool. Because the District's deposits are maintained in a recognized pooled investment fund under the care of a third party and the District's share of the Treasurer's Pooled Investment Fund does not consist of specific, identifiable investment securities owned by the District, no disclosure of the individual deposits and investments or related custodial credit risk classifications is required. In accordance with applicable state laws, the Alameda County Treasurer may invest in derivative securities. However, at June 30, 2011 the Alameda County Treasurer has represented that the Treasurer's pooled investment fund contained no derivatives or other investments with similar risk profiles. 23

57 DUBLIN UNIFIED SCHOOL DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 2. CASH AND INVESTMENTS (Continued) Tax and Revenue Anticipation Note On November 9, 2010, the District issued $10,000,000 of Tax and Revenue Anticipation Notes (TRANs), maturing on August 31, 2011 with an interest rate of 2.0% to provide for facilitating funding for certain school construction and for paying operating expenses. The TRANs are a general obligation of the District and are payable from revenues and cash receipts generated by the District during the fiscal year ended June 30, Repayment terms require the entire TRANs principal and accrued interest to be set aside. As of June 30, 2011, funds totaling $10,090,800 held in the General Fund were pledged to repay the principal and accrued interest. Deposits - Custodial Credit Risk The District limits custodial credit risk by ensuring uninsured balances are collateralized by the respective financial institution. Under Section 343 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, interest-bearing cash balances held in banks are insured up to $250,000 and non-interest bearing cash balances held in banks are fully insured by the Federal Deposit Insurance Corporation (FDIC) and are collateralized by the respective financial institution. At June 30, 2011, the carrying amount of the District's accounts was $1,196,758 and the bank balances were $1,192,044. Of the bank balances, $250,000 was insured by the FDIC and $942,044 was uninsured, but collateralized. Cash with Fiscal Agent Cash with Fiscal Agent represents amounts held by a third party Trustee. Interest Rate Risk The District allows investments with Federal Government Issues that have a maturity date of five years or less. At June 30, 2011, the District had no significant interest rate risk related to cash and investments held. Credit Risk The District may invest as permitted by state law all or part of the special revenue fund of the District or any surplus monies not required for immediate District operations. Such investments shall be limited to securities in Government Code 16430, 53601, and At June 30, 2011, the District had no significant credit risk. Concentration of Credit Risk The District limits investments with Federal Government Issues which may not exceed 1/5 of the investable fund, Time Certificates of Deposit which may not exceed $100,000 per financial institution and State of California Issues which may not exceed 1/5 of the investable fund. At June 30, 2011, the District had no concentration of credit risk. 24

58 3. INTERFUND TRANSACTIONS lnterfund Activity DUBLIN UNIFIED SCHOOL DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Transactions between funds of the District are recorded as interfund transfers. The unpaid balances at year end, as a result of such transactions, are shown as due to and due from other funds. lnterfund Receivables/Payables Individual fund interfund receivable and payable balances at June 30, 2011 were as follows: lnterfund lnterfund Fund Receivables Payables Major Funds: General $ 238,510 County Schools Facilities $ 41,201 Non-Major Funds: Adult Education 2,170 Capital Facilities Totals $ $ lnterfund Transfers lnterfund transfers consist of operating transfers from funds receiving revenue to funds through which the resources are to be expended. lnterfund transfers for the fiscal year were as follows: Transfer from the General Fund to the Adult Education Fund to cover costs as allowed by the flexibility provision. Transfer from the General Fund to the Deferred Maintenance Fund for the current year allocation of deferred maintenance funding. Transfer from the Adult Education to the 'General Fund to cover indirect costs. Transfer from the Cafeteria Fund to the General Fund to cover indirect costs. Transfer from the Capital Facilities Fund to the General Fund for communications with the local community. Transfer from the Capital Facilities Fund to the County School Facilities Fund to transfer developer fees for the construction of Kolb School. $ 68,310 12,500 2,170 45,139 18, ,146,421 25

59 DUBLIN UNIFIED SCHOOL DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 4. CAPITAL ASSETS A schedule of changes in capital assets for the year ended June 30, 2011 is shown below: Balance Transfers Transfers Balance July 1, and and June 30, 2010 Additions Deductions 2011 Non-depreciable: Land $207,622,043 $207,622,043 Work-in-process 58,383,557 $ 30,211,113 $ 42,617,641 45,977,029 Depreciable: Improvement of sites 3,787,374 3,787,374 Buildings 153,785,560 42,774, ,559,673 Equipment 1,955, ,005,981 Totals, at cost 425,534,066 73,035,675 42,617, ,952,100 Less accumulated depreciation: Improvement of sites (2,360,398) (92,662) (2,453,060) Buildings (21,594, 123) (3,422,867) (25,016,990) Equipment (1,529,953) (116,572) (1,646,525) Total accumulated depreciation (25,484,474) (3,632,1 01) (29,116,575) Capital assets, net ~400,049,592 ~ 69,403,574 ~ 42,617,641 ~426,835,525 Depreciation expense was charged to governmental activities as follows: Instruction $ 3,408,451 Site administration 1,087 Food services 5,920 Data processing 2,891 General administration 171,903 Plant services Total depreciation expense $ 3,632, LONG-TERM LIABILITIES General Obligation Bonds On February 1, 2002, the District issued 2002 General Obligation Refunding Bonds totaling $22,760,000. On May 3, 2011, the District advance refunded the bonds through issuance of the 2011 General Obligation Refunding Bonds. The outstanding balance at refunding, $16,605,000 was defeased and have been removed from the District's financial statements. 26

60 5. LONG-TERM LIABILITIES (Continued) DUBLIN UNIFIED SCHOOL DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (Continued) General Obligation Bonds (Continued) On March 22, 2005, the District issued 2005 General Obligation Bonds, Election of 2004 Series "A" totaling $39,500,000. Repayment of the Bonds is made from the special parcel tax revenues levied in connection with this bond issue. The Bonds bear interest rates from 3.0% to 5.0% and are scheduled to mature through August 1, On September 13, 2005, the District issued 2005 Refunding General Obligation Bonds, totaling $21,030,000 to advance refund the Series 1994, 1998 and 1999 General Obligation Bonds. Repayment of the Bonds is made from the special parcel tax revenues levied in connection with this bond issue. The Bonds bear interest rates from 3.5% to 6.0% and are scheduled to mature through August 1, On July 17, 2007, the District issued 2004 General Obligation Bonds, Election of 2004 Series "B" totaling $50,000,000. Repayment of the Bonds is made from the special parcel tax revenues levied in connection with this bond issue. The Bonds bear interest rates from 4.0% to 5.0% and are scheduled to mature through August 1, On July 17, 2007, the District issued 2004 General Obligation Bonds, Election 2004 Series "C" totaling $14,998,934. Repayment of the Bonds is made from the special parcel tax revenues levied in connection with this bond issue. The Bonds bear interest rates from 5.11% to 5.38% and are scheduled to mature through August 1, On September 7, 2009, the District issued 2004 General Obligation Bonds, Election 2004 Series "D" totaling $9,235,858. Repayment of the Bonds is made from the special parcel tax revenues levied in connection with this bond issue. The Bonds bear interest rates from 5.82% to 10.12% and are scheduled to mature through August 1, On September 7, 2009, the District issued 2004 General Obligation Bonds, Election 2004 Series "E" totaling $26,763,908. Repayment of the Bonds is made from the special parcel tax revenues levied in connection with this bond issue. The Bonds bear interest rates from 6.45% to % and are scheduled to mature through August 1, On October 20, 2010, the District issued 2010 General Obligation Refunding Bonds totaling $16,470,000. The proceeds were used to advance refund remaining $16,605,000 of the District's 2002 General Obligation Refunding Bonds. Repayment of the Bonds is made from the special parcel tax revenues levied in connection with this bond issue. The bonds bear interest at rates ranging from 2.00% to 3.00%, and are scheduled to mature through August 1, As a result of the transaction, the refunded bonds are considered defeased and have been removed from the District's financial statements. 27

61 5. LONG-TERM LIABILITIES (Continued) DUBLIN UNIFIED SCHOOL DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (Continued) General Obligation Bonds (Continued) On May 3, 2011, the District issued 2011 General Obligation Bond Anticipation Notes, totaling $25,000,000. The notes are being issued as Qualified School Construction Bonds in anticipation of the issuance of a series of General Obligation Bonds, which are expected to be issued prior to the maturity of the notes. Repayment of the bonds will be made from the proceeds of the issuance of the general obligation bonds, or ad valorem taxes levied upon all property within the District to the extent available for that purpose. The notes bear interest at 4.761%, and are scheduled to mature on May 1, The following is a schedule of outstanding General Obligation Bonds: Balance Current Current Balance July 1, Year Year June 30, Series 2010 Proceeds Maturities Refunding Bonds $ 17,705,000 $ (17,705,000) 2005 Refunding Bonds 20,685,000 (260,000) $ 20,425, GO Bonds, Series A 33,795,000 (575,000) 33,220, GO Bonds, Series B 49,400,000 (300,000) 49,100, GO Bonds, Series C 14,998,934 (12,792) 14,986, GO Bonds, Series D 9,235,858 9,235, GO Bonds, Series E 26,763,908 26,763, Refunding Bonds $ 16,470,000 16,470, GO Bond Anticipation Notes 25,000,000 25,000,000 Totals ~ 172,583,700 ~ ~ (18,852,792) ~ 195,200,908 The General Obligation Bonds are scheduled to mature as follows: Year Ending June 30. Principal Interest Total 2012 $ 3,232,776 $ 6,388,938 $ 9,621, ,149,740 6,458,279 9,608, ,665,249 6,500,151 10,165, ,858,807 6,366,568 10,225, ,385,931 6,355,406 35,741, ,571,435 22,116,990 55,688, ,520,686 14,040,239 55,560, ,827,496 19,413,321 58,240, ,759,797 57,935,666 75,695, ,793,871 66,887,873 79,681, $ 195,200,908 :1! 268,769,368 :1! 463,970,276 28

62 5. LONG-TERM LIABILITIES (Continued) Accreted Interest DUBLIN UNIFIED SCHOOL DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Balance July 1, Series 2010 Accretion Payments 2004 GO Bonds, Series C $ 2,053,257 $ 1,271,490 $ (2,208) 2004 GO Bonds, Series D 234, , GO Bonds, Series E ,374,368 Total Accreted Interest $ $ 4,261,814 $ (2,208) Balance June 30, 2011 $ 3,322, ,906 3,078,579 $ 7,252,024 Earll: Retirement Incentive The District has entered into various early retirement incentive agreements during the past three years. The District has obligations under the STRS golden handshake program of $27,133 that will be paid off over the next two years. Additional incentive agreements amounting to $35,883 include providing medical benefits for each eligible individual over the next one to two years. Schedule of Changes in Long-Term Liabilities A schedule of changes in long-term liabilities for the year ended June 30, 2011 is shown below: Balance Balance Amounts July 1, June 30, Due Within 2010 Additions Deductions 2011 One Year General Obligation Bonds $ 172,583,700 $ 41,470,000 $ 18,852,792 $ 195,200,908 $ 4,307,776 Accreted interest 2,990,418 4,261,814 2,208 7,250,024 62,225 Premium on refinancing 2,329, ,587 2,206,575 Early retirement incentive Totals $ 178,011,203 ~ 45,731,814 ~ 19,022,494 ~ 204,720,523 ~ 4,410,465 Payments on the General Obligation Bonds are made from the Bond Interest and Redemption Fund. Payments on the early retirement incentive are made from the fund for which the related employee worked. 29

63 6. NET ASSETS I FUND BALANCES DUBLIN UNIFIED SCHOOL DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Restricted net assets consisted of the following at June 30, 2011: Governmental Activities Revolving cash $ 25,000 Prepaid expenses 57,370 Stores inventory 83,981 Unspent categorical program revenues 404,373 Special revenues 143,706 Capital projects 53,460,677 Debt service Fund balances, by category, at June 30, 2011 consisted of the following: $ County School All General Building Facilities Non-Major Fund Fund Fund Funds Total Nonspendable: Revolving cash fund $ 25,000 $ 25,000 Prepaid Expenditures 57,370 57,370 Stores inventory $ Subtotal nonspendable Restricted: Unspent categorical revenues 404, ,373 Debt service 6,364,692 6,364,692 Deferred maintenance 24,771 24,771 Food services 26,873 26,873 Capital projects ~ 50,276,219 ~ 25,517,350 3,184,458 78, Subtotal restricted ,517,350 9,600,794 85,798,736 Assigned: Board assignments 2,073,465 2,073,465 Unassigned: Designated for economic uncertainty 6,578,953 6,578,953 Undesignated 309, ,538 Subtotal unassigned 6,888,491 6,888,491 Total fund balances ~ 9,486,649 ~ 50,276,219 ~ 25,517,350 ~ 9,646,825 ~ 94,927,043 30

64 7. EMPLOYEE RETIREMENT SYSTEMS DUBLIN UNIFIED SCHOOL DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Qualified employees are covered under multiple-employer defined benefit pension plans maintained by agencies of the State of California. Certificated employees are members of the State Teachers' Retirement System (STRS), and classified employees are members of the California Public Employees' Retirement System (CaiPERS). Plan Description and Provisions California Public Employees' Retirement System (CaiPERS) Plan Description The District contributes to the School Employer Pool under the California Public Employees' Retirement System (CaiPERS), a cost-sharing multiple-employer public employee retirement system defined benefit pension plan administered by CaiPERS. The plan provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefit provisions are established by state statutes, as legislatively amended, within the Public Employees' Retirement Law. CaiPERS issues a separate comprehensive annual financial report that includes financial statements and required supplementary information. Copies of the CaiPERS annual financial report may be obtained from the CaiPERS Executive Office, 400 Q Street, Sacramento, California Funding Policy Active plan members are required to contribute 7.0% of their salary and the District is required to contribute an actuarially determined rate. The actuarial methods and assumptions used for determining the rate are those adopted by the CaiPERS Board of Administration. The required employer contribution rate for fiscal year was % of annual payroll. The contribution requirements of the plan members are established by state statute. The District's contributions to CaiPERS for the fiscal years ending June 30, 2009, 2010 and 2011 were $783,786, $817,919 and $882,120, respectively, and equal 100% of the required contributions for each year. State Teachers' Retirement System (STRS) Plan Description The District contributes to the State Teachers' Retirement System (STRS), a costsharing multiple-employer public employee retirement system defined benefit pension plan administered by STRS. The plan provides retirement, disability and survivor benefits to beneficiaries. Benefit provisions are established by state statutes, as legislatively amended, within the State Teachers' Retirement Law. STRS issues a separate comprehensive annual financial report that includes financial statements and required supplementary information. Copies of the STRS annual financial report may be obtained from the STRS Executive Office, 100 Waterfront Place, West Sacramento, California

65 DUBLIN UNIFIED SCHOOL DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 7. EMPLOYEE RETIREMENT SYSTEMS (Continued) Plan Description and Provisions (Continued) State Teachers' Retirement System (STRS) (Continued) Funding Policy Active plan members are required to contribute 8.0% of their salary. The required employer contribution rate for fiscal year was 8.25% of annual payroll. The contribution requirements of the plan members are established by state statute. The District's contributions to STRS for the fiscal years ending June 30, 2009, 2010 and 2011 were $2,212,454, $2,250,863 and $2,299,497, respectively, and equal 100% of the required contributions for each year. 8. JOINT POWERS AGREEMENTS Alameda Countv Schools Insurance Group The District is a member with other school districts of a Joint Powers Authority, Alameda County Schools Insurance Group (ACSIG). ACSIG arranges for and provides workers' compensation insurance for its members. The following is a summary of financial information for ACSIG at June 30, 2011: Total assets Total liabilities Net assets Total revenue Total expenses Change in net assets $ 33,967,537 $ 48,934,138 $ (14,966,601) $ 131,226,829 $ 130,235,318 $ 991,511 Schools Excess Liabilitv Fund The District is also a member with other school districts of a Joint Powers Authority, School Excess Liability Fund (SELF), for the purpose of providing excess insurance coverage. The following is a summary of the financial information for SELF at June 30, 2011: Total assets Total liabilities Net assets Total revenues Total expenses Change in net assets $ 174,774,000 $ 141,524,000 $ 33,250,000 $ 9,165,000 $ 12,425,000 $ (3,260,000) The relationship between Dublin Unified School District and the Joint Powers Authorities is such that the Joint Powers Authorities are not component units of the District for financial reporting purposes. 32

66 DUBLIN UNIFIED SCHOOL DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 9. COMMITMENTS AND CONTINGENCIES The District is subject to legal proceedings and claims which arise in the ordinary course of business. In the opinion of management, the amount of ultimate liability with respect to these actions will not materially affect the financial position or results of operations of the District. The District has received federal and state funds for specific purposes that are subject to review and audit by the grantor agencies. Although such audits could result in expenditure disallowances under terms of the grants, it is management's opinion that any required reimbursements or future revenue offsets subsequently determined will not have a material effect on the District's financial statements or results of operations. 33

67 REQUIRED SUPPLEMENTARY INFORMATION

68 DUBLIN UNIFIED SCHOOL DISTRICT GENERAL FUND BUDGETARY COMPARISON SCHEDULE For the Year Ended June 30, 2011 Original Budget Final Actual Variance Favorable {Unfavorable l Revenues: Revenue limit sources: State apportionment Local sources Total revenue limit Federal sources Other state sources Other local sources Total revenues Expenditures: Certificated salaries Classified salaries Employee benefits Books and supplies Contract services and operating expenditures other outgo Total expenditures (Deficiency) excess of revenues (under) over expenditures Other financing sources (uses): Operating transfers in Operating transfers out Total other financing (uses) Net change in fund balances Fund balance, July 1, 2010 Fund balance, June 30, 2011 $ 11,763,237 $ 11,763,237 23,012,956 23,012,956 34,776, ,108,824 1,108,824 5, 109,170 5,109, ,955 4,767, ,142 45, ,883,358 27,883,358 7,685,088 7,685,088 6,912,473 6,912,473 1,041,441 1,041,441 5,345,946 5,345, ,155,514 49,155,514 (3,393,372) (3,393,372) 325, , (3,017,062) (3,017,062) 6,807,542 6,807,542 $ ~ $ 14,678,289 $ 2,915,052 22,172,200 (840,756) 36, , ,568,567 1,459,743 5,864, , ,593 1,076,638 51, ,366,103 28,022,032 (138,674) 7,521, ,642 6,540, ,437 1,338,741 (297,300) 4,575, , ,865 (148,657) ,694,306 6,087,678 65,611 (259,389)!80,810) (132,120) (15,199) (391,509) 2,679,107 5,696,169 6,807,542 ~ ~ The accompanying notes are an integral part of these financial statements. 34

69 DUBLIN UNIFIED SCHOOL DISTRICT NOTE TO REQUIRED SUPPLEMENTARY INFORMATION 1. PURPOSE OF SCHEDULES A Budgetary Comparison Schedule The District employs budget control by object codes and by individual appropriation accounts. Budgets are prepared on the modified accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America as prescribed by the Governmental Accounting Standards Board. The budgets are revised during the year by the Board of Education to provide for revised priorities. Expenditures cannot legally exceed appropriations by major object code. The originally adopted and final revised budgets for the General Fund are presented as Required Supplementary Information. The basis of budgeting is the same as GAAP. Excess of expenditures over appropriations for the year ended June 30, 2011 were as follows: Fund Excess Expenditures General Fund: Certificated salaries Books and supplies $ $ 138, ,300 These excesses are not in accordance with Education Code

70 SUPPLEMENTARY INFORMATION

71 DUBLIN UNIFIED SCHOOL DISTRICT COMBINING BALANCE SHEET ALL NON-MAJOR FUNDS June 30, 2011 Adult Deferred Education Cafeteria Maintenance Fund Fund Fund Bond Capital Interest and Facilities Redemption Fund Fund Total ASSETS Cash and investments: Cash in County Treasury $ Cash on hand and in banks Receivables Stores inventory Total assets $ LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Due to other funds $ Total liabilities Fund balances: Nonspendable Restricted Total fund balances Total liabilities and fund balances $ 2,170 $ 196,594 $ 27,227 8,165 38, $ 289:524 $ $ 21,481 $ 2,483 2, , , ~ ~ $ 3,258,061 $ 6,359,585 $ 9,843,637 8,165 2,250 5,107 46, $ 3 260:311 $ 6 364:692 $ $ 34,652 $ 58, , ,126 46,031 3,184,458 ~ 6,364,692 9,600,794 3,184,458 6,364,692 9,646,825 ~ ~ ~ The accompanying notes are an integral part of these financial statements; 36

72 DUBLIN UNIFIED SCHOOL DISTRICT COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGE IN FUND BALANCES ALL NON-MAJOR FUNDS For the Year Ended June 30, 2011 Bond Adult Deferred Capital Interest and Education Cafeteria Maintenance Facilities Redemption Fund Fund Fund Fund Fund Total Revenues: Federal sources $ 323,825 $ 323,825 Other state sources 123,102 $ 59, ,239 Other local sources $ 27,816 1,037,392 ~ 762 ~ 4,027,066 8,502,783 13,595,819 Total revenues ,066 8,561, ,883 Expenditures: Certificated salaries 60,806 60,806 Classified salaries 17, ,380 58, , ,924 Employee benefits 13, ,706 5,073 36, ,801 Books and supplies 2, ,730 22, , ,449 Contract services and operating expenditures ,803 87, , ,836 Other outgo 69,895 69,895 Debt service: Principal retirement 18,852,792 18,852,792 Interest 5,150, Total expenditures , ,975 24, ,435,049 (Deficiency) excess of revenues (under) over expenditures (67,631) (172,908) 3,274,091 (15, ) (12,333,166) Other financing sources (uses): Operating transfers in 68,310 12,500 80,810 Operating transfers out (2, 170) (45, 139) (4,018,302) (4,065,611) Proceeds from issuance of debt 16,470,000 16,470,000 Total other financing sources (uses) (45, 139) (4,018,302) 16,470,000 12,485,199 Change in fund balances (1,491) 29,561 (160,408) (744,211) 1,028, ,033 Fund balances, July 1, ,928,669 5,336,110 9,494,792 Fund balances, June 30, 2011 $ $ $ 24,771 $ 3, $ 6.364,692 $ 9.646,825 The accompanying notes are an integral part of these financial statements. 37

73 DUBLIN UNIFIED SCHOOL DISTRICT COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS For the Year Ended June 30, 2011 Fallon Middle School Balance Balance July 1, June 30, 2010 Additions Deductions 2011 Assets: Cash on hand and in banks $ $ $ $ Liabilities: Due to student groups $ $ $ 226:795 $ Frederiksen Elementa!Y School Assets: Cash on hand and in banks $ $ $ 38:821 $ Liabilities: Due to student groups $ $ $ $ Wells Middle School Assets: Cash on hand and in banks $ $ $ $ Liabilities: Due to student groups $ $ $ $ Dublin High School Assets: Cash on hand and in banks $ $ $ $ Liabilities: '. Due to student groups $ $ $ $ Valley High School Assets: Cash on hand and in banks $ $ $ $ Liabilities: Due to student groups $ ~ ~ ~ 10:737 (Continued) 38

74 DUBLIN UNIFIED SCHOOL DISTRICT COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS (Continued) For the Year Ended June 30, 2011 Balance July 1, 2010 Additions Deductions Balance June 30, 2011 Total Student Body Assets: Cash on hand and in banks $ $ $ 1 A $ Liabilities: Due to student groups $ ~ ~ ~ The accompanying notes are an integral part of these financial statements. 39

75 DUBLIN UNIFIED SCHOOL DISTRICT ORGANIZATION June 30, 2011 Dublin Unified School District was established in 1988 and comprises an area of approximately 15 square miles located in Alameda County. The District operates 5 elementary schools, 2 middle schools, 1 high school, a continuation high school, an independent study program and an adult education program. There were no changes in the boundaries of the District during the current year. GOVERNING BOARD Name Dan Cunningham Greg Tomlinson David Haubert Sean Kenney Amy Miller Office President Vice President Trustee Trustee Trustee Term Expires ADMINISTRATION Stephen L. Hanke, Ed.D. Superintendent Dave Marken, Ed.D. Assistant Superintendent, Educational Services Ms. Beverly Heironimus, CPA Assistant Superintendent, Business Services 40

76 DUBLIN UNIFIED SCHOOL DISTRICT SCHEDULE OF AVERAGE DAILY ATTENDANCE For the Year Ended June 30, 2011 Elementary: Kindergarten First through Third Fourth through Sixth Seventh and Eighth Special Education Total Elementary Secondary: Regular Classes Continuation Education Home and Hospital Special Education Total Secondary Second Period Report 551 1,609 1, , Annual Report 551 1,609 1, , See accompanying notes to supplementary information. 41

77 DUBLIN UNIFIED SCHOOL DISTRICT SCHEDULE OF INSTRUCTIONAL TIME For the Year Ended June 30, 2011 Grade Level Minutes Require- Actual Actual ment Minutes Minutes Number of Days Traditional Calendar Status Kindergarten Grade 1 Grade 2 Grade 3 Grade 4 Grade 5 Grade 6 Grade 7 Grade 8 Grade 9 Grade 10 Grade 11 Grade 12 36,000 35,000 40,425 50,400 45,775 54,660 50,400 45,775 54,660 50,400 45,775 54,660 54,000 51,950 54,660 54,000 '51,950 54,660 54,000 51,950 60,780 54,000 59,340 60,780 54,000 59,340 60,780 64,800 63,280 65,711 64,800 63,280 65,711 64,800 63,280 65,711 64,800 63,280 65, In Compliance 180 In Compliance 180 In Compliance 180 In Compliance 180 In Compliance 180 In Compliance 180 In Compliance 180 In Compliance 180 In Compliance 180 In Compliance 180 In Compliance 180 In Compliance 180 In Compliance See accompanying notes to supplementary information. 42

78 DUBLIN UNIFIED SCHOOL DISTRICT SCHEDULE OF EXPENDITURE OF FEDERAL AWARDS For the Year Ended June 30, 2011 Federal Catalog Number Federal Grantor/Pass-Through Grantor/Program or Cluster Title Pass- Through Entity Identifying Number Federal Expenditures U.S. De12artment of Education- Passed through California De12artment of Education Special Education Cluster: Special Ed IDEA: Local Assistance Special Ed IDEA: Federal Preschool Grant A Special Ed IDEA: Preschool Local Entitlement A Special Ed IDEA: Preschool Staff Development Special Ed: ARRA IDEA, Basic Local Assistance Special Ed: ARRA IDEA, Preschool Local Entitlement Special Ed: ARRA IDEA, Preschool Grant Subtotal Special Education Cluster Title I Cluster: NCLB: Title I, Part A, Basic NCLB: ARRA Title I, Part A, Basic Subtotal Title I Cluster Education Jobs Fund (SB 847) NCLB: Title II, Part A, Teacher Quality NCLB: Title II, Part D, Technology NCLB: Title II, Part D, Technology NCLB: Title Ill, Limited English Proficiency NCLB: Title Ill, Immigrant Education Program ARRA: State Fiscal Stabilization Fund Total U.S. Department of Education U.S. De12artment of Health and Human Services- Passed through California De12artment of Education Department of Health Services: Medi-Cal Billing Option U.S. De12artment of Agriculture- Passed through California De12artment of Education Child Nutrition - School Programs Total Federal Programs $ 637,976 27,088 59, ,275 26, , , , ,917 35,888 8, ~ 3,695,253 See accompanying notes to supplementary information. 43

79 DUBLIN UNIFIED SCHOOL DISTRICT RECONCILIATION OF UNAUDITED ACTUAL FINANCIAL REPORT WITH AUDITED FINANCIAL STATEMENTS For the Year Ended June 30, 2011 There were no audit adjustments proposed to any funds of the District. See accompanying notes to supplementary information. 44

80 DUBLIN UNIFIED SCHOOL DISTRICT SCHEDULE OF FINANCIAL TRENDS AND ANALYSIS For the Year Ended June 30, 2011 General Fund and Sl!ecial Reserve for Other than Cal!ital Outlall Fund (Budget) Revenues and other financing sources $ 50,141,049 ~ 51,193,856 ~ 45,892,281 ~ 49,967,073 Expenditures 54,244,003 48,433,939 46,791,268 46,237,999 Other uses and transfers out 52, Total outgo 54,296,091 48,514,749 46,927, ,696 Change in fund balance $ (4,155,042) ~ 2,679,107 ~ (1,034,815) ~ 3,551,377 Ending fund balance $ 5,331,607 ~ 9,486,649 ~ 6,807,542 ~ 7,842,357 Available reserves $ 6,695,832 ~ 6,888,491 ~ 3, ~ 2,896,020 Designated for economic uncertainties $ 6,548,149 ~ 6,578,953 ~ 3,052,646 ~ 1,422,825 Undesignated fund balances $ 147,683 ~ 309,538 ~ 728,181 ~ 1,473,195 Available reserves as percentages of total outgo 12.3% 14.2~ 8.1% 6.2% All Funds Total long-term liabilities $ 200,310,058 ~ 204,720,523 ~ 178,011,203 ~ 143,133,118 Average daily attendance at P-2, excluding Adult and ROP The General Fund fund balance has increased by $5,195,669 over the past three years. The District projects a decrease of $4,155,042 for the fiscal year ending June 30, For a district this size, the state requires available reserves of at least 3% of total General Fund expenditures, transfers out, and other uses. For the year ended June 30, 2011, the District has met this requirement. The District has incurred operating surpluses in two of the past three years, but anticipates an operating deficit during the fiscal year. Total long-term liabilities have increased by $61,587,405 over the past two years, primarily due to the issuance of bond indebtedness. See Note 5 to the financial statements. Average daily attendance (excluding classes for adults and ROP) has increased by 494 over the past two years and is anticipated to increase by 326 ADA during the year ending June 30, See accompanying notes to supplementary information. 45

81 DUBLIN UNIFIED SCHOOL DISTRICT SCHEDULE OF CHARTER SCHOOLS For the Year Ended June 30, 2011 Charter Schools Chartered by District Included in District Financial Statements, or Separate Report The District does not sponsor any charter schools. See accompanying notes to supplementary information. 46

82 DUBLIN UNIFIED SCHOOL DISTRICT NOTES TO SUPPLEMENTARY INFORMATION 1. PURPOSE OF SCHEDULES A Schedule of Average Daily Attendance Average daily attendance is a measurement of the number of pupils attending classes of the District. The purpose of attendance accounting from a fiscal standpoint is to provide the basis on which apportionments of state funds are made to school districts. This schedule provides information regarding the attendance of students at various grade levels and in different programs. B Schedule of Instructional Time The District has received incentive funding for increasing instructional time as provided by the Incentives for Longer Instructional Day. This schedule presents information on the amount of instructional time offered by the District, and whether the District complied with the provisions of Education Code Sections through C Schedule of Expenditure of Federal Awards OMB Circular A-133 requires a disclosure of the financial activities of all federally funded programs. This schedule was prepared to comply with A-133 requirements, and is presented on the modified accrual basis of accounting. The following schedule provides a reconciliation between revenues reported on the Statement of Revenues, Expenditures and Change in Fund Balances and the related expenditures reported on the Schedule of Expenditure of Federal Awards. The reconciling amounts represent Federal funds that have been recorded as revenues that have not been expended by June 30, Description Total Federal revenues, Statement of Revenues, Expenditures and Change in Fund Balances Add: State Fiscal Stabilization Funds spent from prior year awards Less: Medi-Cal Billing Funds not spent Total Schedule of Expenditure of Federal Awards CFDA Number Amount $ 2,892, ,581 (3.720) $

83 DUBLIN UNIFIED SCHOOL DISTRICT NOTES TO SUPPLEMENTARY INFORMATION (Continued) 1. PURPOSE OF SCHEDULES (Continued) D Reconciliation of Unaudited Actual Report with Audited Financial Statements This schedule provides the information necessary to reconcile the Unaudited Actual Financial Report to the audited financial statements. E Schedule of Financial Trends and Analysis This schedule provides trend information on fund balances, revenues, expenditures and average daily attendance, as required by the State Controller's Office. F Schedule of Charter Schools This schedule provides information for the California Department of Education to monitor financial reporting by Charter Schools. 2. EARLY RETIREMENT INCENTIVE PROGRAM Education Code Section requires certain disclosure in the financial statements of districts which adopt Early Retirement Incentive Programs pursuant to Education Code Sections and For the fiscal year ended June 30, 2011, the District did not offer an Early Retirement Incentive Program. 48

84 INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH STATE LAWS AND REGULATIONS Governing Board Dublin Unified School District Dublin, California We have audited the compliance of Dublin Unified School District with the types of compliance requirements described in the State of California's Standards and Procedures for Audits of California K-12 Local Educational Agencies (the "Audit Guide") to the state laws and regulations listed below for the year ended June 30, Compliance with the requirements of state laws and regulations is the responsibility of Dublin Unified School District's management. Our responsibility is to express an opinion on Dublin Unified School District's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the State of California's Standards and Procedures for Audits of California K-12 Local Educational Agencies. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the state laws and regulations listed below occurred. An audit includes examining, on a test basis, evidence about Dublin Unified School District's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of Dublin Unified School District's compliance with those requirements. Audit Guide Procedures Description Procedures Performed Regular and Special Day Classes 8 Yes Kindergarten Continuance 3 Yes Independent Study 23 No, see below Continuation Education 10 Yes Instructional Time: School Districts 6 Yes County Offices of Education 3 No, see below Instructional Materials: General requirements 8 Yes Ratio of Administrative Employees to Teachers 1 Yes Classroom Teacher Salaries 1 Yes Early Retirement Incentive Program 4 No, see below Gann Limit Calculation 1 Yes School Accountability Report Card 3 No, see below Public Hearing Requirements- Receipt of Funds 1 Yes Class Size Reduction Program: General requirements 7 Yes Option one classes 3 Yes Option two classes 4 No, see below Districts with only one school serving K-3 4 No, see below After School Education and Safety Program: General requirements 4 No, see below After school 4 No, see below Before school 5 No, see below 49

85 INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH STATE LAWS AND REGULATIONS (Continued) Description Audit Guide Procedures Procedures Performed Contemporaneous Records of Attendance, for charter schools 1 Mode of Instruction, for charter schools 1 Nonclassroom-Based Instruction/Independent Study, for charter schools 15 Determination of Funding for Nonclassroom-Based Instruction, for charter schools 3 Annual Instructional Minutes -Classroom-Based, for charter schools 3 No, see below No, see below No, see below No, see below No, see below The District's reported ADA for Independent Study was below the materiality level that requires testing; therefore, we did not perform any testing of Independent Study ADA. The District is not a County Office of Education; therefore, we did not perform any testing for Instructional Time - County Offices of Education. The District did not enter into any new Early Retirement Incentive Programs in the current year; therefore, we did not perform any procedures relating to Early Retirement Incentive Programs. The School Accountability Report Cards specified by Education Code Section are not required to be completed, nor were they completed, prior to the completion of our audit procedures for the year ended June 30, Accordingly, we could not perform the portions of audit steps (a), (b) and (c) of Section of the Audit Guide relating to the comparison of tested data from the fiscal year to the School Accountability Report Cards. The District does not participate in Option Two of the Class Size Reduction Program; therefore, we did not perform any procedures related to Option Two. The District does not have only one school serving grades K through 3; therefore, we did not perform any procedures relating to Class Size Reduction - Districts with only one school serving grades K through 3. The District did not receive funding from the After School Education and Safety Program; therefore, we did not perform any testing required by Article 4 of the Audit Guide. The District does not have any Charter Schools; therefore, we did not perform any of the testing required by Article 4 of the Audit Guide. In our opinion, Dublin Unified School District complied with the state laws and regulations referred to above for the year ended June 30, Further, based on our examination, for items not tested, nothing came to our attention to indicate that Dublin Unified School District had not complied with the state laws and regulations. 50

86 INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH STATE LAWS AND REGULATIONS (Continued) This report is intended solely for the information of the Governing Board, management, the State Controller's Office, the California Department of Education and the California Department of Finance, and is not intended to be and should not be used by anyone other than these specified parties. Sacramento, California December 12, 2011 Crowe Horwath LLP 51

87 INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Governing Board Dublin Unified School District Dublin, California We have audited the financial statements of Dublin Unified School District as of and for the year ended June 30, 2011, and have issued our report thereon dated December 12, We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting Management of Dublin Unified School District is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered Dublin Unified School District's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Dublin Unified School District's internal control over financial reporting. Accordingly, we do not express an opinion of the effectiveness of Dublin Unified School District's internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. However, we identified certain matters involving internal control that we have communicated to management as identified in the accompanying Schedule of Audit Findings and Questioned Costs as Finding Compliance and Other Matters As part of obtaining reasonable assurance about whether Dublin Unified School District's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. 52

88 INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS (Continued) Compliance and Other Matters (Continued) Dublin Unified School District's response to the finding identified in our audit is included in the accompanying Schedule of Audit Findings and Questioned Costs. We did not audit the District's response and, accordingly, express no opinion on it. This report is intended solely for the information of the Governing Board, management, the California Department of Education, the California State Controller's Office and federal awarding agencies and pass-through entities, and is not intended to be and should not be used by anyone other than these specified parties. Sacramento, California December 12, 2011 ~~u, > Crowe Horwath LLP 53

89 INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 Governing Board Dublin Unified School District Dublin, California Compliance We have audited Dublin Unified School District's compliance with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that could have a direct and material effect on each of Dublin Unified School District's major federal programs for the year ended June 30, Dublin Unified School District's major federal programs are identified in the summary of auditors' results section of the accompanying Schedule of Audit Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of Dublin Unified School District's management. Our responsibility is to express an opinion on Dublin Unified School District's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Dublin Unified School District's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Dublin Unified School District's compliance with those requirements. As described in item in the accompanying schedule of findings and questioned costs, Dublin Unified School District did not comply with requirements regarding calculation of interest earned that are applicable to all of its federal programs. Compliance with such requirements is necessary, in our opinion, for Dublin Unified School District to comply with requirements applicable to those programs. In our opinion, because of the effects of the noncompliance described in the preceding paragraph, Dublin Unified School District did not comply in all material respects, with the requirements referred to above that could have a direct and material effect on its federal programs. Also, in our opinion, Dublin Unified School District complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its other major federal programs for the year ended June 30,