$10,000,000 TOWNSHIP OF CHELTENHAM Montgomery County, Pennsylvania General Obligation Refunding Bonds, Series of 2015

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1 NEW ISSUE BOOK ENTRY ONLY RATING: Moody s: Aa2 Underlying (See RATING herein) In the opinion of Bond Counsel, interest on the Series 2015 Bonds is not includable in gross income for purposes of federal income taxation under existing statutes, regulations, rulings and court decisions, subject to the conditions described in TAX EXEMPTION AND OTHER TAX MATTERS herein. Interest on the Series 2015 Bonds will not be a specific preference item for purposes of the individual and corporate alternative minimum taxes; however, such interest is taken into account in computing the alternative minimum tax for certain corporations and may be subject to certain other federal taxes affecting corporate holders of the Series 2015 Bonds. The Township has designated the Series 2015 Bonds (to the extent the Series 2015 Bonds are not deemed designated) as qualified tax-exempt obligations for purposes of Section 265(b)(3) of the Code (relating to the deductibility of the interest expense by certain financial institutions).under the laws of the Commonwealth of Pennsylvania, as enacted and construed on the date hereof, the Series 2015 Bonds are exempt from Pennsylvania personal property taxes and the interest on the Series 2015 Bonds is exempt from Pennsylvania income tax and Pennsylvania corporate net income tax. For a more complete discussion see TAX EXEMPTION AND OTHER TAX MATTERS herein. $10,000,000 TOWNSHIP OF CHELTENHAM Montgomery County, Pennsylvania General Obligation Refunding Bonds, Series of 2015 Dated: Date of Delivery Principal Due: July 1, as shown herein Interest Payable: January 1 and July 1 First Interest Payable: January 1, 2016 The Township of Cheltenham, Montgomery County, Pennsylvania (the Township ) will issue its General Obligation Refunding Bonds, Series of 2015 (the Series 2015 Bonds or the Bonds ), in fully registered form, without coupons, and when issued, will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ( DTC ), which will act as securities depository for the Series 2015 Bonds. Beneficial ownership interest in the Series 2015 Bonds will be recorded in book-entry-only form in denominations of $5,000 and any integral multiple thereof. Interest on the Series 2015 Bonds will be payable initially on January 1, 2016 and thereafter semiannually on January 1 and July 1 of each year at the annual rates shown on the inside cover. The Series 2015 Bonds will be payable as to principal upon presentation and surrender thereof at the corporate trust office of The Bank of New York Mellon located in Philadelphia, Pennsylvania in its capacity as Paying Agent (the Paying Agent ). So long as DTC or its nominee, Cede & Co., is the registered owner of the Series 2015 Bonds, payments of the principal of and interest on the Bonds will be made directly to Cede & Co., which will remit such payments to the DTC participant, which will in turn remit such payments to the beneficial owners of the Series 2015 Bonds. Purchasers will not receive physical delivery of the Series 2015 Bonds (see BOOK-ENTRY ONLY SYSTEM herein). The Series 2015 Bonds are subject to optional redemption prior to maturity and are subject to mandatory redemption prior to maturity as described herein. Proceeds of the Series 2015 Bonds will provide funds for: (i) the current refunding of a portion of the Township s General Obligation Refunding Bonds, Series of 2005A; (ii) the advance refunding of a portion of the Township s General Obligation Bonds, Series of 2011; and (iii) paying costs of issuance of the Series 2015 Bonds. The Series 2015 Bonds are general obligations of the Township, payable from the tax and other general revenues of the Township, which presently include ad valorem taxes which may be levied on all taxable real property within the Township without limitation as to rate or amount. The Township has covenanted, in the Ordinance (hereinafter defined), that the Township shall do the following: (1) include the amount of the debt service for the Series 2015 Bonds for each fiscal year in which such sums are payable in its budget for that year; (2) appropriate those amounts from its general revenues for the payment of such debt service; and (3) duly and punctually pay or cause to be paid from its Sinking Fund, as hereinafter defined, or any other of its revenues or funds, the principal of and interest on each of the Series 2015 Bonds at the dates and places and in the manner stated in the Series 2015 Bonds, according to the true intent and meaning thereof. For such budgeting, appropriation and payment in respect of the Series 2015 Bonds, the Township, under the Ordinance, has irrevocably pledged its full faith, credit and taxing power (See SECURITY FOR THE SERIES 2015 BONDS herein). MATURITIES, AMOUNTS, RATES AND YIELDS See Inside Front Cover The Series 2015 Bonds are legal investment for fiduciaries in the Commonwealth of Pennsylvania under the Probate, Estate and Fiduciaries Code, Act of June 30, 1972, No. 164, P.L. 508, as amended and supplemented. The Series 2015 Bonds are offered when, as and if issued, subject to withdrawal or modification of the offer without notice, and subject to the receipt of the approving legal opinion of Dilworth Paxson LLP, Philadelphia, Pennsylvania, Bond Counsel, to be furnished upon delivery of the Series 2015 Bonds. Certain legal matters will be passed upon for the Township by its Solicitor, Wisler Pearlstine, LLP, Blue Bell, Pennsylvania. Acacia Financial Group, Inc., Marlton, New Jersey serves as Financial Advisor to the Township in connection with the issuance of the Series 2015 Bonds. It is expected that the Series 2015 Bonds will be available for delivery in New York, New York, on or about August 25, Official Statement Dated July 21, 2015.

2 $10,000,000 TOWNSHIP OF CHELTENHAM Montgomery County, Pennsylvania General Obligation Refunding Bonds, Series of 2015 Dated: Date of Delivery Principal Due: July 1, as shown below Interest Payable: January 1 and July 1 First Interest Payable: January 1, 2016 PRINCIPAL AMOUNTS, INTEREST RATES AND YIELDS July 1 Amount Interest Rate Price/Yield July 1 Amount Interest Rate Price/Yield 2016 $85, % 0.450% 2021 $1,350, % 1.940%* , ,375, , ,225, , ,295, , $130, % Term Bond Due July 1, 2025 to Yield 2.65% $2,275, % Term Bond Due July 1, 2029 to Yield 3.14% *Yield to First Optional Redemption Date of January 1, 2021

3 TOWNSHIP OF CHELTENHAM MONTGOMERY COUNTY, PENNSYLVANIA TOWNSHIP BOARD OF COMMISSIONERS Date of Expiration Name Office of Term Harvey Portner President 2015 Morton J. Simon, Jr. Vice President 2017 Daniel B. Norris Member 2017 Charles D. McKeown, Sr. Member 2015 Baron B. Holland Member 2015 Ann L. Rappoport Member 2017 J. Andrew Sharkey Member 2015 APPOINTED TOWNSHIP OFFICIALS Bryan T. Havir... Township Manager Stephen G. Burns... Controller Bruce Rangnow... Director of Fiscal Affairs SOLICITOR WISLER PEARLSTINE, LLP Blue Bell, Pennsylvania BOND COUNSEL DILWORTH PAXSON LLP Philadelphia, Pennsylvania FINANCIAL ADVISOR ACACIA FINANCIAL GROUP, INC. Marlton, New Jersey PAYING AGENT AND SINKING FUND DEPOSITORY THE BANK OF NEW YORK MELLON Philadelphia, Pennsylvania UNDERWRITER PNC CAPITAL MARKETS LLC Philadelphia, Pennsylvania TOWNSHIP ADDRESS 8230 Old York Road Elkins Park, Pennsylvania

4 THE ORDER AND PLACEMENT OF MATERIALS IN THIS OFFICIAL STATEMENT, INCLUDING THE APPENDICES, ARE NOT TO BE DEEMED TO BE A DETERMINATION OF RELEVANCE, MATERIALITY OR IMPORTANCE, AND THIS OFFICIAL STATEMENT, INCLUDING THE APPENDICES, MUST BE CONSIDERED IN ITS ENTIRETY. THE OFFERING OF THE BONDS IS MADE ONLY BY MEANS OF THIS ENTIRE OFFICIAL STATEMENT. No dealer, broker, salesman or other person has been authorized by the Township or the Underwriter to give any information or to make any representations, other than those contained in this Official Statement. If given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy any security other than the Bonds, nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth in this Official Statement has been obtained from the Township and other sources which are believed to be reliable. Such information is not guaranteed as to accuracy or completeness. The information and expressions of opinion in this Official Statement are subject to change without notice and neither the delivery of this Official Statement nor any sale made under it shall, under any circumstances, create any implication that there have been no changes in the affairs of the Township since the date hereof. The quotations from and summaries and explanation of provisions of laws and documents contained herein, including the cover page and Appendices attached hereto, do not purport to be complete. Reference is made to such laws and documents for full and complete statements of their provisions. Any statements made in this Official Statement involving estimates or matters of opinion, whether or not expressly so stated, are intended merely as estimates or opinions and not as representations of fact. The information and expressions of opinion herein are subject to change without notice. Neither the delivery of this Official Statement nor any sale of the Series 2015 Bonds shall under any circumstances create any implication that there has been no change in the affairs of the Township since the date of this Official Statement. The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. The Underwriter may offer and sell the Series 2015 Bonds to certain dealers (including dealers depositing the Bonds into investment trust(s)) and others at prices lower than the public offering prices stated on the inside cover hereof. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2015 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET, SUCH STABILIZING, IF COMMENCED MAY BE DISCONTINUED AT ANY TIME, WITHOUT PRIOR NOTICE. i

5 IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THE SERIES 2015 BONDS HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ii

6 TABLE OF CONTENTS Page INTRODUCTORY STATEMENT... 1 AUTHORITY FOR ISSUANCE... 1 PURPOSE OF THE ISSUE AND PLAN OF FINANCING... 2 DESCRIPTION OF THE SERIES 2015 BONDS... 3 BOOK-ENTRY ONLY SYSTEM... 4 REDEMPTION PROVISIONS... 7 SECURITY FOR THE SERIES 2015 BONDS... 9 SOURCES AND USES OF FUNDS DEBT SERVICE SCHEDULE TAXING POWER OF THE TOWNSHIP DEBT LIMIT AND REMAINING BORROWING CAPACITY CALCULATION OF BORROWING BASE TOWNSHIP BORROWING CAPACITY OUTSTANDING TOWNSHIP DEBT CERTAIN FINANCIAL MATTERS RELATING TO THE TOWNSHIP FUTURE FINANCING TAX AND REVENUE ANTICIPATION BORROWING TAX EXEMPTION AND OTHER TAX MATTERS Federal Tax Exemption Pennsylvania Tax Exemption CERTAIN LEGAL MATTERS CONTINUING DISCLOSURE UNDERTAKING Continuing Compliance NEGOTIABILITY MUNICIPAL BANKRUPTCY LAW LITIGATION RATING UNDERWRITING FINANCIAL ADVISOR VERIFICATION MISCELLANEOUS APPENDIX A - Demographic and Economic Information Relating to the Township.A-1 APPENDIX B - Form of Bond Counsel Opinion......B-1 APPENDIX C Form of Continuing Disclosure Agreement......C-1 iii

7 OFFICIAL STATEMENT $10,000,000 TOWNSHIP OF CHELTENHAM Montgomery County, Pennsylvania General Obligation Refunding Bonds, Series of 2015 INTRODUCTORY STATEMENT This Official Statement, including the cover page, inside cover page and the Appendices hereto, is furnished by the Township of Cheltenham, Montgomery County, Pennsylvania (the Township ), in connection with the offering of $10,000,000 aggregate principal amount of its General Obligation Refunding Bonds, Series of 2015 (the Series 2015 Bonds or the Bonds ). The Series 2015 Bonds are issued in accordance with the requirements of the Local Government Unit Debt Act, 53 Pa.C.S. Chs (the Debt Act ) of the Commonwealth of Pennsylvania (the Commonwealth ), and pursuant to an ordinance of the Township enacted June 17, 2015 (the Ordinance ). The Bank of New York Mellon (the Paying Agent ), which has a corporate trust office in Philadelphia, Pennsylvania, will act as the Paying Agent and Sinking Fund Depository for the Series 2015 Bonds. The Series 2015 Bonds are general obligations of the Township, payable from the tax and other general revenues of the Township. The Township has covenanted, in the Ordinance, that the Township shall do the following, to the fullest extent authorized under applicable law: (1) include the amount of the debt service for the Series 2015 Bonds for each fiscal year in which such sums are payable in its budget for that year, (2) appropriate those amounts from its general revenues for the payment of such debt service, and (3) duly and punctually pay or cause to be paid from its Sinking Fund, as hereinafter defined, or any other of its revenues or funds, the principal of and interest on each of the Series 2015 Bonds at the dates and places and in the manner stated in the Series 2015 Bonds, according to the true intent and meaning thereof. For such budgeting, appropriation and payment in respect of the Series 2015 Bonds, the Township, under the Ordinance, has pledged its full faith, credit and taxing power. Neither the delivery of this Official Statement nor any sale of the Series 2015 Bonds made hereunder shall, under any circumstances, create an implication that thereafter there have been no changes in the affairs of the Township, since the date of this Official Statement or the earliest date as of which certain information contained herein is given. The information which follows contains summaries of the Ordinance, the Series 2015 Bonds, and the Township s budget and financial statements. Such summaries do not purport to be complete and reference is made to such documents and information, copies of which are available for examination at the offices of the Township. AUTHORITY FOR ISSUANCE The Series 2015 Bonds are issued in accordance with the requirements of the Debt Act and pursuant to the Ordinance. Debt proceedings prepared by the Township with respect to the issuance of the Series 2015 Bonds will be approved by the Department of Community and Economic Development ( DCED ) of the Commonwealth pursuant to the Debt Act. 1

8 PURPOSE OF THE ISSUE AND PLAN OF FINANCING Proceeds of the Series 2015 Bonds will provide funds for: (i) the current refunding of a portion of the Township s General Obligation Refunding Bonds, Series of 2005A (the Refunded 2005A Bonds ); (ii) the advance refunding of a portion of the Township s General Obligation Bonds, Series of 2011 (the Refunded 2011 Bonds and together with the Refunded 2005A Bonds, the Refunded Bonds ); and (iii) paying costs of issuance of the Series 2015 Bonds. The Refunded Bonds include: Refunded Bonds Maturity Interest Rate Principal Amount to be Refunded Redemption Date Redemption Price Refunded 2005A Bonds 7/1/ % $70,000 8/26/ % Refunded 2005A Bonds 7/1/ % 1,295,000 8/26/ % Refunded 2005A Bonds 7/1/ % 1,350,000 8/26/ % Refunded 2005A Bonds 7/1/ % 90,000 8/26/ % $2,805,000 Refunded 2011 Bonds 7/1/ % $2,120,000 7/1/ % Refunded 2011 Bonds 7/1/ % 2,215,000 7/1/ % Refunded 2011 Bonds 7/1/ % 2,315,000 7/1/ % $6,650,000 Refunding Program Refunded 2005A Bonds A portion of the net proceeds to be derived from the sale of the Series 2015 Bonds will be deposited in the sinking fund with The Bank of New York Mellon, Philadelphia, Pennsylvania (the Redemption Agent ), as redemption agent for the Refunded 2005A Bonds, and will provide the Township with sufficient monies, which, without regard to maturity value or interest earned thereon, will be sufficient to pay and redeem, at 100% of the principal amount thereof, on August 26, 2015, the Refunded 2005A Bonds then outstanding. Refunding Program Refunded 2011 Bonds A portion of the net proceeds to be derived from the sale of the Series 2015 Bonds will be irrevocably deposited with The Bank of New York Mellon, Philadelphia, Pennsylvania (the Escrow Agent ), as escrow agent for the Refunded 2011 Bonds pursuant to an Escrow Agreement dated the date of delivery of the Series 2015 Bonds, between the Township and the Escrow Agent. The proceeds of the Bonds so deposited (the Escrow Deposit ), will be used to purchase certain direct obligations of the United States of America (the Escrow Securities ). The maturing principal of said Escrow Securities, together with interest earned thereon, will provide the Township with sufficient monies to pay the respective maturing principal of, and periodic interest on the Refunded 2011 Bonds and, upon the redemption date of the Refunded 2011 Bonds of July 1, 2016, to redeem the remaining principal amount of the Refunded 2011 Bonds then outstanding. 2

9 DESCRIPTION OF THE SERIES 2015 BONDS Description The Series 2015 Bonds will be issued only as fully registered bonds, without coupons, in the denomination of $5,000 and integral multiples thereof. The Series 2015 Bonds will be dated as of date of delivery (the Dated Date of the Bonds ) to PNC Capital Markets LLC ( the Underwriter ) and will bear interest at the rates per annum and will mature in the principal amounts and at the times set forth on the inside front cover page of this Official Statement. Interest on the Series 2015 Bonds will be payable initially on January 1, 2016, and thereafter semiannually on January 1 and July 1 of each year until the maturity date of such Series 2015 Bond or, if such Series 2015 Bond is subject to redemption prior to maturity, until the date fixed for redemption thereof, if payment of the redemption price has been duly made or provided for. The Series 2015 Bonds, when issued, will be registered in the name of Cede & Co., as nominee of DTC. Purchases of beneficial interests in the Bonds will be made in "book entry" form in the denomination of $5,000 each or any integral multiple thereof. Purchasers will not receive physical delivery of the Series 2015 Bonds, see "Book-Entry Only System" below. Unless such system is discontinued, the provisions described under "Book-Entry Only System" below (including provisions regarding payments to and transfers by owners of beneficial interests in the Series 2015 Bonds) will be applicable to the Series 2015 Bonds. If such system is discontinued, the provisions described under "Discontinuation of Book-Entry Only System" will be applicable. Payment of Principal and Interest So long as Cede & Co., as nominee of DTC, is the registered owner of the Series 2015 Bonds, payments of principal of, redemption premium, if any, and interest on the Series 2015 Bonds, when due, are to be made to DTC and all such payments shall be valid and effective to satisfy fully and to discharge the obligations of the Township with respect to, and to the extent of, principal, redemption premium, if any, and interest so paid. If the use of the Book-Entry Only System for the Series 2015 Bonds is discontinued for any reason, bond certificates will be issued to the Beneficial Owners of the Series 2015 Bonds and payment of principal, redemption premium, if any, and interest on the Series 2015 Bonds shall be made as described in the following paragraphs: Principal of, and premium, if any, on the certificated Series 2015 Bonds will be paid to the registered owners thereof or assigns, when due, upon surrender thereof at designated office of the Paying Agent. Interest is payable to the registered owners of the Series 2015 Bonds from the interest payment date next preceding the date of registration and authentication of the Bonds, unless: (a) a Series 2015 Bond is registered and authenticated as of the interest payment date, in which event such Series 2015 Bond shall bear interest from said interest payment date; or (b) a Series 2015 Bond is registered and authenticated after a Record Date (hereinafter defined) and before the next succeeding interest payment date, in which event such Series 2015 Bond shall bear interest from such interest payment date; or (c) a Series 2015 Bond is registered and authenticated on or prior to the Record Date (hereinafter defined) preceding January 1, 2016, in which event such Series 2015 Bond shall bear interest from the Dated Date of the Bonds, or (d) as shown by the records of the Paying Agent, interest on a Series 2015 Bond shall be in default, in which event such Series 2015 Bond shall bear interest from the date interest was last paid on such Series 2015 Bond. The interest on each Series 2015 Bond is payable by check drawn on the Paying Agent, which shall be mailed to the registered owner whose name and address shall appear, at the close of business on the fifteenth (15th) day next preceding such interest payment date (the Record Date ), on the registration books maintained by the Paying Agent in behalf of the Township, irrespective of any transfer or exchange of such Series 2015 Bond subsequent to such Record Date and prior to such interest payment date, unless the 3

10 Township shall be in default in payment of interest due on such interest payment date. In the event of any such default, such defaulted interest shall be payable to the person in whose name the Series 2015 Bond is registered at the close of business on a special record date for the payment of such defaulted interest established by notice mailed by the Paying Agent to the registered owners not less than fifteen (15) days preceding such special record date. Such notice shall be mailed to the persons in whose names the Series 2015 Bonds are registered at the close of business on the fifth (5th) day preceding the date of mailing. If the date for the payment of the principal of or interest on any Series 2015 Bonds shall be a Saturday, Sunday, legal holiday or a day on which banking institutions in the Commonwealth are authorized by law or executive order to close, then the date for payment of such principal or interest shall be the next succeeding day which is not a Saturday, Sunday or legal holiday or a day on which such banking institutions are authorized to close, and payment on such date shall have the same force and effect as if made on the nominal date established for such payment. Transfer, Exchange and Registration of Series 2015 Bonds Subject to the provisions described below under Book-Entry Only System, the Series 2015 Bonds are transferable or exchangeable by the registered owners thereof upon surrender of the Series 2015 Bonds to the Paying Agent at its designated corporate trust office, accompanied by a written instrument or instruments in form, with instructions, and with guaranty of signature satisfactory to the Paying Agent, duly executed by the registered owner of such Series 2015 Bond or the owner s attorney-in-fact or legal representative. The Paying Agent shall enter any transfer of ownership of Series 2015 Bonds in the registration books and shall authenticate and deliver in the name of the transferee or transferees a new fully registered Series 2015 Bond of authorized denominations of the same maturity and interest rate for the aggregate amount which the registered owner is entitled to receive at the earliest practicable time. The Township and the Paying Agent may deem and treat the registered owner of any Series 2015 Bond as the absolute owner thereof (whether or not a Series 2015 Bond shall be overdue) for the purpose of receiving payment of or on account of principal and interest and for all other purposes, and the Township and the Paying Agent shall not be affected by any notice to the contrary. The Township and the Paying Agent shall not be required: (i) to issue or to register the transfer of or exchange any Series 2015 Bonds then considered for redemption during a period beginning at the close of business on the fifteenth (15th) day next preceding any date of selection of Series 2015 Bonds to be redeemed and ending at the close of business on the day on which the applicable notice of redemption is given, or (ii) to register the transfer of or exchange any portion of any Series 2015 Bond selected for redemption, in whole or in part until after the date fixed for redemption, or (iii) to issue or to register the transfer of or exchange of any Series 2015 Bonds during the period beginning at the opening of business on a Record Date and ending at the close of business on the interest payment date. Bonds may be exchanged for a like aggregate amount of Series 2015 Bonds of other authorized denominations of the same maturity and interest rate. BOOK-ENTRY ONLY SYSTEM The information in this section has been obtained from materials provided by DTC for such purpose. The Township (sometimes referred to herein as the Issuer ) and the Underwriter do not guarantee the accuracy or completeness of such information, and such information is not to be construed as a representation of the Township or the Underwriter. The Depository Trust Company ( DTC ), New York, NY, will act as securities depository for the Series 2015 Bonds (the Securities ). The Securities will be issued as fully-registered securities 4

11 registered in the name of Cede & Co. (DTC s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for the Securities, in the aggregate principal amount of such issue, and will be deposited with DTC. DTC, the world s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code, and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-u.s. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC s participants ( Direct Participants ) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ( DTCC ). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( Indirect Participants ). DTC has Standard & Poor s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at and Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC s records. The ownership interest of each actual purchaser of each Security ( Beneficial Owner ) is in turn to be recorded on the Direct and Indirect Participants records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. 5

12 Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Township as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC s practice is to credit Direct Participants accounts upon DTC s receipt of funds and corresponding detail information from the Township or Agent, on payable date in accordance with their respective holdings shown on DTC s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such Participant and not of DTC, Agent, or the Township, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Township or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to Paying Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant s interest in the Securities, on DTC s records, to Paying Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC s records and followed by a book-entry credit of tendered Securities to Paying Agent s DTC account. The information in this section concerning DTC and DTC s book-entry system has been obtained from sources that the Township believes to be reliable, but the Township takes no responsibility for the accuracy thereof. Discontinuation of Book-Entry Only System DTC may determine to discontinue providing its service with respect to the Series 2015 Bonds at any time by giving notice to the Township and the Paying Agent and discharging its responsibilities with respect thereto under applicable law. Under such circumstances, in the event that a successor depository is not obtained, Series 2015 Bonds are required to be printed and delivered. In addition, under certain circumstances set forth in the Ordinance, the Township may determine to discontinue the book-entryonly system. In the event that the book-entry-only system for the Series 2015 Bonds is discontinued, the registration, transfer, and related provisions set forth in the Ordinance would apply. In that event, Series 2015 Bonds will be printed and delivered to DTC. THE TOWNSHIP AND THE PAYING AGENT CANNOT AND DO NOT GIVE ANY ASSURANCES THAT DTC, THE DTC PARTICIPANTS OR THE INDIRECT PARTICIPANTS WILL DISTRIBUTE TO THE BENEFICIAL OWNERS (1) PAYMENTS OF PRINCIPAL OR REDEMPTION PRICE OF OR INTEREST ON THE SERIES 2015 BONDS, (2) CERTIFICATES REPRESENTING AN OWNERSHIP INTEREST OR OTHER CONFIRMATION OF BENEFICIAL OWNERSHIP INTERESTS IN SERIES 2015 BONDS, OR (3) REDEMPTION OR OTHER NOTICES SENT TO DTC OR CEDE & CO., ITS 6

13 NOMINEE, AS THE REGISTERED OWNER OF THE BONDS, OR THAT THEY WILL DO SO ON A TIMELY BASIS OR THAT DTC, DTC PARTICIPANTS OR INDIRECT PARTICIPANTS WILL SERVE AND ACT IN THE MANNER DESCRIBED IN THIS OFFICIAL STATEMENT. THE CURRENT RULES APPLICABLE TO DTC ARE ON FILE WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE CURRENT PROCEDURES OF DTC TO BE FOLLOWED IN DEALING WITH DTC PARTICIPANTS ARE ON FILE WITH DTC. THE TOWNSHIP AND THE PAYING AGENT WILL HAVE NO RESPONSIBILITY OR OBLIGATION TO ANY DTC PARTICIPANT, INDIRECT PARTICIPANT OR BENEFICIAL OWNER OR ANY OTHER PERSON WITH RESPECT TO: (1) THE SERIES 2015 BONDS; (2) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT; (3) THE PAYMENT BY DTC OR ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL OR REDEMPTION PRICE OF OR INTEREST ON THE SERIES 2015 BONDS; (4) THE DELIVERY BY DTC OR ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE ORDINANCE TO BE GIVEN TO BONDHOLDERS; (5) THE SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF SERIES 2015 BONDS; OR (6) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS BONDHOLDER. Optional Redemption REDEMPTION PROVISIONS The Bonds stated to mature on and after July 1, 2021 are subject to redemption prior to maturity at the option of the Township as a whole, or from time to time in part (and if in part, in any order of maturities designated by the Township and within a maturity as selected by lot), on January 1, 2021 or on any date thereafter, at a redemption price equal to 100% of the principal amount redeemed, together with accrued interest to the date fixed for redemption. Mandatory Redemption The Series 2015 Bonds maturing on July 1, 2025 and July 1, 2029 are subject to mandatory redemption prior to maturity by lot at a redemption price equal to 100% of the principal amount of the Series 2015 Bonds to be redeemed plus accrued interest to the date fixed for redemption, on July 1 of the years and in the aggregate principal amounts set forth for the Series 2015 Bonds of each such maturity below. In the event less than all the Series 2015 Bonds of such particular maturity then outstanding are to be so redeemed at any particular time, the Series 2015 Bonds of each such maturity to be so redeemed shall be drawn by lot by the Paying Agent. As to the Series 2015 Bonds maturing on July 1, 2025: July 1, Redemption Date Aggregate Principal Amount of the Series 2015 Bonds to be Redeemed 2023 $60, , ,000* 7

14 As to the Series 2015 Bonds maturing on July 1, 2029: *Maturity July 1, Redemption Date Aggregate Principal Amount of the Series 2015 Bonds to be Redeemed 2026 $35, , , ,160,000* Such mandatory redemption shall be made by application of money in the mandatory sinking fund upon payment of the principal amount redeemed, plus accrued interest to the date fixed for redemption. In the case of any optional redemption of any term Series 2015 Bond in part, the Township shall be entitled to designate whether the principal amount of such term Series 2015 Bond to be redeemed shall be credited against the principal amount of such term Series 2015 Bond due at stated maturity or credited against the principal amount of such term Series 2015 Bond scheduled to be called for mandatory sinking fund redemption on any particular date or dates, in each case in an integral multiple of $5,000 principal amount. Manner of Redemption If a Series 2015 Bond is of a denomination larger than $5,000, a portion of such Series 2015 Bond may be redeemed. For the purpose of redemption, a Series 2015 Bond shall be treated as representing the number of Series 2015 Bonds that is equal to the principal amount thereof divided by $5,000, each $5,000 portion of such Series 2015 Bond being subject to redemption. In the case of partial redemption of a Series 2015 Bond, payment of the redemption price shall be made only upon surrender of such Series 2015 Bond in exchange for Series 2015 Bonds of authorized denominations in aggregate principal amount equal to the unredeemed portion of the principal amount thereof. Notice of Redemption The Paying Agent will mail by first class mail, postage prepaid (except when DTC, or its nominee, is the registered owner of all of the Series 2015 Bonds) to the registered owners of all of the Series 2015 Bonds to be redeemed, at the registered addresses appearing in the registration books kept for such purpose, notice of redemption not less than thirty (30) days prior to the redemption date for the Series 2015 Bonds. Each notice of redemption of the Series 2015 Bonds will identify the Series 2015 Bonds to be redeemed including CUSIP number if applicable, and will state, among other things, the redemption date, the redemption price and whether the notice is conditional or not as described below. So long as DTC, or its nominee, is the sole registered owner of the Series 2015 Bonds under the book-entry-only system, redemption notices will be sent to Cede & Co. If at the time of mailing of notice of an optional redemption there shall not have been deposited with the Paying Agent moneys sufficient to redeem all of the Series 2015 Bonds called for redemption, such notice may state that it is conditional, i.e., subject to the deposit with the Paying Agent on or prior to the redemption date of moneys sufficient to pay the redemption price of the Series 2015 Bonds to be redeemed plus interest accrued thereon to the date of redemption, and such notice shall be of no effect unless such moneys are so deposited. Failure to mail any notice of redemption, or any defect therein, or in the mailing thereof, with respect to any Series 2015 Bond shall not affect the validity of any proceeding for redemption of other Bonds so called for redemption. 8

15 On the date designated for redemption and upon deposit with the Paying Agent of funds sufficient for payment of the principal of and accrued interest on the Series 2015 Bonds called for redemption, interest on the Series 2015 Bonds or portions thereof so called for redemption shall cease to accrue and the Series 2015 Bonds or portions thereof so called for redemption shall cease to be entitled to any benefit of security under the Ordinance, and Registered Owners of the Series 2015 Bonds so called for redemption shall have no rights with respect to the Bonds or portions thereof so called for redemption, except to receive payment of the principal of and accrued interest on the Series 2015 Bonds so called for redemption to the date fixed for redemption. General Obligations of the Township SECURITY FOR THE SERIES 2015 BONDS The Series 2015 Bonds will be general obligations of the Township, payable from its tax and other general revenues, which presently include ad valorem taxes which may be levied on all taxable real property within the Township without limitation as to rate or amount. The Township has covenanted in the Ordinance that it shall do the following: (1) include the amount of debt service for the Series 2015 Bonds for each fiscal year in which such sums are payable in its budget for that year, (2) appropriate those amounts from its general revenues for the payment of such debt service on the Series 2015 Bonds for such year, and (3) duly and punctually pay or cause to be paid from its Sinking Fund, as hereinafter defined, or any other of its revenues or funds, the principal of and interest on each of the Series 2015 Bonds at the dates and place and in the manner stated on the Series 2015 Bonds, and for such budgeting, appropriation, and payment the Township irrevocably has pledged its full faith, credit and taxing power, which taxing power presently includes the power to levy an annual ad valorem tax on all real property within the Township, presently unlimited as to rate or amount for the payment of principal and interest on the Series 2015 Bonds. See TAXING POWER OF THE TOWNSHIP herein. The Debt Act provides that the foregoing covenant shall be specifically enforceable. The Sinking Fund A sinking fund designated Sinking Fund-Township of Cheltenham General Obligation Bonds, Series of 2015 (Refunding Project) (the Sinking Fund ) created under the Ordinance shall be held by the Paying Agent segregated from all other funds of the Township. The Township shall deposit in the Sinking Fund not later than the date when interest or principal is to become due on the Series 2015 Bonds, a sufficient sum so that on each payment date the Sinking Fund will contain, together with any other available funds therein, sufficient money to pay in full interest and/or principal then due on the Series 2015 Bonds. The Sinking Fund shall be secured and invested by the Paying Agent in securities or deposits authorized by the Debt Act, upon direction of the Township, all as provided in the Debt Act. Such deposits and securities shall be in the name of the Township but subject to withdrawal or collection only by the Paying Agent, as sinking fund depository, and such deposits and securities, together with interest thereon shall be a part of the Sinking Fund. The Paying Agent is authorized without further order from the Township to pay from the Sinking Fund the principal of and interest on the Series 2015 Bonds when due and payable. 9

16 SOURCES AND USES OF FUNDS The proceeds of the Series 2015 Bonds will be applied substantially as shown below: Sources of Funds Total Series 2015 Bonds Par Amount $10,000,000 Less: Net Original Issue Discount (1) (113,519,05) Total Sources of Funds $9,886, Uses of Funds Cash Deposit for Redemption of Refunded 2005A Bonds $2,822, Deposit for Refunded 2011 Bonds Escrow 6,933, Costs of Issuance (2) 130, Total Uses of Funds $9,886, (1) See TAX EXEMPTION AND OTHER TAX MATTERS herein; (2) Includes legal fees and disbursements; Underwriter s discount; Financial Advisor fee; rating fee; Verification, printing; Paying Agent (initial); Escrow Agent; Redemption fee; CUSIP; and cost contingency. (Remainder of Page Intentionally Left Blank) 10

17 Series 2015 Bonds DEBT SERVICE SCHEDULE Principal Interest Total Total Debt Fiscal Year Date Maturity Rate Interest Service Debt Service 1/1/ $96, $96, /1/2016 $85, % 138, ,028,13 $319, /1/ , , /1/ , % 137, , , /1/ , , /1/ , % 136, , , /1/ , , /1/ , % 136, , , /1/ , , /1/ , % 135, , , /1/ , , /1/2021 1,350, % 134, ,484, ,619, /1/ , , /1/2022 1,375, % 121, ,496, ,617, /1/ , , /1/ ,000* 2.500% 106, , , /1/ , , /1/ ,000* 2.500% 105, , , /1/ , , /1/ ,000** 2.500% 105, , , /1/ , , /1/ ,000* 3.000% 104, , , /1/ , , /1/ ,000* 3.000% 104, , , /1/ , , /1/ ,000* 3.000% 103, , , /1/ , , /1/2029 2,160,000** 3.000% 103, ,263, ,366, /1/ , , /1/2030 2,225, % 70, ,295, ,366, /1/ , , /1/2031 2,295, % 37, ,332, ,369, Total: $10,000,000 $3,519, $13,519, $13,519, * Sinking Fund Maturity. ** Term Bond Maturity. 11

18 TAXING POWER OF THE TOWNSHIP Real Property Taxes The Township s taxing powers are limited by provisions of its Home Rule Charter and the Act of December 31, 1965, P.L. 1257, No. 511, effective January 1, 1966, of the Commonwealth. The Township may levy a tax for general purposes on the assessed value of real estate up to 30 mills and up to 35 mills with the approval of 2/3 of members of the Board of Commissioners (the Board ). Other specific millages are permitted under the Home Rule Charter and under other laws for certain specific purposes. In the opinion of Bond Counsel, the limitation on real estate taxes applies only to said taxes as levied for general purposes, and under applicable Commonwealth statutes, said real estate taxes may be levied to pay debt service without limitation as to rate or amount. Act 7 (amending Act of May 25, 1945, P.L. 1050) approved by the General Assembly of the Commonwealth of Pennsylvania on February 10, 1970, provides that notices be sent out by the Tax Collector within 30 days following receipt of the tax duplicate by the Tax Collector unless extended by the taxing district but in no case later than the first day of July. A 2% discount is allowed for payment within 60 days of date of notice and a penalty of 10% is imposed on payments received more than 120 days after receipt of such notice. Delinquent taxes are liened by filing in the Court of Common Pleas of Montgomery County on a regular basis. The Township levies its own taxes and is independent of any other taxing authority Tax Rate Summary Tax Millage General Township (Real Estate) Fire Debt Service Pensions Parks and Recreation Library Ambulance TOTAL Other 2015 Taxes Tax Municipal School District Total Earned Income (Residents) 0.50% 0.50% 1.00% Earned Income (Nonresidents) 1.00% 0.00% 1.00% Real Estate Transfer 0.50% 0.50% 1.00% Local Services Tax $47.00 $5.00 $

19 Maximum Allowable Township Taxes Potential Tax Sources GENERAL PURPOSE TAX LEVIES (1) Real Estate Occupation Legal Limit 35 mills 35 mills ACT 511 TAXES (2) Per Capita $10 Occupation (Flat Rate) $10 Occupation (Millage) No limit Local Services Tax (EMT) $52 Earned Income 1% Deed Transfer 1% Mechanical Devices No limit Amusement 10% Business Gross Receipts 1 mill wholesale SPECIAL PURPOSE TAXES Firehouses and Equipment 3 mills (3) Shade Trees 1/10 mill Municipal Building No limit Debt Service No limit Pensions and Retirement ½ mills Fire and Water District 2 mills Permanent Improvement Fund 5 mills Recreation No limit Library No limit Community Colleges (4) Ambulance and Rescue Squads ½ mill (3) Distressed Pension System Recovery No limit Program Financial Distressed Municipalities Program No limit (5) (1) The Township of Cheltenham is currently under Home Rule Charter. The Charter does not enlarge the taxing ability or the borrowing ability of the Township. It does eliminate the current requirement that the Board petition the Court for some part of its real estate taxing authority, substituting for that requirement the necessity that the change be made by an absolute two-thirds vote of the Board. (2) Local Taxes under Local Tax Enabling Act (Act 511) (3) Higher rate may be approved by voters in referendum. (4) Local sponsors may levy any tax permitted by law to support a community college. The tax cannot exceed 5 mills of the market value of real estate, except for first class cities and school districts where it cannot exceed one mill of the market value of real estate. (5) Levied only on court order. DEBT LIMIT AND REMAINING BORROWING CAPACITY The borrowing power of the Township is governed by the Debt Act. The statutory borrowing limit of the Township under the Debt Act is computed as a percentage of the Township's "Borrowing Base". The Borrowing Base is calculated as the arithmetic average of the "Total Revenues" (as defined by the Debt Act) of the Township, for the three full fiscal years ended next preceding the date of incurring debt. Under the Debt Act as presently in effect, (i) new non-electoral debt may not be incurred if the net amount of such new non-electoral debt plus all outstanding net non-electoral debt would cause total net non-electoral debt to exceed 250% of the Borrowing Base, and (ii) new lease 13

20 rental debt or new non-electoral debt may not be incurred if the net amount of such new debt plus all outstanding net non-electoral debt and net lease rental debt would cause the total net non-electoral debt plus net lease rental debt to exceed 350% of the Borrowing Base. A calculation of the Borrowing Base and Borrowing Capacity available to the Township is shown below: CALCULATION OF BORROWING BASE Period ending December 31, Total General Fund Revenues and Other Financing Sources $38,296,300 $37,768,015 $42,634,904 Deduct excludable items 1. State and Federal subsidies and reimbursements 2. Revenues, receipts and assessments, etc. pledged for self-liquidating debt 3. Interest on sinking fund Grants and Gifts-in-Aid 1,110,837 1,177,582 1,112, Nonrecurring receipts Total excludable items $1,110,837 $1,177,582 $4,588,167 Total Revenues as defined in the Act $37,185,463 $36,590,433 $38,046,737 Total Revenues for the three year period ending December 31, 2014 $111,822,633 Borrowing Base arithmetic average of Total Revenues $37,274,211 Source: Township Audited Financial Statements and Township Auditor TOWNSHIP BORROWING CAPACITY Non-Electoral and Non-Electoral Debt Lease Rental Debt Gross Borrowing Capacity $93,185,528 (1) $130,459,739 (2) Debt Before Issuance of Bonds $49,655,000 $49,655,000 Debt After Issuance of Bonds $50,200,000 $50,200,000 Remaining Borrowing Capacity After Issuance of the Bonds $42,985,528 $80,259,739 (1) 250% of Borrowing Base (2) 350% of Borrowing Base 14

21 Type OUTSTANDING TOWNSHIP DEBT Amount Issued Issuance Date Outstanding As of July 1, 2015 Outstanding After Issuance of Series 2015 Bonds Series Final Maturity General Obligation Bonds Township General Obligation Bonds, Series B of 2004 $5,065,000 8/24/2004 $1,550,000 $1,550, Township General Obligation Bonds, Series C of 2004 $4,405,000 12/16/2004 $585,000 $585, Township General Obligation Bonds, Series of 2005 $9,555,000 5/26/2005 $130,000 $130, Township General Obligation Bonds, Series A of 2005 $3,815,000 10/18/2005 $3,565,000 $760, Township General Obligation Bonds, Series of 2008 $7,500,000 3/11/2008 $6,145,000 $6,145, Township General Obligation Bonds, Series of 2009 $8,620,000 3/18/2009 $2,330,000 $2,330, Township General Obligation Bonds, Series of 2011 $7,200,000 3/23/2011 $7,120,000 $470, Township General Obligation Bonds, Series of 2012 $7,200,000 12/27/2012 $7,105,000 $7,105, Township General Obligation Refunding Bonds, Series A of 2013 $1,305,000 6/27/2013 $1,285,000 $1,285, Township General Obligation Refunding Bonds, Series B of 2013 $9,700,000 6/27/2013 $9,595,000 $9,595, Township General Obligation Refunding Bonds, Series A of 2014 $3,425,000 8/26/2014 $3,205,000 $3,205, Township General Obligation Refunding Bonds, Series B of 2014 $7,050,000 8/26/2014 $7,040,000 $7,040, Township General Obligation Refunding Bonds, Series 2015 $10,000,000* 8/25/2015 $0 $10,000, Total General Obligation Debt $49,655,000 $50,200,000 15

22 Financial History CERTAIN FINANCIAL MATTERS RELATING TO THE TOWNSHIP The Township has not defaulted on the payment of interest or principal on any of the Township's obligations nor has the Township, at any time, issued refunding obligations in order to avoid a default on an existing obligation. Financial Reporting Township operations are carried out through its General Fund. The General Fund is used to account for all financial resources and expenditures except those required by law to be accounted for in other funds. The modified accrual basis of accounting is currently being used. The following comparative financial statements of the Township were extracted from the Township's annual audit reports for the years ending December 31, 2011 through 2014, and budgets for the years ended December 31, 2014 and TOWNSHIP OF CHELTENHAM SUMMARY OF GENERAL FUND REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE Year Ended December Revenues Cable Franchise Fee Revenue 584, , , ,628 Real Estate Taxes from current levy 12,995,119 12,978,250 12,963,367 13,585,999 Real Estate Taxes from prior years 306, , , ,878 Interest and Rents 83,917 61,993 61,458 79,679 Grants and Gifts 1,699,324 1,110,837 1,177,582 1,112,801 Fees, Licenses and Permits 415, , , ,181 Fines, Forfeits and Costs 214, , , ,118 Departmental Earnings 13,402,228 14,196,300 13,935,054 13,406,499 Taxes Levied Under Local Tax Enabling Act 6,137,018 6,678,492 7,021,946 8,093,917 Miscellaneous Revenues 1,160,137 1,406, ,310 1,038,838 Total Revenues 36,999,606 38,296,300 37,768,015 39,159,538 Expenditures General Government 1,870,583 1,765,017 1,676,575 1,807,555 Protection to Persons and Property 11,372,713 11,470,660 11,129,377 11,344,315 Health and Sanitation 6,220,273 6,957,331 5,718,517 5,383,509 Highways 1,624,448 1,631,203 1,631,501 1,768,066 Recreation 1,929,651 1,936,914 1,863,681 1,841,398 Insurance 5,888,514 6,368,622 6,524,176 6,900,986 Contributions to Pensions 2,484,326 2,481,439 3,424,083 3,306,369 Contributions to Library 1,448,150 1,499,886 1,499,886 1,499,886 Miscellaneous 1,142,586 1,141,786 1,115,871 1,120,632 Debt Service 41,533 36,723 13,365 85,556 Total Expenditures 34,022,777 35,289,581 34,597,032 35,058,272 Excess Revenues Over (Under) Expenditures 2,976,829 3,006,719 3,170,983 4,101,266 Other Financing Sources (Uses) Transfers In 309, , ,122 22,934 Transfers Out (2,829,111) (3,180,800) (2,946,612) (3,280,021) Total Other Financing Sources (Uses) ($2,519,921) ($2,867,051) (2,824,490) (3,172,070) Net Change in Fund Balances 456, , , ,196 Fund Balance, January 1 4,138,705 4,595,613 4,735,281 5,081,774 Fund Balance, December 31 $4,595,613 $4,735,281 $5,081,774 $6,010,970 16

23 TOWNSHIP OF CHELTENHAM GENERAL FUND BUDGET FOR THE YEARS ENDED DECEMBER 31, 2014 AND Budget 2015 Budget REVENUES Real Estate Taxes $13,792,493 $14,588,497 Act 511 Taxes 6,605,000 7,020,000 Licenses & Permits 668, ,580 Fines & Forfeits 240, ,000 Interest & Rents 71,000 71,000 Grants and Aids 1,185,287 1,091,015 Departmental Earnings 14,930,438 14,983,921 Miscellaneous Revenues 2,516,209 2,461,770 Total Revenues and Balance $40,208,677 $41,395,783 EXPENDITURES General Government $1,954,706 $2,043,809 Protection to Persons and Property 10,572,127 10,969,765 Highways and Sanitation 9,424,902 8,987,921 Libraries 1,499,886 1,548,000 Recreation 2,070,355 2,026,367 Miscellaneous 11,412,774 12,401,360 Debt Service 3,273,927 3,418,561 Total Expenditures $40,208,677 $41,395,783 FUTURE FINANCING It is anticipated by the Township that its financings for subsequent years will include funding for continued improvements to its sanitary sewer system. The Township is committed to working with the Pennsylvania Department of Environmental Protection on a multi-year schedule of work on the system to address ongoing storm water inflow and infiltration abatement matters. In addition to the sewers, future financings may address acquisition of public works equipment and rehabilitation of certain Township-owned buildings. It is anticipated that approximately $7 million dollars will be financed approximately each year for at least the next two years. TAX AND REVENUE ANTICIPATION BORROWING The Township s Tax and Revenue Anticipation Borrowing for the past 5 years is listed below $ ,800, ,800, ,800, ,800,000 17

24 Federal Tax Exemption TAX EXEMPTION AND OTHER TAX MATTERS Bond Counsel will deliver, concurrently with the issuance of the Series 2015 Bonds, its opinion to the effect that under existing statutes, regulations, rulings and court decisions, interest on the Series 2015 Bonds will not be includable in the gross income of the holders thereof for federal income tax purposes and will not be a preference item for purposes of calculating individual or corporate alternative minimum taxable income. Interest on the Series 2015 Bonds is included in the adjusted current earnings of corporations for purposes of computing the alternative minimum tax imposed on corporations. In addition, interest on the Series 2015 Bonds may be included in a foreign corporation s effectively connected earnings and profits upon which certain foreign corporations are required to pay the foreign branch profits tax imposed under Section 884 of the Internal Revenue Code of 1986, as amended (the Code ). Certain maturities of the Series 2015 Bonds have been offered at a discount ( original issue discount ) equal generally to the difference between public offering price and principal amount. For federal income tax purposes, original issue discount on a Bond accrues periodically over the term of the Series 2015 Bond as interest with the same tax exemption and alternative minimum tax status as regular interest. The accrual of original issue discount increases the holder s tax basis in the Series 2015 Bond for determining taxable gain or loss from sale or from redemption prior to maturity. Prospective purchasers of the Series 2015 Bonds should consult their tax advisers for an explanation of the treatment of original issue discount. Certain maturities of the Series 2015 Bonds have been offered at a premium ( original issue premium ) over their principal amount. For federal income tax purposes, original issue premium is amortizable periodically over the term of a Series 2015 Bond through reductions in the holder s tax basis for the Series 2015 Bond for determining taxable gain or loss from sale or from redemption prior to maturity. Amortizable premium is accounted for as reducing the tax-exempt interest on the Series 2015 Bond rather than creating a deductible expense or loss. Prospective purchasers of the Series 2015 Bonds should consult their tax advisers for an explanation of the treatment of original issue premium. Ownership of the Series 2015 Bonds may result in collateral federal tax consequences to certain taxpayers, including, without limitation, financial institutions, S corporations with excess net passive income, property and casualty companies, individual recipients of social security or railroad retirement benefits and taxpayers who may be deemed to have incurred indebtedness to purchase or carry the Series 2015 Bonds. Bond Counsel will express no opinion with respect to these or any other collateral tax consequences of the ownership of the Series 2015 Bonds. The nature and extent of the tax benefit to a taxpayer of ownership of the Series 2015 Bonds will generally depend upon the particular nature of such taxpayer or such taxpayer s own particular circumstances, including other items of income or deduction. Accordingly, prospective purchasers of the Series 2015 Bonds should consult their own tax advisors. The Code imposes various restrictions, conditions and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Series 2015 Bonds. Ongoing requirements include, among other things, the provisions of Section 148 of the Code which prescribes yield and other limits within which the proceeds of the Series 2015 Bonds are to be invested and which may require that certain excess earnings on investments made with the proceeds of the Series 2015 Bond be rebated on a periodic basis to the United States. The Township will make certain representations and undertake certain agreements and covenants in the tax compliance agreement to be delivered concurrently with the issuance of the Series 2015 Bonds, that are designed to ensure compliance with the applicable provisions of the Code. The inaccuracy of these 18

25 representations or the failure on the part of the Township to comply with such covenants and agreements could result in the interest on the Series 2015 Bonds being included in the gross income of the holder for federal income tax purposes, in certain cases retroactive to the date of original issue of the Series 2015 Bonds. The opinion of Bond Counsel assumes the accuracy of these representations and the future compliance by the Township with its covenants and agreements. Moreover, Bond Counsel has not undertaken to evaluate, determine or inform any person, including any holder of the Series 2015 Bonds, whether any actions taken or not taken, events occurring or not occurring, or other matters that might come to the attention of Bond Counsel, would adversely affect the value of, or tax status of the interest on, the Series 2015 Bonds. There can be no assurance that currently existing or future legislative proposals by the United States Congress limiting or further qualifying the excludability of interest on tax-exempt bonds from gross income for federal tax purposes, or changes in federal tax policy generally, will not adversely affect the market for the Series 2015 Bonds. The Township has designated the Series 2015 Bonds, to the extent they are not otherwise deemed designated, as qualified tax-exempt obligations within the meaning of Section 265(b)(3)(B) of the Code and has made certain representations and covenants in the Ordinance with the registered owners of the Series 2015 Bonds necessary to cause the Series 2015 Bonds to continue to be qualified tax-exempt obligations during the period in which the Series 2015 Bonds are outstanding. Banks, thrift institutions and other financial institutions which purchase qualified tax-exempt obligations may take into account as a deductible expense in calculating their federal income tax liability 80 percent of their interest expense allocable to ownership such qualified tax-exempt obligations. Pennsylvania Tax Exemption Bond Counsel will also deliver an opinion to the effect that under existing law as enacted and construed on the date of such opinion, the Series 2015 Bonds are exempt from personal property taxes in Pennsylvania, and interest on the Series 2015 Bonds is exempt from the Pennsylvania personal income tax and the Pennsylvania corporate net income tax. However, under the laws of the Commonwealth as presently enacted and construed, any profits, gains or income derived from the sale, exchange or other disposition of obligations of the Township, such as the Series 2015 Bonds, will be subject to Pennsylvania taxes within the Commonwealth. The Series 2015 Bonds and the interest thereon may be subject to state or local taxes in jurisdictions other than the Commonwealth under applicable state or local tax laws. PROSPECTIVE PURCHASERS OF THE SERIES 2015 BONDS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE FEDERAL, STATE AND LOCAL INCOME TAX CONSEQUENCES OF OWNERSHIP OF THE SERIES 2015 BONDS AND ANY CHANGES IN THE STATUS OF PENDING OR PROPOSED TAX LEGISLATION. CERTAIN LEGAL MATTERS Issuance of the Series 2015 Bonds is subject to receipt of the unqualified approving legal opinion of Dilworth Paxson LLP, Philadelphia, Pennsylvania, Bond Counsel. Certain legal matters will be passed upon for the Township by its Solicitor, Wisler Pearlstine, LLP, Blue Bell, Pennsylvania. 19

26 CONTINUING DISCLOSURE UNDERTAKING On July 10, 2014 the Township entered into a Disclosure Dissemination Agent Agreement ( Disclosure Dissemination Agreement ) with Digital Assurance Certification, L.L.C. ( DAC ) as its Disclosure Dissemination Agent for the purpose of assisting with ongoing compliance with its continuing disclosure filing requirements. DAC provides its clients with automated filing of rating events, templates consolidating all outstanding filing requirements that accompany reminder notices of annual or interim mandatory filings, review of all template filings by professional accountants, as well as a time and date stamp record of each filing along with the unique ID from EMMA accompanying the copy of the actual document filed. DAC also offers its clients a series of training webinars each year qualified for NASBA certified CPE credits, as well as model secondary market compliance policies and procedures. The Disclosure Dissemination Agent has only the duties specifically set forth in the Disclosure Dissemination Agreement. The Disclosure Dissemination Agent s obligation to deliver the information at the times and with the contents described in the Disclosure Dissemination Agreement is limited to the extent the Township has provided such information to the Disclosure Dissemination Agent as required by this Disclosure Dissemination Agreement. The Disclosure Dissemination Agent has no duty with respect to the content of any disclosures or notice made pursuant to the terms of the Disclosure Dissemination Agreement. The Disclosure Dissemination Agent has no duty or obligation to review or verify any information in the Annual Report, Audited Financial Statements, notice of Notice Event or Voluntary Report, or any other information, disclosures or notices provided to it by the Township and shall not be deemed to be acting in any fiduciary capacity for the Township, the Holders of the Bonds or any other party. The Disclosure Dissemination Agent has no responsibility for the Township s failure to report to the Disclosure Dissemination Agent a Notice Event or a duty to determine the materiality thereof. The Disclosure Dissemination Agent shall have no duty to determine or liability for failing to determine whether the Township has complied with the Disclosure Dissemination Agreement. The Disclosure Dissemination Agent may conclusively rely upon certifications of the Township at all times. In accordance with the requirements of the Rule 15c2-12 (the Rule ) promulgated by the Securities and Exchange Commission (the SEC ) pursuant to the Securities Exchange Act of 1934, as amended, the Township (being an obligated person with respect to $10,000,000 or more of outstanding securities, including the Bonds, within the meaning of the Rule), will agree to provide the following to the Municipal Securities Rulemaking Board (the MSRB ) in an electronic format as prescribed by the MSRB, either directly or indirectly through a designated agent: (A) Annually, not later than 240 days following the end of each fiscal year, beginning with the fiscal year ending December 31, 2015, the following financial information and operating information for the Township: financial statements for the most recent fiscal year, prepared in accordance with generally accepted accounting principles for local government units a summary of the budget for the current fiscal year the assessed value and market value of all taxable real estate for the current fiscal year the taxes and millage rates imposed for the current fiscal year the real property tax collection results for the most recent fiscal year, including (1) the real estate levy imposed (expressed both as a millage rate and an 20

27 aggregate dollar amount), (2) the dollar amount of real estate taxes collected that represented current collections (expressed both as a percentage of such fiscal year s levy and as an aggregate dollar amount), (3) the amount of real estate taxes collected that represented taxes levied in prior years (expressed as an aggregate dollar amount), and (4) the total amount of real estate taxes collected (expressed both as a percentage of the current year s levy and as an aggregate dollar amount) a list of the ten (10) largest real estate taxpayers and, for each, the total assessed value of real estate for the current fiscal year debt limit and borrowing capacity pursuant to the Local Government Unit Debt Act; (B) If not submitted as part of the annual financial information, then when and if available, audited financial statements for the Township; (C) In a timely manner not in excess of ten (10) business days after the occurrence of the event, notice of the occurrence of any of the following events with respect to the Bonds: (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax-exempt status of the Bonds, or other material events affecting the tax-exempt status of the Bonds; (7) modifications to rights of holders of the Bonds, if material; (8) bond calls, if material, and tender offers; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the Township; (13) the consummation of a merger, consolidation, or acquisition involving the Township or the sale of all or substantially all of the assets of the Township, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (14) appointment of a successor or additional trustee or the change of name of a trustee, if material; and (D) In a timely manner, notice of a failure of the Township to provide the required annual financial information specified above, on or before the date specified above. With respect to the filing of annual financial and operating information, the Township reserves the right to modify from time to time the specific types of information provided or the format of the presentation of such information to the extent necessary or appropriate as a result of a change in legal requirements or a change in the nature of the Township or its operations or financial reporting, but the Township will agree that any such modification will be done in a manner consistent with the Rule. The events listed in (C) above are those specified in the Rule, not all of which may be relevant to the Bonds. The Township may from time to time choose to file notice of the occurrence of other events, in addition to the events listed in (C) above, but the Township does not commit to provide notice of the occurrence of any events except those specifically listed in (C) above. The Township acknowledges that its undertaking pursuant to the Rule described herein is intended to be for the benefit of the holders and beneficial owners of the Bonds and shall be enforceable by the holders and beneficial owners of the Bonds, but the right of the holders and 21

28 beneficial owners of the Bonds to enforce the provisions of the Township s continuing disclosure undertaking shall be limited to a right to obtain specific enforcement, and any failure by the Township to comply with the provisions of the undertaking shall not be an event of default with respect to the Bonds. Continuing Compliance The Township failed to comply with certain of its existing annual disclosure requirements (the Prior Disclosure Requirements ) in connection with the outstanding bonds of the Township. Under those Prior Disclosure Requirements, the Township, among other things, agreed to provide updates to certain audited financial statements and financial and operational information relating to the Township. Required deadlines under the Prior Disclosure Requirements for the Township s currently outstanding bonds are detailed below: Continuing Disclosure Agreements Relating to Prior Issues Series B of 2004 Series C of 2004 Series of 2005 Series A of 2005 Series of 2008 Series of 2009 Series of 2011 Series of 2012 Series A & B of 2013 Series A & B of 2014 Filing Requirement 180 Days 180 Days 180 Days 180 Days 180 Days 180 Days 180 Days 240 Days 240 Days 240 Days The Township filed its audited financial statements to EMMA for fiscal year 2009 on January 14, 2011, approximately 199 days after the earliest deadline specified in previous continuing disclosure agreements; its audited financial statements to EMMA for fiscal years 2010 and 2011 on November 16, 2012, approximately 506 days and 141 days, respectively, after the earliest deadline specified in previous continuing disclosure agreements; and its audited financial statements to EMMA for fiscal year 2012 on September 16, 2013, approximately 79 days after the earliest deadline specified in previous continuing disclosure agreements. The Township inadvertently neglected to separately file the portions of its Annual Financial Information not included within its audited financial statements. That data, including trends of assessed valuation, real estate tax collection data, largest real estate taxpayers and assessed values, debt statement and borrowing capacity, debt ratios, future financing, tax anticipation borrowing history, and budgets was filed separately via the EMMA system on June 26, 2014, and in the future will be filed annually along with the audited financial statements. Updates of the aforesaid information, with the exception of the Township s budgets, have also been incorporated in official statements of the Township completed in fiscal years 2009, 2011, 2012 and The Township filed its audited financial statements and annual financial information for fiscal year 2013 on June 26, 2014 and for the fiscal year 2014 on June 19, 2015 which is prior to the earliest deadline specified in previous continuing disclosure agreements. Additionally, under such Prior Disclosure Requirements, the Township agreed to provide notice of those events specified in the Rule. The Township failed to file rating change notices of its bond insurance providers within the time periods required by the Rule. The Township subsequently filed insurer rating change information to EMMA on June 26,

29 The Township formally adopted policies and procedures relating to Continuing Disclosure on July 16, 2014 so that the Township efficiently carries out its continuing disclosure obligations with respect to the Rule and to file its complete annual financial information on a more consistent and timely basis in future years. These policies and procedures may be amended at any time by the Township. With respect to its ongoing continuing disclosure obligations, the Township participated in the SEC Municipalities Continuing Disclosure Cooperation (MCDC) Initiative. NEGOTIABILITY The Series 2015 Bonds are investment securities under Article 8 of the Pennsylvania Uniform Commercial Code and are negotiable instruments to the extent provided therein. MUNICIPAL BANKRUPTCY LAW The undertakings of the Township and the security for the Series 2015 Bonds should be considered with reference to Chapter 9 of the Bankruptcy Act, United States Code Title 2, Section 301, et. seq., as amended by Public Law , approved April 8, 1978, effective October 1, 1979 (the Bankruptcy Code ), and other laws affecting creditor's rights and municipalities in general. The bankruptcy code permits a State, and if authorized by State law, a political subdivision, public agency or instrumentality that is insolvent or unable to meet its debts, to file with the Bankruptcy Court a list of its creditors; provided that a petition filed under Chapter 9 shall operate as a stay of the commencement or continuation of any judicial or other proceedings against the petitioner; grant priority to debts owed for service or materials actually provided within three months of the filing of the petition; direct a petitioner to file a plan for the adjustment of its debts; and provide that the plan must be accepted in writing by or on behalf of creditors holding at least two-thirds in amount and more than one-half in number of the listed claims. Act No ("Act 47"), of the Commonwealth known as the "Distressed Municipalities Act", governs the ability of the Township to declare bankruptcy under Federal law. Act 47 provides that no municipality may file a municipal debt adjustment action pursuant to the Bankruptcy Code unless one of the following conditions exists: (1) filing is recommended by a plan coordinator appointed by the Pennsylvania Department of Community of Economic and Development (the "Department"); (2) there is imminent jeopardy of an action by a Creditor that is likely to substantially interrupt or restrict the continued ability of the municipality to provide health or safety services; (3) creditors have rejected a plan and unsuccessful negotiations have continued for ten days; (4) a condition of financial distress is potentially soluble only by using a remedy exclusively available through the Federal Municipal Debt Readjustment Act; or (5) the governing body of a municipality determined by the Department to be financially distressed has failed to adopt a plan or carry out the recommendations of such a plan coordinator. Act 47 also contains provisions and circumstances under which a municipality may be declared to be in "financial distress" making it eligible for interest free loans, grants and/or administrative assistance through adoption of a financial plan and appointment of a plan coordinator. Such coordinator, appointed by the Department, would have the authority to recommend a plan increasing taxes or other sources of revenues, reducing services, rescheduling obligations or merging municipalities. The above reference to the Federal Bankruptcy Code or Act 47 is not to be construed as an indication that the Township expects to resort to the provisions of such laws or that, if it did, any proposed plan or plans would include a dilution of the sources of payment of and the security for the payment of the Series 2015 Bonds. 23

30 LITIGATION Several claims are pending against the Township with respect to matters for which the Township maintains insurance. Such claims are being handled by the respective insurers and by legal counsel engaged by such insurers. The Township does not believe that any of such claims will exceed the applicable limits of insurance coverage; however, the Township cannot be certain of the eventual outcome and any adverse result in these or other matters that may arise from time to time may materially impact its financial position. In 2012, the Township received notice of a proposed civil penalty by the Pennsylvania Department of Environmental Protection ( DEP ) with respect to alleged environmental violations in connection with the operation of the Township s sewage collection and conveyance system. DEP and Township representatives engaged in negotiations with respect to monetary and non-monetary satisfaction of the proposed civil penalty. The civil penalty is shared with two other municipalities. The parties agreed to a consent assessment of civil penalty in December 2014 of $280,000 in installments. The Township does not expect that these payments will have a material adverse impact upon the Township s finances. Upon delivery of the Bonds, the Township shall furnish an opinion letter, in form and substance satisfactory to Bond Counsel and the Underwriter, to the effect that, among other things, there is no litigation pending in any court to restrain or enjoin the issuance or delivery of the Bonds, or the proceedings of the Township taken in connection therewith, or the application of monies provided for their payment, or contesting the powers of the Township with respect to the foregoing or the consummation of the transactions contemplated by this Official Statement. RATING Moody s Investors Service, New York, New York ("Moody s") has assigned its municipal bond rating of Aa2 to the 2015 Bonds. Such rating reflects only the view of such organization and any desired explanation of the significance of such rating should be obtained from the rating agency furnishing the same, at the following address: Moody s Investors Service, 99 Church Street, New York, New York Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance that any such rating will continue for any given period of time or that it will not be revised downward or withdrawn entirely by the rating agency, if circumstances so warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the Series 2015 Bonds. UNDERWRITING The Series 2015 Bonds are being purchased by PNC Capital Markets LLC (the Underwriter ) of Philadelphia, Pennsylvania. The Underwriter has agreed to purchase the Series 2015 Bonds at a purchase price of $9,837, (equal to the par value of the Series 2015 Bonds less an underwriter's discount of $49,000.00, and less net original issue discount of $113,519.05) pursuant to the Bond Purchase Agreement between the Underwriter and the Township dated June 17, 2015 and an addendum thereto dated July 21, 2015 (together, the Bond Purchase Agreement ). The Bond Purchase Agreement for the Series 2015 Bonds provides that the Underwriter will purchase all of the Series 2015 Bonds, if any are purchased, and in accordance with its terms and requires that the Township certify to the Underwriter that, to the knowledge of Township officials as of the date of delivery of the Series 2015 Bonds, the Official Statement does not contain any untrue statement of material fact or omit to state any material fact required to be stated pertaining to the Township or the Series 2015 Bonds. The initial public offering price set forth on the inside cover page may be changed from time to time by the Underwriter and the Underwriter may allow a concession from the public offering price to certain dealers. 24

31 FINANCIAL ADVISOR The Township has retained Acacia Financial Group, Inc., Marlton, New Jersey, as financial advisor (the Financial Advisor ) in connection with the offering of the Series 2015 Bonds. The Financial Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume responsibility for the accuracy, completeness, or fairness of the information contained in the Official Statement and the appendices hereto. The Financial Advisor is an independent firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities. VERIFICATION The mathematical accuracy of (a) the computation of the adequacy of the maturing principal and interest earned on the Escrow Securities to be purchased to provide for the payment of the principal of, interest on and call premium, if any, due and to be due on the Refunded 2011 Bonds and (b) the computations made supporting the conclusion by Bond Counsel that the Series 2015 Bonds are not arbitrage bonds under Section 148 of the Internal Revenue Code of 1986, will be verified by Causey Demgen & Moore P.C. MISCELLANEOUS All summaries of the provisions of the Debt Act/Act 47, the Series 2015 Bonds, and the Ordinance hereinabove set forth in this Official Statement are made subject to all of the detailed provisions thereof, to which reference is hereby made for further information, and do not purport to be complete statements of any or all such provisions. The order and placement of the materials in this Official Statement, including the Appendices, are not to be deemed a determination of relevance, materiality or importance. This Official Statement, including its Appendices, must be considered in its entirety. The information assembled in the Official Statement is not be construed as a contract with the holders of the Series 2015 Bonds. All estimates and assumptions in this Official Statement have been made on the best information available and are believed to be reliable, but no representations whatsoever are made that such estimates or assumptions are correct or will be realized. So far as any statements herein involve matters of opinion, whether or not expressly so stated, they are intended merely as such and not representations of fact. The Township has authorized the distribution of the Official Statement. Use of the words shall, will, expects, forecasts, anticipates, estimates, assumes, or must, or words of similar import of meaning in summaries of documents or law in this Official Statement to describe future events or continuing obligations is not intended as a representation that such event will occur or such obligation will be fulfilled, but only that the document or law contemplates or requires such event to occur or such obligation to be fulfilled. Any such statement is inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those that have been projected. Such risks and uncertainties which could affect the revenues and obligations of the Township include, among others, changes in economic conditions, mandates from other governments and various other events, conditions and circumstances, many of which are beyond the control of the Township. Such statements speak only as of the date of this Official Statement. The Township disclaims any obligation or undertaking to release publicly any updates or revisions to any such statement contained herein to reflect any changes in the Township s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. TOWNSHIP OF CHELTENHAM Montgomery County, Pennsylvania By: /s/ Harvey Portner President, Township Board of Commissioners 25

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33 APPENDIX A DEMOGRAPHIC AND ECONOMIC INFORMATION RELATING TO THE TOWNSHIP

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35 DESCRIPTION OF THE TOWNSHIP Location The Township of Cheltenham is located in the southeastern tier of Montgomery County, Pennsylvania, where it borders the City of Philadelphia. The Township occupies an 8.7 square mile area and includes the areas of Cedarbrook, Cheltenham Village, Chelten Hills, Edge Hill, Elkins Park, La Mott, Laverock, Melrose Park and Wyncote. The Township is bounded on the west and southwest by the Township of Springfield, on the north by the Township of Abington and the Borough of Jenkintown, and on the northeast, east and south by the City of Philadelphia. Township Government The Township is a Home Rule Charter Municipality (formerly a Township of the First Class) and operates pursuant to a Home Rule Charter, approved by voter referendum in 1976 under the authority of an Act of Assembly of the Commonwealth of Pennsylvania, being the Act of April 13, 1972, P.L. 62, as amended on July 3, 1974, P.L. 421 and on October 11, 1984, P.L. 873 (the Home Rule Charter and Optional Plans Law). The fiscal year of the Township is the calendar year. The governing body, empowered with legislative functions, is the Board of Commissioners (the Board ), comprised of seven (7) members elected by wards. The Township Manager is appointed by, and serves at the direction of the Board, to administer the operations of the Township. The current Township Manager was appointed to his position in July He previously served as Assistant Township Manager since The Township Manager supervises and is assisted by a staff which includes the positions of: Director of Fiscal Affairs, Assistant Township Manager, Director of Engineering, Zoning and Inspection, Human Resources Coordinator, Public Works Superintendent, Chief of Police, Fire Marshal, Director of Parks and Recreation, Public Works Coordinator/Code Official and Public Information Officer. Population The land area and population trends of the Township, the County and the Commonwealth of Pennsylvania are shown below: Land Area Sq. Mile Cheltenham Township ,875 36,793 Montgomery County , ,874 Pennsylvania 45, ,281,054 12,702,379 Source: U.S. Bureau of the Census, 2000 and 2010 Census. Income Characteristics Per capita income for the Township, the County of Montgomery and Commonwealth of Pennsylvania are presented below: (2010) (2010) (2010) (2010) (2010) Median Median Total Total Per Capita Family Household Persons Households Income Income Income Cheltenham Township 36,793 14,468 $39,879 $96,906 $72,584 Montgomery County 799, ,661 $40,076 $94,592 $76,380 Pennsylvania 12,702,379 5,018,904 $27,049 $63,283 $50,398 Source: U.S. Bureau of the Census, 2010 Census A-1

36 Age Composition Total Percent Over Percent Over Population 18 Years 65 Years Cheltenham Township 36, % 16.1% Montgomery County 799, % 15.1% Pennsylvania 12,702, % 15.4% Source: U.S. Census Bureau, 2010 Census Occupied Housing Units Total Occupied (2010) Persons Housing Housing Owner Median Per Units Units Occupied Value Household Cheltenham Township 15,409 14,468 9,106 $293, Montgomery County 322, , ,627 $297, Pennsylvania 5,567,315 5,018,904 3,491,722 $159, Source: U.S. Census Bureau, 2010 Census Major Employers Within the Township The Township has a number of large employers within its boundaries. Company or Institution Product or Service Approximate Employment Arcadia University Education 1,309 Albert Einstein Center Medical Center 1,166 School District of Cheltenham Education 603 Genesis Healthcare Nursing Home 430 Target Corp. Retail 392 Fox Chase Cancer Center Medical Center 286 Wal Mart Corp. Retail 248 Pediatric Services of America Medical 219 Home Depot Retail 198 Cheltenham Township Municipality 197 Source: Township Officials Employment Trends The following table shows recent trends in labor force, employment and unemployment for Montgomery County. The unemployment rate for Montgomery County has been lower than the statewide average during this period. Montgomery County (1) Civilian Labor Force (000) Employment (000) Unemployment (000) Unemployment rate 6.7% 7.2% 6.7% 6.8% 6.7% 5.3% 4.4% Pennsylvania A-2

37 Civilian Labor Force 6,414 6,390 6,386 6,504 6,541 6,442 6,393 (000) Employment (000) 5,895 5,849 5,879 5,974 6,009 6,052 6,053 Unemployment (000) Unemployment rate 8.1% 8.5% 7.9% 8.2% 8.1% 6.0% 5.3% Source: Pennsylvania Department of Labor and Industry, Center for Workforce Information & Analysis. Data may not add to totals due to rounding. (1) As of April 2015 Seasonally Adjusted Recent Trends in Per Capita Income Compound Average Annual Percentage Change Cheltenham Township $31,424 $39, Montgomery County 30,898 40, Pennsylvania 20,880 27, Source: Pennsylvania State Data Center, 2000 and 2010 Pennsylvania Census. Trends of Assessed Valuation The trend of assessed valuations and market valuations of real estate in the Township since 2010 as reported by the Pennsylvania State Tax Equalization Board is shown below: Year Assessed Valuation Market Valuation Ratio ,911,464,087 2,833,088, ,893,859,317 2,801,144, ,879,161,617 2,782,221, ,872,577,667 2,772,568, * 1,871,366,337 2,956,758, Source: Pennsylvania State Tax Equalization Board. * 2014 figures provided by Township Officials Real Estate Tax Collection Current collections and total collections of real property taxes for the last nine years are analyzed below in relation to the levy for the year Current Prior Year's Total Assessed Current Collections Taxes Total Collections Year Valuation Millage Levy Collections to Levy Collected Collections To Levy ,872,443, ,967,493 13,648, % 288,157 13,936, % ,867,279, ,334,803 12,963, % 314,667 13,278, % ,884,699, ,417,590 12,978, % 517,574 13,495, % ,911,410, ,524,635 12,995, % 306,992 13,302, % ,913,831, ,498,833 13,153, % 269,396 13,422, % ,907,757, ,202,755 12,934, % 305,526 13,239, % ,906,557, ,220,730 12,853, % 202,500 13,056, % ,907,128, ,042,864 12,561, % 185,792 12,746, % ,891,220, ,586,994 12,226, % 239,565 12,466, % Source: Township's Annual Audit and Financial Report for the year indicated which is filed with the Commonwealth's Department of Community and Economic Development, and Township Officials. A-3

38 Five Year Analysis of Direct and Overlapping Tax Millage (Mills) Fiscal Year School Year Township School District County Total 2015 (15-16) (14-15) (13-14) (12-13) (11-12) Source: Township s Annual Accountant prepared Audits for the years indicated and Department of Community and Economic Development. Ten Largest Taxpayers (1) The ten largest real estate property taxpayers in the Township are set forth below: Taxpayer Description 2014 Assessed Valuation Lynnewood Gardens Apartments Housing $47,890,000 Cheltenham Square Shopping Mall Retail 35,535,000 Lindey Wyncote Apartments Apartment Complex 24,889,900 Cedarbrook Shopping Center Retail 24,493,050 Lindey Wyncote Apartments Apartment Complex 22,410,400 Lindey Wyncote Apartments Apartment Complex 20,537,700 Brookview Terrace Apartments Housing 13,340,000 Wyncote House Apartments (Mid Island Properties) Housing 12,470,000 Arcadia University Housing 8,200,000 Target Retail 8,040,340 Total $217,806,390 (1) The ten largest taxpayers represent 11.1% of the total assessed valuation of the Township for Summary of Building Permits Issued by the Township Year Number of Permits Dollar Value of Projects ,582, ,394, ,521, ,297, ,977, ,337, ,747, ,511, ,937, ,810, ,037,971 A-4

39 Education Primary and secondary public schools are provided by the School District of Cheltenham Township (the School District ). The School District educates approximately 4,500 students and operates 4 elementary schools, 2 middle schools and 1 high school. Township residents are provided with numerous higher education facilities in addition to many business and technical schools which complement the colleges and universities in the area. There are several private and parochial schools in the County. Higher education is offered by Villanova University, Ursinus College, Bryn Mawr College, Rosemont College, Haverford College, Arcadia University, Ambler Campus of Temple University, Pennsylvania State University, Abington Campus, Gwynedd Mercy College and Montgomery County Community College. The Philadelphia metropolitan area includes over 70 additional degree-granting institutions, offering a wide variety of educational choices. Utilities Electric: Telephone: Gas: Water: Sewer: The Philadelphia Electric Company supplies electricity to the residents of the Township. Verizon Telephone Company of Pennsylvania provides telephone service to the Township. The Philadelphia Electric Company provides natural gas to the residents of the Township. Water service is provided by Aqua America, Inc. Sewer services are provided by the Township and by contract with the City of Philadelphia. It is estimated that the average annual residential sewer bill is $513. Labor Relations The Township employs 194 full-time employees and 3 part-time, permanent employees. As of April 2015, 3 collective bargaining units represented 155 employees, as follows: Number of Bargaining Unit Employee Category Employees Represented Police Association Teamsters Local 115 Salaried Association Uniformed Police Officers 68 Public Works Employees 53 Non-Uniformed Employees 34 The Township contributes to four public employee retirement systems (PERS): the Cheltenham Township Police Pension Plan ( Police ); the Cheltenham Township Salaried Employee Pension Plan ( Salaried ); the Cheltenham Township Hourly Employee Pension Plan ( Hourly ) and the Cheltenham Township Board of Commissioners Pension Plan ( Board ). All four PERS are single-employer PERS administered by PFM Advisors, who also serves as financial advisor to the PERS. The benefit provisions of the Township s PERS are established by Township ordinances. A-5

40 The Township s employees are required to contribute a percentage of their annual wages to their respective PERS (see above). The Township is required to contribute amounts necessary to fund the PERS, using the actuarial bases specified by state statute. The PERS are partially funded by state moneys. The Township holds contracts with the Teamsters Local 115, the Salaried Association, and the Police Association. The Township approved and ratified a one year contract for 2014 with the Teamsters Local 115. The Salaried Association is currently operating without a contract in The Police are currently under contract for years The Township has not had any serious labor problems or strikes since The Township terms its labor relations as amicable. Actuarial reports are generated every 2 years. The Township received the latest report for January 1, 2013 in March The report for January 2015 is currently being prepared. The unfunded pension liability of the pension funds expected as of December 31, 2014 is as follow: Cheltenham Township Defined Benefit Pension Plans Approximate Funded Status at January 1, 2015 Police Pension Plan** Sal d Employee Pension Plan Hourly Employee Pension Plan Actuarial Accrued Liability* $43,040,000 $19,402,000 $13,668,000 Market Value of Assets $32,871,000 $14,850,000 $10,534,000 Est. Unfunded Liability $10,169,000 $4,552,000 $3,134,000 Estimated Funded Ratio 76.4% 76.5% 77.1% * Estimated liabilities at , based on preliminary actuarial valuations performed under Act 205. Cost method is Entry Age Normal. ** Includes DROP accounts in both Liability and Assets In 2013, the rating on the funding status of the Township s pension obligations was downgraded from minimally distressed (70% to 90% funded) to moderately distressed (50% to 70% funded) pursuant to Act 44 of The distress rating is based on the aggregate funding of all four of the pensions plans established for employees of the Township. The change in the distress rating was necessitated because the funding of the Township s pension obligations was 67% as of January 1, 2013 which was down from 71% as of January 1, The Township has taken steps consistent with the requirements of Act 44 of 2009 to improve the funding level of its pension obligations and believes that it now qualifies for an upgrade to minimally distressed based on exceeding the 70% funding level. A-6

41 Parks and Recreation Township residents have access to numerous facilities throughout the Township itself and Montgomery County. Activities such as golf, skiing, boating, fishing and hunting are available. Of the many parks and recreational facilities, the best known is nearby Valley Forge National Park. Medical Facilities A division of Albert Einstein Medical Center is located in the northeast corner of the Township. This general care hospital facility currently provides approximately 200 beds. In addition, Township residents have access to Abington Memorial Hospital, located in the adjacent Township of Abington, Pennsylvania, as well as more than 50 health care facilities located throughout the City of Philadelphia. Transportation Among the major highways serving the Township are the Pennsylvania Turnpike (I-76), Route 73, Route 309 and Route 611. Both Route 73 and 611 traverse the Township, and significant commercial development has occurred in the areas adjacent to each thoroughfare. Commuter rail service (SEPTA) is available at five local stations, with connecting service to long distance rail facilities (AMTRAK). Air transportation is available at Philadelphia International Airport, which is served by approximately 20 major air carriers. FINANCIAL FACTORS OF THE TOWNSHIP Assessed Valuation of Real Estate (2013)... $1,872,577,607 Market Valuation of Real Estate (2013)... $2,776,568,512 Ratio of Assessed to Market Valuation % Population: 2010 Federal Census... 36, Federal Census... 36,875 Obligations of the Residents of the Township Before Reimbursement: Township General Obligation... $50,200,000 School District (1)... $145,165,000 Share of County (2)... $12,726,280 Total Obligations Before Reimbursement... $208,091,280 Ratio of Total Obligations Before Reimbursement to: Assessed Valuation of Real Estate % Market Valuation of Real Estate % Population (2010)... $5,656 Ratio of 2010 Population to: Assessed Valuation of Real Estate... $51,074 Market Valuation of Real Estate... $75,618 Source: State Tax Equalization Board; Department of Community and Economic Development Includes the 2015 Bonds issued through this Official Statement. (1) The School District is coterminous with the Township and, therefore, this represents all of the School District s outstanding debt as of July 1, (2) Township's proportionate share (3.18%) ($12,726,280) based on assessed valuations of real estate) of the outstanding $400,197,476 general obligation and guaranteed debt of Montgomery County as of July 1, 2015 A-7

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43 APPENDIX B FORM OF BOND COUNSEL OPINION

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45 August 25, 2015 Township of Cheltenham Montgomery County, Pennsylvania Re: $10,000,000 Township of Cheltenham Montgomery County, Pennsylvania General Obligation Refunding Bonds, Series of 2015 You have requested our opinion as to the legality of the above referenced series of general obligation refunding bonds (the Bonds ) which are being issued on the date hereof by the Township of Cheltenham, Montgomery County, Pennsylvania (the Township ), under the provisions of the Pennsylvania Local Government Unit Debt Act, 53 Pa. Cons. Stat et seq., as amended (the Act ), and pursuant to an ordinance duly enacted by the Township s Board of Commissioners (the Ordinance ). The Bonds are being issued for the purpose of providing funds to finance: (1) the costs of the current refunding of a portion of the Township s outstanding General Obligation Bonds, Series A of 2005; (2) the costs of the advance refunding of a portion of the Township s General Obligation Refunding Bonds, Series of 2011; and (3) the costs and expenses of issuing the Bonds. The Township has covenanted in the Ordinance (i) to include the amount of debt service for the Bonds for each fiscal year in which such sums are due and payable in its budget for that year; (ii) to appropriate such amounts from its general revenues for the payment of such debt service; and (iii) to duly and punctually pay, or cause to be paid, from its sinking fund or any other of its revenues or funds, the principal of, and interest on, the Bonds at the dates and places and in the manner stated in the Bonds, according to the true intent and meaning thereof; for such budgeting, appropriation and payment the Township in the Ordinance has pledged its full faith, credit and taxing power. As Bond Counsel for the Township, we have examined the relevant provisions of the Constitution of the Commonwealth of Pennsylvania; the Acts of Assembly pursuant to which the Bonds are authorized, issued and sold; the transcript of proceedings filed with the Pennsylvania Department of Community and Economic Development (the Department ); and certain statements, affidavits and other documents which we have considered pertinent. In rendering this opinion we have examined and relied upon (a) the opinion of counsel to the Township with respect, inter alia, to the due adoption by the Township of the Ordinance in accordance with applicable laws; and (b) the accuracy of the statements and representations and the performance by the Township of its covenants set forth in the Ordinance

46 Township of Cheltenham August 25, 2015 Page 2 and the Township s Tax Certificate delivered on this date in connection with the issuance of the Bonds. As to questions of fact material to our opinion, we have relied upon the representations of the Township contained in the Ordinance and in the certified proceedings and other certifications of public officials and others furnished to us without undertaking to verify the same by independent investigation. Based on the foregoing, we are of the opinion that, under existing law: 1. The Township is authorized under the provisions of the Constitution and laws of the Commonwealth of Pennsylvania to issue the Bonds for the purposes above set forth, and the Township has authorized the issuance thereof. 2. As indicated in the Township s debt statement filed with the Department in connection with the issuance of the Bonds, outstanding debt of the Township, including debt represented by the Bonds, is within the debt limitations of the Act. 3. The Bonds are the valid and binding general obligations of the Township payable from the revenues of the Township from whatever source derived, which revenues, at the time of the issuance and sale of the Bonds, include ad valorem taxes levied upon all the taxable property within the Township, within limitations provided by law. 4. Under the laws of the Commonwealth of Pennsylvania, as currently enacted and construed, the Bonds are exempt from personal property taxes in Pennsylvania and the interest on the Bonds is exempt from Pennsylvania personal income tax and Pennsylvania corporate net income tax. 5. Interest on the Bonds is excluded from the gross income of the owners of the Bonds for federal income tax purposes under existing law, as currently enacted and construed. Interest on the Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed upon individuals and corporations. Interest on a Bond held by a corporation (other than an S corporation, regulated investment company, real estate investment trust or real estate mortgage investment conduit) may be indirectly subject to alternative minimum tax because of its inclusion in the earnings and profits of the corporate holder. Interest on a Bond held by a foreign corporation may be subject to the branch profits tax imposed by the Internal Revenue Code of 1986, as amended (the Code ). 6. The Township has taken the actions necessary for the Bonds to be designated and/or deemed designated as qualified tax-exempt obligations, as defined in and for purposes of Section 265(b)(3) of the Code. Assuming the accuracy of the representations of the Township relating to such designation/deemed designation, we are of the opinion that such

47 Township of Cheltenham August 25, 2015 Page 3 designation/deemed designation is valid with respect to the Bonds for the purposes of such Section. In providing this opinion, we advise you that it may be determined in the future that interest on the Bonds, retroactive to the date of issuance thereof or prospectively, will not be excluded from the gross income of the owners of the Bonds for federal income tax purposes if certain requirements of the Code are not met. The Township has covenanted in the Ordinance to comply with such requirements. Purchasers of the Bonds should consult their own tax advisors as to collateral federal income tax consequences. We express no opinion regarding federal or state tax consequences arising with respect to the Bonds other than as expressly set forth in paragraphs 4 and 5 hereof. These opinions are rendered on the basis of federal law and the laws of the Commonwealth as enacted and construed on the date hereof. We express no opinion as to any matter not set forth in the numbered paragraphs above including, without limitation, with respect to, and assume no responsibility for, the accuracy, adequacy or completeness of, the Preliminary Official Statement prepared in respect of the Bonds, or the Official Statement, including, in both cases, the appendices thereto, and make no representation that we have independently verified any such information. The opinions set forth herein are given solely for the benefit of the purchasers of the Bonds and may not be relied on by any other person or entity without our express prior written consent. The opinions set forth herein are given solely as of the date hereof, and we do not undertake to update or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. The rights of the owners of the Bonds and the enforceability of the Bonds may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors rights generally and by equitable principles, whether considered at law or in equity. DILWORTH PAXSON LLP

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49 APPENDIX C FORM OF CONTINUING DISCLOSURE AGREEMENT

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51 $10,000,000 TOWNSHIP OF CHELTENHAM GENERAL OBLIGATION REFUNDING BONDS, SERIES OF 2015 CONTINUING DISCLOSURE AGREEMENT This Continuing Disclosure Agreement, dated August 25, 2015 (the Disclosure Agreement ), is executed and delivered by the Township of Cheltenham, Montgomery County, Pennsylvania (the Township ), in connection with the issuance by the Township of $10,000,000 aggregate principal amount of its General Obligation Refunding Bonds, Series of 2015 (the Bonds ), dated as of August 25, The Bonds are being issued pursuant to an ordinance enacted by the Board of Commissioners of the Township on June 17, 2015 (the Ordinance ). The Township, intending to be legally bound, hereby covenants and agrees as follows: Section 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is the written undertaking for the benefit of the holders of the Bonds required by Section (b)(5)(i) of Rule 15c2-12, as amended, promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as the same may be amended from time to time (the Rule ). Section 2. Definitions. In addition to the definitions set forth in the Ordinance, which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section 2, the following capitalized terms shall have the following meanings: Business Day shall mean any day other than a Saturday or Sunday or a legal holiday or a day on which banking institutions are authorized by law to close. Commonwealth shall mean the Commonwealth of Pennsylvania. Dissemination Agent means any agent of the Township designated in writing by the Township, which agent has filed with the Township a written acceptance of such designation. EMMA System means the Municipal Securities Rulemaking Board s Electronic Municipal Market Access System approved by the Securities and Exchange Commission as the sole repository for all filings made pursuant to the Rule. MSRB means the Municipal Securities Rulemaking Board. Participating Underwriter means the original underwriter of the Bonds required to comply with the Rule in connection with the offering of the Bonds. Submission Date means the date, which is 240 days after the end of each fiscal year of the Township, beginning with the fiscal year ending December 31, 2015.

52 Section 3. Provision of Annual Reports. (a) The Township, on or before the Submission Date, shall provide or shall cause the Dissemination Agent, if any, to provide to the MSRB through its EMMA System, an annual report (the Annual Report ) which contains or incorporates by reference the following two components: (A) a copy of the Township s annual financial statements prepared in accordance with generally accepted accounting principles for governmental units as prescribed by the Governmental Accounting Standards Board and audited by a certified public accountant or independent public accountant in accordance with generally accepted auditing standards; and (B) the annual financial information or operating data set forth in clause (b) on Appendix A, attached hereto and made a part hereof. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information contained within the package; audited financial statements of the Township referenced above in the first component of the Annual Report may be submitted separately from the balance of the Annual Report, if and when available. Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues with respect to which the Township is an obligated person (as defined by the Rule) which have been filed with the MSRB through its EMMA System. If the document incorporated by reference is a final official statement, it must be available from the MSRB as a word-searchable PDF file, as required by the MSRB for filing on the EMMA System. The Township shall clearly identify each such other document so incorporated by reference. (b) If the Township on its own or through a Dissemination Agent, if any, is unable to provide the annual financial information portions of the Annual Report to the MSRB through its EMMA System by the Submission Date, the Township shall send or cause to be sent a notice to the MSRB through its EMMA System, in a timely manner. (c) The Dissemination Agent, if any, shall: (i) determine each year prior to the Submission Date the name and address for filing with the MSRB through its EMMA System; and (ii) file a report with the Township certifying that the Annual Report has been provided pursuant to this Disclosure Agreement, stating the date it was filed with the MSRB through its EMMA System. (d) Audited financial statements of the Township not submitted as part of the Annual Report shall be provided to the MSRB through its EMMA System, if and when available to the Township, and in any event not more than thirty (30) days after receipt thereof from the Township s auditors. (e) The Township shall promptly provide written notice of any change in its fiscal year to the MSRB. Section 4. Reporting of Events. (a) The Township, in a timely manner, not in excess of eight (8) business days after the occurrence of the event, shall provide to the Dissemination Agent, if any shall have been appointed and serving, or if there shall be no Dissemination Agent appointed and serving, then, in a timely manner, not in excess of ten (10) business days after the occurrence of the event, to the 2

53 MSRB through its EMMA System, written notice of the occurrence of any of the following events with respect to the Bonds: (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on the debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; (7) modification to rights of Holders of the Bonds, if material; (8) bond calls, if material, and tender offers; (9) defeasances; (10) release, substitution or sale of property securing repayment of the Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the obligated person; (13) the consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (14) appointment of a successor or additional trustee or the change of name of a trustee, if material. (b) If a Dissemination Agent shall have been appointed and serving, the Dissemination Agent shall, within two (2) business days of receipt of notice from the Township of any of the events described in (a) above, file a notice of such event with the MSRB through its EMMA System. Section 5. Termination of Reporting Obligation. The Township s obligations under this Disclosure Certificate shall terminate upon the defeasance, prior redemption or payment in full of all of the Bonds. The Township shall provide timely written notice to the MSRB through its EMMA System of any termination of its obligations hereunder. Section 6. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the Township may amend this Disclosure Agreement, and any provision of this Disclosure Agreement may be waived, if such amendment or waiver is supported by an opinion of counsel qualified in federal securities laws, acceptable to the Township, to the effect that such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule. 3

54 Section 7. Default. In the event of a failure of the Township or the Dissemination Agent, if any, to comply with any provision of this Disclosure Agreement, any Participating Underwriter or any beneficial holder of the Bonds may take such actions as may be necessary and appropriate, including seeking mandated or specific performance by court order, to cause the defaulting party to comply with its obligations under this Disclosure Agreement. The sole remedy under this Disclosure Agreement in the event of any failure of any party to comply with this Disclosure Agreement shall be an action to compel performance. Section 8. Concerning the Dissemination Agent. The Township may from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such agent, with or without appointing a successor Dissemination Agent. Section 9. Notices. All reports, notices and disclosures required to be given hereunder shall be in writing and shall be addressed as follows: Township of Cheltenham 8230 Old York Road Elkins Park, PA ATTN: Township Manager Telecopy No.: (215) Any notice to be given to the Dissemination Agent, if any, shall be given at or sent to such address as shall be specified by such Dissemination Agent. Section 10. Governing Law. This Disclosure Agreement shall be governed by and interpreted in accordance with the laws of the Commonwealth of Pennsylvania; provided, however, that, to the extent that the Securities and Exchange Commission, the MSRB or any other federal agency or regulatory body with jurisdiction shall have promulgated any rule or regulation governing the subject matter hereof, this Disclosure Agreement shall be interpreted and construed in a manner consistent therewith. Section 11. Severability. If any provision hereof shall be held invalid or unenforceable by a court of competent jurisdiction, the remaining provisions hereof shall survive and continue in full force and effect. Section 12. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Participating Underwriter and the Holders of the Bonds and shall create no rights in any other person or entity. [Signature Page to Follow] 4

55 IN WITNESS WHEREOF, the Township has caused its duly authorized representatives to execute this Disclosure Agreement as of the day and year first written above. TOWNSHIP OF CHELTENHAM President, Board of Commissioners [Signature Page to the Continuing Disclosure Agreement]

56 APPENDIX A The Annual Report shall contain or incorporate by reference the following: (a) the financial statements for the most recent fiscal year, prepared in accordance with generally accepted accounting principles for local government units and audited in accordance with generally accepted auditing standards; and (b) the following annual financial information and operating data: a summary or copy of the budget for the current fiscal year; the total assessed value and aggregate market value of all taxable real estate for the current fiscal year; the taxes and millage rates imposed for the current fiscal year; the real property tax collection results for the most recent fiscal year, including (1) the real estate levy imposed (expressed both as a millage rate and an aggregate dollar amount), (2) the dollar amount of real estate taxes collected that represented current collections (expressed both as a percentage of such fiscal year s levy and as an aggregate dollar amount), (3) the amount of real estate taxes collected that represented taxes levied in prior years (expressed as an aggregate dollar amount), and (4) the total amount of real estate taxes collected (expressed both as a percentage of the current year s levy and as an aggregate dollar amount); a list of the ten (10) largest real estate taxpayers and, for each, the total assessed value of real estate for the current fiscal year; and pursuant to the provisions of the Local Government Unit Debt Act, the Township s debt limit and borrowing capacity. A-1

57