NEW ISSUE BOOK-ENTRY ONLY OFFICIAL STATEMENT DATED FEBRUARY 4,2015 NON-RATED BANK-QUALIFIED In the opinion of Kutak Rock LLP, Bond Counsel, under existing laws, regulations, rulings and judicial decisions and assuming the accuracy of certain representations and continuing compliance with certain covenants, interest on the Series 2015 Bonds is excluded from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax. Bond Counsel also is of the opinion that, under existing laws of the State of Nebraska, such interest is exempt from Nebraska state income taxation. The Series 2015 Bonds are "qualified tax-exempt obligations " under Section 265(b)(3) of the Internal Revenue Code of1986, as amended. See "TAX MATTERS" herein. Dated: Date of Delivery $1,345,000 DAKOTA COUNTY SCHOOL DISTRICT 0011 (SOUTH SIOUX CITY COMMUNITY SCHOOLS) IN THE STATE OF NEBRASKA LIMITED TAX OBLIGATION SCHOOL BONDS SERIES 2015 Due: December IS, as shown below Dakota County School District 0011 (South Sioux City Community Schools) in the State of Nebraska (the "District") is issuing the abovecaptioned Bonds (the "Series 2015 Bonds") as fully registered bonds which, when initially issued, will be registered in the name of Cede & Co., as nominee of The Depositoiy Trust Company, New York, New York ("DTC"). DTC is acting as the securities depository for the Series 2015 Bonds. Purchases of the Series 2015 Bonds will be made in book-entry only form, in the principal amount of $5,000 or any whole multiple thereof, through brokers and dealers who are, or who act through, DTC Participants. Beneficial owners of the Series 2015 Bonds will not receive physical delivery of bond certificates so long as DTC or a successor acts as the securities depository with respect to the Series 2015 Bonds. Interest is payable semiannually on June 15 and December 15 of each year, commencing December 15, 2015, until maturity or earlier redemption. So long as DTC or its nominee is the registered owner of the Series 2015 Bonds, payments of the principal of and interest on the Series 2015 Bonds will be made directly to DTC. Disbursement of such payments to DTC Participants is the responsibility of DTC, and disbursement of such payments to the beneficial owners is the responsibility of DTC Participants. First National Bank of Omaha, Fremont, Nebraska, is acting as Paying Agent and Registrar for the Series 2015 Bonds. For terms relating to payments made to DTC or its nominee or in the event that the use of book-entry form is discontinued, see "THE SERIES 2015 BONDS - Global Book-Entiy Bonds" herein. MATURITY SCHEDULE December 15 Principal Interest December 15 Principal Interest Maturity Amount Rate Price CUSIP Maturitv Amount Rate Price CUSEP 2015 $130,000 0.40% 100.00% 234219 MB6 2020 $135,000 1.40% 100.00% 234219 MG5 2016 130,000 0.60 100.00 234219 MC4 2021 135,000 1.60 100.00 234219 MH3 2017 130,000 0.80 100.00 234219 MD2 2022 140,000 1.75 100.00 234219 MJ9 2018 130,000 1.00 100.00 234219 ME0 2023 140,000 1.95 100.00 234219 MK6 2019 130,000 1.25 100.00 234219 MF7 2024 145,000 2.10 100.00 234219 ML4 The Series 2015 Bonds maturing on and after December 15,2020 are subject to optional redemption prior to maturity at any time, in whole or in part, on or after Februaiy 26, 2020, at par plus accrued interest to the date of redemption. See "THE SERIES 2015 BONDS - Redemption Provisions" herein. The District is using the proceeds of the Series 2015 Bonds to (1) pay the costs of abating actual or potential environmental hazards, eliminating accessibility barriers, correcting life safety code violations, improving indoor air quality, and/or abating and preventing mold within the District's facilities located in South Sioux City, Nebraska, and (2) pay costs of issuing the Series 2015 Bonds. See "PURPOSE AND AUTHORITY" herein. The Series 2015 Bonds are payable from ad valorem taxes, not to exceed five and one-fifth cents ($0,052) per one hundred dollars of taxable valuation, on all taxable property located in the District. The Series 2015 Bonds are not general obligations of the District, may not be paid from any portion of its general fund, and are secured solely by the District's irrevocable pledge of amounts received from the levy of the limited tax described herein. See "SECURITY" and "NEBRASKA DEVELOPMENTS RELATED TO BUDGETS AND TAXATION" herein. THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THIS ISSUE. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION. The Series 2015 Bonds are offered in book-entry form when, as and if issued and received by the Underwriter and subject to the approval of legality by Kutak Rock LLP, Omaha, Nebraska, Bond Counsel, and certain other conditions. It is expected that the Series 2015 Bonds will be available for delivery through DTC in New York, New York, on or about Februaiy 26,2015. AMERITAS INVESTMENT CORP.
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DAKOTA COUNTY SCHOOL DISTRICT 0011 (SOUTH SIOUX CITY COMMUNITY SCHOOLS) IN THE STATE OF NEBRASKA DISTRICT OFFICIALS Board of Education Rick Robinette, President Marcia Mahon, Vice President Janice Hohenstein, Secretary Tom Gesell, Director Kevin O'Dell, Director Patricia Slaughter, Director Superintendent of Schools Dr. Vernon Fisher REGISTRAR AND PAYING AGENT First National Bank of Omaha Fremont, Nebraska UNDERWRITER Ameritas Investment Corp. Omaha, Nebraska INDEPENDENT AUDITORS Erickson & Brooks Certified Public Accountants Fremont, Nebraska BOND COUNSEL Kutak Rock LLP Omaha, Nebraska
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The information contained in this Official Statement has been obtained from Dakota County School District 0011 and other sources which are believed to be reliable. The Underwriter makes no representation or warranty, however, as to the accuracy or completeness of such information, and nothing contained in the Official Statement is, or shall be relied on, as a promise or representation by the Underwriter. The Official Statement is submitted in connection with the sale of securities as referred to therein, and may not be reproduced or be used, in whole or in part, for any other purpose. The information and expressions of opinion contained herein are subject to change, without notice, and neither the delivery of this Official Statement, nor any sale made hereunder, shall, under any circumstances, create any implication that there has been no change in the matters described herein since the date hereof. Neither delivery of the Official Statement nor any sale made thereunder shall create an implication that information therein is correct as of any time subsequent to its date. No dealer, broker, salesman, or other person has been authorized by the District or the Underwriter to give any information or to make any representations with respect to the Series 2015 Bonds other than those contained in this Official Statement, and, 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 nor shall there be any sale of the Series 2015 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. TABLE OF CONTENTS Page INTRODUCTION 1 PURPOSE AND AUTHORITY 1 SECURITY 1 THE SERIES 2015 BONDS 2 SOURCES AND APPLICATIONS OF FUNDS 7 DEBT SERVICE SCHEDULE 7 NEBRASKA DEVELOPMENTS RELATED TO BUDGETS AND TAXATION 8 TAX MATTERS 10 BONDHOLDERS' RISKS 11 LITIGATION 12 INDEPENDENT AUDITORS 12 CONTINUING DISCLOSURE 12 LEGAL MATTERS 13 UNDERWRITING 13 MISCELLANEOUS :. 14 APPENDIX A -THE DISTRICT APPENDIX B -INDEPENDENT AUDITOR'S REPORT AND FINANCIAL STATEMENTS APPENDIX C - FORM OF CONTINUING DISCLOSURE AGREEMENT IN CONNECTION WITH THE OFFERING OF THE SERIES 2015 BONDS, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF SUCH SERIES 2015 BONDS AT SUCH LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. SUCH SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR HAS ANY DOCUMENT BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATIONS OF THE TERMS OF THE OFFERING. THE SECURITIES DESCRIBED HEREIN 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 OFFICIAL STATEMENT.
Forward-Looking Statements This Official Statement contains statements which should be considered "forward-looking statements," meaning they refer to possible future events or conditions. Such statements are generally identifiable by the words such as "plan,", "expect," "estimate," "budget," or similar words. THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE DISTRICT DOES NOT EXPECT OR INTEND TO ISSUE ANY UPDATES OR REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN ITS EXPECTATIONS, OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR.
OFFICIAL STATEMENT $1,345,000 DAKOTA COUNTY SCHOOL DISTRICT 0011 (SOUTH SIOUX CITY COMMUNITY SCHOOLS) IN THE STATE OF NEBRASKA LIMITED TAX OBLIGATION SCHOOL BONDS SERIES 2015 INTRODUCTION The purpose of this Official Statement, which includes the cover page and the appendices attached hereto, is to set forth certain information concerning Dakota County School District 0011 (South Sioux City Community Schools) in the State of Nebraska (the "District") and the District's issuance of the abovecaptioned bonds (the "Series 2015 Bonds"). PURPOSE AND AUTHORITY The District is using the proceeds of the Series 2015 Bonds to (1) pay the costs of abating actual or potential environmental hazards, eliminating accessibility barriers, correcting life safety code violations, improving indoor air quality, and/or abating and preventing mold within the District's facilities located in South Sioux City, Nebraska, and (2) pay issuance costs of the Series 2015 Bonds. The District is issuing the Series 2015 Bonds pursuant to a resolution adopted by its Board of Education (the "Board") on November 10, 2014 (the "Resolution") in accordance with the provisions of Section 79-10,110, Reissue Revised Statutes of Nebraska, as amended (the "Act"). SECURITY The Series 2015 Bonds are not general obligations of the District, may not be paid from any portion of its general fund, and are secured solely by the District's irrevocable pledge of amounts received from the levy of the limited tax described herein. The Act permits the District to issue bonds to pay the amounts necessary to abate actual or potential environmental hazards, eliminate accessibility barriers, correct life safety code violations, improve indoor air quality, and/or abate and prevent mold within the District's facilities, and to levy property taxes in the manner set forth in the Act not to exceed five and one-fifth cents ($0,052) per one hundred dollars ($100) of taxable valuation on the taxable property of the District, as may be necessary to cover the costs of one or more projects and related bonds as determined by the District. The District may levy such tax on all taxable property within the District for no more than ten (10) years with respect to any particular project financed under the Act. Subject to such limitation, the District is required annually to include in its budget an amount sufficient to enable it to meet its obligations under the Resolution. See the caption "NEBRASKA DEVELOPMENTS RELATED TO BUDGETS AND TAXATION" for further discussion on taxation and the District's budgetary process. The 2014 taxable valuation of all taxable property located in the District is $857,738,060. A levy of 5.2 cents ($0,052) per one hundred dollars ($100) of such taxable valuation would annually yield approximately $446,024 in tax revenues. As of the date of this Official Statement, the District has no other obligations outstanding that are payable from or secured by the limited tax authorized under the Act. The amount required to pay principal and interest on the Series 2015 Bonds in 2022 - the year in which the debt service on the Series 2015 Bonds is anticipated to be the greatest - is $148,225 which would require a levy equal to approximately 1.72809 cents ($0.0172809) per one hundred dollars ($100) of 2014 taxable valuation. Based on such 2014 taxable valuation, the limited tax authorized by the Act would, if
all taxes levied at the maximum permissible rate of 5.2 cents ($0,052) per one hundred dollars ($100) of taxable valuation were actually received by the District, cover the estimated debt service requirements for such year by approximately 3.01 times. Neither the Act nor the Resolution limits the ability of the District to issue additional obligations secured by a pledge of the revenues derived from the limited tax described in the Act, except that the annual levy for all such obligations - including the Series 2015 Bonds - may not exceed five and one-fifth cents ($0,052) per one hundred dollars ($100) of such taxable valuation, and that the tax with respect to any single obligation may not be levied for more than ten years; however, the Act does provide that the base valuation for the District throughout the term of the Series 2015 Bonds shall not be less than the valuation as of the date of issuance of the Series 2015 Bonds. While the District does not currently anticipate issuing additional obligations payable from such tax levy, no assurance can be given that the District will not elect to do so prior to the final maturity of the Series 2015 Bonds. General THE SERIES 2015 BONDS The District is issuing the Series 2015 Bonds as fully registered bonds, and when initially issued the Series 2015 Bonds will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"). DTC is acting as securities depository for the Series 2015 Bonds. Purchases of Series 2015 Bonds are being made in book-entry-only form and in the principal amount of $5,000 or any whole multiple thereof, through brokers and dealers who are, or who act through, DTC's Direct Participants. Beneficial owners of the Series 2015 Bonds will not receive physical delivery of bond certificates so long as DTC or a successor securities depository acts as the securities depository with respect to the Series 2015 Bonds. See "THE SERIES 2015 BONDS - Global Book- Entry Bonds" herein. The original issue date of the Series 2015 Bonds is their date of delivery. The Series 2015 Bonds bear interest at the rates and mature on the dates and in the principal amounts set forth on the cover page of this Official Statement. Interest on the Series 2015 Bonds is payable semiannually on June 15 and December 15 of each year, commencing December 15, 2015 (each, an "Interest Payment Date"), from their original issue date or the most recent Interest Payment Date, whichever is later, until maturity or earlier redemption. Interest is computed on the basis of a 360-day year consisting of twelve 30-day months. Payment of Series 2015 Bonds The First National Bank of Omaha, Fremont, Nebraska, the initial Registrar and Paying Agent with respect to the Series 2015 Bonds (the "Registrar"), will pay interest due on the Series 2015 Bonds by check or draft mailed to the registered owners at their registered addresses, both as shown on the registration books of the Registrar at the close of business on the fifteenth day (whether or not a business day) immediately preceding each Interest Payment Date (the "Record Date"). The Registrar will pay the principal of the Series 2015 Bonds at maturity or earlier date of redemption upon presentation and surrender of the Series 2015 Bonds at the office of the Registrar. The foregoing procedures and methods for payment will apply if the provisions for global book-entry bonds as described below cease to be in effect and will apply to the holding and transfer of Series 2015 Bonds by DTC subject to certain modifications provided for in a Letter of Representations between the District and DTC. SO LONG AS DTC OR ITS NOMINEE IS THE REGISTERED OWNER OF THE SERIES 2015 BONDS, PAYMENT OF THE PRINCIPAL OR THE REDEMPTION PRICE THEREOF AND THE INTEREST THEREON WILL BE MADE DIRECTLY TO DTC. See "THE SERIES 2015 BONDS Global Book-Entry Bonds" herein. 2
If payments of interest due on the Series 2015 Bonds on any Interest Payment Date are not timely made, such interest shall cease to be payable to the registered owners as of the Record Date for such Interest Payment Date and shall be payable to the registered owners as o f a special date o f record for payment of such defaulted interest as shall be designated by the Registrar whenever moneys for the purpose o f paying such defaulted interest become available. Global Book-Entry Bonds Book-Entry-Only System The Series 2015 Bonds initially are being issued solely in book-entry form to be held in the book-entry only system maintained by The Depository Trust Company ("DTC"), New York, New York. So long as such book-entiy system is used, only DTC will receive or have the right to receive physical delivery of Series 2015 Bonds and Beneficial Owners (as hereinafter defined) will not be or be considered to be, and will not have any rights as, owners or holders of the Series 2015 Bonds under the Resolution. The following information about the book-entry only system applicable to the Series 2015 Bonds has been supplied by DTC. Neither the District nor the Registrar makes any representations, warranties or guarantees with respect to its accuracy or completeness. DTC will act as securities depository for the Series 2015 Bonds. The Series 2015 Bonds will be issued as fully-registered securities registered in the name o f Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. Onefolly-registered Bond certificate will be issued for each maturity of the Series 2015 Bonds, each in the aggregate principal amount of maturity and will be deposited with DTC. DTC, the world's largest 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 o f 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 o f 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-u.s. equity, 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 o f sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and at www.dtc.org. Purchases of Series 2015 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2015 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2015 Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC o f 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 o f ownership interests in the Series 2015 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Series 2015 3
Bonds, except if use of the book-entry system for the Series 2015 Bonds is discontinued. To facilitate subsequent transfers, all Series 2015 Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Series 2015 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2015 Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2015 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Series 2015 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2015 Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Series 2015 Bond documents. For example, Beneficial Owners of Series 2015 Bonds may wish to ascertain that the nominee holding the Series 2015 Bonds for Iheir benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Series 2015 Bonds 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 the Series 2015 Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the District, as issuer of the Series 2015 Bonds, 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 Series 2015 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments, redemption proceeds and distributions on the Series 2015 Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the District or the Registrar, 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 Series 2015 Bonds held for the accounts of customers in bearer form or registered in "street name" and will be the responsibility of such Participant and not of DTC, the Registrar or the District, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the District or the Registrar, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Series 2015 Bonds at any time by giving reasonable notice to the District or the Registrar. Under such circumstances, if a successor depository is not obtained, Series 2015 Bond certificates are required to be printed and delivered. 4
The District may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Series 2015 Bond certificates will be printed and delivered. NEITHER THE DISTRICT NOR THE PAYING AGENT AND REGISTRAR WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO ANY DIRECT PARTICIPANT, INDIRECT PARTICIPANT OR ANY BENEFICIAL OWNER OR ANY OTHER PERSON NOT SHOWN ON THE REGISTRATION BOOKS OF THE PAYING AGENT AND REGISTRAR AS BEING A HOLDER WITH RESPECT TO: (1) THE SERIES 2015 BONDS; (2) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT; (3) THE PAYMENT BY DTC OR ANY DIRECT 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 ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE RESOLUTION TO BE GIVEN TO HOLDERS; (5) THE SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE SERIES 2015 BONDS; OR (6) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS HOLDER. Each Beneficial Owner for whom a Direct Participant or Indirect Participant acquires an interest in the Series 2015 Bonds, as nominee, may desire to make arrangements with such Direct Participant or Indirect Participant to receive a credit balance in the records of such Direct Participant or Indirect Participant, to have all notices of redemption, elections to tender Series 2015 Bonds or other communications to or by DTC which may affect such Beneficial Owner forwarded in writing by such Direct Participant or Indirect Participant, and to have notification made of all debt service payments. Beneficial Owners may be charged a sum sufficient to cover any tax, fee, or other governmental charge that may be imposed in relation to any transfer or exchange of their interests in the Series 2015 Bonds. THE DISTRICT AND THE PAYING AGENT AND REGISTRAR CANNOT AND DO NOT GIVE ANY ASSURANCES THAT THE DIRECT PARTICIPANTS OR THE INDIRECT PARTICIPANTS WILL DISTRIBUTE TO THE BENEFICIAL OWNERS OF THE SERIES 2015 BONDS (i) PAYMENTS OF PRINCIPAL OF AND INTEREST ON THE SERIES 2015 BONDS, (ii) BONDS REPRESENTING AN OWNERSHIP INTEREST OR OTHER CONFIRMATION OF BENEFICIAL OWNERSHIP INTERESTS IN THE SERIES 2015 BONDS OR (iii) REDEMPTION OR OTHER NOTICES SENT TO DTC OR CEDE & CO., ITS NOMINEE, AS THE REGISTERED OWNERS OF THE SERIES 2015 BONDS, OR THAT THEY WILL DO SO ON A TIMELY BASIS OR THAT DTC, DIRECT 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 DIRECT PARTICIPANTS ARE ON FILE WITH DTC. Book-Entry System Risk Factors Notice of any proposed modification or amendment of the resolution authorizing issuance of the Series 2015 Bonds by means of a supplemental resolution or resolutions that are to be effective with the consent of the registered owners of the Series 2015 Bonds as well as all notices of redemption will be mailed to DTC, as the registered owner of the Series 2015 Bonds then outstanding. No assurance can be given by the District or the Registrar that DTC will distribute to the Participants, or that the Participants will distribute to the Beneficial Owners, (i) payment of debt service on the Series 2015 Bonds paid to DTC, or its nominee, as the registered owner, or (ii) any redemption or other notices, or that DTC or the Participants will serve and act on a timely basis or in the manner described in this Official Statement. 5
Beneficial Owners of the Series 2015 Bonds may experience some delay in their receipt of distributions of principal of, and interest on, the Series 2015 Bonds since such distributions will be forwarded by the Registrar to DTC and DTC will credit such distributions to the accounts of its Participants, which will thereafter credit them to the accounts of the Beneficial Owners either directly or indirectly through Indirect Participants. Since transactions in the Series 2015 Bonds can be effected only through DTC and its Participants and Indirect Participants and certain banks, the ability of a Beneficial Owner to pledge any Series 2015 Bonds to persons or entities that do not participate in the DTC system, or otherwise to take actions in respect of such Series 2015 Bonds, may be limited due to lack of physical certificate. Beneficial Owners will not be recognized by the Registrar as registered owners for purposes of the Resolution, and Beneficial Owners will be permitted to exercise the rights of registered owners only indirectly through DTC and its Participants. For the rights of Beneficial Owners with respect to the District's continuing disclosure obligation, see Appendix C hereto. Redemption Provisions Optional Redemption. The Series 2015 Bonds maturing on and after December 15, 2020 are subject to redemption prior to maturity at the option of the District on February 26, 2020, or any date thereafter, in whole or in part, in such principal amounts and from such maturity or maturities as the District shall determine, in its sole and absolute discretion, at a redemption price equal to the principal amount thereof, together with the interest accrued thereon to the date of redemption, with no premium. If less than all of the Series 2015 Bonds of any maturity are to be called for redemption, the particular Series 2015 Bonds of such maturity to be redeemed shall be selected by lot in whole multiples of $5,000 within a maturity. Redemption - Series 2015 Bonds Held by DTC. If the Series 2015 Bonds are being held by DTC under the book-entry system and less than all of such Series 2015 Bonds within a maturity are being redeemed, DTC's current practice is to determine by lot the amount of the interest of each Participant in such maturity to be called for redemption, and each Participant is to then select by lot the ownership interest in such maturity to be redeemed. See "THE SERIES 2015 BONDS - Global Book-Entry Bonds" herein. Notice of Redemption. Notice of the call for redemption, identifying the Series 2015 Bonds or portions thereof to be redeemed, shall be given by the Registrar to the registered owners of the Series 2015 Bonds to be redeemed at their registered addresses as shown on the registration books maintained by the Registrar, by first class mail, postage prepaid, not less than 30 days prior to the date fixed for redemption (or such shorter period as may be acceptable to the then-registered owner of the Series 2015 Bonds). Failure to give notice to any particular registered owner or any defect in the notice given to such owner shall not affect the validity of the proceedings calling the Series 2015 Bonds for redemption or the redemption of any Series 2015 Bonds for which proper notice has been given. Effect of Redemption. If notice of redemption has been properly given and moneys for payment are available on the redemption date, the Series 2015 Bonds so called for redemption shall, on the redemption date, become due and payable and shall cease to bear interest and shall cease to be entitled to any lien, benefit or security under the Resolution and the owners of the Series 2015 Bonds so called for redemption shall have no rights under the Resolution except to receive payment of the redemption price plus accrued interest to the date fixed for redemption from fiinds deposited with the Registrar by the District. Registration, Transfer and Exchange of Bonds The District and the Registrar may treat the registered owner of any Series 2015 Bond as the absolute owner of such Series 2015 Bond for the purpose of making payment thereof and for all other purposes and neither the District nor the Registrar shall be bound by any notice or knowledge to the contrary, whether such Series 2015 Bond shall be overdue or not. All payments of or on account of interest to any registered owner of any Series 2015 Bond and all payments of or on account of principal to the registered owner of any Series 2015 6
Bond shall be valid and effectual and shall be a discharge of the District and the Registrar, in respect of the liability upon the Series 2015 Bonds or claim for interest, as the case may be, to the extent of the sum or sums paid. Any Series 2015 Bond may be transferred pursuant to its provisions at the designated corporate trust office of the Registrar by surrender of such Series 2015 Bond for cancellation, accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner in person or by such owner's duly authorized agent. To the extent of the denominations authorized for the Series 2015 Bonds, one Bond may be transferred for several such Bonds of the same interest rate and maturity and for a like aggregate principal amount, and several such Bonds may be transferred for one or several such Bonds, respectively, of the same interest rate and maturity and for a like aggregate principal amount. In every case of transfer of a Bond, the surrendered Bond shall be canceled and destroyed. The Registrar may impose a charge sufficient to defray all costs and expenses incident to registrations of transfer and exchanges. In each case the Registrar shall require the payment by the owner requesting exchange or transfer of any tax or other governmental charge required to be paid with respect to such exchange or transfer. The District and the Registrar shall not be required to transfer any Series 2015 Bond during any period from any Record Date until its immediately following Interest Payment Date or to transfer any Series 2015 Bond called for redemption for a period of 30 days immediately preceding the date fixed for redemption. SOURCES AND APPLICATIONS OF FUNDS Following are the estimated sources and applications of funds: Sources of Fund s: Par Amount of Series 2015 Bonds $1,345.000.00 Total $1.345.000.00 Applications of Fund s: Deposit to Construction Fund $1,329,368.75 Payment of Issuance Costs (including Underwriter's Discount) 15,631.25 Total $1.345.000.00 DEBT SERVICE SCHEDULE The following schedule sets forth the debt service requirements in each calendar year for payment of the principal of and the interest on the Series 2015 Bonds, which amounts are to be paid from the levy of the limited tax described herein: Calendar Year Ending December 31 PrinciDal Interest Total 2015 $ 130,000 $ 14,080.72 $ 144,080.72 2016 130,000 17,020.00 147,020.00 2017 130,000 16,240.00 146,240.00 2018 130,000 15,200.00 145,200.00 2019 130,000 13,900.00 143,900.00 2020 135,000 12,275.00 147,275.00 2021 135,000 10,385.00 145,385.00 2022 140,000 8,225.00 148,225.00 2023 140,000 5,775.00 145,775.00 2024 145.000 3.045.00 148.045.00 Total S 1.345.000 S116.145.72 XI.461.145.72 7
General NEBRASKA DEVELOPMENTS RELATED TO BUDGETS AND TAXATION The District's principal sources of revenue for its general fund are local property taxes and State Aid. Local property taxes constitute the District's largest revenue sources, but are subject to certain limitations as discussed below. State Aid for each school district is determined annually based on student adjustment weightings and a variety of other factors including taxable valuations and per-student costs. The system of assessing and taxing personal property by the State for purposes of local ad valorem taxation for support of local political subdivisions, including the District, has from time to time been the object of controversy, legal challenges, constitutional initiative petitions and legislative action. Budget and Levy Limitations Budget Limitations. The Nebraska Legislature has imposed budget limitations and property tax restrictions on Nebraska political subdivisions, including public school districts, intended to reduce the level of property taxation and expenditures within the State. Budget limitations relating to school districts (Section 79-1023 et seq., Reissue Revised Statutes of Nebraska, as amended, and related sections, the "Budget Limitations") limit the growth in general fond expenditures for school districts. Tax levy limitations (Section 77-3442 et seq., Reissue Revised Statutes of Nebraska, as amended, and related sections, the "Levy Limitations") provide for an overall limitation on tax rates levied by school districts. The Budget Limitations, because they apply only to general fund expenditures, do not limit the budgeting of expenditures for debt service on bonded indebtedness, nor do they limit building fund and certain other special fund expenditures. Similarly, the Levy Limitations expressly exclude property tax levies relating to bonded indebtedness (other than bonded indebtedness incurred by a school district pursuant to Section 44-4317, Reissue Revised Statutes of Nebraska, as amended), certain lease-purchase obligations approved prior to July 1, 1998 and building fond levies relating to projects established prior to April 1, 1996; provided, however, that any combined levy of a school district in excess of the greater of (a) $1.20 per one hundred dollars ($100) of taxable value or (b) the maximum levy authorized by a vote pursuant to Section 77-3444, Reissue Revised Statutes of Nebraska, as amended, except levies for bonded indebtedness approved by the voters of the school district and levies for the refinancing of such bonded indebtedness, is considered an unauthorized levy pursuant to Section 77-1606, Reissue Revised Statutes of Nebraska, as amended. As the Series 2015 Bonds are payable from the limited property tax levy authorized by the Act, and such tax levy when combined with the District's other tax levies (except any levies for voter-approved bonded indebtedness) do not exceed the greater of (a) or (b) as described above, such tax and corresponding expenditures are not subject to the Budget Limitations and are not expected to be subject to the Levy Limitations. Under the Budget Limitations, a school district may not increase its general fond operating expenditures more than its allowable growth rate established each year by the Nebraska Department of Education. A school district's allowable growth rate ranges from the basic allowable growth rate (which is equal to the base limitation set forth in Section 77-3446, Reissue Revised Statutes of Nebraska, as amended) and 3% above the base limitation. The base limitation is currently set at 2.5%. The base limitation is subject to modification from year to year by the Nebraska Legislature. The allowable growth rate for each school district is calculated based upon student population, certain cost factors and target budget levels established by the Nebraska Department of Education. The Budget Limitations are part of the system for determining aid from the State and are to be enforced through the office of the Auditor of Public Accounts of the State and the Nebraska Department of Education. State Aid may be withheld from governmental units which fail to comply. Such budgetary limitations do not apply to, among other things, revenue pledged to retire bonded indebtedness, such as the Series 2015 Bonds. 8
Levy Limitations. Under the Levy Limitations the rates for levying property taxes have been limited for each type of governmental unit in the State. The rate of levy for school districts, such as the District, may not levy more than $1.05 per one hundred dollars ($100) of taxable value. The District's general fund levy for the 2014-15 fiscal year is set at $1.040527 per one hundred dollars ($100) of taxable valuation, which includes certain exclusions permitted under the Levy Limitations, such as sums paid to certificated employees in exchange for voluntary termination of employment and special building funds and sinking funds established for construction, expansion or alteration projects commenced prior to April 1, 1996. In addition, property tax levies to pay bonded indebtedness (such as the Series 2015 Bonds) and lease-purchase contracts approved prior to July 1, 1998 are not included in such limitation (taxes to pay bonds issued by school districts pursuant to Section 44-4317, Reissue Revised Statutes of Nebraska, as amended, are included in such limitation, but the District has not issued any bonds pursuant to such statute). Any combined tax levy of a school district in excess of the greater of (a) $1.20 per one hundred dollars ($100) of taxable value or (b) the maximum levy authorized by a vote pursuant to Section 77-3444, Reissue Revised Statutes of Nebraska, as amended, except levies for bonded indebtedness approved by the voters of the school district and levies for the refinancing of such bonded indebtedness, is considered an unauthorized levy pursuant to Section 77-1606, Reissue Revised Statutes of Nebraska, as amended. Any tax levied to pay the principal of and interest on the Series 2015 Bonds is not expected to be subject to the Levy Limitations. Section 79-10,120, Reissue Revised Statutes of Nebraska, as amended, authorizes a building fund tax levy of not to exceed 14 cents ($0.14) on each one hundred dollars ($100) of taxable valuation. Funds collected from this tax levy may be used solely acquiring, constructing, erecting, altering, equipping and furnishing school buildings and additions thereto for elementary and high school grades. The District has utilized this levy in the past. The District is levying 1.0726 cents ($0.010726) per one hundred dollars ($100) of taxable valuation for the building fund for the 2014-15 fiscal year which is expected to generate approximately $92,000. Under current statutes such levying authority is subject to the Levy Limitations, but is not included within the budgeted expenditure limitations provided for in the Budget Limitations. Funds collected from the building fund levy cannot be used to pay the principal of and interest on the Series 2015 Bonds. State Aid State Aid is funded through the collection of statewide sales and income taxes. Legislative enactments in recent years have both increased and decreased the amounts of funds available for State Aid to school districts, as well as established and revised procedures and formulae for the distribution of State Aid to school districts. State Aid amounts fluctuate from year to year based upon factors set in the related statutes, and the District's State Aid amount could increase or decrease in future years. Motor Vehicle Taxes State law allocates to each school district 60% of the motor vehicle taxes and fees (less a 1% county treasurer collection fee) arising from motor vehicles within the school district. Motor vehicle valuations are not included in the District's property tax base, and the District, like other taxing subdivisions, receives distributions of taxes collected by Dakota County. State law further requires school districts to deposit such distributions of taxes into their general funds, and such moneys are not available to repay bonded indebtedness, including the Bonds. Additional Considerations The future methods for providing for financing school districts and other local units may be altered depending upon future actions taken by voters of the State under initiative and referendum provisions of the Nebraska constitution, future actions of the Nebraska Legislature and future decisions of Nebraska state and federal courts. 9
TAX MATTERS Federal Tax Matters Tax Opinions. In the opinion of Kutak Rock LLP, Bond Counsel, under existing laws, regulations, rulings and judicial decisions, interest on the Series 2015 Bonds is excludable from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax. The opinions described in the preceding sentence assume the accuracy of certain representations and compliance by the District with covenants designed to satisfy the requirements of the Code that must be met subsequent to the issuance of the Series 2015 Bonds. Failure to comply with such requirements could cause interest on the Series 2015 Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2015 Bonds. The District has covenanted to comply with such requirements. Notwithstanding Bond Counsel's opinion that interest on the Series 2015 Bonds is not a specific preference item for purposes of the federal alternative minimum tax, such interest will be included in adjusted current earnings of certain corporations, and such corporations are required to include in the calculation of alternative minimum taxable income 75% of the excess of such corporations' adjusted current earnings over their alternative minimum taxable income (determined without regard to such adjustment and prior to reduction for certain net operating losses). The accrual or receipt of interest on the Series 2015 Bonds may otherwise affect the federal income tax liability of the owners of the Series 2015 Bonds. The extent of these other tax consequences will depend upon such owner's particular tax status and other items of income or deduction. Bond Counsel expresses no opinion regarding any such consequences. Purchasers of the Series 2015 Bonds, particularly purchasers that are corporations (including S corporations and foreign corporations operating branches in the United States), property or casualty insurance companies, banks, thrifts or other financial institutions, certain recipients of social security or railroad retirement benefits, taxpayers otherwise entitled to claim the earned income credit, or taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry taxexempt obligations, should consult their tax advisors as to the tax consequences of purchasing or owning the Series 2015 Bonds. Bank Qualified. The District has represented that it does not expect to issue greater than $10,000,000 of tax-exempt obligations during the 2015 calendar year (excluding certain private activity bonds and refunding bonds), and in the Resolution it has designated the Series 2015 Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code. Accordingly, Bond Counsel is of the opinion that in the case of certain banks, thrift institutions or other financial institutions owning the Series 2015 Bonds, a deduction is allowed for 80% of that portion of such institutions' interest expense allocable to interest on the Series 2015 Bonds. Bond Counsel expresses no opinion with respect to any deduction for federal tax law purposes of interest on indebtedness incurred or continued by a holder of the Series 2015 Bonds or a related person to purchase or carry the Series 2015 Bonds. Backup Withholding. As a result of the enactment of the Tax Increase Prevention and Reconciliation Act of 2005, interest on tax-exempt obligations such as the Series 2015 Bonds is subject to information reporting in a manner similar to interest paid on taxable obligations. Backup withholding may be imposed on payments made after March 31, 2007 to any bondholder who fails to provide certain required information including an accurate taxpayer identification number to any person required to collect such information pursuant to Section 6049 of the Code. The reporting requirement does not in and of itself affect or alter the excludability of interest on the Series 2015 Bonds from gross income for federal income tax purposes or any other federal tax consequence of purchasing, holding or selling tax-exempt obligations. No Other Opinion. Bond Counsel expresses no other opinion regarding the federal tax consequences arising with respect to the Series 2015 Bonds. 10
State Tax Matters In the opinion of Bond Counsel, under the existing laws of the State, the interest on the Series 2015 Bonds is exempt from Nebraska state income taxation so long as it is exempt for purposes of the federal income tax. Bond Counsel expresses no other opinion regarding the State or local tax consequences arising with respect to the Series 2015 Bonds. Changes in Federal and State Tax Law From time to time, there are legislative proposals in the Congress and in the states that, if enacted, could alter or amend the federal and state tax matters referred to above or adversely affect the market value of the Series 2015 Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether if enacted it would apply to bonds issued prior to enactment. In addition, regulatory actions are from time to time announced or proposed and litigation is threatened or commenced which, if implemented or concluded in a particular manner, could adversely affect the market value of the Series 2015 Bonds. It cannot be predicted whether any such regulatory action will be implemented, how any particular litigation or judicial action will be resolved, or whether the Series 2015 Bonds or the market value thereof would be impacted thereby. Purchasers of the Series 2015 Bonds should consult their tax advisors regarding any pending or proposed legislation, regulatory initiatives or litigation. The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of issuance and delivery of the Series 2015 Bonds and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any pending legislation, regulatory initiatives or litigation. BONDHOLDERS' RISKS The Series 2015 Bonds are payable from ad valorem taxes upon the taxable property in the District, subject to the limitations as set forth in the Act. The following items, among others, should be considered by potential investors: 1. Series 2015 Bonds Not d. Rate The Series 2015 Bonds have not been rated, and the District does not expect to apply for a rating with respect thereto. Certain investors restrict their investments only to obligations which have been rated and the absence of a rating can affect the ease of marketability for nonrated obligations. 2. Limitation of Rights upon Insolvenc y. The United States Bankruptcy Code enables debtors, including municipalities, counties and school districts, which are insolvent to obtain relief through petition and plan which may result in the modification or delay of payments to creditors, including bondholders. In the event of any insolvency upon the part of the District, the holders of the Series 2015 Bonds would represent general unsecured obligations of the District. The extent to which the exception from limitations upon overall tax rates provided for in existing legislation, including the provisions of "Budget Limitations" and "Tax Levy Limitations" (as such terms are defined and described above under the heading "NEBRASKA DEVELOPMENTS RELATED TO BUDGETS AND TAXATION" herein), might entitle bondholders to be treated as a separate class or otherwise given priority over other unsecured claimants is a matter that would be subject to future determinations of Nebraska state and federal courts interpreting and applying both state law and the United States Bankruptcy Code. Procedures under the Bankruptcy Code or other insolvency laws could result in delays in payment and modifications of payment rights. The State has authorized its political subdivisions to seek relief under the United States Bankruptcy Code by statute. 3. Nebraska Developments Related to Budgets and Taxatio n. The Nebraska Legislature frequently takes actions which reduce the reliance of local governmental units on property taxation. For a brief discussion of taxation by Nebraska school districts, see "NEBRASKA DEVELOPMENTS RELATED TO BUDGETS AND TAXATION" herein. 11
4. Reduced State Revenue s. The State, like many other states, has experienced in recent years decreased collections of revenues relating to general economic conditions as they impact enterprises throughout the State. Such decreased collections resulted in lower forecasts of revenues for the budgeting purposes of the State. In response to this change in revenue receipts and forecasts, the Nebraska Legislature increased certain taxes and has also enacted certain changes reducing State expenditures, including certain State contributions to cities and other political subdivisions. Further consideration of decreased aid to local governments, including school districts, may occur in regular legislative sessions and, possibly, in one or more special sessions. Although revenue receipts and forecasts, as publicly reported, have recently improved, there can be no assurance concerning levels of expenditure by the State affecting school districts. LITIGATION Upon delivery of the Series 2015 Bonds, the District will certify that there is no litigation, suit or other proceeding of any kind pending, or to its knowledge threatened, (a) seeking to restrain or enjoin the issuance or delivery of the Series 2015 Bonds, (b) contesting, disputing or affecting in any way (i) the legal organization of the District or its boundaries, (ii) the right or title of any of its officers to their respective offices, (iii) the legality of any of its official acts shown to have been done in the transcript relating to the Series 2015 Bonds, (iv)the constitutionality or validity of the Series 2015 Bonds or the indebtedness represented by the Series 2015 Bonds, or any of the proceedings had in relation to the authorization, issuance or sale thereof, (v) the legality, validity or enforceability of the Resolution or any of the Bond documents, (vi) the power or authority of the District to levy and collect ad valorem taxes as set forth in the Resolution, subject to the limitation set forth in the Act, to pay the principal of and interest on the Series 2015 Bonds, or (vii) the federal or State tax-exempt status of the interest on the Series 2015 Bonds, or (c) that could have a material adverse effect on the financial condition or operations of the District or its ability to make payments on the Series 2015 Bonds or to perform its agreements and obligations under the Resolution or the Bond documents. INDEPENDENT AUDITORS The financial statements of the District, as of and for the year ended August 31, 2014, included in Appendix B to this Official Statement, have been audited by Erickson & Brooks, Certified Public Accountants, Fremont, Nebraska, Certified Public Accountants, (the "Auditors") as stated in the report appearing herein. The Auditors have not been asked to review the information in this Official Statement, to express any opinion with respect thereto, to update or revise their report in light thereof or to provide their consent to the inclusion of the financial statements and report in this Official Statement. CONTINUING DISCLOSURE Pursuant to a Continuing Disclosure Agreement (the "Continuing Disclosure Agreement"), the District will provide (a) within 270 days following the end of each fiscal year, commencing with the fiscal year ending August 31, 2015, to the Municipal Securities Rulemaking Board ("MSRB") in an electronic format accompanied by identifying information as prescribed by the MSRB, the District's audited financial statements and certain financial information and operating data relating to the District and (b) notice to the MSRB of the occurrence of certain enumerated events, all pursuant to the requirements of Rule 15c2-12 promulgated by the Securities and Exchange Commission (the "Rule"). The proposed form of the Continuing Disclosure Agreement by and between the District and First National Bank of Omaha as dissemination agent is attached to this Official Statement as Appendix C. All annual reports and notices of listed events required to be filed by the District or the dissemination agent pursuant to the Continuing Disclosure Agreement must be submitted to the MSRB through the MSRB's Electronic Municipal Market Access system ("EMMA"). EMMA is an internet-based, online portal for free investor access to municipal bond information, including offering documents, material 12
event notices, real-time municipal securities trade prices and MSRB education resources, available at. www.emma.msrb.org Nothing contained on EMMA relating to the District or the Series 2015 Bonds is incorporated by reference in this Official Statement. A failure by the District to comply with the Continuing Disclosure Agreement will not constitute a default under the Resolution or with respect to the Series 2015 Bonds, and the sole remedy under the Continuing Disclosure Agreement following any such failure shall be an action to compel performance. Any such failure must be reported in accordance with the Rule and must be considered by any broker, dealer or municipal securities dealer before recommending the purchase or sale of the Series 2015 Bonds in the secondary market. Consequently, such a failure may adversely affect the transferability and liquidity of the Series 2015 Bonds and their market price. The Rule requires that the District disclose in this Official Statement any instances in the previous five years in which the District failed to comply, in all material respects, with any previous undertakings in a written contract or agreement specified in paragraph (b)(5)(i) of the Rule. In connection with one or more series of bonds previously issued by the District, the District undertook to provide certain ongoing disclosure regarding the District ("Undertakings") pursuant to written agreements specified in paragraph (b)(5)(i) of the Rule, which were substantially similar to the Continuing Disclosure Agreement. Each Undertaking obligated the District to disclose, by the deadline set forth in each such Undertaking, the District's Annual Report, which consisted o f the District's audited financial statement and certain financial information and operating data concerning the District. The District failed to timely file its Annual Report for the fiscal year ended August 31, 2013. LEGAL MATTERS All legal matters incidental to the authorization, issuance, sale and validity o f the Series 2015 Bonds are subject to the approval of Kutak Rock LLP, Omaha, Nebraska, as Bond Counsel to the District. Bond Counsel has participated in the preparation of this Official Statement, but has not been engaged nor undertaken to review the accuracy, completeness, or sufficiency of this Official Statement or other offering material relating to the Series 2015 Bonds and expresses no opinion relating thereto except for the matters appearing under the heading "TAX MATTERS" herein. UNDERWRITING The Series 2015 Bonds are being purchased by Ameritas Investment Corp., Omaha, Nebraska (the "Underwriter"). The Underwriter has agreed, subject to certain conditions, to purchase the Series 2015 Bonds from the District at a price equal to 99.0% o f the aggregate face amount thereof, plus accrued interest, if any. The Underwriter will purchase all such Series 2015 Bonds i f any such Series 2015 Bonds are purchased. The Underwriter intends to offer the Series 2015 Bonds to the public initially at the offering prices set forth on the cover page o f this Official Statement, which may subsequently change without any requirement o f prior notice. The Underwriter reserves the right to join with dealers and other underwriters) in offering the Series 2015 Bonds to the public. The Underwriter may offer and sell Bonds to certain dealers (including dealers depositing Series 2015 Bonds into investment trusts) at prices lower than the public offering prices. In connection with this offering, the Underwriter may overallot or effect transactions that stabilize or maintain the market price o f 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. While the Underwriter expects, insofar as possible, to maintain a secondary market for the Series 2015 Bonds, no assurance can be given concerning the future maintenance of such a market by the Underwriter or others, and prospective purchasers of the Series 2015 Bonds should therefore be prepared to hold their Bonds to their maturity. 13
The Underwriter is not acting as a financial advisor to the District in connection with the offer and sale of the Series 2015 Bonds. MISCELLANEOUS All estimates and assumptions herein have been made on the basis of the best information available and are believed to be reliable, but no representations whatsoever are made that such estimates or assumptions are current 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 as representations of fact. DAKOTA COUNTY SCHOOL DISTRICT 0011 14
APPENDIX A SELECTED FINANCIAL INFORMATION OF THE DISTRICT (December 1,2014) Dakota County School District 0011 (South Sioux City Community Schools) Taxable Valuation - General Fund (2014) Taxable Valuation - Bond Fund (2014) General Obligation Debt Limited Tax Bonds (this issue) Overlapping Bonded Debt Dakota County: Taxable Valuation (2014) General Obligation Bonded Debt Highway Allocation Fund Pledge Bonds Lease Purchase Debt (53.07% applicable to District) Underlying Bonded Debt City of South Sioux City: Taxable Valuation (2014) General Obligation Bonded Debt Flood Control BANs Lease Purchase (100% applicable to District) Revenue Debt City of Dakota City: Taxable Valuation (2014) General Obligation Bonded Debt Municipal Facilities Corp Bonds (100% applicable to District) Debt Ratios Direct Debt to Taxable Valuation (approx) Total Direct, Overlapping & Underlying Debt Direct, Overlapping & Underlying Debt to Taxable Valuation (approx) Direct Debt per Capita (approx) (District -13,912 est. population) $857,738,060 839,336,348 9,780,000 1,345,000 $1,616,238,281 500,000 1,675,000 160,149 $ 1,239,264 $575,475,262 12,085,000 1,645,000 5.305.000 $ 19,035,000 $ 37,792,680 $72,810,108 3,230,000 195.000 $3,425,000 1.33% $34,824,264 4.06% $799.67 THE DISTRICT South Sioux City Community Schools includes six elementary schools, one middle school and one senior high school with a current enrollment of approximately 3,925 students. The District includes the Cities of South Sioux City (District headquarters) and Dakota City ( county seat of Dakota County). The District is a Class III district with an A rating by the Nebraska State Department of Education. The District ranks 13th in the state in enrollment for Class II-V districts. A-1
Administration The District is governed by a Board of Education, which is composed of six elected Board members. The Superintendent of Schools is an appointed official. The Board is responsible for the organizational and financial control of the District. The Superintendent is responsible for the administration of the District's business affairs and the supervision of instruction. The present members of the Board of Education are as follows: Rick Robinette MarciaMahon Janice Hohenstein... Tom Gesell Kevin O'Dell Patricia Slaughter Richard J. Feauto, Jr. President Vice President Secretary Director Director Director School District Treasurer The Superintendent of Schools is Dr. Vernon Fisher, who joined the South Sioux City Community Schools in June of 2010. He is assisted by the following staff members: Jessica Major Allyson Olson Richard Feauto, Jr Lance Swanson Rebecca Eckhardt Tracy Heilman Jill Gill Doyle Smith Director of Elementary Education Director of Secondaiy Education Director of Business Operations Director of Technology Director of Student Services Director of Program Evaluation HR Coordinator Director of Buildings & Grounds Budgetary Process The Superintendent, with input from staff, principals and interested community groups, prepares a recommended budget and submits it to the Board, which may modify it. The Board adopts a budget which is sub mitted along with the Annual Financial report to the State of Nebraska Department of Education. The budget is designated as the Official Budget and governs the general operations for the fiscal year unless amended by the Board. The budget process begins in January and is passed at the regular Board of Education meeting in September. Under applicable statutes limitations are imposed upon increases which may be made in the District's general fund budget from year to year. See "NEBRASKA DEVELOPMENTS RELATED TO BUDGETS AND TAXATION" herein. School District Budget Limitations The District's principal sources of revenue for its general fund are local property taxes and state aid. State aid is allocated to school districts based upon statutory formulas which take into consideration taxable valuations, student population, per student costs and a variety of other factors. The District's current budget is governed by the provisions of the "Budget Limitations" which are discussed under the heading "NEBRASKA DEVELOPMENTS RELATED TO BUDGETS AND TAXATION". The "Levy Limitations" (as described below), also discussed under the heading "NEBRASKA DEVELOPMENTS RELATED TO BUDGETS AND TAXATION," limit the current tax levies and will also limit such levies for subsequent fiscal years. Such limitations do not affect the District's ability to levy and collect taxes sufficient to pay the principal of and interest on the Series 2015 Bonds. A-2
General Fund Revenue Sources The District's General Fund revenues are derived from State appropriations, from local sources of funds and from property taxes. The District budgeted $43,216,600 for the 2014-15 fiscal year to be received from property taxes for its general fund. The District also anticipates the following receipts for such fiscal year from the sources shown: State Apportionment State Aid Other $ 525,000 26,619,360 16,166,640 The amount of State aid to be paid to the District for the 2014-15 school year is projected to be $26,619,360, an increase of $1,217,223 from the $25,402,137 of State aid received in 2013-14. The District is restricted in charging student fees for certain activities and is required to waive such fees for students who are eligible to participate in the federal student lunch program. School districts with larger percentages of such students face greater expense related to activities for which charges are permitted. Employee Relations The District's teachers are represented by the South Sioux City Education Association. Negotiations for the teachers' contract for the 2014-15 school year were completed in February of 2014. Nebraska School Employees Retirement System The Nebraska School Employees Retirement Act (Sections 79-901 to 79-977, Reissue Revised Statutes of Nebraska, as amended, the "Retirement Act") establishes a retirement system for school employees in the State (the "System"), except employees of the Omaha Public schools, which are governed by a separate set of statutes. The System became effective (under prior statutes) in 1945. The Retirement Act requires payments by the State to fund, based upon actuarial calculations, unfunded accrued liabilities of the System which are not funded by the required contributions of participating school employees and contributions of the school districts. Section 79-958 of the Retirement act requires school district employees to contribute 9.78% of pay. Section 79-958 currently requires school districts to contribute an amount equal to 101% of the contributions of their employees. The current State of Nebraska contribution rate is 2%. The Retirement Act, including the employee and state contribution rates, was amended in the 2013 legislative session when the Nebraska Legislature passed LB 553 over the Governor's veto. The unfunded accrued liability as of July 1, 2014 for all covered employees within the Nebraska School Employee Retirement System amounted to $1,804,088,610. Actuarial Valuation Report as of My 1, 2014 by Cavanaugh Macdonald Consulting, LLC reports a positive contribution margin for the current plan year of 3.27%, resulting in no additional state funding required for that year. Source: School Retirement System of the State of Nebraska - Actuarial Valuation Report as of July 1,2014, Sixty- Second Actuarial Report for State Fiscal Year ending June 30, 2016 and System Plan Year Beginning July 1, 2014. A-3
SELECTED TAX, ECONOMIC AND DEMOGRAPHIC INFORMATION Statistical Data Five-Year Staffing Levels (Full-Time Equivalent) Other Non- Office Para- Classified Administration Certified Personnel professionals Trade Persons Total 2014-15 22 323 33 115 51 544 2013-14 23 323 33 115 51 545 2012-13 20 319 33 115 52 539 2011-12 21 325 33 115 46 540 2010-11 20 327 38 122 51 558 Source: School District Enrollment Trend School Year PreK Grades K-6 Grades 7-8 Grades 9-12 Total 2009-10 132 2,012 551 1,105 3,800 2010-11 128 1,951 586 1,108 3,773 2011-12 137 1,914 564 1,116 3,731 2012-13 200 1,934 550 1,159 3,843 2013-14 189 1,919 554 1,199 3,861 2014-15 180 1,960 582 1,199 3,921 (1 ) 2015-16 (1 ) 2016-17 185 1,970 590 1,210 3,955 190 1,980 600 1,220 3,990 (1 ) 2017-18 (1 ) Projected Source: School District 195 1,990 610 1,230 4,025 A-4
Values for Tax Lew Purposes DISTRICT TAX INFORMATION Increase (Decrease) vs. Prior Year School Year Valuation Amount Percent 2014-15 $857,738,060 $25,868,488 3.11% 2013-14 831,869,572 23,380,058 2.89 2012-13 808,489,514 37,083,735 4.81 2011-12 771,405,779 14,963,953 1.98 2010-11 756,441,826 Source: School District District Tax Levy History ($ per $100 taxable valuation) Qual Cap Year General Bond Building Purpose Total 2014 $1.0405 $0.1364 $0.0107 $0.0173 $1.2049 2013 1.0410 0.1369 0.0270-0- 1.2049 2012 1.0414 0.1409 0.0254-0- 1.2077 2011 1.0468 0.203 6 0.0134-0- 1.2638 2010 1.0430 0.2116 0.0109-0- 1.2655 Schedule of Tax Collections (General Fund) School Year Taxes Certified Amount Collected % Collected 2014-15 $8,925,000 n/a n/a 2013-14 8,660,000 $8,286,976 95.7% 2012-13 8,420,000 9,004,672 106.9 2011-12 8,075,200 7,777,097 96.3 2010-11 7,889,800 7,489,993 94.9 General ADDITIONAL INFORMATION South Sioux City (the "City") is located in the northeast corner of Nebraska in Dakota County and is served by U.S. Highways 77 and 20 and State Highway 35. Interstate 29 is located approximately 1 mile to the east of the City. The economy of the area is based primarily on agriculture and agribusiness and A-5
beef, pork, grain processing along with allied support industries dominate the industrial sector. The Union Pacific and Burlington Northern Santa Fe Railroads serve the community. Commercial air service is available at the Sioux Gateway Airport, located approximately seven miles south of the City, adjacent to 1-29, which has two paved and lighted runways (6,599 feet and 8,999 feet). Martin's Field, located two miles west of the City, has two runways (a 3,277-foot paved and lighted runway and a 1,950-foot turf runway) and provides services for private planes. The City's electrical system covers seven square miles. The distribution system's primary voltage is 12,470Y and is supplied by seven substations located throughout the City. Eighty percent of the electrical system is underground. The system consists of 4,691 customers. Electricity is purchased from Nebraska Public Power District. Nebraska Public Power District provides the City with management, operation and maintenance services under a contract with the City. The City's water utility system has a storage capacity of 1,000,000 gallons and includes three towers and five wells. The average daily consumption is 1,813,000 gallons per day and peak consumption is approximately 4,700,000 gallons per day. There are 3,655 metered customers. The City has a contract to purchase any water requirements in excess of amounts which can be supplied from its wells from the City of Sioux City, Iowa; water is treated prior to purchase by the City. Treatment of the City's sewage is currently provided by Sioux City, Iowa, which bills the City monthly for service. The current capacity of the sewer facilities is 30 million gallons per day, with approximately 1.6 million gallons per day attributable to South Sioux City. There are 3,523 metered customers. On March 24, 2014, the City approved a twenty-year agreement with Big Ox Energy, Inc. and 2014 Acquisitions 10 LLC ("Owner"), for construction and operation of a sanitary sewer pretreatment plant to be located in the City's Industrial Park that will be financed and owned by 2014 Acquisitions 10 LLC. The City is required to construct and maintain certain Interconnection Transmission Facilities necessary to connect the City's sewers with the plant. Upon completion of such plant, approximately one-half of the City's wastewater (including anticipated loading for expanding enterprises) will be processed by the contractor's new wastewater treatment plant and approximately one-half will continue to be piped to Sioux City, Iowa, for processing. The District is a member of Educational Service Unit 1, which is headquartered in Wakefield and serves six counties. The ESU provides services for visually handicapped programs, physical therapy, mentally handicapped programs and learning disability workshops. Northeast Community College, with its main campus located in Norfolk and off-campus centers located throughout the region, offers more than 70 technical, vocational, business and liberal arts programs. Also serving the community are Briar Cliff College, Morningside College and Western Iowa Tech Community College located in Sioux City, Iowa, five miles east of South Sioux City, and the University of South Dakota, located in Vermillion, South Dakota, 35 miles northwest of South Sioux City. Values of Overlapping Subdivisions for Tax Levy Purposes Dakota County Year School District 0011 2010 2011 2012 2013 2014 $756,441,826 771,405,779 808,489,514 831,869,572 857,738,060 Dakota County $1,190,165,517 1,237,533,623 1,327,189,899 1,474,379,709 1,616,238,281 City of South Sioux City $540,480,775 550,997,434 552,615,819 561,984,828 575,475,262 City of Dakota City $70,883,528 71,469,057 71,991,391 72,156,153 72,810,108 A-6
Tax Levy for Overlapping/Underlying Subdivisions 2014 Dakota County $0.3666 Dakota City 0.5511 South Sioux City 0.4043 Agricultural Society 0.0063 Historical Society 0.0016 Papio-Missouri NRD 0.0328 ESU #1 0.0150 NE Tech. College 0.0990 2013 $0.4229 0.5510 0.4043 0.0069 0.0016 0.0328 0.0150 0.0993 2012 $0.4491 0.5429 0.4043 0.0077 0.0017 0.0328 0.0150 0.0983 2011 2010 $0.4497 $0.4456 0.5429 0.5429 0.3991 0.3991 0.0083 0.0086 0.0018 0.0018 0.0328 0.0328 0.0150 0.0150 0.0953 0.0985 Ten Largest Taxpayers Taxpayer IBP Inc. (Tyson Foods Inc) Tyson Fresh Meats, Inc. Beef Products Inc. CHS, Inc. 21C Oats Inc. Wall-Mart Realty Co. Richardson Milling, Inc. Norfolk Building, LLC Great West Casually Co. IRET Properties ^Real Estate Only ^Personal Property Only ^Real Estate and Personal Property Source: Dakota County Assessor Type of Business Meat Processing Meat Processing Meat Processing Energy, Grains & Foods Oat Milling Retail Food Commodities Distribution/Producers Real Estate Insurance Apartment Complex 2014 %of Valuation Total (1 ) $55,566,590 6.48% (2 ) 26,850,887 3.13 (3 ) 21,800,110 2.54 (2 ) 13,553,031 1.58 (2 ) 9,764,536 1.14 (1 ) 9,497,300 1.11 (1 ) 8,741,065 (1 ) 7,577,920 (1 ) 7,428,120 (1 ) 6,690,535 1.02 0.88 0.87 0.78 Population South Sioux City Dakota County 2000 Census 11,925 20,253 2010 Census 13,353 21,006 2013 Estimate 13,424 21,279 Source: U.S. Census Bureau; Nebraska Databook Retail Sales (000s) Year 2009 2010 2011 2012 2013 Source: NE Dept. of Revenue City o f South Sioux City $127,664 127,731 133,056 133,947 134,013 Dakota County $141,937 142,064 147,369 148,586 148,909 A-7
Major Employers - Metro Area Company Product No. of Employees Tyson Fresh Meats Beef slaughter & processing 5,256 City Schools Education 474 Great West Casualty Co./ Joe Morton & Son, Inc. Insurance 393 Walmart Retail 330 BPI, Inc. Beef processing 191 HyVee Grocery 173 Marina Inn Motel/restaurant 150 Sara Lee B akery Group Bakery products 135 Gerkin Windows & Doors Windows & doors 135 Phillips Kiln Repair service 113 Sioux City Foundry Ductile gray iron foundry 108 City of South Sioux City Government 87 Source: City of South Sioux City Employment The State of Nebraska Department of Labor reports adjusted) for Dakota County: Total Year Labor Force 2009 11,079 2010 11,490 2011 11,212 2012 11,410 2013 11,587 Source: Nebraska Department of Labor Financial Institutions Financial services are provided by Bank of the West (Branch of San Francisco, CA), F & M Bank (Branch of West Point), Great Southern Bank (Branch of Reeds Spring, MO), Iowa-Nebraska State Bank, Siouxland Federal Credit Union and Siouxland National Bank all located in South Sioux City, and Siouxland Federal Credit Union (Branch of South Sioux City) located in Dakota City, Nebraska. Health Care the following labor force data (not seasonally Average No. Unemployment Employed Rate 10,404 6.1% 10,572 8.0 10,480 6.5 10,679 6.4 10,788 6.9 Health care services are provided by Mercy Medical Center and St. Luke's Regional Medical Center (694 total beds) which are both located in Sioux City, Iowa. Mercy Medical Center offers a full range of medical services including a comprehensive cardiology program with the only open heart surgery program in the area. It employs approximately 2,060 people. St. Luke's, a part of St. Luke's Health System of Sioux City, Iowa, provides family practice physicians to the area, occupational and business health services, physical therapy as well as other health-related services and employs approximately 1,800 people. Two privately-owned nursing home facilities are also located in the City. A-8
Recreation Scenic Park in South Sioux City includes a five-field Riverfront baseball/softball complex and the Jeff C. Dible 15-field soccer complex. The Greater Sioux Cities tri-state area (which includes South Sioux City) provides NASCAR stock car racing, national championship caliber junior 'A' hockey, nationally ranked men's and women's college basketball and college football. The region offers a multitude of public and private golf courses, tennis courts, swimming pools and athletic health clubs. Approximately 60 city parks totaling more than 1,700 acres are available in the tri-state area including Bacon Creek Park which has a 34-acre lake offering fishing and boating. Housing The US Census Bureau reports the following averages for Dakota County, South Sioux City and the State ofnebraska: Homeownership rate, 2009-2013 Median value of owner-occupied housing units, 2009-2013 Median household income, 2009-2013 City of South Sioux City 56.6% $98,800 $43,865 Dakota County 64.4% $103,300 $47,069 State of Nebraska 67.0% $128,000 $51,672 A-9
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APPENDIX B DAKOTA COUNTY SCHOOL DISTRICT NO. Oil SOUTH SIOUX CITY COMMUNITY SCHOOLS FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31,2014
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DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS FINANCIAL STATEMENTS FOR THE YEAR ENDED AUGUST 31, 2014 ERICKSON & BROOKS Certified Public Accountants FREMONT, NEBRASKA
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA AUGUST 31.2014 TABLE OF CONTENTS INDEPENDENT AUDITOR'S REPORT 1-2 BASIC FINANCIAL STATEMENTS - CASH BASIS: Government-Wide Financial Statements: Statement of Net Position 3 Statement of Activities 4-5 Fund Financial Statements: Statement of Assets and Fund Balances - Governmental Funds 6 Statement of Receipts, Disbursements, and Changes in Fund Balances - Governmental Funds 7 Statement of Net Position - Proprietary Fund 8 Statement of Receipts, disbursements, and Changes in Net Position - Proprietary Fund 9 Statement of Net Position and Receipts, Disbursements and Changes in Net Position - Fiduciary Funds 10 Notes to the Financial Statements 11-18 OTHER SUPPLEMENTARY INFORMATION Individual Fund Budgetary Comparison Schedules 19-29 Supporting Schedule of Cash Disbursements - General Fund 30-34 REPORTS REQUIRED BY GOVERNMENT AUDITING STANDARDS AND OMB CIRCULAR A-133: Schedule of Expenditures of Federal Awards 35 Notes to Supplementary Schedule of Expenditures of Federal Awards 36 Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 37-38 Independent Auditor's Report on Compliance For Each Major Program and on Internal Control over Compliance In Accordance with OMB Circular A-133 39-40 Schedule of Findings and Questioned Costs 41-42 Schedule of Prior Year Audit Findings 42 Page
StHcAs^ort/ CERTIFIED PUBLIC ACCOUNTANTS STEVEN E. PRIBNOW DANIEL J. WIESEN KENT P. SPEICHER 2195 NORTH BROAD STREET P.O. BOX 1270 FREMONT, NEBRASKA 68026-1270 INDEPENDENT AUDITOR'S REPORT (402) 721-3454 FAX (402) 721-2894 eb-cpa.com Board of Education Dakota County School District No. 011 South Sioux City Community Schools South Sioux City, Nebraska Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, and each major fund of Dakota County School District No. 011 - South Sioux City Community Schools ("School District"), as of and for the year ended August 31, 2014, and the related notes to the financial statements, which colfectively comprise the School District's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with the cash basis of accounting described in Note 1; this includes determining that the cash basis of accounting is an acceptable basis for the preparation of the financial statements in the circumstances. Management is aiso responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to error or fraud. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the School District's preparation and fair presentation of the financial statements in order to design audit procedures.that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the School District's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position - cash basis of the governmental activities, the business-type activities, and each major fund of Dakota County School District No. 011 - South Sioux City Community Schools, as of August 31, 2014, and the respective changes in financial position - cash basis, thereof for the year then ended in accordance with the basis of accounting as described in Note 1. 1 -
Sfw/tsori/ & (Mroo/i&s Basis of Accounting We draw your attention to Note 1 of the financial statements, which describes the basis of accounting. The financial statements are prepared on the cash basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to that matter. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the School District's basic financial statements. The accompanying supplementary information as listed on pages 19 through 34 are presented for purposes of additional analysis and are not a required part of the basic financial statements. The accompanying schedule of expenditures of federal awards as listed on pages 35 and 36 is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the basic financial statements. The accompanying supplementary information as listed on pages 19 through 34 and the schedule of expenditures of federal awards as listed on pages 35 and 36 are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 30, 2014, on our consideration of the School District's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the School District's internal control over financial reporting and compliance. ERICKSON & BROOKS Fremont, Nebraska October 30, 2014-2-
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA STATEMENT OF NET POSITION - CASH BASIS AUGUST 31. 2014 Governmental Activities Primary Government Business-type Activities Total ASSETS Cash and cash equivalents Due from County Treasurer $14,192,806 2,041,749 $ 306,414 $ 14,499,220 2,041,749 Total net assets $16,234,555 $ 306,414 $ 16,540,969 NET POSITION Restricted Unrestricted $ 3,480,114 12,754,441 $ 306,414 $ 3,480,114 13,060,855 Total net position $16,234,555 $ 306,414 $16,540,969 The accompanying notes are an integral part of these financial statements, -3-
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY-SCHOOLS SOUTH SIOUX CITY. NEBRASKA STATEMENT OF ACTIVITIES - CASH BASIS FOR THE YEAR ENDED AUGUST 31. 2014 Functions/Proarams Net (Disbursement) Receipt Program Receipt s and Changes in Net Assets Operating Primary Government Charges for Grants and Governmental Business-type Disbursements Services Contributions Activities Activities Total Governmental activities: Instruction $ 27,226,736 $ $ $ (27,226,736) $ $ (27,226,736) Pupil support services 1,579,108 - - (1,579,108) - (1,579,108) Staff support services 2,262,239 - - (2,262,239) - (2,262,239) General administration 728,437 - - (728,437) - (728,437) Office of principal 1,031,730 - - (1,031,730) - (1,031,730) Business services 1,599,897 - - (1,599,897) - (1,599,897) Maintenance and operations of buildings 4,758,427 - - (4,758,427) - (4,758,427) Pupil transportation 958,845 - - (958,845) - (958,845) Early retirements or terminations 126,759 - - (126,759) - (126,759) State categorical programs 21,743 - - (21,743) - (21,743) Federal programs 2,493,127 2,795,062 301,935-301,935 Debt service 1,127,370 - (1,127,370) - (1,127,370) Summer school 120,668 - - (120,668) - (120,668) Transfers 134,748 - - (134,748) - (134,748) 44,169,834-2,795,062 (41,374,772) - (41,374,772) Business-type activities: School lunch and milk 2,097,248 590,196 1,484,905 - (22,147) (22,147) Total primary government $ 46,267,082 $ 590,196 $ 4,279,967 (41,374,772) (22,147) (41,396,919) The accompanying notes are an integral part of these financial statements. -4-
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SiOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA STATEMENT OF ACTIVITIES - CASH BASIS FOR THE YEAR ENDED AUGUST 31. 2014 (continued) Net (Disbursement) Receipt and Changes in Net Assets Primary Government Governmental Business-type Activities Activities Total Balance Forward $ (41,374,772) $. (22,147) $ (41,396,919) General receipts: Taxes 9,899,214-9,899,214 Other local receipts 365,930-365,930 County receipts 281,275-281,275 State receipts 29,485,855-29,485,855 Transfers 835,312-835,312 Non-revenue receipts 132,830 217 133,047 41,000,416 217 41,000,633 Change in net position (374,356) (21,930) (396,286) Net position - beginning 16,608,911 328,344. 16,937,255 Net position - ending $ 16,234,555 $ 306,414 $ 16,540,969 The accompanying notes are an integral part of these financial statements. -5-
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA STATEMENT OF ASSETS AND FUND BALANCES - CASH BASIS GOVERNMENTAL FUNDS AUGUST 31.2014 ASSETS General Fund Depreciation Fund Major Funds Special Building Fund Bond Fund Coop Fund Total Governmental Funds Cash and cash equivalents Due from County Treasurer $ 9,912,500 1,782,244 $ 1,059,697 $1,709,391 39,343 $1,121,988 220,162 $ 389,230 $14,192,806 2,041,749 Total assets $11,694,744 $ 1,059,697 $1,748,734 $1,342,150 $ 389,230 $16,234,555 FUND BALANCES Fund Balances Restricted for: Capital projects Debt service Cooperative Assigned for: Capital Outlay Unassigned $ 11,694,744 $ 1,059,697 $1,748,734 $ 1,342,150 $ 389,230 $ 1,748,734 1,342,150 389,230 1,059,697 11,694,744 Total fund balances 11,694,744 1,059,697 1,748,734 1,342,150 389,230 16,234,555 Total fund balance $11,694,744 $ 1,059,697 $1,748,734 $1,342,150 $ 389,230 $16,234,555 The accompanying notes are an integral part of these financial statements. -6-
STATEMEN T DAKOTA COUNTY SCHOOL DISTRICT NO. Q11 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA OF RECEIPTS. DISBURSEMENTS. AND CHANGES IN FUND BALANCES - CASH BASIS GOVERNMENTAL FUNDS FOR THE YEAR ENDED AUGUST 31. 2014 RECEIPTS Major Funds Special Total General Depreciation Building Coop Governmental Fund Fund Fund Bond Fund Fund Funds Taxes $ 8,671,858 $ $. 181,399 $1,045,957 $ $ 9,899,214 Other local receipts 332,273 221 3,514 1,302 28,620 365,930 County receipts 281,275 - - - - 281,275 State receipts 29,411,459-11,184 63,212-29,485,855 Federal receipts 2,795,062 - - - - 2,795,062 Transfers - 835,312 - - - 835,312 Other non-revenue receipts 132,830 - - - - 132,830 Total receipts 41,624,757 835,533 196 TQ97 1,110,471 28,620 43,795,478 DISBURSEMENTS Instruction 27,226,736 _ 27,226,736 Pupil support services 1,579,108 - - - - 1,579,108 Staff support services 2,231,026 - - - 31,213 2,262,239 General administration 725,741. - - 2,696 728,437 Office of principal 1,031,730 - - - - 1,031,730 Support services business 570,470. 1,029,427 - - - 1,599,897 Maintenance and operations of buildings 4,261,578-496,849 - - 4,758,427 Pupil transportation 958,845 - - - - 958,845 Early retirements or terminations 126,759 - - - - 126,759 State categorical programs 21,743 - - - - 21,743 Federal programs 2,493,127 - - - - 2,493,127 Debt service - - - 1,127,370-1,127,370 Summer school 120,668 - - - - 120,668 Transfers 134,748 - - - - 134,748 Total disbursements 41,482,279 1,029,427 496,849 1,127,370 33,909 44,169,834 Net change in fund balance 142,478 (193,894) (300,752) (16,899) (5,289) (374,356) Fund balances - beginning 11,552,266 1,253,591 2,049,486 1,359,049 394,519 16,608,911 Fund balances - ending $11,694,744 $ 1,059,697 $ 1,748,734 $1,342,150 $ 389,230 $16,234,555 The accompanying notes are an integral part of these financial statements. -7-
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA STATEMENT OF NET POSITION - CASH BASIS PROPRIETARY FUND FOR THE YEAR ENDED AUGUST 31. 2014 School Lunch and Milk Fund ASSETS Cash $ 306,414 NET ASSETS Unrestricted $ 306,414 The accompanying notes are an integral part of these financial statements. -8-
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA STATEMENT OF RECEIPTS. DISBURSEMENTS. AND CHANGES IN NET POSITION - CASH BASIS PROPRIETARY FUND FOR THE YEAR ENDED AUGUST 31. 2014 OPERATING RECEIPTS School Lunch and Milk Fund Charges for services: Lunchroom sales $ 590,143 Other food sales 53 Total operating receipts 590,196 OPERATING DISBURSEMENTS Cost of sales and services 2,097,248 Operating loss (1,507,052) NONOPERATING RECEIPTS USDA and State subsidy 1,484,905 Investment income 217 Total nonoperating receipts 1,485,122 Change in net position (21,930) Total net position - beginning 328,344 Total net position - ending $ 306,414 The accompanying notes are an integral part of these financial statements. -9-
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA STATEMENT OF NET POSITION - CASH BASIS AND RECEIPTS. DISBURSEMENTS AND CHANGES IN NET POSITION - CASH BASIS FIDUCIARY FUNDS FOR THE YEAR ENDED AUGUST 31. 2014 Net Position Net Position 9/1/13 Receipts Disbursements 8/31/14 ACTIVITIES FUND Senior High $ 495,033 $ 685,957 $ 634,399 $ 546,591 Middle School 99,278 110,233 92,034 117,477 Elementary Schools 29,097 34,346 34,672 28,771 $ 623,408 $ 830,536 $ 761,105 $ 692,839 The accompanying notes are an Integral part of these financial statements. -10-
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA NOTES TO FINANCIAL STATEMENTS AUGUST 31. 2014 Note 1 - Summary of Significant Accounting Policies Overview The significant accounting principles and practices followed by Dakota County School District No. 011 - South Sioux City Community Schools ("School District") are presented below to assist the reader in evaluating the financial statements and the accompanying notes. The financial statements presented represent all funds maintained by school authorities' incident to school building construction, and the operation, maintenance and management of school services, activities, projects and investments. The Government Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the School District's accounting policies are described below. Reporting Entity The School District's Board of Education ("Board") is the basic level of government which has financial accountability and control over all activities related to the public school education in the School District. The Board receives funding from local, state and federal government sources and must comply with the requirements of these funding source entities. However, the Board is not included in any other governmental "reporting entity" as defined by the GASB pronouncement, since Board members are elected by the public and have decision making authority, the authority to levy taxes, the power to designate management, the ability to significantly influence operations and primary accountability for fiscal matters. In addition, there are no component units as defined in GASB, which are included in the School District's reporting entity. Basis of Accounting The School District prepares its financial statements on the cash basis, which is in conformity with the accounting practices prescribed or permitted by the State of Nebraska Department of Education; consequently, these statements represent a summary of the cash activity of the various funds of the School District and do not include certain transactions that would be included if the School District prepared its financial statements in accordance with generally accepted accounting principles, as applicable to Governmental units. Under the cash basis, revenues are recognized when collected rather than when earned, and expenses are recognized when paid rather than when incurred. Consequently, these financial statements are not intended to present financial position or results of operations in conformity with accounting principles generally accepted in the United States, as applicable to Governmental units. Taxes and other revenues collected by County Treasurers are included in revenues of the School District in the year collected by the counties and the School District funds held by the County Treasurers at year end are included as assets of the School District. This is in accordance with the requirements of the State of Nebraska Department of Education. Basis of Presentation The School District follows the provisions of Statement No. 34 ("Statement 34") of the Government Accounting Standards Board "Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments." Statement 34 established standards for external financial reporting for all state and local government entities, which includes government-wide financial statements, fund financial statements and the classification of net assets into three components - invested in capital assets, net of related debt; restricted; and unrestricted. -11 -
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA NOTES TO FINANCIAL STATEMENTS AUGUST 31. 2014 (continued) Government-wide and Fund Financial Statements The government-wide financial statements report information on all of the nonfiduciary activities of the primary government. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental receipts, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support, The statement of activities demonstrates the degree to which the direct disbursements of a given function or segment are offset by program receipts. Direct disbursements are those that are clearly identifiable with a specific function or segment. Program receipts include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes, state aid, and other items not properly included among program revenues are reported instead as general receipts. Fund financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. A fund is considered major if it is the primary operating fund of the School District (General), meets specific criteria set forth by GASB, total assets, liabilities, receipts or disbursements are at least 10% of the total for all funds of that type and at least 5% of the corresponding element for all governmental and proprietary funds combined, or is designated as a major fund by the School District's management. The School District has elected to treat all funds as major. The following fund types are used by the School District: Governmental Fund Types Major Funds: General Fund - The General Fund is the general operating fund of the School District and accounts for all receipts and disbursements of the School District not encompassed within other funds. All property tax receipts and other receipts that are not allocated by law, budgetary requirement, or contractual agreement to some other fund are accounted for in this fund. General operating expenditures and the new and replacement capital outlay costs that are not paid through other funds are paid from the General Fund. Depreciation Fund - A Depreciation Fund may be established in order to specifically reserve money for the eventual acquisition of costly capital outlay purchases by reserving such monies from the General Fund. The School District accounts for the allocation of funds, from the General Fund to this fund as an expense in the General Fund and as a "transfer from General Fund" in the Depreciation Fund. This fund may consist of more than one account for valid allocation purposes. The purpose of a Depreciation Fund is to spread replacement costs of capital outlays over a period of years in order to avoid a disproportionate tax effect in a single year to meet such an expense. This fund is restricted as part of the Allowable Reserve by the Tax Equity and Education Opportunities Support Act. The Depreciation Fund is considered a component of the General Fund. Special Building Fund - The Special Building Fund is established for acquiring or improving sites and buildings, including the construction, alteration, or improvements of buildings. The Board of Education may approve a. budget with a levy limitation of 14 cents per one hundred dollars of valuation; or a tax levy not to exceed 17,5 cents per one hundred dollars of valuation may be established for this fund by a vote of the people within the School District. -12-
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA NOTES TO FINANCIAL STATEMENTS AUGUST 31. 2014 (continued) Bond Fund - The Bond Fund is used to record receipts and expenditures for bond principal and interest payments. Proceeds from bond issues are deposited and recorded as a receipt in the Special Building Fund. The General Fund is used to make interest and bond retirement payments if the Bond Fund balance is not sufficient to meet these requirements. Cooperative Fund - The Cooperative Fund is used by the School District acting as the fiscal agent for any cooperative activity between one or more public agencies. Ali school districts, including the school district acting as the fiscal agent, shall show the payment for services to the cooperative in their General Fund. Proprietary Fund Types School Lunch Fund - The School Lunch Fund is used to accommodate all aspects of the school lunch program and accounts for all receipts and disbursements of all child nutrition programs. Receipts in this fund include the federal and state program cost reimbursements received by the School District and general fund support of the lunch program. All food purchases and other supplies are accounted for as expenses of the school lunch fund; accordingly, no inventories are maintained in this fund. Fiduciary Fund Types Activities Fund - The Activities Fund is used to account for the financial operations of quasi-independent student organizations, interschool athletics, and other self-supporting or partially self-supporting school activities, not part of another fund. They are not included in the government wide financial statements since their receipts are not available to finance programs of the School District. Eauitv Classifications and Fund Balances For the government wide financial statements, equity is classified as net position and displayed in two components: Restricted Net Position - consists of net position with constraints placed on the use either by 1) external groups, such as creditors, grantors, contributors, or laws and regulations of other governments; or 2) law through constitutional provisions or enabling legislation. Unrestricted Net Position - all other net position that does not meet the definition of "restricted". It is the School District's policy to first use restricted net position, then use unrestricted net position when a disbursement is made for purposes in which both restricted and unrestricted net position is available. For the fund financial statements, the School District follows the provisions of GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. The objective of the statement is to enhance the usefulness of fund balance information by providing clearer fund balance classifications that can be more consistently applied and by clarifying the existing governmental fund type definitions. As prescribed by GASB Statement No. 54, governmental funds report fund balance in classifications based primarily on the extent to which the School District is bound to honor constraints on the specific purposes for which amounts in the funds can be spent. Fund balance for governmental funds can consist of the following: Non-spendable Fund Balance - includes amounts that are not in spendable form, or legally or contractually required to be maintained intact The "not in spendable form" criterion includes items that are not expected to be converted to cash, for example: inventories, prepaid amounts, and long-term notes receivable. Restricted Fund Balance - includes amounts that are restricted for specific purposes stipulated by external resource providers, constitutionally or through enabling legislation. Restrictions may effectively be changed or lifted only with the consent of resource providers. -13-
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA NOTES TO FINANCIAL STATEMENTS AUGUST 31. 2014 (continued) Committed Fund Balance - includes amounts that can only be used for the specific purposes determined by a formal action of the School District's highest level of decision-making authority, the Board of Trustees of the School District. Commitments may be changed or lifted only by the School District taking the same formal action that imposed the constraint originally (for example: resolution and ordinance). Assigned Fund Balance - includes amounts intended to be used by the School District for specific purposes that are neither restricted nor committed. Intent is expressed by the District Board of Trustees, or a body (a budget, finance committee, or District Manager) to which the assigned amounts are to be used for specific purposes. Assigned amounts also include all residual amounts in governmental funds (except negative amounts) that are not classified as non-spendable, restricted, or committed. Unassigned Fund Balance - this residual classification is used for all negative fund balances. In circumstances when an expenditure is made for a purpose for which amounts are available in multiple fund balance classifications, fund balance is depleted in the order of restricted, committed, assigned, and unassigned. Capital Assets In accordance with the cash basis of accounting, expenditures for capital assets are charged to expense when paid. No asset is recorded and no allowance for depreciation is provided or included in the accompanying financial statements. Note 2 - Budget Process and Property Taxes The School District is required by state law to adopt annual budgets for the General Fund, Depreciation Fund, Special Building Fund, Bond Fund, Cooperative Fund, School Lunch Fund and Activity Funds. Each budget is presented on the cash basis of accounting, which is consistent with the requirements of the state budget act. State Statutes of the Nebraska Budget Act provide the prescribed budget practices and procedures that governing bodies are required to follow. The amounts that may be budgeted for certain specific funds are subject to various expenditures and/or tax levy limitations. The following procedures are followed in establishing the budgetary data reflected in the financial statements: 1. Prior to August 1, the administration of the School District prepares a proposed operating budget for the fiscal year commencing the following September 1. The operating budget includes proposed expenditures and the means of financing them. 2. Public hearings are conducted at a public meeting to obtain taxpayer comments. 3. Prior to the budget filing date, the budget is legally adopted by the Board of Education through passage of a resolution. 4. Total expenditures may not legally exceed the total budget of expenditures. Appropriations lapse at year end and any revisions require a public hearing and Board approval. 5. The property tax requirement resulting from the budget process is utilized to establish the tax levy in accordance with state statutes, which attaches as an enforceable lien on property within the School District as of January 1. Taxes are due as of that date. One half of the real estate taxes due January 1 became delinquent after the following May 1, with the second one-half becoming delinquent after September 1. -14-
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA NOTES TO FINANCIAL STATEMENTS AUGUST 31. 2014 (continued) Note 3 - Amounts Due from County Treasurer The amounts presented as due from County Treasurer are held by the Dakota County Treasurer. The County bills and collects the local property taxes as agent for the School District and remits the funds to the School District monthly. Note 4 - Cash and Investments Nebraska Statute Section 79-1043 provides that the School District may, by and with the consent of the Board of Education of the School District, invest the funds of the School District in securities, including repurchase agreements, the nature of which individuals of prudence, discretion and intelligence acquire or retain in dealing with the property of another. At August 31, 2014, the School District had bank deposits of $15,749,638 all of which, was covered by federal depository insurance and/or collateralized by U.S. Government securities and municipal obligations subject to joint custody safe keeping receipts issued by the custodial financial institution which was not the pledging institution. No attorney's opinion has been obtained regarding the enforceability of claims which might arise under the custodial arrangements. All investments are registered in the School District's name, or are fully insured. Investments are recorded at carrying amounts which approximates market value. Note 5 - Bonds Payable The following is a summary of bond transactions of the School District for the year ended August 31, 2014: Issue Beginning Ending Date Balance Issued Redeemed Balance Series 2011 refunding bonds 5/24/11 $ 6,095,000 $ - $ 645,000 $ 5,450,000 Series 2011 refunding bonds 7/26/11 4,525,00 0 ^ 195,000 4,330,000 $10.620.000 $ $ 840.000 $ 9.780.000 The bonds are financed by a property tax levy in the Bond Fund. All bonds are backed by the fuli faith, credit and taxing power of the School District. Interest expense from bonds for the year ended August 31, 2014 was $286,425. The May 24,2011 refunding bonds bear interest rates ranging from 0.55% to 4.00% with semi-annual interest and principal payments on June 15 and December 15. The bonds mature on June 15,2024. The July 26,2011 refunding bonds bear interest rates ranging from 0.25% to 3.40% with semi-annual interest and principal payments on June 15 and December 15. The bonds mature on December 15, 2024. -15-
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA NOTES TO FINANCIAL STATEMENTS AUGUST 31.2014 (continued) The annual requirements to amortize bonds payable outstanding as of August 31,2014 are as follows: Mav2011 Refundina Bonds Julv 2011 Refundina Bonds Principal Interest Principal Interest FYE Portion Portion Portion Portion 2015 $ 525,000 $ 153,762 $ 320,000 $ 122,415 2016 630,000 144,838 285,000 118,962 2017 870,000 131,922 20,000 116,955 2018 910,000 110,608 25,000 116,556 2019 865,000 85,128 65,000 115,565 0-2024 1,650,000 127,094 2,700,000 443,644 2025 - - 915,000 15,555 Note 6 - Operating Leases $ 5,450,000 $ 753,352 $ 4,330,000 $ 1,049,652 The School District has entered into operating lease agreements with the City of South Sioux City, Nebraska, which call for the exchanging of real properties for like terms and conditions. The leases expire October 9, 2082, and require no monetary considerations. Note 7 - Commitments and Contracts The following is a summary of multi-year contracts under commitment at August 31,2014: Office space lease for two suites with Siouxland National Bank for five years, expiring May, 2014. This lease was extended for one year, expiring May, 2015 with monthly lease payments of $4,575. Future minimum payments are $41,175 for the year ending August 31, 2015. Pool usage agreement with the Siouxland YMCA for thirty years, expiring November, 2036 with no required payments. Student transportation contract with Durham School Services for 3 years, expiring in June, 2015. minimum payments are $852,400 for the year ending August 31, 2015. Future Contract with Nohava Construction Inc. for the High School roof replacement. The balance remaining on the contract is $187,370 as of August 31, 2014. Contract with FEH Associates Inc. for the CSD Program Compatibility Assessment. The balance remaining on the contract is $27,860 as of August 31, 2014. Note 8 - Contingencies Grant Program - The School District participates in a number of state and federally assisted programs. These programs are subject to financial and compliance audits of various agencies and departments, many of which have not yet been performed. The School District's management believes that the amount of expenditures, if any, which may be disallowed by the granting agencies would not be significant. Compensated Absences - As a result of the School District's use of the cash basis of accounting, accrued liabilities related to compensated absences (sick leave and vacation) and any employer-related costs earned and unpaid, are not reflected in the government-wide or fund financial statements. -16-
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA NOTES TO FINANCIAL STATEMENTS AUGUST 31.2014 (continued) Note 9 Pension Pfan Plan Description - The Dakota County School District No. 011 contributes to the Nebraska School Employees Retirement System, a cost-sharing multiple-employer defined benefit pension plan administered by the Nebraska Public Employees Retirement System (NPERS). NPERS provides retirement and disability benefits to plan members and beneficiaries. The School Employees Retirement Act establishes benefit provisions. NPERS issues a publicly available financial report that includes financial statements and required supplementary information for NPERS. That report may be obtained by writing the NPERS, PO Box 94816, Lincoln, Nebraska 68509-4816 or by calling 1-800-245-5712. Funding Policy - Plan members were required to contribute 8.88% of their annual covered salary from September 1, 2011 - August 31, 2012. Plan members were required to contribute 9.78% of their annual covered salary from September 1, 2012 - August 31, 2013. Plan members were required to contribute 9.78% of their annual covered salary from September 1, 2013 - August 31, 2014. The School District is required to contribute 101% of the employee contribution. The contribution requirements of plan members and the School District are established by the Nebraska statutes. The School District's contributions to NPERS for the years ending August 31, 2012, 2013 and 2014 were $2,060,113, $2,305,827 and $2,392,501, respectively, equal to the required contributions for each year. Early Retirement Incentive Plan - The School District has an early retirement incentive plan that is available to certified employees and administrators having at least 10 years of credited service. The benefit is available to covered individuals starting at age 55. The cost of the plan is recorded when paid. For the year ended August 31, 2014, benefits of $126,759 were paid from the General Fund. Note 10-Interfund Loans/Transfers The following is a summary of the School District's interfund transfers/loans for the year ended August 31,2014: interfund Transfers Received Disbursed General Fund $ $ 970,060 Depreciation Fund 835,312 Activities Fund 134,74 8 - $ 970.060 $ 970.060 The interfund transfers are to assist in funding future capital projects in the depreciation fund and activities in the High School and Middle School activity funds. Note 11 - Risk Management The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. During the year, the School District carried commercial insurance for general liability, public official's liability, property coverage, worker's compensation coverage, commercial excess liability coverage, crime and blanket bond coverage. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three fiscal years. -17-
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA NOTES TO FINANCIAL STATEMENTS AUGUST 31. 2014 (continued) Note 12 - Subsequent Events The School District has evaluated all subsequent events through October 30, 2014, the date the financial statements were available to be issued. Through that date, no significant transactions have occurred that would have a material impact on the School District's financial position and results of operations as of August 31,2014. -18-
OTHER SUPPLEMENTARY INFORMATION
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA BUDGETARY COMPARISON SCHEDULE GENERAL FUND FOR THE YEAR ENDED AUGUST 31. 2014 Variance with Budget Budget Positive (Oriainal & Final) Actual (Neaative) Fund balance, September 1, 2013 $ 9,525,000 $11,552,266 $ 2.027,266 Receipts (inflows): Local receipts: Local property taxes 8,450,000 7,832,722 (617,278) Carline tax 4,300 3,924 (376) Public power district tax 38,000 40,295 2,295 Motor vehicle taxes 780,000 794,917 14,917 Tuition from other districts (special education) 187,333 217,962 30,629 Interest 2,672 39,266 36,594 Local license fees 9,000 7,825 (1,175) Police court fines 10,000 6,955 (3,045) Rental of school equipment and facilities 2,000 500 (1,500) Contributions and donations 28,000 27,820 (180) Other local receipts 18,000 31,945 13,945 9,529,305 9,004,131 (525,174) County receipts: County fines and license fees 370,000 281,275 (88,725) State receipts: State aid 25,402,137 25,402,137 - Special education programs (school age) 2,740,000 2,623,548 (116,452) Special education transportation (school age) 150,000 225,526 75,526 Homestead exemption - 214,235 214,235 Property tax credit - 240,018 240,018 Payments for high ability learners 15,000 14,213 (787) Textbook loan 1,000 3,802 2,802 Flex funding: birth to age five support services 5,000 - (5,000) Flex funding: school age support services - 139,616 139,616 Pro-rate motor vehicle 28,000 29,508 1,508 State apportionment 545,000 515,949 (29,051) State categorical programs - 2,907 2,907 Other state receipts 12,000 - (12,000) 28,898,137 29,411,459 513,322 Federal receipts: Title I, Part A NCLB, Improving the Academic Achievement 1,200,000 1,480,580 280,580 Title I, NCLB, Improving Basic Programs Accountability - 32,265 32,265 Title II, Part A NCLB, Teacher Quality Grants 113,000 154,883 41,883 IDEA, Part B, Special Education 244,500 185,077 (59,423) IDEA Enrollment/Poverty 569,100 173,603 (395,497) Medicaid in Public Schools 80,000 87,646 7,646 Medicaid Administrative Activities (MAAPS) 190,000 211,739 21,739 Federal Vocational & Applied Tech. Education (Carl Perkins) 39,800 33,632 (6,168) Title I, Part C, NCLB, Migrant Education 140,000 132,137 (7,863) Title III, NCLB, Limited English Proficient Grant 101,640 130,555 28,915 The accompanying notes are an integral part of these financial statements. -19-
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA BUDGETARY COMPARISON SCHEDULE GENERAL FUND FOR THE YEAR ENDED AUGUST 31. 2014 (continued) Variance with Budget Budget Positive COriainal & Final) Actual (Neaative) Categorical Grants from Corporations & Other Private Interests $ 12,000 $ 26,075 $ 14,075 Other federal categorical receipts - 146,870 146,870 2,690,040 2,795,062 105,022 Non-revenue receipts: Other non-revenue receipts 7,518 132,830 125,312 Total receipts 41.495,000 41,624,757 129,757 Total resources available 51,020,000 53,177,023 2,157,023 Disbursements (outflows): Instruction: Regular instructional 19,402,838 19,062,104 340,734 English language learners instructional 2,291,790 2,182,890 108,900 Special education instructional 6,091,945 5,981,742 110,203 Support services: Pupils 1,469,150 1,436,371 32,779 Pupils safety & security 141,090 142,737 (1,647) Staff 2,111,393 2,212,274 (100,881) Staff training/standards 77,529 18,752 58,777 General Administration: Board of education 298,880 240,676 58,204 Executive administration services 480,410 485,065 (4,655) Office of principal 1,002,155 1,031,730 (29,575) Business services 297,800 286,824 10,976 Vehicle acquisition and maintenance 158,700 283,646 (124,946) Maintenance and operation of plant 3,906,440 4,261,578 (355,138) Pupil transportation: Regular instructional 513,000 506,365 6,635 Special education (school age) 340,200 452,480 (112,280) Early retirements or terminations - 126,759 (126,759) State categorical programs 29,213 21,743 7,470 Federal programs 2,690,727 2,493,127 197,600 Summer school 136,740 120,668 16,072 Transfers 60,000 134.748 (74,748) Total disbursements 41,500,000 41,482.279 17,721 Fund baiance, August 31,2014 $ 9.520.000 $11.694.744 $ 2,174,744 The accompanying notes are an integral part of these financial statements. -20-
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA BUDGETARY COMPARISON SCHEDULE DEPRECIATION FUND FOR THE YEAR ENDED AUGUST 31. 2014 Budget (Oriainai & Final) Actual Variance with Budget Positive (Negative) Fund balance, September 1, 2013 $ 1,244,995 $1,253,591 $ 8,596 Receipts (inflows): Local receipts: Interest Transfer from other funds 5 221 835,312 216 835,312 Total receipts 5 835,533 835,528 Total resources available 1,245,000 2,089,124 844,124 Disbursements (outflows): Business services: Supplies Capital outlay 116,500 1,128,500 17,910 1,011,517 98,590 116,983 Total disbursements 1,245,000 1,029,427 215,573 Fund balance, August 31, 2014 $ $1,059,697 $ 1,059,697 The accompanying notes are an integral part of these financial statements. -21 -
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA BUDGETARY COMPARISON SCHEDULE SPECIAL BUILDING FUND FOR THE YEAR ENDED AUGUST 31. 2014 Variance with Budget Budget Positive (Original & Final) Actual (Negative) Fund balance, September 1,2013 $ 2,110,800 $ 2,049,486 $ (61,314) Receipts (inflows): Local receipts: Local property taxes 195,000 181,309 (13,691) Carline taxes 500 90 (410) Interest 3,000 1,114 (1,886) Other local receipts 2,600 2,400 (200) 201,100 184,913 (16,187) State receipts: Homestead exemption - 4,948 4,948 Pro-rate motor vehicle 400 693 293 Property tax credit - 5,543 5,543 40 0 11,18 4 10,784 Total receipts 201,50 0 196,097 (5,403) Total resources available 2,312,300 2,245,583. (66,717) Disbursements (outflows): Buildings and sites: Purchased services Building acquisition and improvement - 138,211 358,638 (138,211) (358,638). 496,849 (496,849) Debt service: Other expenses 2,312,300 2,312,300 Totai disbursements 2,312,300 496,849 1,815,451 Fund balance, August 31, 2014 $ - $ 1,748,734 $ 1,748,734 The accompanying notes are an integral part of these financial statements. -22-
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA BUDGETARY COMPARISON SCHEDULE BOND FUND FOR THE YEAR ENDED AUGUST 31. 2014 Variance with Budget Budget Positive (Original & Finai> Actual (Negative) Fund balance, September 1,2013 $ 1,209,440 $ 1,359,049 $ 149,609 Receipts (inflows): Local receipts: Local property taxes 1,100,000 1,045,435 (54,565) Carline taxes 1,500 522 (978) Interest 3,00 0 21,30 (1,698) 1,104,500 1,047,259 (57,241) State receipts: Homestead exemption - 28,161 28,161 Pro-rate motor vehicle 5,000 3,886 (1,114) Property tax relief - 31,16 5 31,165 5,000 63,21 2 58,212 Total receipts 1,109,500 1,110,47 971 Total resources available 2,318,940 2,469,52 0 150,580 Disbursements (outflows): Debt service: Redemption of principal 840,000 840,000 Debt service interest 286,425 286,425 Other expenses 5,57 945 4,630 Total disbursements 1,132,000 1,127,37 0 4,630 Fund balance, August 31,2014 $ 1,186,940 $1,342,150 $ 155,210 The accompanying notes are an integral part of these financial statements. -23-
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SiOUX CITY. NEBRASKA BUDGETARY COMPARISON SCHEDULE COOPERATIVE FUND FOR THE-YEAR ENDED AUGUST 31. 2014 Variance with Budget Budget Positive (Original & Final) Actual (Negative) Fund balance, September 1,2013 $ 374,000 $ 394,519 $ 20,519 Receipts (inflows): Local receipts: Other 16,000 28,375 12,375 interest 10,000 245 (9,755) Total receipts 26,000 28,620 2,620 Total resources available 400,000 423,139 23,139 Disbursements (outflows): Buildings and sites: Support services - staff 5,000 31,213 (26,213) Executive administration - 2,696 (2,696) Community services 395,00 0 395,000 Total disbursements 400,00 0 33,90 9 366,091 Fund balance, August 31,2014 $ $ 389,230 $ 389,230 The accompanying notes are an integral part of these financial statements. -24-
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA ' BUDGETARY COMPARISON SCHEDULE SCHOOL LUNCH FUND Budget forrainai & Final) Actual Variance with Budget Positive (Neaative) Fund balance, September 1, 2013 $ 478,000 $ 328,344 $ (149,656) Receipts (inflows): Local receipts: Interest Sale of lunches Other local receipts 5,000 814,000 217 590,144 53 (4,783) (223,856) 53 819,000 590,414 (228,586) State receipts: State reimbursements 13,000 14,821 1,821 Federal receipts: Federal reimbursements 1,460,000 1,470,083 10,083 Total receipts 2,292,000 2,075,318 (216,682) Total resources available 2,770,000 2,403,662 (366,338) Disbursements (outflows): Salary - clerical and cooks Employee benefits Purchased services Supplies and materials Total disbursements Fund balance, August 31, 2014 29,000 27,283 1,717 7,500 5,144 2,356 2,230,000 2,058,507 171,493 33,500 6,314 27,186 2,300,000 2,097,248 202,752 $ 470,000 $ 306,414 i P (163,586) The accompanying notes are an integral part of these financial statements. -25-
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA BUDGETARY COMPARISON SCHEDULE ACTIVITIES FUND FOR THE YEAR ENDED AUGUST 31.2014 ELEMENTARY ACTIVITIES Receipts Over (Under) Disbursements Fund Balance 9/1/2013 8/31/2014 Receipts Disbursements Transfers Cardinal Elem. $ 2,151 $ 1,673 $ $ 478 $ 10,289 $ 10,767 Covington Elem. 5,275 3,472-1,803 1,214 3,017 Dakota City Elem. 1,119 1,394 - (275) 4,259 3,984 E.N.Swett Elem. 19,942 21,564 - (1,622) 8,530 6,908 Elem. Technology - - - - 299 299 Harney Elem. 717 740 - (23) 1,802 1,779 L & C Elem. 2,915 3,995 - (1,080) 1,962 882 Misc. Entry - 904 - (904) 904 - SAB Pop Fund 1,619 843-776 (412) 364 SAB Social Fund 608 87-521 250 771 $ 34,346 $ 34,672 $ $ (326) $ 29,097 $ 28,771 Balance consisting of: Dakota County State Bank: Checking Account $ 28,771 MIDDLE SCHOOL ACTIVITIES Receipts Over (Under) Disbursements Fund Balance 9/1/2013 8/31/2014 Receipts Disbursements Transfers Activity Tickets $ 1,750 $ $ (1,195) $ 555 $ $ 555 Apollo Team 959 1,430 - (471) 1,259 788 Athletic Uniform Account - - 2,000 2,000 2,000 4,000 Athletics 7,071 11,297 13,290 9,064 8,844 17,908 Board of Education 1,276-22 1,298 3,806 5,104 Challenger Team 1,063 752-311 782 1,093 Discovery Team 959 836-123 511 634 Donations - 104 - (104) 235 131 Drama Club 662 261-401 1,991 2,392 Endeavour Team 2,630 2,046-584 986 1,570 Grant Account 700 700 (536) (536) 536 - Instrumental Band 25,848 27,048 882 (318) 29,800. 29,482 Interest 106 - (106) - - - Library 4,383 3,277 (17) 1,089 12,363 13,452 Magellan Team - 186. (186) 427 241 MOMH 1,454 699 500 1,255-1,255 My Choice - 297 535 238 802 1,040 Office Fines 438 303 (135) - - - Office of the Principal 1,249 4,028 3,403 624 4,880 5,504 Phoenix Team 1,738 930-808 31 839 The accompanying notes are an integral part of these financial statements. -26-
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA BUDGETARY COMPARISON SCHEDULE ACTIVITIES FUND FOR THE YEAR ENDED AUGUST 31. 2014 (continued) MIDDLE SCHOOL ACTIVITIES Physical Education School within a School Sci Sel Student Activities Student Council Student Pop Teacher Coffee Acct Teacher Pop Vocal Music Yearbook Disbursements Transfers 60 - - 1,571 1,636-11 380-1,609 1,565 1,774 6,839 9,649 31 3,016 1,784 (4,553) 580 278-3,424 2,510 (915) 21,018 17,882-4,819 2,156 20 $ 95.233 5 92,034 $ 15,000 Receipts Over (Under) Disbursements 60 (65) (369) 1,818 (2,779) (3,321) 302 (1) 3,136 2.683 $ 18,199 Fund Balance 9/1/2013 8/31/2014 282 342 43 43 578 513 750 381 5,172 6,990 7,565 4,786 4,321 1,000 11 313 1,001 1,000 4,965 8,101 5,337 8,020 $ 99,278 $ 117,477 Transfers from Other Funds: General Fund $ 15,000 Balance consisting of: Dakota County State Bank: Checking Account $ 117.477 HIGH SCHOOL ACTIVITIES 32nd St. Jazz A.P. Scholarship ACT Fund Activities Activity Tickets Applied Economics Art Art Club Band Trip Baseball Beverage Contract Board of Education Boiler Fund Booster Club Boys' Basketball Boys' Golf Boys' Soccer Boys' Tennis Boys'Track Business Ads Business Workbooks Receipts $ $ Disbursements - (4) 81,178 113,815 6,415-7,738 7,682-168 52 224 9,997 5,275 7,868 6,717 10,000-1,027 114 20,996 20,996 21,050 22,504 150 696 448 203 347 327 4,682 3,891 3,400 270 Receipts Over (Under) Transfers Disbursements $ (701) $ (701) 46,149 (6,365) 400 40,274 400 (3,130) 4 13,512 50 56 (168) 228 4,722 1,151 10,000 913 40,274 (1,454) (146) 245 20 791 9/1/2013 701 516 704 79,546 Fnnd Balance 432 3,117 734 7,053 5,353 30,000 9,736 12,536 537 509 185 2,227 2,621 131/2014 $ 516 708 93,058 50 488 2,949 962 11,775 6,504 40,000 10,649 40,274 11,082 391 754 205 3.018 2,621 The accompanying notes are an integral part of these financial statements. -27-
HIGH SCHOOL ACTIVITIES DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA BUDGETARY COMPARISON SCHEDULE ACTIVITIES FUND FOR THE YEAR ENDED AUGUST 31. 2014 (continued) Receipts Disbursements Transfers Receipts Over (Under) Disbursements Fund Balance 9/1/2013 8/31/2014 Card Power - 1,000 - (1,000) 1,972 972 Cardinal Classroom - - - - 1,213 1,213 Cardinal House 1,965 4,036 (50) (2,121) 12,585 10,464 Career & Technical Educ. _ - - - 2,070 2,070 Change Fund 7,968 8,318 50 (300) (125) (425) Cheerleaders 24,787 25,086 140 (159) 16,899 16,740 Choir Trip 17,519 9,610 800 8,709 18,691 27,400 Close Up - - - - 810 810 Computers 101 30,991 15,319-15,672 46,314 61,986 Concessions 38,159 24,660 (7,912) 5,587 14,882 20,469 Concessions Repair 116 11,739 - (11,623) 13,002 1,379 Dance 13,261 10,160 (60) 3,041 8,338 11,379 Debate - - (177) (177) 177 - Destination imagination - - - - 570 570 District Music Contest 2,630 3,360 440 (290) 416 126 District Wellness 11,393 13,397 500 (1,504) 4,006 2,502 Drafting - - - - 308 308 Drama 8,559 4,624-3,935 9,053 12,988 Durham 89,413 85,834 (353) 3,226 26,428 29,654 Escape Magazine 144 468 - (324) 658 334 Family & Consumer 206 37-169 1,053 1,222 FBLA 3,383 4,371 1,300 312 1 313 FCA 465 841 - (376) 801 425 Flags - - - - 432 432 Football 29,591 39,353 - (9,762) 25,007 15,245 Gateway to Learning 1,794 1,822 353 325 3,495 3,820 Girls' Basketball 6,845 10,429 - (3,584) 8,131 4,547 Girls' Golf.148 944 1,200 404 373 777 Girls' Soccer 15,486 13,895-1,591 4 ; 311 5,902 Girls' Tennis 824 842 5 (13) 13 - Girls'Track 10,141 10,598 67 (390) 390 - Graduation Accessories - 313 - (313) 2,244 1,931 Guidance 840 888 - (48) 337 289 ID'S & Lanyards 80 2,424 - (2,344) 2,396 52 Instrumental Music 271 44,316 19,805 (24,240) 24,852 612 Interest 166 - - 166 56 222 Leadership 91 - - 91 463 554 Library 1,252 794-458 945 1,403 Madrigal Dinner 1,652 1,495-157 5,633 5,790 Metals 585 1,127 547 5 ' 245 250 Mexico Trip - - - - 325 325 Mild & Moderate 2,101 2,304 - (203) 253 50 Mock Trial - 70 100 30 3 33 Nat. Honor Society 95 720 300 (325) 1,338 1,013 NECC Classes - 840 - (840) 8,019 7,179 The accompanying notes are an integral part of these financial statements. -28-
HIGH SCHOOL ACTIVITIES DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA BUDGETARY COMPARISON SCHEDULE ACTIVITIES FUND FOR THE YEAR ENDED AUGUST 31. 2014 (continued) Receipts Over (Under) Fund Balance Receipts Disbursements Transfers Disbursements 9/1/2013 8/31/2014 Newspaper Club - - (684) (684) 684 - Padlocks - - - - 660 660 Pop Fund 9,864 9,509 (7,620) (7,265) 9,689 2,424 Power Drive - - - - 195 195 Powerlifting - - - - 263 263 Prom 6,988 6,522 400 866 9,369 10,235 Quiz Bowl - 158 300 142-142 S Club - - - - 704 704 School News 75 - - 75 823 898 School Store 1,440 1,012-428 - 428 Science - 107 - (107) 423 316 Science Club - - - 22 22 Self-Contained Program - 620 - (620) 818 198 Senior High School 851 10,524 12,768 3,095 175 3,270 Show Choir 572 8,406 - (7,834) 7,859 25 Skills USA 334 250-84 30 114 Social Committee 5,204 5,137-67 1,444 1,511 Softball 3,464 2,094-1,370 2,088 3,458 Spanish Club 190 460 - (270) 888 618 Special Education - 361 800 439 1,565 2,004 Speech 2,437 2,407 277 307 435 742 Student Council 5,946 7,781 - (1,835) 8,472 6,637 Summer School 510 - - 510-510 Swimming 1,450 2,509 - (1,059) 3,807 2,748 Vocal Music 2 920 456 (462) 1,708 1,246 Volleyball 7,512 6,715 1,272 2,069 6,203 8,272 Woods 429 1,862 1,433 - - - World Changers - 618 (20) (638) 1,509 871 World Dance Club - - - - 797 797 Wrestling 5,694 5,585-109 324 433 X Country - 107 - (107) 1,231 1,124 Yearbook 14,978 21,823 16,284 9,439 6,958 16,397 $ 566,209 $ 634,399 $ 119,748 $ 51,558 $ 495,033 $ 546,591 *Original / Final Budget $ 1,000,000 $ 1,000,000 $ $ _ $ 502,223 $ 502,223 Transfers from Other Funds: Balance consisting of: General Fund $ 119,748 Iowa-Nebraska State Bank: Checking Account $ 546,591 *Represents combined budget for all District activity funds The accompanying notes are an integral part of these financial statements. -29-
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA SUPPORTING SCHEDULE OF CASH DISBURSEMENTS GENERAL FUND FOR THE YEAR ENDED AUGUST 31. 2014 Instructional services: Regular programs: Salary - teachers $ 10,140,077 Salary - substitutes 475,704 Salary - clerical and paraprofessional staff 105,758 Employee benefits 2,651,370 Purchased services 199,886 Distance education and telecommunications 835 Supplies and materials 1,095,841 Textbooks 93,933 Capital outlay 5,184 Other 4,111 14,772,699 School age (flex-spending): Salary - teachers 147,138 Salary - clerical and paraprofessional staff 38,414 Employee benefits 40,709 Purchased services 89,951 Supplies and materials 5,440 Other expenses 2,583 324,235 English language learners program: Salary - teachers 1,347,070 Salary - clerical and paraprofessional staff 454,840 Employee benefits 372,909 Purchased services 2,025 Supplies and materials 5,000 Textbooks 1,046 2,182,890 Poverty programs: Salary - teachers 2,428,320 Salary - clerical and paraprofessional staff 534,850 Employee benefits. 633,926 Purchased services. 301,574 Supplies and materials 3,165 3,901,835 Early childhood educational programs: Salary - teachers 18,650 Salary - clerical and paraprofessional 12,489 Employee benefits 6,566 Purchased services 3,290 Distance education and telecommunications 749 Supplies and materials 21,096 Other 495 63,335 The aecompanying notes are an integral part of these financial statements. -30-
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA SUPPORTING SCHEDULE OF CASH DISBURSEMENTS GENERAL FUND FOR THE YEAR ENDED AUGUST 31. 2014 (continued) Special education programs: Salary - teachers Salary - substitutes Salary - clerical and paraprofessional staff Employee benefits Purchased services Distance education and telecommunications Supplies and materials. Other Early childhood special education instructional programs: Salary - clerical and paraprofessional staff Employee benefits Purchased services Supplies and materials Other Total instructional services Pupil support services: Support services pupils: Salary - professional staff Salary - clerical and paraprofessional staff Employee benefits Purchased services Supplies and materials Capital outlay Other Support services pupils safety and security: Salaries - professional staff Salaries - clerical and paraprofessional Employee benefits Purchased services Distance education and telecommunications Supplies and materials Capital outlay Other Total pupil support services Staff support services: Support services staff: Salary - professional staff Salary - clerical and paraprofessional staff Employee benefits Purchased services 2,906,991 27,482 1,470,790 985,872 340,843 3,652 218,822 23,371 5,977,823 240 19 167 2,725 768 3,919 27,226,736 1,020,297 67,757 214,797 87,962 9,773 35,000 785 1,436,371 1,453 6,629 1,338 2,551 844 104,923 24,811 188 142,737 1,579,108 1,210,516 176,520 283,480 136,353 The accompanying notes are an integral part of these financial statements. -31 -
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA SUPPORTING SCHEDULE OF CASH DISBURSEMENTS GENERAL FUND FOR THE YEAR ENDED AUGUST 31. 2014 (continued) Support services staff: (continued) Distance education and telecommunications 66,352 Supplies and materials 198,593 Capital outlay 33,726 Other 87,372 2,192,912 Support services school improvement: Salary - professional staff 15,481 Employee benefits 2,713 Supplies and materials 312 Other 856 19,362 Staff training/standards: Salary 7,194 Salary - clerical and paraprofessional staff 8,136 Employee benefits 2,747 Supplies and materials 175 Other 500 18,752 Total staff support services 2,231,026 General administration: Board of education: Salaries - professional staff 29,210 Salaries - clerical and paraprofessionai 8,146 Employee benefits, 9,206 Purchased services 79,115 Legal services 69,773 Liability insurance 13,562 Supplies and materials 19,437 Other 12,227 240,676 Executive administration services: Salary - superintendent 203,925 Salary - other professional staff 76,937 Salary - clerical staff 105,356 Employee benefits 82,308 Purchased services 4,770 Distance education and telecommunications 711 Supplies and materials 3,072 Other 7,986 485,065 Total general administration 725,741 The accompanying notes are an integral part of these financial statements. -32-
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA SUPPORTING SCHEDULE OF CASH DISBURSEMENTS GENERAL FUND FOR THE YEAR ENDED AUGUST 31. 2014 (continued) Office of principal: Salary - professional staff 461,422 Salary - clerical staff 291,993 Employee benefits ' 172,387 Purchased services 15,778 Distance education and telecommunications 21,278 Supplies and materials 57,070 Other 11,802 Total office of principal 1,031,730 Support services business: Business services: Salary - professional staff 87,629 Salary - clerical staff 96,745 Employee benefits 52,079 Purchased services 36,033 Distance education and telecommunications 4,680 Supplies and materials 8,497 Other 1,161 286,824 Vehicle acquisition and maintenance: Purchased services 69,777 Supplies and materials 436 Capital outlay 213,649 Other (216) 283,646 Total support services business 570,470 Maintenance and operation of buildings and sites: Salary - professional staff 84,176 Salary - clerical and custodial staff 1,162,538 Employee benefits 289,172 Purchased services 2,261,676 Distance education and telecommunications 5,637 Supplies and materials 425,659 Capital outlay 31,944 Other 776 Total maintenance and operation of buildings and sites 4,261,578 Pupil transportation: Regular pupil transportation: Employee benefits 1,000 Purchased services 505,365 506,365 The accompanying notes are an integral part of these financial statements. - 33 -
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA SUPPORTING SCHEDULE OF CASH DISBURSEMENTS GENERAL FUND FOR THE YEAR ENDED AUGUST 31. 2014 (continued) Special education pupil transportation: Purchased services Supplies and materials Capital outlay Total pupil transportation Eariy retirements or terminations State categorical programs: Salary - professional staff Employee benefits Purchased services Other Total state categorical programs Federal programs: Title i, Part A NCLB, Improving Academic Achievement of the Disadvantaged Title t Improving Basic Programs Accountability Title H, Part A NCLB, Teacher Quality Grants IDEA Part B Base Allocation - Birth through Age Four IDEA Preschool Base Allocation IDEA Enrollment/poverty (611) IDEA Part B Early Intervening Services IDEA Part B Proportionate Share Federal Vocation and Applied Tech Title I, Part C, Migrant Education Title III, NCLB Limited English Proficient Grant Foundation grants Other federal categorical expenditures Total federal programs Summer school: Salary - professional staff Employee benefits Purchased services Supplies and materials Transfers Total summer school Total disbursements 424,259 221 28,000 452,480 958,845 126,759 14,620 3,486 3,500 137 21,743 1,186,645 46,879 113,192 239,241 17,366 435,398 121,544 14,111 23,318 127,175 101,611 26,151 40,496 2,493,127 82,883 14,519 22,538 728 120,668 134,748 $ 41,482,279 The accompanying notes are an integral part of these financial statements. -34-
REPORTS REQUIRED BY GOVERNMENT AUDITING STANDARDS AND OMB CIRCULAR A-133
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED AUGUST 31. 2014 Federal Grantor/ Federal Pass Through Grantor/ CFDA Agency or Federal Proaram Title.Number Pass-throuah Number Expenditures U.S. Deoartment of Aariculture Pass through Nebraska Department of Education: School Lunch 10.555 22-0011 $ 1,445,155 Summer Food Program 10.559 22-0011 24,929 1,470,084 Pass through Nebraska Department of Health and Human Services: Food distribution - non cash award 10.555 85,205 Total U.S. Department of Agriculture 1,555,289 U.S. Deoartment of Education Pass through Nebraska Department of Education: Title I Part A 84.010 SO 10A120027; S010A130027 1,186,645 Title I Part A - Accountability 84.010 SO 10A120027; S010A130027 46,879 Title I Part C - Education of Migratory Children 84.011 S011A120027; S011A130027 127,174 Special Education Cluster Special Education IDEA - Base 84.027 H027A130149 239,241 Special Education IDEA - Preschool 84.173 H173A130077 17,366 Special Education IDEA - Enrollment/Poverty 84.027 H027A130149 435,398 Special Education IDEA - CEIS 84.027 H027A130149 121,544 Special Education IDEA - Nonpublic 84.027 H027A130149 14,111 Perkins Basic Grant 84.048 V048A130027 19,960 Perkins Innovation Competitive Grant 84.048 V048A130027 3,359 Title III - English Language Acquisition 84.365 S365A120027; S365A130027 101,611 Title II Part A - Teacher Quality 84.367 S367A120026; S367A130026 113,192 Total U.S. Department of Education 2,426,480 U.S. Department of Health and Human Services Pass through Nebraska Department of Health and Human Services: Medicaid Administration 93.778 211,739 Total Financial Awards, All Programs $ 4,193,608-35-
DAKOTA COUNTY SCHOOL DISTRICT NO. 011 SOUTH SIOUX CITY COMMUNITY SCHOOLS SOUTH SIOUX CITY. NEBRASKA NOTES TO SUPPLEMENTARY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AUGUST 31.2014 Note 1 - Basis of Accounting The Supplementary Schedule of Expenditures of Federal Awards is prepared on the cash basis of accounting. Certain federal grants received by the School District are funded on a cost-reimbursement basis whereby expenditures are subject to audit by various government agencies prior to submitting reimbursement. Under such circumstances and in a manner consistent with the basis of accounting described above, expenditure balances for these grants represent the disbursement of funds received during the course of the year. This treatment results in timing differences, which are resolved over the term of the grant period. Note 2 - Reporting Entity The School District, for purposes of the Supplementary Schedule of Expenditures of Federal Awards, includes all funds for which the School District is financially accountable. Note 3 - Pass Through Awards The School District receives certain federal awards in the form of pass-through awards from the State of Nebraska and other various agencies. Such amounts received as pass-through awards are specifically identified on the Supplementary Schedule of Expenditures of Federal Awards. Note 4 - Non-cash Awards The National School Lunch Program involves both cash and non-cash awards to the School District. Such noncash awards consist of donated commodities which are separately identified in the Schedule of Expenditures of Federal Awards. Note 5 - Contingencies The School District receives funds under various federal grant programs and such assistance is to be expended in accordance with the provisions of the various grants. Compliance with the grants is subject to audit by various government agencies which may impose sanctions in the event of non-compliance. Management believes that they have complied with all aspects of the various grant provisions and the results of adjustments, if any, relating to such audits would not have a material financial impact. -36-
SntchsjOfv &> fm/'oo/w/ CERTIFIED PUBLIC ACCOUNTANTS STEVEN E. PRIBNOW DANIEL J. WIESEN KENT P. SPEICHER 2195 NORTH BROAD STREET P.O. BOX 1270 FREMONT, NEBRASKA 68026-1270 INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS (402) 721-3454 FAX (402) 721-2894 eb-cpa.com Board of Education Dakota County School District No. 011 South Sioux City Community Schools South Sioux City, Nebraska We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the governmental activities, the businesstype activities, and each major fund, of Dakota County School District No. 011 ("School District") as of and for the year ended August 31, 2014, and the related notes to the financial statements, which collectively comprise the School District's basic financial statements, and have issued our report thereon dated October 30, 2014. Our report disclosed that, as described in Note 1 to the financial statements, the School District prepares its financial statements on the cash basis of accounting, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. Internal Control Over Ffnancial Reporting In planning and performing our audit of the financial statements, we considered the School District's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the School District's internal control. Accordingly, we do not express an opinion on the effectiveness of the School District's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the School District's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in interna! control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters. As part of obtaining reasonable assurance about whether the School District's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. - 37-
S/u'c/lXOf V & Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the School District's internal control or on compliance. This report is an integral part of an agdit performed in accordance with Government Auditing Standards in considering the School District's internal control and compliance. Accordingly, this report is not suitable for any other purpose. ERICKSON & BROOKS Fremont, Nebraska October 30, 2014-38-
STEVEN E. PRIBNOW DANIEL J. WIESEN KENT P. SPEICHER /«cca&oft/ <&> $$/*(><>/{ / CERTIFIED PUBLIC ACCOUNTANTS 2195 NORTH BROAD STREET P.O. BOX 1270 FREMONT, NEBRASKA 68026-1270 INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 (402) 721-3454 FAX (402) 721-2894 eb-cpa.com Board of Education Dakota County School District No. 011. South Sioux City Community Schools South Sioux City, Nebraska Report on Compliance for Each Major Federal Program We have audited Dakota County School District No. 011-s ("School District") compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of the School District's major federal programs for the year ended August 31, 2014. The School District's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of the School District's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the School District's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the School District's compliance. Opinion on Each Major Federal Program In our opinion, Dakota County School District No. 011, complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended August 31,2014. Report on Internal Control Over Compliance Management of the School District is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the School District's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A- 133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. - 39-
S/Hc/iSWV (fc Accordingly, we do not express an opinion on the effectiveness of the School District's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. ERICKSON & BROOKS Fremont, Nebraska October 30,2014-40-