CASH FLOWS &

INVESTMENT STRATEGY

Conestoga Valley School District

Cash Flow Projections 2011-12

Monthly Summary of Cash Receipts, Disbursements

MONTHCASH

RECEIVEDCASH

DISTRIBUTED VARIANCEJULY 5,379,332$ 3,838,574$ 1,540,758$ AUGUST 26,632,571 3,710,240 22,922,331SEPTEMBER 3,094,801 5,315,886 (2,221,085)OCTOBER 3,530,545 3,296,374 234,171NOVEMBER 2,522,073 3,428,133 (906,060)DECEMBER 2,781,951 4,005,933 (1,223,982)JANUARY 860,726 6,759,274 (5,898,548)FEBRUARY 1,446,557 3,838,655 (2,392,098)MARCH 1,424,757 6,749,511 (5,324,754)APRIL 1,010,270 3,256,545 (2,246,275)MAY 419,917 3,600,689 (3,180,772)JUNE 3,377,098 5,103,863 (1,726,765)

TOTAL $52,480,598 $52,903,677

Permissible Investments

US Treasury Bills – 1 year or lessObligations of US Agencies – 1 year or less

FHLB, FFCB, FNMA, FHLMC, SLMA

Obligations of US Government backed by full faith & credit – short-term or long-term GNMA (collateralized mortgage obligations)

CDs insured by FDIC - $250,000C0llateralized CDs

102% Market Value Collateral (US Treasury/ Agency Securities only), or Federal Home Loan Bank Irrevocable Letter of Credit

Bank Failures

2000 through 2007 total of 27 bank failures2008 – 25 bank failures2009 – 140 bank failures2010 – 157 bank failuresYTD 2011 – 51 bank failures

Total since 2000 = 400 bank failures

20 Year History of T-Bill Interest Rates

Current Interest Rates

US Treasury Bills – 0.13%Agencies – 0.16%FDIC Individual Bank CDs – 0.25% - 0.35%Collateralized CDs – 0.20% - 0.25%

Minimal increase in interest rates is projected for 2011-2012

Current Portfolio

CV’s Investment Strategy

FDIC Insured CDs – properly ratedCollateralized CDsAgencies such as FHLB, FNMA, FHLMCUS Treasury Bills if interest rates increaseInvestment term within 12 months unless

rates increaseIf rates increase, invest longer term with

staggering maturities, i.e. 12 month, 15 month, 18 month, 24 month maturities