greenport village refunding official statement

45

Upload: suffolk-times

Post on 21-Apr-2015

51 views

Category:

Documents


1 download

DESCRIPTION

Greenport Village Refunding Official Statement

TRANSCRIPT

Page 1: Greenport Village Refunding Official Statement
Page 2: Greenport Village Refunding Official Statement

VILLAGE OF GREENPORT SUFFOLK COUNTY, NEW YORK

$4,190,000* REFUNDING SERIAL BONDS – 2012

MATURITIES, RATES AND YIELDS Dated: Date of Delivery Principal Due: August 1, 2012-2020, inclusive

Interest Due: August 1, 2012, and semi-annually thereafter on February 1 and August 1 in each year to maturity

Amount*

Maturity

Rate

Price or Yield

CUSIP #

$ 485,000 2013

505,000 2014 510,000 2015 515,000 2016 515,000 2017 355,000 2018 355,000 2019 250,000 2020 220,000 2021 240,000 2022 240,000 2023

*Preliminary, subject to change.

Page 3: Greenport Village Refunding Official Statement

VILLAGE OF GREENPORT SUFFOLK COUNTY, NEW YORK

236 Third Street Greenport, New York 11944 Telephone: 631/477-2385

Fax: 631/477-1877

VILLAGE OFFICIALS

David Nyce, Mayor

Trustees

George Hubbard, Jr. David Murray Chris Kempner Mary Bess Phillips

------------------------

David Abatelli, Village Administrator Sylvia Lazzari Pirillo, Village Clerk

Charlene Kagel,CPA, Village Treasurer

* * *

BOND COUNSEL

Fulbright & Jaworski L.L.P. New York, New York

* * *

FINANCIAL ADVISOR

MUNISTAT SERVICES, INC.

Municipal Finance Advisory Service

12 Roosevelt Avenue Port Jefferson Station, N.Y. 11776

(631) 331-8888

E-mail: [email protected] Website: http://www.munistat.com

Page 4: Greenport Village Refunding Official Statement

i

No dealer, broker, salesman or other person has been authorized by the Village to give any information or to make any representations, other than those contained in this Official Statement and if given or made, such other information or representations must not be relied upon as having been authorized by the Village. 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 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained by the Village from sources which are believed to be reliable but it is not guaranteed as to accuracy or completeness. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Village since the date hereof. The Underwriter has provided the following sentence for inclusion in this Official Statement. “The Underwriter has reviewed the information in this Official Statement in accordance with, and as a part of its responsibilities under the federal securities law as applied to the facts and circumstances of this transaction, but the Underwriter does not guaranty the accuracy or completeness of such information.” IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKETS. SUCH STABILIZATION, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

TABLE OF CONTENTS

Page

THE BONDS .............................................................................................................................................................................. 1

DESCRIPTION OF THE BONDS .................................................................................................................................................... 1

OPTIONAL REDEMPTION ........................................................................................................................................................... 1

BOOK-ENTRY-ONLY SYSTEM ................................................................................................................................................... 1

CERTIFICATED BONDS .............................................................................................................................................................. 3

AUTHORIZATION AND PURPOSE ................................................................................................................................................ 3

SUMMARY OF BONDS TO BE REFUNDED ................................................................................................................................... 4

REFUNDING FINANCIAL PLAN ................................................................................................................................................... 5

SOURCES AND USES OF BOND PROCEEDS ................................................................................................................................. 6

SECURITY AND SOURCE OF PAYMENT ...................................................................................................................................... 6

REMEDIES UPON DEFAULT ....................................................................................................................................................... 6

VILLAGE OF GREENPORT .................................................................................................................................................. 7

GENERAL INFORMATION ........................................................................................................................................................... 7

UTILITIES AND OTHER SERVICES .............................................................................................................................................. 7

GOVERNMENT .......................................................................................................................................................................... 7

EMPLOYEES .............................................................................................................................................................................. 8

ECONOMIC AND DEMOGRAPHIC INFORMATION ...................................................................................................... 8

POPULATION CHARACTERISTICS ............................................................................................................................................... 8

INCOME DATA .......................................................................................................................................................................... 8

SELECTED LISTING OF LARGER EMPLOYERS IN THE TOWN OF SOUTHOLD ................................................................................ 9

UNEMPLOYMENT RATE STATISTICS .......................................................................................................................................... 9

INDEBTEDNESS OF THE VILLAGE .................................................................................................................................... 9

CONSTITUTIONAL AND STATUTORY REQUIREMENTS ................................................................................................................ 9

STATUTORY PROCEDURE ........................................................................................................................................................ 10

COMPUTATION OF DEBT LIMIT AND CALCULATION OF NET DEBT CONTRACTING MARGIN .................................................... 11

DETAILS OF SHORT-TERM INDEBTEDNESS OUTSTANDING ...................................................................................................... 11

DEBT SERVICE REQUIREMENTS – OUTSTANDING BONDS AND REFUNDING BONDS ................................................................ 12

AUTHORIZED BUT UNISSUED INDEBTEDNESS ......................................................................................................................... 12

VILLAGE OF GREENPORT WATER POLLUTION CONTROL DISTRICT ......................................................................................... 12

TREND OF VILLAGE INDEBTEDNESS ........................................................................................................................................ 13

CALCULATION OF ESTIMATED OVERLAPPING AND UNDERLYING INDEBTEDNESS ................................................................... 13

DEBT RATIOS .......................................................................................................................................................................... 13

Page 5: Greenport Village Refunding Official Statement

ii

TABLE OF CONTENTS - CONTINUED

Page

FINANCES OF THE VILLAGE ............................................................................................................................................ 13

FINANCIAL STATEMENTS AND ACCOUNTING PROCEDURES .................................................................................................... 13

INVESTMENT POLICY .............................................................................................................................................................. 14

FINANCIAL ORGANIZATION AND BUDGETARY PROCEDURES .................................................................................................. 15

FUND STRUCTURE AND ACCOUNTS ........................................................................................................................................ 15

BASIS OF ACCOUNTING ........................................................................................................................................................... 16

REVENUES .............................................................................................................................................................................. 16

Real Property Taxes ........................................................................................................................................................... 16

State Aid ............................................................................................................................................................................ 16

EXPENDITURES ....................................................................................................................................................................... 17

2010-11 RESULTS OF OPERATIONS AND 2011-12 OPERATIONS TO DATE ................................................................................ 17

2012-13 BUDGET .................................................................................................................................................................... 17

EMPLOYEE PENSION SYSTEM ................................................................................................................................................. 17

CONTRIBUTIONS TO THE RETIREMENT SYSTEMS..................................................................................................................... 18

OTHER POST EMPLOYMENT BENEFITS .................................................................................................................................... 18

TAX INFORMATION ............................................................................................................................................................ 19

REAL PROPERTY TAXES ......................................................................................................................................................... 19

TAX COLLECTION PROCEDURE ............................................................................................................................................... 19

TAX INCREASE PROCEDURAL LIMITATION LEGISLATION ........................................................................................................ 19

TAX LIMIT .............................................................................................................................................................................. 20

TAX LEVY AND COLLECTION RECORD AND TAX RATES ......................................................................................................... 20

SELECTED LISTING OF LARGE TAXABLE PROPERTIES ............................................................................................................. 20

LITIGATION ........................................................................................................................................................................... 21

RISK FACTORS AND MARKET FACTORS AFFECTING FINANCINGS OF THE STATE AND MUNICIPALITIES OF THE STATE.................................................................................................................................... 21

TAX MATTERS ...................................................................................................................................................................... 22

TAX EXEMPTION ..................................................................................................................................................................... 22

TAX ACCOUNTING TREATMENT OF DISCOUNT AND PREMIUM ON CERTAIN BONDS ............................................................... 22

LEGAL MATTERS ................................................................................................................................................................. 23

RATING ................................................................................................................................................................................... 24

VERIFICATION OF MATHEMATICAL COMPUTATIONS .......................................................................................... 24

FINANCIAL ADVISOR ......................................................................................................................................................... 24

ADDITIONAL INFORMATION ........................................................................................................................................... 24

APPENDIX A: FINIANCIAL INFORMATION ................................................................................................................. 26

APPENDIX B: AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED MAY 31, 2011 APPENDIX C: CONTINUING DISCLOSURE UNDERTAKING

APPENDIX D: FORM OF OPINION OF FULBRIGHT & JAWORSKI L.L.P.

Page 6: Greenport Village Refunding Official Statement

1

OFFICIAL STATEMENT

VILLAGE OF GREENPORT SUFFOLK COUNTY, NEW YORK

$4,190,000* REFUNDING SERIAL BONDS – 2012 [BOOK-ENTRY-ONLY BONDS]

This Official Statement and the appendices thereto present certain information relating to the Village of Greenport, in the County of Suffolk, in the State of New York (the “Village,” “County” and “State,” respectively) in connection with the sale of $4,190,000* Refunding Serial Bonds – 2012 (the “Bonds”). All quotations from and summaries and explanations of provisions of the Constitution and laws of the State and acts and proceedings of the Village contained herein do not purport to be complete and are qualified in their entirety by reference to the official compilations thereof and all references to the Bonds and the proceedings of the Village relating thereto are qualified in their entirety by reference to the definitive form of the Bonds and such proceedings.

THE BONDS

Description of the Bonds

The Bonds will be dated the date of delivery, and will mature in the principal amounts on August 1, in each of the years 2013 to 2023, inclusive, in the principal amounts as set forth on the inside cover page hereof.

The Bonds will issued in fully registered form and when issued will be registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York (“DTC”). DTC will act as Securities Depository for the Bonds. Individual purchases of the Bonds may be made in book-entry form only, in denomination of $5,000 or integral multiples thereof. Purchasers will not receive certificates representing their interest in the Bonds.

Interest on the Bonds will be payable August 1, 2012 and semi-annually thereafter on February 1 and August 1 in each year to maturity. Principal and interest will be paid by the Village to the Securities Depository, which will in turn remit such principal and interest to its Participants, for subsequent distribution to the Beneficial Owners of the Bonds, as described herein. The Bonds may be transferred in the manner described on the Bonds and as referenced in certain proceedings of the Village referred to therein. The Record Date of the Bonds will be the fifteenth day of the month preceding each interest payment date. The Village will act as Paying Agent for the Bonds. Paying agent fees, if any, will be paid by the purchaser. The Village’s contact information is as follows: Charlene Kagel, Village Treasurer, Village of Greenport, 236 Third Street, Greenport, NY 11944, Phone (631) 477-2385, Fax (631) 477-1877 and email: [email protected].

Optional Redemption

The Bonds will not be subject to redemption prior to their maturity.

Book-Entry-Only System

DTC, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities, in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered bond certificate will be issued and deposited with DTC for all of the Bonds bearing the same rate of interest. *Preliminary, subject to change.

Page 7: Greenport Village Refunding Official Statement

2

DTC is limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilities the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of 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”). Effective August 9, 2011, Standard & Poor’s assigns a rating of “AA+” to DTC. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found a www.dtcc.com and www.dtc.org. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase, Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct or Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interest in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of the Bonds with DTC and their registration in the name of Cede & Co., or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping accounts 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 the Bonds may wish to take certain steps to augment the transmission to them or notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of the Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to the 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. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the 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 Village on the payable date, in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC (nor its nominee) or the Village, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the

Page 8: Greenport Village Refunding Official Statement

3

responsibility of the Village, 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 Bonds at any time by giving reasonable notice to the Village. Under such circumstances, in the event that a successor depository is not obtained, bond certificates are required to be printed and delivered. The Village may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered to DTC. Source: The Depository Trust Company, New York, New York. The information contained in the above section concerning DTC and DTC’s book-entry system has been obtained from sample offering document language supplied by DTC, but the Village takes no responsibility for the accuracy thereof. In addition, the Village will not have any responsibility or obligation to participants, to indirect participants or to any beneficial owner with respect to: (i) the accuracy of any records maintained by DTC, and participant or any indirect participant; (ii) the payments by DTC or any participant or any indirect participant of any amount with respect to the principal of, or premium, if any, or interest on the bonds or (iii) any notice which is permitted or required to be given to Bondowners. THE VILLAGE WILL NOT HAVE ANY RESPONSIBILITY OR OBLIGATIONS TO PARTICIPANTS, TO INDIRECT PARTICIPANTS OR ANY BENEFICIAL OWNER WITH RESPECT TO (I) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC, ANY PARTICIPANTS, OR ANY INDIRECT PARTICIPANT; (II) THE PAYMENT BY DTC OR ANY PARTICIPANT OR INDIRECT PARTICIPANT OR ANY AMOUNT WITH RESPECT TO THE PRINCIPAL OF OR INTEREST ON THE BONDS; (III) ANY NOTICE WHICH IS PERMITTED OR REQUIRED TO BE GIVEN TO HOLDERS; OR (IV) THE SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE BONDS; OR (V) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS HOLDER. THE VILLAGE CANNOT AND DOES NOT GIVE ANY ASSURANCES THAT DTC WILL DISTRIBUTE TO DIRECT PARTICIPANTS OR THAT DIRECT PARTICIPANTS OR INDIRECT PARTICIPANTS WILL DISTRIBUTE TO THE BENEFICIAL OWNERS OF THE BONDS (I) PAYMENTS OF THE PRINCIPAL OF OR INTEREST ON THE BONDS; (II) CONFIRMATION OF THEIR OWNERSHIP INTEREST IN THE BONDS; OR (III) REDEMPTION OR OTHER NOTICES SENT TO DTC OR CEDE & CO. AS NOMINEE, AS REGISTERED OWNER OF THE BONDS, OR THAT THEY WILL DO SO ON A TIMELY BASIS, OR THAT DTC, DIRECT PARTICIPANTS OR INDIRECT PARTICIPANTS WILL SO SERVE AND ACT IN THE MANNER DESCRIBED IN THE OFFICIAL STATEMENT.

Certificated Bonds

DTC may discontinue providing its services with respect to the Bonds at any time by giving notice to the Village and discharging its responsibilities with respect thereto under applicable law, or the Village may terminate its participation in the system of book-entry-only transfers through DTC at any time. In the event that such book-entry-only system is discontinued, and a replacement book-entry securities depository is not appointed, the following provisions will apply: the Bonds will be issued in registered form in denominations of $5,000, or integral multiples thereof. Principal of and interest on the Bonds when due will be payable at the principal corporate trust office of a bank or trust company to be named by the Village as the fiscal agent; certificated Bonds may be transferred or exchanged at no cost to the owner of such bonds at any time prior to maturity at the corporate trust office of the fiscal agent for bonds of the same or any other authorized denomination or denominations in the same aggregate principal amount upon the terms set forth in the certificate of the Village Treasurer authorizing the sale of the Bonds and fixing the details thereof and in accordance with the Local Finance Law.

Authorization and Purpose

The Bonds are being issued pursuant to the Constitution and statutes of the State of New York, including among others, the Education Law and the Local Finance Law, and a refunding bond resolution duly adopted by the Board of Education of the Village on February 7, 2012 (the “Refunding Bond Resolution”), authorizing the refunding of all or a part of the 2001, 2002, 2004 and 2006 Bonds (the “Refunded Bonds”). The original amounts and the amounts to be refunded are set forth below:

Page 9: Greenport Village Refunding Official Statement

4

Summary of Bonds to be Refunded

$2,035,000 Public Improvements Bonds-2001 Amount Interest Date of Call CUSIP

Maturity Date Outstanding Rate Redemption Price Numbers

09/15/2013 $ 100,000 4.800% 06/15/2012 100.00% 395388HH7 09/15/2014 100,000 4.800 06/15/2012 100.00 395388HJ3 09/15/2015 100,000 4.800 06/15/2012 100.00 395388HK0 09/15/2016 100,000 4.875 06/15/2012 100.00 395388HL8 09/15/2017 100,000 5.000 06/15/2012 100.00 395388HM6 09/15/2018 100,000 5.000 06/15/2012 100.00 395388HN4 09/15/2019 100,000 5.000 06/15/2012 100.00 395388HP9

$ 700,000

$932,525 Public Improvements Bonds-2002 Amount Interest Date of Call CUSIP

Maturity Date Outstanding Rate Redemption Price Numbers

05/15/2014 $ 50,000 4.750% 06/15/2012 101.00% 395388JA0 05/15/2015 50,000 4.750 06/15/2012 101.00 395388JB8 05/15/2016 50,000 4.800 06/15/2012 101.00 395388JC6 05/15/2017 50,000 5.000 06/15/2012 101.00 395388JD4 05/15/2018 50,000 5.000 06/15/2012 101.00 395388JE2 05/15/2019 50,000 5.000 06/15/2012 101.00 395388JF9 05/15/2020 50,000 5.100 06/15/2012 101.00 395388JG7 05/15/2021 35,000 5.250 06/15/2012 101.00 395388JH5

$ 385,000

$1,962,534 Public Improvements Bonds-2004 Amount Interest Date of Call CUSIP

Maturity Date Outstanding Rate Redemption Price Numbers

11/15/2013 $ 150,000 4.000%

395388JU6 11/15/2014 155,000 4.000 11/15/2013 100.00% 395388JV4 11/15/2015 165,000 4.000 11/15/2013 100.00 395388JW2 11/15/2016 175,000 4.000 11/15/2013 100.00 395388JX0 11/15/2017 180,000 4.000 11/15/2013 100.00 395388JY8

$ 825,000

Page 10: Greenport Village Refunding Official Statement

5

$4,800,000 Public Improvements Bonds-2006 Amount Interest Date of Call CUSIP

Maturity Date Outstanding Rate Redemption Price Numbers

08/01/2013 $ 425,000 3.750%

395388KG5 08/01/2014 425,000 3.750 08/01/2013 100.00% 395388KH3 08/01/2015 450,000 3.800 08/01/2013 100.00 395388KJ9 08/01/2016 450,000 3.875 08/01/2013 100.00 395388KK6 08/01/2017 450,000 3.875 08/01/2013 100.00 395388KL4

$2,200,000

The Refunding Bond Resolution authorizes the issuance of the Bonds to provide the funds necessary to effect the refunding of all or a portion of the Refunded Bonds. For further information regarding bond authorizations of the Village for capital purposes and other matters relating thereto see “Indebtedness of the Village”.

Refunding Financial Plan

The Refunding Financial Plan will permit the Village to realize, as a result of the issuance of the Bonds, cumulative dollar and present-value debt service savings. The net proceeds of the Bonds (after payment of the underwriting fee and other costs of issuance relating to the Bonds), will be used to purchase non–callable, direct obligations of or obligations guaranteed by the United States of America (the “Government Obligations”) which, together with remaining cash proceeds from the sale of the Bonds, will be placed in an irrevocable trust fund (the “Escrow Fund”) to be held by The Bank of New York Mellon (the “Escrow Holder”), a bank located and authorized to do business in the State, pursuant to the terms of an escrow contract by and between the Village and the Escrow Holder, dated as of the delivery date of the Bonds (the “Escrow Contract”). The Government Obligations so deposited will mature in amounts which, together with the cash so deposited, will be sufficient to pay the principal of, interest on and applicable redemption premiums, if any, of the Refunded Bonds on the dates of their redemption. The Refunding Plan requires the Escrow Holder, pursuant to the refunding bond resolution of the Village and Escrow Contract, to pay the Refunded Bonds at maturity or at the earliest date on which the Refunded Bonds may be called for redemption prior to maturity. The holders of the Refunded Bonds will have a first lien on all investment income from, and maturing principal of the Government Obligations, along with other available monies held in the Escrow Fund. The Escrow Contract shall terminate upon final payments by the Escrow Holder to the paying agents/fiscal agent for the Refunded Bonds amounts from the Escrow Fund adequate for the payment, if full, of the Refunded Bonds, including interest and the redemption premium payable with respect thereto. Under the Refunding Plan, the Refunded Bonds will continue to be general obligations of the Village. However, inasmuch as the Government Obligations held in the Escrow Fund will be sufficient to meet all required payments of principal, interest and redemption premium requirements when required in accordance with the Refunding Plan, it is not anticipated that any other source of payment will be required.

Page 11: Greenport Village Refunding Official Statement

6

Sources and Uses of Bond Proceeds

Sources: Par Amount of Bonds .............................................................................................................. $

Original Issue Premium ...........................................................................................................

Total .................................................................................................................................... $

Uses: Escrow Deposit ....................................................................................................................... $

Underwriters’ Discount ...........................................................................................................

Allowance for Costs of Issuance and Contingency .................................................................

Total .................................................................................................................................... $

Security and Source of Payment

The Bonds are general obligations of the Village and will contain a pledge of its faith and credit for the payment of the principal of and interest on the Bonds as required by the Constitution and laws of the State of New York (State Constitution, Art. VIII, Section 2; Local Finance Law, Section 100.00). All the taxable real property within the Village is subject to the levy of ad valorem taxes to pay the Bonds and interest thereon, without limitation as to rate or amount, except as to certain statutory limitations which may result from the application of Chapter 97 of the Laws of 2011. See “Tax Increase Procedural Limitation Legislation” herein.

Remedies Upon Default

Under current law, provision is made for contract creditors (including the Bondholders) of the Village to enforce payments upon such contracts, if necessary, through court action, although the present statute limits interest on the amount adjudged due to creditors to nine per centum per annum from the date due to the date of payment. As a general rule, property and funds of a municipal corporation serving the public welfare and interest have not been judicially subjected to execution or attachment to satisfy a judgment, although judicial mandates to officials to appropriate and pay judgments out of current funds or the proceeds of a tax levy have been issued. Remedies for enforcement of payment are not expressly included in the Village's contract with holders of its bonds and notes, although any permanent repeal by statute or constitutional amendment of a Bondholder's remedial right to judicial enforcement of the contract should, in the opinion of Bond Counsel, be held unconstitutional. The State has consented that any municipality in the State may file a petition with any United States district court or court of bankruptcy under any provision of the laws of the United States, now or hereafter in effect, for the composition or adjustment of municipal indebtedness. Subject to such consent, under the United States Constitution, Congress has jurisdiction over such matters and has enacted amendments to the existing federal bankruptcy statute, generally to the effect and with the purpose of affording municipal corporations, under certain circumstances, with easier access to judicially approved adjustment of debts, including judicial control over identifiable and unidentifiable creditors. In recent times, certain events and legislation affecting remedies on default have resulted in litigation. While courts of final jurisdiction have upheld and sustained the rights of bondholders, such courts might hold that future events, including financial crises as they may occur in the State and in municipalities of the State, require the exercise by the State of its emergency police powers to assure the continuation of essential services. No principal or interest payments on Village indebtedness are past due. The Village has never defaulted in the payment of the principal of and interest on any indebtedness.

Page 12: Greenport Village Refunding Official Statement

7

VILLAGE OF GREENPORT

There follows in this Official Statement a brief description of the Village, together with certain information concerning its economy and governmental organization, its indebtedness, current major revenue sources and expenditures and general and specific funds.

General Information

The Village, which encompasses about 1.3 square miles in area and has an estimated population of 2,655 (2010 U.S. Census Bureau) is located on the eastern portion of the North Fork of Long Island, approximately 100 miles from New York City. The Village is located in a harbor that connects the Peconic Bay with Gardiners Bay, thus providing access to Long Island Sound and the Atlantic Ocean. Shelter Island is located directly across the harbor from Greenport to the south and ferry service is provided to Shelter Island from the Village. The area was originally settled in 1640, and the Village was incorporated in 1838. The population of the Village increases significantly during the summer months due to tourism and summer residences, but the Village’s economy is supplemented by the year-round commercial enterprises in its central business district as well as Eastern Long Island Hospital, a 60 bed facility employing 400 people which is located in the Village. Residential properties consist primarily of single-family homes with some apartment houses and townhouse condominiums. In addition to employment opportunities in the Village, residents commute to the surrounding communities, including the Suffolk County Government Complex and State and County court facilities in Riverhead. In addition to ferry service to Shelter Island, the Long Island Railroad provides passenger rail service to New York City. Highways include New York State Route 25 which continues beyond the Village to Orient Point, the eastern end of the North Fork, where high speed ferry service is available to New England.

Utilities and Other Services

Electricity, water and sewer service are provided by the Village. Until recently, the Village also provided water service to certain areas outside the Village, but in December 1997 it sold the portion of the water department assets located outside its boundaries (including wells, treatment plants and distribution facilities) and the Village water storage tank (which is located on Village land inside the Village boundaries) to the Suffolk County Water Authority (the “Authority”) for $3.5 million. The Authority is now providing such services to areas outside the Village as well as treatment and distribution to Village residents and properties. A portion of the proceeds of the sale were used to defease outstanding debt of the Village incurred for the facilities sold to the Water Authority. The Village also maintains its own volunteer fire department, and police protection is provided by the Town of Southold and Suffolk County.

Government

The Village was incorporated in 1838. One independently governed school district is located partially within the Village which relies on its own taxing powers granted by the State to raise revenues. The school district uses the Town of Southold’s assessment roll as its basis for taxation of property located within the Village. Subject to the provisions of the State Constitution, the Village operates pursuant to the Village Law, the Local Finance Law, other laws generally applicable to the Village, and any special laws generally applicable to the Village. Under such laws, there is no authority for the Village to have a charter but pursuant to the Village Law and other laws generally applicable to home rule, the Village may from time to time adopt local laws. The legislative power of the Village is vested in the Board of Trustees, which consists of five members, including the Mayor, who is the chief executive officer of the Village, elected for a term of four years. The four other members of the Village Board are elected to four-year terms, which terms are staggered such that two Trustees are elected every other year. All the Board members are elected at large and there is no limitation to the number of terms each may serve. The Village Clerk is appointed to a 4-year term, the Village Treasurer is appointed to a one- year term and the Village Attorney is appointed to a one-year term.

Page 13: Greenport Village Refunding Official Statement

8

Employees

The Village provides services through approximately 30 full-time and two part-time employees, 27 of which are represented by the Civil Service Employees Association under a contract which expired on May 31, 2011. Such contract is presently under negotiation.

ECONOMIC AND DEMOGRAPHIC INFORMATION

Population Characteristics

Since 1970, the Village has had a population trend, as compared to the Town and County, as indicated below:

Town of Suffolk Year Village Southold County 1970 ..................................... 2,481 16,804 1,127,030 1980 ..................................... 2,273 19,172 1,284,231 1990 ..................................... 2,070 19,836 1,321,684 2000 ..................................... 2,048 20,599 1,419,369 2009 ...................................... 2,151 22,631 1,518,475 2010 ...................................... 2,655 23,707 1,515,943 Source: U.S. Bureau of the Census and Long Island Power Authority.

Income Data

Per Capita Money Income 1990 2000 2009* Village of Greenport $14,002 $17,595 $ 31,749 Town of Southold 19,037 27,619 40,137 County of Suffolk 18,481 26,577 35,062 State of New York 16,501 23,389 30,634 Median Household Income 1990 2000 2009* Village of Greenport $25,562 $31,675 $ 58,345 Town of Southold 35,392 49,898 72,899 County of Suffolk 49,128 65,288 84,530 State of New York 32,965 43,393 55,233 Source: United States Bureau of the Census *Note: Based on American Community Survey 4-Year Estimates (2005-2009)

Page 14: Greenport Village Refunding Official Statement

9

Selected Listing of Larger Employers in the Town of Southold

Approx. No.

Name Type of Employees Eastern Long Island Hospital ............................................... Hospital 390 Mattituck-Cutchogue UFSD ................................................ Public School 380 Plum Island ADC* ................................................................ U.S. Govt. Facility 330 Town of Southold ................................................................ Local Government 276 Peconic Landing ................................................................... Life Care Community 210 Southold UFSD ................................................................... Public School 198 San Simeon by the Sound .................................................... Nursing Home 175 Greenport UFSD .................................................................. Public School 120 *Note: As of the date of this Official Statement, the U.S. General Services Administration is undertaking measures to study the decommission and potential sale of the Plum Island and PIADC facilities pending completion of the replacement National Bio and Agro-Defense Facility (“NBAF”) in Manhattan, Kansas, anticipated in 2014.

Unemployment Rate Statistics

Unemployment statistics are not available for the Village as such. The smallest area for which such statistics are available (which includes the Village) is the County of Suffolk. The information set forth below with respect to such County is included for information purposes only. It should not be implied from the inclusion of such data in this Official Statement that the Village is necessarily representative of the County or vice versa. Suffolk New York County State Annual Averages: 2006 .................................................................. 4.0% 4.6% 2007 ................................................................. 3.9 4.5 2008 .................................................................. 4.9 5.3 2009 ................................................................. 7.3 8.4 2010 ................................................................. 7.6 8.6 2011 ................................................................. 7.3 8.0 Source: Department of Labor, State of New York

INDEBTEDNESS OF THE VILLAGE

Constitutional and Statutory Requirements

The State Constitution limits the power of the Village (as well as other municipalities and school districts of the State) to issue obligations and contract indebtedness. Such constitutional limitations include the following, in summary form, and are generally applicable to the Village and the Bonds: Purpose and Pledge. The Village shall not give or loan any money or property to or in aid of any individual or private corporation or private undertaking or give or loan its credit to or in aid of any of the foregoing or any public corporation. The Village may contract indebtedness only for a Village purpose and shall pledge its faith and credit for the payment of principal of and interest thereon. Payment and Maturity. Except for certain short-term indebtedness contracted in anticipation of taxes, indebtedness shall be paid in annual installments commencing no later than two years after the date such indebtedness shall have been contracted and ending no later than the expiration of the period of probable usefulness of the object or purpose as determined by statute; no installment may be more than fifty per centum in excess of the smallest prior installment, unless the Village has authorized the issuance of indebtedness having substantially level or declining annual debt service. The Village is required to provide an annual appropriation

Page 15: Greenport Village Refunding Official Statement

10

for the payment of interest due during the year on its indebtedness and for the amounts required in such year for amortization and redemption of its serial bonds and bond anticipation notes. General. The Village is further subject to constitutional limitation by the general constitutionally imposed duty on the State Legislature to restrict the power of taxation, assessment, borrowing money, contracting indebtedness and loaning the credit of the Village so as to prevent abuses in the exercise of such powers; however, as has been noted under "Security and Source of Payment", the State Legislature is prohibited by a specific constitutional provision from restricting the power of the Village to levy taxes on real estate for the payment of interest on or principal of indebtedness theretofore contracted. However, the New Tax Levy Limit Law imposes a statutory limitation on the Village’s power to increase its annual tax levy. The amount of such increase is limited by the formulas set forth in the New Levy Limit Law. See “Legal Matters and the New Tax Levy Limit Law” and “New Tax Levy Limit Law,” herein.

Statutory Procedure In general, the State Legislature has authorized the power and procedure for the Village to borrow and incur indebtedness subject, of course, to the constitutional provisions set forth above. The power to spend money, however, generally derives from other law, including the Village Law and the General Municipal Law. Pursuant to the Local Finance Law, the Village authorizes the incurrence of indebtedness by the adoption of a bond resolution approved by at least two-thirds of the members of the Board of Trustees, except in the event that the Village determines to subject the bond resolution to voter approval by mandatory referendum, in which case only a three-fifths vote is required. The Local Finance Law also provides a twenty-day statute of limitations after publication of a bond resolution which, in effect, estops thereafter legal challenges to the validity of obligations authorized by such bond resolution except for alleged constitutional violations. The Village has complied with such requirements with respect to the refunding bond resolution authorizing the issuance of the Bonds. Each bond resolution usually authorizes the construction, acquisition or installation of the object or purpose to be financed, sets forth the plan of financing and specifies the maximum maturity of the bonds subject to the legal (Constitution, Local Finance Law and case law) restrictions relating to the period of probable usefulness with respect thereto. Each bond resolution also authorizes the issuance of bond anticipation notes prior to the issuance of serial bonds. Statutory law in New York permits notes to be renewed each year provided that principal is amortized and provided that such renewals do not (with certain exceptions) extend more than five years beyond the original date of borrowing. However, bonds issued in anticipation of the sale of serial bonds for assessable improvements are not subject to such five year limit and may be renewed subject to annual reductions of principal for the entire period of probable usefulness of the purpose for which such bonds were originally issued. (See "Payment and Maturity" under "Constitutional Requirements"). In addition, under each bond resolution, the Board of Trustees may delegate, and has delegated, power to issue and sell bonds and notes, to the Village Treasurer, the chief fiscal officer of the Village. In general, the Local Finance Law contains similar provisions providing the Village with power to issue general obligation revenue anticipation notes, tax anticipation notes deficiency notes and budget notes. Debt Limit. The Village has the power to contract indebtedness for any Village purpose so long as the principal amount thereof shall not exceed seven per centum of the average full valuation of taxable real estate of the Village and subject to certain enumerated exclusions and deductions such as water and certain sewer facilities and cash or appropriations for current debt service. The constitutional and statutory method for determining the full valuation is by dividing the assessed valuation of taxable real estate by the respective equalization rates assigned to each assessment roll. Such equalization rates are the ratios which each of such assessed valuations bear to the respective full valuation of such year, as assigned by the Office of Real Property Tax Services. The State Legislature is required to prescribe the manner by which such ratios shall be determined. Average full valuation is determined by adding the full valuations for the most recently completed assessment roll and the four immediately preceding assessment rolls and dividing the resulting sum of such addition by five.

Page 16: Greenport Village Refunding Official Statement

11

There is no constitutional limitation on the amount that may be raised by the Village by tax on real estate in any fiscal year to pay principal and interest on all indebtedness. However, the New Tax Levy Limit Law, imposes a statutory limitation on the power of the Village to increase its annual tax levy. The amount of such increases is limited by the formulas set forth in the New Tax Levy Limit Law. See “Legal Matters and the New Tax Levy Limit Law” and “New Tax Levy Limit Law,” herein. The following pages set forth certain details with respect to the indebtedness of the Village.

Computation of Debt Limit and Calculation of Net Debt Contracting Margin (As of May 17, 2012)

Fiscal Year State Ending Assessed Equalization Full May 31: Valuation Rate Valuation 2008 ...................................................... $4,926,306 0.95% $518,558,526 2009 ....................................................... 5,009,285 1.05 477,074,761 2010 ....................................................... 5,042,738 1.06 475,730,000 2011 ....................................................... 5,073,484 1.09 465,457,248 2012 ....................................................... 5,072,091 1.11 456,945,135 Total Five Year Full Valuation ...................................................................................................... 2,393,765,671 Average Five Year Full Valuation ................................................................................................. 478,753,134 Debt Limit - 7% of Average Full Valuation ................................................................................... 33,512,719 Inclusions: Outstanding Bondsa: ............................................................................................................. 5,642,000 Bond Anticipation Notes ........................................................................................................ 2,459,000 Total Inclusions .............................................................................................................................. 8,101,000 Exclusions: Excluded Sewer Debt ............................................................................................................. 497,000 Appropriations ........................................................................................................................ 45,000 Total Exclusions .............................................................................................................................. 542,000 Total Net Indebtedness .................................................................................................................... 7,559,000 Net Debt Contracting Margin .......................................................................................................... $ 25,953,719 Per Cent of Debt Limit Exhausted ................................................................................................. 22.55 % a. See “Village of Greenport Water Pollution Control District” herein.

Details of Short-Term Indebtedness Outstanding (As of May 17, 2012)

The Village presently has outstanding the following short-term obligations:

Bond Anticipation Notes Date Due Purpose Amount 10-19-2012 Electric Systems Upgrade ....................................................................... $ 225,000 01-22-2013 Electric System Improvements ................................................................ 1,730,000 04-12-2013 Bulkhead Repairs .................................................................................... 54,000 04-05-2013 Wastewater Treatment Plant ................................................................... 450,000 Total .................................................................................... $2,459,000

Page 17: Greenport Village Refunding Official Statement

12

Debt Service Requirements – Outstanding Bonds and Refunding Bonds

Net After Fiscal Year Less: Debt Issuance of Ending Outstanding Refunding Service to be Refunding June 30: Debt Service Debt Service Sub-Total Refunded Bonds 2012 .......... $ 1,148,627 2013 .......... 1,150,939 2014 .......... 1,120,035 2015 .......... 1,083,771 2016 .......... 1,081,571 2017 .......... 990,507 2018 .......... 959,128 2019 .......... 232,584 2020 .......... 224,965 2021 .......... 104,561 Totals ....... $ 8,096,688 $ $ $ $

Authorized But Unissued Indebtedness

The following items are authorized but unissued: Date Authorized Purpose Amount 06-15-06 Fire Department Improvements ..................................................................... $ 120,000 10-26-09 Sanitary Sewer Improvements ...................................................................... 1,559,678a

10-25-05 Maintenance Vehicles-Electric Department .................................................. 150,000 06-18-11 Parking Meters ............................................................................................... 100,000 Total ................................................................... $1,929,678 a. See “Village of Greenport Water Pollution Control District” herein.

Village of Greenport Water Pollution Control District

The Village is undertaking a full-scale Biological Nitrogen Removal and Ultraviolet Light Disinfection Upgrade and other improvements to the Wastewater Treatment Plant. The estimated project costs are $8.1 million and will be funded with a combination of short-term interest free financing, principal forgiveness and NYSDEC Clean Water/Clean Air Bond Act Grant for $1,075,000, a NYSDEC Long Island Sound Restoration Program Grant for $459,000, a Office of Community Renewal Community Development Block Grant for $400,000, and a NYSERDA Research & Development Grant for $200,000. As of the date of this Statement, the Village has bond anticipation notes outstanding in the amount of $450,000 and has received a total of $6,540,322 pursuant to such project. The Village plans to convert to long-term interest-free financing in 2012.

Page 18: Greenport Village Refunding Official Statement

13

Trend of Village Indebtedness

The following table represents the outstanding indebtedness of the Village at the end of the last five preceding fiscal years. Fiscal Year Ending May 31: 2007 2008 2009 2010 2011 Debt Outstanding End of Year: Bonds ................................ $ 10,274,000 $9,481,000 $ 8,668,000 $7,821,000 $6,919,000 Bond Anticipation Notes ... 806,800 616,200 569,100 1,950,400 1,892,700 Other Debt .......................... 0 0 0 0 0 Total Debt Outstanding .............. $13,422,997 $11,080,800 $ 9,236,100 $9,771,400 $8,811,700

Calculation of Estimated Overlapping and Underlying Indebtedness Applicable Applicable Overlapping Date of Percentage Total Net Units Report Applicable Indebtedness Indebtedness County of Suffolk ............................................. 12-08-11 0.14% $2,112,062 $ 1,898,120 Town of Southold ............................................. 06-01-11 4.05 1,555,480 1,523,205 Greenport UFSD .............................................. 11-23-11 26.89 1,882,300 1,694,070 Totals ............................................................................ $5,549,842 $5,115,395 Sources: Annual Reports of the respective units for the most recently completed fiscal year on file with the Office of the State

Comptroller or more recently published Official Statements.

Debt Ratios (As of May 17, 2012)

Amount

Per

Capitab

Percentage Of

Full Valuec

Total Direct Debt .............................................................. $8,101,000 $ 3,051 1.77% Net Direct Debt ................................................................. 7,559,000 2,847 1.65 Total Direct & Applicable Total Overlapping Debt ......... 13,650,842 5,142 2.99 Net Direct & Applicable Net Overlapping Debt ............... 12,674,395 4,774 2.77 a. Does not includes the Bonds. b. The current population of the Village is 2,655 (2010 U.S. Census). c. The full valuation of taxable real property in the Village for 2011-12 is $456,945,135.

FINANCES OF THE VILLAGE

Financial Statements and Accounting Procedures

The financial statements of the Village are audited each year by an independent public accountant. The latest year for which an audit report is available is the fiscal year ended May 31, 2011. A copy of such report is attached hereto as Appendix B.

Page 19: Greenport Village Refunding Official Statement

14

Investment Policy

The Village has adopted an investment policy which is summarized as follows: The primary objectives of the local government's investment activities are, in priority order • to conform with all applicable federal, state and other legal requirements (legal); • to adequately safeguard principal (safety); • to provide sufficient liquidity to meet all operating requirements (liquidity); and • to obtain a reasonable rate of return (yield). The governing board's responsibility for administration of the investment program is delegated to the Village Treasurer who has established written procedures for the operation of the investment program consistent with these investment guidelines. Such procedures include an adequate internal control structure to provide a satisfactory level of accountability based on a data base or records incorporating description and amounts of investments, transaction dates, and other relevant information such procedures also regulate the activities of subordinate employees. Certain aspects of such procedures are summarized as follows: All participants in the investment process shall seek to act responsibly as custodians of the public trust and shall avoid any transaction that might impair public confidence in the Village to govern effectively. Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the safety of the principal as well as the probable income to be derived. All participants involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions. It is the policy of the Village to diversify its deposits and investments by financial institution, by investment instrument, and by maturity scheduling. It is the policy of the Village for all moneys collected by an officer or employee of the government to transfer those funds to the Village Treasurer within the time period specified by law. The Village Treasurer is responsible for establishing and maintaining an internal control structure to provide reasonable, but not absolute, assurance that deposits and investments are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and recorded properly, and are managed in compliance with applicable laws and regulations. In accordance with the provisions of General Municipal Law, §10, all deposits of the Village, including certificates of deposit and special time deposits, in excess of the amount insured under the provisions of the Federal Deposit Insurance Act shall be secured:

By a pledge of "eligible securities" with an aggregate "market value" as provided by GML §10, equal to the aggregate amount of deposits.

Eligible securities used for collateralizing deposits shall be held by a third party bank or trust company subject to security and custodial agreements. The security agreement shall provide that eligible securities are being pledged to secure local government deposits together with agreed upon interest, if any, and any costs or expenses arising out of the collection of such deposits upon default. It shall also provide the conditions under which the securities may be sold, presented for payment, substituted or released and the events which will enable the local government to exercise its rights against the pledged securities. In the event that the securities are not registered or inscribed in the name of the Village, such securities shall be delivered in a form suitable for transfer or with an assignment in blank to the Village or its custodial bank.

Page 20: Greenport Village Refunding Official Statement

15

The custodial agreement shall provide that securities held by the bank or trust company, or agent of and custodian for, the Village, will be kept separate and apart from the general assets of the custodial bank or trust company and will not, in any circumstances, be commingled with or become part of the backing for any other deposit or other liabilities. The agreement should also describe that the custodian shall confirm the receipt, substitution or release of the securities. The agreement shall provide for the frequency of revaluation of eligible securities and for the substitution of securities when a change in the rating of a security may cause ineligibility. Such agreement shall include all provisions necessary to provide the Village a perfected interest in the securities. As authorized by General Municipal Law, §11, the Village authorizes the Village Treasurer to invest moneys not required for immediate expenditure for terms not to exceed its projected cash flow needs in the following types of investments: • Special time deposit accounts; • Certificates of deposit; • Obligations of the United States of America;

• Obligations guaranteed by agencies of the United States of America where the payment of principal and interest are guaranteed by the United States of America;

• Obligations of the State of New York; • Obligations issued pursuant to Local Finance Law §24.00 or 25.00 (with approval of the

State Comptroller) by any municipality, school district or district corporation other than the Village of Greenport;

• Obligations of public authorities, public housing authorities, urban renewal agencies and

industrial development agencies where the general State statutes governing such entities or the specific enabling legislation authorizes such investments.

All investment obligations shall be payable or redeemable at the option of the Village within such times as the proceeds will be needed to meet expenditures for purposes for which the moneys were provided and, in the case of obligations purchased with the proceeds of bonds or notes, shall be payable or redeemable at the option of the Village within two years of the date of purchase. The Village shall maintain a list of financial institutions and dealers approved for investment purposes and establish appropriate limits to the amount of investments which can be made with each financial institution or dealer. All financial institutions with which the Village conducts business must be credit worthy. Banks shall provide their most recent Consolidated Report of Condition (Call Report) at the request of the Village of Greenport. Security dealers not affiliated with a bank shall be required to be classified as reporting dealers affiliated with the New York Federal Reserve Bank, as primary dealers. The Village Treasurer is responsible for evaluating the financial position and maintaining a listing of proposed depositaries, trading partners and custodians. Such listing shall be evaluated at least annually.

Financial Organization and Budgetary Procedures

The Village Treasurer is the chief fiscal officer of the Village. The duties of the Village Treasurer include administration and general supervision of all Village accounting and bookkeeping functions and departmental operations. As required by the Village’s adopted Investment Policy, the Village Treasurer has promulgated a policy statement outlining the procedures for operation of the financial management and investment program. The Mayor is the Budget Officer who prepares a preliminary budget in the Spring of each year and holds a public hearing thereon by April 15. Subsequent to the budget hearing, revisions, if any, are made and the budget is then adopted by the Board of Trustees as its final budget for the coming fiscal year by May 1. The budget is not subject to voter approval.

Fund Structure and Accounts

The General Fund is the general operating fund for the Village and is used to account for substantially all revenues and expenditures of the Village. The Village also maintains a Water Fund, a Light Fund, a Sewer Fund, a Special Revenue Fund, Capital Projects Fund, and a Trust and Agency Fund.

Page 21: Greenport Village Refunding Official Statement

16

Basis of Accounting The Village's governmental funds are accounted for on a modified accrual basis whereby revenues, other than those susceptible ("measurable" and "available" to finance current operations) to accrual, are recorded when received in cash. Revenues susceptible to accrual include real property taxes and State aid. The Village generally records expenditures on the accrual basis when fund liabilities are incurred, except as follows: Interest on general obligation debt which is recorded when it becomes due. Pension costs billed to the Village by the State are recorded as expenditures in full in the fiscal year billed. The estimated unbilled portion of these pension costs for governmental funds are shown as a liability on the balance sheet of the general long-term debt accounts group. Accumulated vacation and sick leave are also accounted for in the general long-term debt account group. Inventories are generally not recorded but expensed at the time of purchase. Fixed assets are recorded at cost; there is no provision for depreciation expense.

Revenues

The Village receives most of its revenues from a real property tax on all non-exempt real property situtated within the Village. Non-Property Taxes, Intergovernmental Charges, Departmental Income and State aid. A summary of such revenues for the five most recently completed fiscal years and estimated revenues for the current fiscal year may be found in Appendix A.

Real Property Taxes See "Tax Information", herein. State Aid

The Village receives financial assistance from the State. If the State should not adopt its budget in a timely manner, municipalities and school districts in the State, including the Village, may be affected by a delay in the payment of State aid. Additionally, if the State should experience difficulty in borrowing funds in anticipation of the receipt of State taxes in order to pay State aid to municipalities and school districts in the State, including the Village, in this year or future years, the Village may be affected by a delay in the receipt of State aid until sufficient State taxes have been received by the State to make State aid payments. Based on the audited financial statements of the Village, the Village received approximately 4.7% of its total General Fund operating revenue from State aid in the fiscal year ending May 31, 2011. There is no assurance, however, that State appropriations for aid to municipalities will continue, either pursuant to existing formulas or in any form whatsoever. The State is not constitutionally obligated to maintain or continue such aid and, in fact, the State has drastically reduced funding to municipalities and school districts in the last several years in order to balance its own budget. Although the Village cannot predict at this time whether there will be any delays and/or reductions in State aid in the current year or in future fiscal years, the Village may be able to mitigate the impact of any delays or reductions by reducing expenditures, increasing revenues appropriating other available funds on hand, and/or by any combination of the foregoing. The following table sets forth the percentage of the Village’s General Fund revenue comprised of State aid for each of the fiscal years 2007 through 2011, and, as budgeted, for 2012 and 2013.

Year

Ended May 31:

Total General Fund

Village Revenue

State Aid

State Aid

To Revenues (%)

2007 $4,027,527 $145,964 3.6% 2008 2,492,933 15,959 0.6 2009 2,478,050 109,373 4.4 2010 4,354,100 114,426 2.6 2011 2,815,875 132,066 4.7 2012 (Budgeted) 2,933,694 81,200 2.8 2013 (Budgeted) 2,807,764 81,200 2.9 Source: Audited financial statements 2007 through 2011 and the adopted budget for the fiscal years ending May 31, 2012 and 2013.

Page 22: Greenport Village Refunding Official Statement

17

Expenditures

The major categories of expenditure for the District are General Support, Instruction, Employee Benefits, Pupil Transportation and Debt Service. A summary of the expenditures for the five most recently completed fiscal years may be found in Appendix A.

2010-11 Results of Operations and 2011-12 Operations to Date

For the fiscal year ended May 31, 2011, the audited financial statements show the total revenue, including transfers, in the General Fund were $3,022,579 and the total expenditures, including transfers, were $3,125,931, resulting in an operating deficit of $103,352. The total overall fund balance in the General Fund decreased from $3,167,093 to $3,063,741. For the fiscal year ending May 31, 2012, the Village is projecting an operating surplus in the General Fund of approximately $140,000 due to conservative budgeting practices.

2012-13 Budget The 2012-13 Budget was adopted on April 23, 2012 and a summary is presented in Appendix A. It includes a tax rate increase of approximately 1.8% with appropriations increasing approximately $130,000. The Village did not appropriate the use of fund balance for the 2012-13 budget year.

Employee Pension System

Substantially all employees of the Village are members of the New York State and Local Employees’ Retirement System (the “Retirement System” or “ERS”). The Retirement System is a cost-sharing multiple public employer retirement system. The obligation of employers and employees to contribute and the benefits to employees are governed by the New York State Retirement System and Social Security Law (the “Retirement System Law”). The Retirement System offers a wide range of plans and benefits which are related to years of service and final average salary, vesting of retirement benefits, death and disability benefits and optional methods of benefit payments. All benefits generally vest after five years of credited service. The Retirement System Law generally provides that all participating employers in the Retirement System are jointly and severally liable for any unfunded amounts. Such amounts are collected through annual billings to all participating employers. Generally, all employees, except certain part-time employees, participate in the Retirement System. The Retirement System is non-contributory with respect to members hired prior to July 27, 1976. All members hired on or after July 27, 1976 must contribute three percent of their gross annual salary towards the costs of retirement programs until they attain ten years in the Retirement System, at such time contributions become voluntary. On December 10, 2009, the Governor signed into law the creation of a new Tier 5, which is effective for new ERS employees hired after January 1, 2010. New ERS employees in Tier 5 will now contribute 3% of their salaries. There is no provision for these contributions to cease for Tier 5 employees after a certain period of service. Additionally, on March 16, 2012, the Governor signed into law the new Tier 6 pension program, effective for new ERS employees hired after April 1, 2012. The Tier 6 legislation provides for increased employee contribution rates of between 3% and 6%, an increase in the retirement age from 62 years to 63 years, a readjustment of the pension multiplier, and a change in the time period for final average salary calculation from 3 years to 5 years. Tier 6 employees will vest in the system after ten years of employment and will continue to make employee contributions throughout employment. As a result of significant capital market declines in the recent past, in certain years the State’s Retirement System portfolio has experienced negative investment performance and severe downward trends in market earnings. As a result of the foregoing, it is anticipated that the employer contribution rate for the State’s Retirement System in future years may be significantly higher than the minimum contribution rate established under the Retirement System Law. The Office of the New York State Comptroller has informed participating employers that due to the global economic crisis, the rate of return of the pension fund has experienced an unprecedented decline and consequently, for the next several years, contribution rates may increase. The Employer Contribution Stabilization Program, signed into law on August 11, 2010 gives local governments the option to amortize a portion of annual pension costs. Amortizations are paid in equal installments over a ten-year period at an interest rate that is set annually. Under such legislation, local governments and school districts that choose to amortize will be required to set aside and reserve funds for certain future rate increases. The Village has not chosen to amortize its pension contributions. The legislation also authorizes local governments and school district to establish reserve accounts to fund future payment increases that are a result of fluctuations in pension plan performance. The Village is required to contribute an actuarially determined rate. The Village’s contributions made to the System were equal to 100% of the contributions required for each year. The required contributions for the five most recently completed fiscal years are as follows:

Page 23: Greenport Village Refunding Official Statement

18

Contributions to the Retirement Systems

Fiscal Year Ending May 31:

Amount of Contributiona

2008................................................................... $125,212 2009................................................................... 127,826 2010................................................................... 119,423 2011................................................................... 178,387 2012................................................................... 206,435 2013 (Budgeted) ............................................... 280,120

a. Includes contribution to the LOSAP for the Volunteer Fire Department.

Other Post Employment Benefits

It should also be noted that the Village provides post-retirement healthcare benefits to various categories of former employees. These costs may be expected to rise substantially in the future. GASB Statement No. 45 ("GASB 45") of the Governmental Accounting Standards Board ("GASB"), requires governmental entities, such as the Village, to account for the cost of certain non-pension post-employment benefits as it accounts for vested pension benefits. GASB 45 and OPEB. OPEB refers to "other post-employment benefits," and refers to benefits other than pension benefits. OPEB consists primarily of health care benefits, and may include other benefits such as disability benefits and life insurance. Before GASB 45, OPEB costs were generally accounted for and managed as current expenses in the year paid and were not reported as a liability on governmental financial statements. GASB 45 requires municipalities and school districts to account for OPEB liabilities much like they already account for pension liabilities, generally adopting the actuarial methodologies used for pensions, with adjustments for the different characteristics of OPEB and the fact that most municipalities and school districts have not set aside any funds against this liability. Unlike GASB Statement No. 27, which covers accounting for pensions, GASB 45 does not require municipalities or school districts to report a net OPEB obligation at the start. Under GASB 45, based on actuarial valuation, an annual required contribution ("ARC") will be determined for each municipality or school district. The ARC is the sum of (a) the normal cost for the year (the present value of future benefits being earned by current employees) plus (b) amortization of the unfunded accrued liability (benefits already earned by current and former employees but not yet provided for), using an amortization period of not more than 30 years. If a municipality or school district contributes an amount less than the ARC, a net OPEB obligation will result, which is required to be recorded as a liability on its financial statements. GASB 45 does not require that the unfunded liability actually be amortized nor that it be advance funded, only that the municipality or school district account for its unfunded accrued liability and compliance in meeting its ARC. The Village presents their financial statements under a comprehensive statutory basis of accounting in accordance with principles prescribed by the Office of the State Comptrollers (“OSC”) of the State of New York, and, as such, the Village is not required to implement this standard since OSC does not currently require entities to record this liability. If this were to change or if the Village should in the future elect to present their financial statements in accordance with GAAP, the Village would retain an actuary to perform the required evaluation of its liabilities pursuant to GASB 45. Actuarial Valuation will be required every two years for OPEB plans with more than two hundred members, or every three years if there are less than two hundred members. Additional information about GASB 45 and other accounting rules applicable to municipalities and school districts may be obtained from GASB.

Page 24: Greenport Village Refunding Official Statement

19

TAX INFORMATION

Real Property Taxes The Village derives its power to levy an ad valorem real property tax from the Constitution of the State. The Village's power to levy real property taxes, other than for debt service and certain other purposes, is limited by the State Constitution to two percent of the five-year average full valuation of taxable property of the Village. The State Board of Real Property Services annually establishes State Equalization Rates for all localities in the State, which are determined by statistical sampling of market sales/assessment studies. The equalization rates are used in the calculation and distribution of certain State aids and are used by many localities in the calculation or debt contracting and real property taxing limitations.

The following table sets forth the percentage of the Village’s General Fund revenue (excluding other financing sources) comprised of real property taxes for each of the fiscal years 2007 through 2011, and, as budgeted, for the year ending May 31, 2012 and 2013.

Year

Ended May 31:

Total General Fund

Village Revenue

State and Federal Aid

State and Federal Aid

To Revenues (%)

2007 $4,027,527 $1,053,990 26.2% 2008 2,492,933 841,450 33.8 2009 2,478,050 852,580 34.4 2010 4,354,100 956,056 21.9 2011 2,815,875 948,956 33.7

2012 (Budgeted) 2,933,694 942,547 34.2 2013 (Budgeted) 2,807,764 960,547 34.2 Source: Audited financial statements 2007 through 2011 and the adopted budget for the fiscal year ending May 31, 2012 and 2013.

Tax Collection Procedure

Tax payments are due on June 1st each year and are payable without penalty up to and including July 1. Penalties for tax delinquencies are imposed at the rate of 5% for the balance of July and an additional percentage (which is set by the State each year and in recent years has approximated 1%) for each month or fraction thereof thereafter. In March of each year tax liens are sold at auction pursuant to proceedings set forth in the Real Property Tax Law. Consequently, there are usually no uncollected taxes at the end of the fiscal year.

Tax Increase Procedural Limitation Legislation

Although the State Legislature is limited by Article VIII, Section 12 of the State Constitution from imposing limitations on the power to raise taxes to pay “interest on or principal of indebtedness theretofore contracted”, the New York State Legislature may from time to time impose additional limitations on the ability to issue new indebtedness or to raise taxes therefor.

On June 24, 2011, Chapter 97 of the Laws of 2011 was signed into law by the Governor (the “Tax Levy Limit Law” or the “Law”). The Tax Levy Limit Law generally applies to local governments and school districts in the State (with certain exceptions) and imposes additional procedural requirements on the ability of municipalities to levy certain year-to-year increases in real property taxes.

The Village is subject to the Tax Levy Limit Law, beginning with the Village’s budget for its fiscal year beginning January 1, 2012. Pursuant to the Tax Levy Limit Law, additional procedural requirements are imposed if a municipality seeks to increase the tax levy by more than the lesser of (1) two percent (2%) or (ii) the annual increase in the consumer price index, over the amount of the Village’s prior year’s tax levy (the “Tax Levy Increase Limit”). In the event the Village seeks to adopt a budget requiring a tax levy exceeding the Tax Levy Increase Limit, a favorable vote of at least five members of the seven-member Village Board would be required. The Village Board would also be required to act by Local Law rather than simply by resolution, and a public hearing would be required.

The Law permits certain exceptions to the Tax Levy Increase Limit. The Village may levy taxes exceeding the Tax Levy Increase Limit, if necessary, to support the following expenditures: (i) funds needed to pay judgments arising out of tort actions that exceed five percent of the total tax levied by the Village in the prior fiscal year and (ii) required pension payments (but only that portion of such payments attributable to the average actuarial contribution rate exceeding two percentage points). Taxes necessary for these expenditures will not be included in the calculation of the Tax Levy Increase Limit.

Page 25: Greenport Village Refunding Official Statement

20

The Law also provides for adjustments to be made to the Village’s Tax Levy Increase Limit based upon changes in the assessed value of the taxable real property in the Village. Additionally, the Village will be permitted to carry forward a certain portion of its unused tax levy capacity from the prior year.

Notes or Bonds of the Village issued prior to the July 1, 2011 effective date of the Tax Levy Limit Law are payable from real property taxes that can be levied as necessary without regard to any Constitutional or statutory limit. Inasmuch as the Law has no exclusion for principal and interest on notes and bonds, however, levies required to pay principal and interest on notes and bonds will be included in the calculation of the Tax Levy Increase Limit. In the absence of administrative or judicial guidance, and with a lack of any experience operating under the Law, the effect of the Law on the Village’s finances and its ability to continue to levy taxes sufficient to both pay debt service on pre July 1, 2011 and post July 1, 2011 notes and bonds and meet its other governmental responsibilities is uncertain.

Tax Limit The Constitution limits the amount that may be raised by the Village ad valorem tax levy on real estate in any fiscal year to two per centum (2%) of the five-year average full valuation of taxable real estate of the Village plus (1) the amounts required for principal and interest on all capital indebtedness, and (2) current appropriations for certain purposes. The tax limit for the Village for the 2011-2012 fiscal year (based on the 2011 assessment roll) is as follows: Five-year Average Full Valuation .............................................................. $485,039,441 Tax Limit - 2% thereof ............................................................................... 9,700,789 Tax Levy for General Village Purposes ...................................................... 942,547 Less: Exclusions ......................................................................................... 0 Tax Levy Subject to Tax Limit ................................................................... 942,547 Constitutional Tax Margin ......................................................................... $8,758,242

Tax Levy and Collection Record and Tax Rates

Fiscal Year Ending May 31:

2009 2010 2011 2012 2013 Tax Levy ....................................... $852,580 $898,616 919,442 942,662 $960,547 Taxes Rate per $100 of Assessed Valuation ...................... $17.02 $17.82 $18.13 18.58 $18.92

Selected Listing of Large Taxable Properties

2010-2011 Assessment Roll1

Assessed Name Type Valuation Hawkeye Electric Co. .............................................................. Electric Generating Facility $585,000 Front Street Park LLC .............................................................. Hotel 51,500 Townsend Manor Inn Inc. ....................................................... Hotel/Restaurant 44,400 Claudio, William F Inc. ............................................................ Restaurant/Commercial 42,160 Greenport Yacht & Shipbuilding ............................................ Industrial 33,400 Brewer Sterling Harbor Marina ............................................... Marina 25,900 Research Charters .................................................................... Pier/Wharf 25,600 Osinski, Michael & Isabel ........................................................ Residence 21,300 Sterlington Commons At Greenport LLC ............................... Neighborhood Shopping Center 20,540 JP Morgan Chase Bank ........................................................... Bank 19,900 101 Greenport Properties LLC ................................................ Supermarket 19,320 Vitale, John & Anthony .......................................................... Commercial & Apartments 18,800 Guzmar Enterprises LLC ......................................................... Stores 18,500 ST. Preston & Son, Inc. ........................................................... Stores 18,400 Research Charters. .................................................................... Wharf 15,800 $ 960,520

1

1. Represents 19.13% of the most recently available Total Taxable Assessed Valuation.

Page 26: Greenport Village Refunding Official Statement

21

LITIGATION

In common with other school districts, the District from time to time receives notices of claim and is party to litigation. In the opinion of the District, after consultation with its attorney, unless otherwise set forth herein and apart from matters provided for by applicable insurance coverage, there are no significant claims or actions pending in which the District has not asserted a substantial and adequate defense, nor which, if determined against the District, would have an adverse material effect on the financial condition of the District.

RISK FACTORS

AND

MARKET FACTORS AFFECTING FINANCINGS OF THE STATE AND MUNICIPALITIES OF THE STATE

The financial and economic condition of the Village, as well as the market for the Bonds, could be

affected by a variety of factors, many of which are beyond the Village's control. There can be no assurance that adverse events in the global economy the State or elsewhere, including, for example, the seeking by a municipality or large taxable property owner of remedies pursuant to the Federal Bankruptcy Code or otherwise, will not occur which might affect the market price of and the market for the Bonds. If a significant default or other financial crisis should occur in the affairs of the State or another jurisdiction, or of any of their respective agencies or political subdivisions or elsewhere, thereby further impairing the acceptability of obligations issued by borrowers within the State, both the ability of the Village to arrange for additional borrowings, and the market for and market value of outstanding debt obligations, including the Bonds, could be adversely affected.

The State is currently under considerable financial stress. In the State’s Supplement to the Third

Quarterly Update to the Annual Information Statement, dated May 12, 2010 (the “Supplement”), the State Division of the Budget indicated that the Estimated General Fund Budget Gap Before Executive Recommendations, as of February 2010, would be $1.4 billion and $6.8 billion for the 2009-10 and 2010-11 fiscal years, respectively. The Supplement indicated that if the Executive Budget recommendations had been adopted in their entirety, these budget gaps would have been eliminated, but budget gaps in the range of $6 billion in fiscal year 2011-12, $11 billion in 2010-13 and $13 billion in 2013-14 would have remained. The Supplement also indicates that delays in implementation of recommended budgetary adjustments would likely increase budget gaps. On March 31, 2011, the Governor of the state announced the passage of the 2011-12 budget. The 2011-12 budget is expected to reduce the former year budget gap from approximately $63 million to approximately $10 billion. The Supplement and other information about the State’s finance is provided by the State Divisions of the Budget on its website.

There are various other forms of risk associated with investing in the Bonds. Although none of such

risks currently exist with respect to the Village or the Bonds, there can be no assurance that one or more of such events will not occur in the future. One such risk is that the Village will be unable to promptly pay interest and principal on the Bonds as they become due (see "Remedies Upon Default", herein). If a Bondholder elects to sell his investment prior to its scheduled maturity date, market access or price risk may be incurred. The following is a discussion of certain events that could affect the risk of investing in the Bonds. In addition, there may be other risk factors which a potential investor must consider. In order to make an informed investment decision, an investor should be thoroughly familiar with the entire Official Statement, including its appendices, as well as all areas of potential risk.

There are a number of factors which could have a detrimental effect on the ability of the Village to continue to generate revenues, particularly its property taxes. For instance, the termination of a major commercial enterprise or an unexpected increase in certiorari proceedings could result in a large reduction in the assessed valuation of taxable real property in the Village. Unforeseen developments could also result in substantial increases in Village expenditures, thus placing considerable strain on the Village's financial condition.

A deterioration of Village finances could cause the credit rating of the Bonds to be lowered, suspended or withdrawn, if such action were to be deemed appropriate by Moody's Investors Service and/or Standard & Poor=s Corporation. Any of such actions on the part of either or both of such rating agencies could have an adverse effect on the market price of the Bonds or the availability of a secondary market for the Bonds.

If and when a holder of any of the Bonds should elect to sell a Bond prior to its maturity, there can be no assurance that a market shall have been established, maintained and be in existence for the purchase and sale of any of the Bonds. In addition, the price and principal value of the Bonds is dependent on the prevailing level of interests rates; if interest rates rise, the price of a bond or note will decline, causing the bondholder or noteholder to incur a potential capital loss if such bond or note is sold prior to its maturity.

Amendments to U.S. Internal Revenue Code could reduce or eliminate the favorable tax treatment granted to municipal debt, including the Bonds and other debt issued by the Village. Any such future legislation would have an adverse effect on the market value of the Bonds (See "Tax Matters" herein).

Page 27: Greenport Village Refunding Official Statement

22

TAX MATTERS

Tax Exemption

The delivery of the Bonds is subject to the opinion of Bond Counsel to the effect that interest on the Bonds for federal income tax purposes (1) will be excludable from gross income, as defined in section 61 of the Internal Revenue Code of 1986, as amended to the date of such opinion (the “Code”), pursuant to section 103 of the Code and existing regulations, published rulings, and court decisions, and (2) will not be included in computing the alternative minimum taxable income of the owners thereof who are individuals or, except as hereinafter described, corporations. The statutes, regulations, rulings, and court decisions on which such opinion is based are subject to change.

Interest on the Bonds owned by a corporation will be included in such corporation's adjusted current earnings for purposes of calculating the alternative minimum taxable income of such corporation, other than an S corporation, a qualified mutual fund, a real estate investment trust, a real estate mortgage investment conduit, or a financial asset securitization investment trust (“FASIT”). A corporation's alternative minimum taxable income is the basis on which the alternative minimum tax imposed by Section 55 of the Code will be computed.

In rendering the foregoing opinions, Bond Counsel will rely upon representations and certifications of the Village made in a certificate (the “Tax Certificate”) dated the date of delivery of the Bonds pertaining to the use, expenditure, and investment of the proceeds of the Bonds and will assume continuing compliance by the Village with the provisions of the Tax Certificate subsequent to the issuance of the Bonds. The Tax Certificate contains covenants by the Village with respect to, among other matters, the use of the proceeds of the Bonds and the facilities financed therewith by persons other than state or local governmental units, the manner in which the proceeds of the Bonds are to be invested, the periodic calculation and payment to the United States Treasury of arbitrage “profits” from the investment of proceeds, and the reporting of certain information to the United States Treasury. Failure to comply with any of these covenants may cause interest on the Bonds to be includable in the gross income of the owners thereof from the date of the issuance.

Bond Counsel’s opinion is not a guarantee of a result, but represents its legal judgment based upon its review of existing statutes, regulations, published rulings and court decisions and the representations and covenants of the Village described above. No ruling has been sought from the Internal Revenue Service (the “IRS”) with respect to the matters addressed in the opinion of Bond Counsel, and Bond Counsel’s opinion is not binding on the IRS. The IRS has an ongoing program of auditing the tax-exempt status of the interest on tax-exempt obligations. If an audit of the Bonds is commenced, under current procedures the IRS is likely to treat the Village as the “taxpayer,” and the owners of the Bonds would have no right to participate in the audit process. In responding to or defending an audit of the tax-exempt status of the interest on the Bonds, the Village may have different or conflicting interests from the owners of the Bonds. Public awareness of any future audit of the Bonds could adversely affect the value and liquidity of the Bonds during the pendency of the audit, regardless of its ultimate outcome.

In the opinion of Bond Counsel, under existing law interest on the Bonds is exempt from personal income taxes imposed by the State of New York or any political subdivision thereof (including The City of New York).

Except as described above, Bond Counsel expresses no opinion with respect to any federal, state or local tax consequences under present law, or proposed legislation, resulting from the receipt or accrual of interest on, or the acquisition or disposition of, the Bonds. Prospective purchasers of the Bonds should be aware that the ownership of tax-exempt obligations such as the Bonds may result in collateral federal tax consequences to, among others, financial institutions, life insurance companies, property and casualty insurance companies, certain foreign corporations doing business in the United States, S corporations with subchapter C earnings and profits, individual recipients of Social Security or Railroad Retirement benefits, individuals otherwise qualifying for the earned income tax credit, owners of an interest in a FASIT, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry, or who have paid or incurred certain expenses allocable to, tax-exempt obligations. Prospective purchasers should consult their own tax advisors as to the applicability of these consequences to their particular circumstances.

Tax Accounting Treatment of Discount and Premium on Certain Bonds

The initial public offering price of certain Bonds (the "Discount Bonds") may be less than the amount payable on such Bonds at maturity. An amount equal to the difference between the initial public offering price of a Discount Bond (assuming that a substantial amount of the Discount Bonds of that maturity are sold to the public at such price) and the amount payable at maturity constitutes original issue discount to the initial purchaser of such Discount Bond. A portion of such original issue discount allocable to the holding period of such Discount Bond by the initial purchaser will, upon the disposition of such Discount Bond (including by reason of its payment at maturity), be treated as interest excludable from gross income, rather than as taxable gain, for federal income tax purposes, on the same terms and conditions as those for other interest on the Bonds

Page 28: Greenport Village Refunding Official Statement

23

described above under "Tax Exemption." Such interest is considered to be accrued actuarially in accordance with the constant interest method over the life of a Discount Bond, taking into account the semiannual compounding of accrued interest, at the yield to maturity on such Discount Bond and generally will be allocated to an initial purchaser in a different amount from the amount of the payment denominated as interest actually received by the initial purchaser during the tax year.

However, such interest may be required to be taken into account in determining the alternative minimum taxable income of a corporation, for purposes of calculating a corporation's alternative minimum tax imposed by Section 55 of the Code, and the amount of the branch profits tax applicable to certain foreign corporations doing business in the United States, even though there will not be a corresponding cash payment. In addition, the accrual of such interest may result in certain other collateral federal income tax consequences to, among others, financial institutions, life insurance companies, property and casualty insurance companies, S corporations with subchapter C earnings and profits, individual recipients of Social Security or Railroad Retirement benefits, individuals otherwise qualifying for the earned income tax credit, owners of an interest in a FASIT, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry, or who have paid or incurred certain expenses allocable to, tax-exempt obligations. Moreover, in the event of the redemption, sale or other taxable disposition of a Discount Bond by the initial owner prior to maturity, the amount realized by such owner in excess of the basis of such Discount Bond in the hands of such owner (adjusted upward by the portion of the original issue discount allocable to the period for which such Discount Bond was held) is includable in gross income. Owners of Discount Bonds should consult with their own tax advisors with respect to the determination of accrued original issue discount on Discount Bonds for federal income tax purposes and with respect to the state and local tax consequences of owning and disposing of Discount Bonds.

The purchase price of certain Bonds (the "Premium Bonds") paid by an owner may be greater than the amount payable on such Bonds at maturity. An amount equal to the excess of a purchaser’s tax basis in a Premium Bond over the amount payable at maturity constitutes premium to such purchaser. The basis for federal income tax purposes of a Premium Bond in the hands of such purchaser must be reduced each year by the amortizable bond premium, although no federal income tax deduction is allowed as a result of such reduction in basis for amortizable bond premium. Such reduction in basis will increase the amount of any gain (or decrease the amount of any loss) to be recognized for federal income tax purposes upon a sale or other taxable disposition of a Premium Bond. The amount of premium which is amortizable each year by a purchaser is determined by using such purchaser's yield to maturity. Purchasers of the Premium Bonds should consult with their own tax advisors with respect to the determination of amortizable bond premium on Premium Bonds for federal income tax purposes and with respect to the state and local tax consequences of owning and disposing of Premium Bonds.

LEGAL MATTERS

The legality of the authorization and issuance of the Bonds will be covered by the unqualified legal opinion of Fulbright & Jaworski L.L.P., Bond Counsel, New York, New York. Such legal opinion will state that in the opinion of Bond Counsel (i) the Bonds have been authorized and issued in accordance with the Constitution and statutes of the State of New York and constitute valid and legally binding general obligations of the Village, all the taxable real property within which is subject to the levy of ad valorem taxes to pay the Bonds and interest thereon, without limitation as to rate or amount, provided, however, that the enforceability (but not the validity) of the Bonds: (a) may be limited by any applicable existing or future bankruptcy, insolvency or other law (State or Federal), affecting the enforcement of creditors' rights, and (b) may be subject to the exercise of judicial discretion in appropriate cases, (ii) the Village has the power to comply with its covenants included in its Tax Certificate with respect to the Bonds relating to compliance with the Code as it relates to the Bonds; provided, however, that the enforceability (but not the validity) of such covenants may be limited by any applicable existing or future bankruptcy, insolvency or other law (State or Federal) affecting the enforcement of creditors' rights; and (iii) as described under “Tax Matters” herein, interest on the Bonds will be excludable from the gross income of the owners thereof for Federal income tax purposes.

Such legal opinion also will state that (i) in rendering the opinions expressed therein, Bond Counsel has assumed the accuracy and truthfulness of all public records, documents and proceedings including factual information, expectations and statements contained therein, examined by Bond Counsel which have been executed or certified by public officials acting within the scope of their official capacities, and has not verified the accuracy or truthfulness thereof, and Bond Counsel also has assumed the genuineness of the signatures appearing upon such public records, documents and proceedings, and such certifications thereof, (ii) the scope of Bond Counsel's engagement in relation to the issuance of the Bonds has extended solely to the examination of the facts and law incident to rendering the opinions expressed therein; (iii) the opinions expressed therein are not intended and should not be construed to express or imply any conclusion that the amount of real property subject to taxation within the boundaries of the Village, together with other legally available sources of revenue, if any, will be sufficient to enable the Village to pay the principal of and interest on the Bonds as the same respectively become due and payable; (iv) reference should be made to the Official Statement for factual information which, in the judgment of the Village, would materially affect the ability of the Village to pay such principal and

Page 29: Greenport Village Refunding Official Statement

24

interest; and (v) while Bond Counsel has participated in the preparation of the Official Statement, Bond Counsel has not verified the accuracy, completeness or fairness of the factual information contained therein and, accordingly, no opinion is expressed by Bond Counsel as to whether the Village, in connection with the sale of the Bonds, has made any untrue statement of a material fact, or omitted to state a material fact necessary in order to make any statements made, in the light of the circumstances under which they were made, not misleading.

RATING The Village has applied to Moody’s Investors Service for a rating and such rating is pending at this time. This rating reflects only the view of such rating agency, and any desired explanation of the significance of such rating should be obtained from such rating agency. Generally, a rating agency bases its ratings on the information and materials furnished to it and on investigation, studies and assumptions by the rating agency. There is no assurance that a particular rating will apply for any given period of time or that it will not be lowered or withdrawn entirely if, in the judgment of the agency originally establishing the rating, circumstances so warrant. Any downward revision or withdrawal of such ratings could have an adverse affect on the market price of the outstanding bonds or the availability of a secondary market for such bonds. Such ratings should not be taken as a recommendation to put or hold the bonds.

VERIFICATION OF MATHEMATICAL COMPUTATIONS

The accuracy of the mathematical computations (a) regarding the adequacy of the maturing principal of and interest earned on the Government Obligations together with the uninvested cash, to pay, when due, the principal of and interest on and redemption premium, if any, with regard to the Refunded Bonds on the applicable payment dates and (b) relating to the determination by Bond Counsel of compliance with the regulations and rulings promulgated under Section 148 of the Code, as amended, will be verified by Causey Demgen & Moore Inc. Such verification of the accuracy of the mathematical computations will be based, in part, upon factual information supplied by the Village and the Underwriter (as defined below).

FINANCIAL ADVISOR

Munistat Services, Inc. has acted as the Financial Advisor to the Village in connection with the sale of the Bonds.

ADDITIONAL INFORMATION

Additional information may be obtained upon request from the business office of the Village: Village of Greenport, 236 Third Street, Greenport, NY 11944, telephone number 631/477-2385, Fax (631/477-1877, email: [email protected] or from the office of Munistat Services, Inc., 12 Roosevelt Avenue, Port Jefferson Station, New York 11776, telephone number 631/331-8888. Munistat Services, Inc. may place a copy of this Official Statement on its website at www.munistat.com. Unless this Official Statement specifically indicates otherwise, no statement on such website is included by specific reference or constitutes a part of this Official Statement. Munistat Services, Inc. has prepared such website information for convenience, but no decisions should be made in reliance upon that information. Typographical or other errors may have occurred in converting original source documents to digital format, and neither the Village nor Munistat Services, Inc. assumes any liability or responsibility for errors or omissions on such website. Further, Munistat Services, Inc. and the Village disclaim any duty or obligation either to update or to maintain that information or any responsibility or liability for any damages caused by viruses in the electronic files on the website. Munistat Services, Inc. and the Village also assume no liability or responsibility for any errors or omissions or for any updates to dated website information. Any statements in this Official Statement involving matters of opinion or estimates, whether or not expressly stated, are intended as such and not as representations of fact. No representation is made that any of such statements will be, in fact, realized. This Official Statement is not to be construed as a contract or agreement between the Village and the original purchasers or owners of any of the Bonds.

Page 30: Greenport Village Refunding Official Statement

25

Except for its review of the descriptions of the terms of the Bonds and its approving legal opinion to be rendered on the Bonds as Bond Counsel to the Village, Fulbright & Jaworski L.L.P., has not participated in the preparation of this Official Statement, nor verified the accuracy, completeness or fairness of the information contained herein, and accordingly, expresses no opinion with respect thereto. The preparation and distribution of this Official Statement has been authorized by a resolution of the Village which delegates to the Treasurer the power to sell and issue the Bonds. This Official Statement has been duly executed and delivered by the Treasurer of the Village of Greenport, New York.

By: s/s CHARLENE KAGEL, CPA Village of Greenport Greenport, New York May 17, 2012

Page 31: Greenport Village Refunding Official Statement

APPENDIX A

FINIANCIAL INFORMATION

Page 32: Greenport Village Refunding Official Statement

Statement of Revenues, Expenditures and Changes in Fund Balances

General Fund

Fiscal Years Ending May 31:

2007 2008 2009 2010 2011

Revenues:

Real Property Taxes $ 1,053,990 $ 841,450 $ 852,580 $ 956,056 $ 948,956

Other Real Property Tax Items 8,885 97,449 49,838 14,736 11,905

Departmental Income 66,939 162,513 146,890 147,490 154,079

Intergovernmental Charges 623,334 498,758 534,542 598,745 651,921

Use of Money and Property 791,901 699,155 671,932 695,167 726,638

Sale of Property and Compensation for Loss 1,282,344 17,662 1,700,000 20,000

Interfund Revenues 82,361 85,072 85,313

Licenses & Permits 23,566 69,523 19,844 19,286 12,326

Miscellaneous 30,604 90,464 10,690 23,122 61,291

State Aid 145,964 15,959 109,373 114,426 132,066

Federal Aid 11,380

Total Revenues 4,027,527 2,492,933 2,478,050 4,354,100 2,815,875

Expenditures:

General Government Support 234,732 274,330 291,023 312,613 349,285

Public Safety 628,094 595,815 427,767 468,826 620,819

Health 5,632 3,752 3,197 3,500 2,847

Transportation 654,017 539,612 605,219 581,857 538,462

Economic Opportunity & Development 30,875 49,535

Culture & Recreation 265,228 248,022 290,601 256,351 175,118

Home & Community Service 104,859 53,640 232,138 149,860 70,755

Employee Benefits 248,980 409,135 472,644 509,477 575,939

Debt Service:

Principal 33,000 116,200 125,000 151,900

Interest 5,534 50,419 47,691 40,806

Total Expenditures 2,172,417 2,212,375 2,489,208 2,455,175 2,525,931

Excess (Deficiency) of Revenues Over Expenditures 1,855,110 280,558 (11,158) 1,898,925 289,944

Other Financing Sources (Uses)

BAN Proceeds

Operating Transfers In 61,366 0 85,000 85,000 206,704

Operating Transfers Out (1,340,200) 0 (143,000) (37,000) (600,000)

Total Other Financing Sources (Uses) (1,278,834) 0 (58,000) 48,000 (393,296)

Excess (Deficiency) of Revenues & Other Financing

Fiscal Year Ending May 31, 2012 576,276 280,558 (69,158) 1,946,925 (103,352)

Adjustment to Fund Balance from Prior Year (29) 0 26,268

Fund Balance Beginning of Year 406,244 982,500 1,289,326 1,220,168 3,167,093

Fund Equity - End of Year $ 982,500 $ 1,263,058 $ 1,220,168 $ 3,167,093 $ 3,063,741

Sources: Audited Annual Financial Reports of the Village, 2007 - 2011

NOTE: This Schedule NOT audited

Village of GreenportA 1

Page 33: Greenport Village Refunding Official Statement

2010 2011Assets:

Cash $ 2,457,396 $ 2,251,314

Restricted Cash 1,284,434 1,226,698

Receivables:

Taxes Receivable 96,852

Accounts Receivable 223,277

Due from other funds 15,984

Due from other governments 2,723

Prepaid items 71,666 78,961

Total Assets: 3,926,332 3,782,973

Liabilities:

Accounts Payable 99,771 103,546

Accrued Liabilities

Due to Other Governments

Due to Other Funds 216,241 49,282

Deferred revenue 443,227 566,404

Total Liabilities 759,239 719,232

Fund Equity:

Reserved for Debt 1,078,200 1,093,201

Reserved (Other) 197,234 194,118

Unreserved, undesignated 1,891,659 1,776,422

Total Fund Balance 3,167,093 3,063,741

Total Liabilities and Fund Balance $ 3,926,332 $ 3,782,973

Sources: Audited Annual Financial Reports of the Village, 2010 and 2011

Note: This schedule NOT audited

Fiscal Year Ending May 31

Balance Sheet-General Fund

Village of GreenportA 2

Page 34: Greenport Village Refunding Official Statement

Statement of Revenues, Expenditures and Changes in Fund Balances

Special Revenue Fund *

Fiscal Years Ending May 31:

2007 2008 2009 2010 2011

Revenues:

Departmental Income $ 28,880 $ 19,040 $ 59,395 $ 54,524 $ 62,403

Use of Money and Property 911 33,472 799 622 324

Licenses and Permits

Intergovernmental income 14,866

Miscellaneous Local Sources 3,330 3,844

Federal Aid 1,012,837 931,385 910,396 964,078 1,016,098

Total Revenues 1,057,494 987,227 970,590 1,019,224 1,082,669

Expenditures:

General Government Support 97,465 70,650

Economic Opportunity and Development 48,138 40,114

Home & Community Service 1,055,676 783,125 891,535 929,355 924,855

Total Expenditures 1,055,676 880,590 939,673 1,000,005 964,969

Excess (Deficiency) of Revenues Over Expenditur 1,818 106,637 30,917 19,219 117,700

Operating Transfers (In)

Operating Transfers (Out) (61,366)

Fund Equity, Beginning of Year 182,567 123,019 229,656 260,573 279,792

Prior Period Adjustment 4,350

Fund Balance End of Year $ 123,019 $ 229,656 $ 260,573 $ 279,792 $ 401,842

* Consists of the Community Development Fund and the Housing Authority Fund.

Sources: Audited Annual Financial Reports of the Village, 2007 - 2011 and 2010 Annual Financial Update Document (Unaudited)

Note: This schedule NOT audited

Village of GreenportA3

Page 35: Greenport Village Refunding Official Statement

Statement of Revenues, Expenditures and Changes in Fund Net Assets

Light Fund

Fiscal Years Ending May 31:

2007 2008 2009 2010 2011

Operating Revenues:

Electricity Sales $ 2,822,334 $ 3,318,607 $ 3,397,290 $ 3,060,358 $ 3,209,049

Use of money and Property 949

Interest and Penalties

Other Operating Revenue 213,249

Total Operating Revenues 2,822,334 3,318,607 3,397,290 3,061,307 3,422,298

Operating Expenditures:

Administrative and Personal 618,227 616,187 636,847 325,076 555,679

Taxes 85,000

Power

Plant , Transmission and Distribution 1,441,262 1,917,060 1,826,304 1,802,078 2,115,706

Depreciation 137,103 144,422 147,331 152,970 163,068

Other 311,111 205,539 171,000 587

Total Operating Expenditures 2,592,703 2,883,208 2,781,482 2,280,124 2,835,040

Operating Income 229,631 435,399 615,808 781,183 587,258

Nonoperating Revenues (Expenses)

Interest Revenue 13 100 400 1,191

Interest Expense (110,917) (103,267) (93,907) (83,593) (77,800)

Amortization of Deferred Charges (8,046) (8,046) (8,046) (8,046)

Elimination of sick-time acrual 115,397

Contribution to General Fund

Operating Transfers Out (85,000)

Total Non-Operating Revenues (3,553) (111,213) (101,553) (168,593) (84,655)

Net Income (Loss) 226,078 324,186 514,255 612,590 502,603

Prior Period Adjustment (81,719)

Net Assets - Beginning of Year 1,437,571 1,663,649 1,906,116 2,420,371 3,032,961

Prior Period Adjustment (30,002)

Net Assets - End of Year $ 1,663,649 $ 1,987,835 $ 2,420,371 $ 3,032,961 $ 3,505,562

Sources: Audited Annual Financial Reports of the Village, 2007 - 2011 and 2010 Annual Financial Update Document (Unaudited)

This schedule NOT audited

Village of GreenportA 4

Page 36: Greenport Village Refunding Official Statement

Statement of Revenues, Expenditures and Changes in Fund Net Assets

Water Fund

Fiscal Years Ending May 31:

2007 2008 2009 2010 2011

Operating Revenues:

Water Sales $ 363,126 $ 422,382 $ 409,969 $ 386,779 $ 464,329

Use of Money and Property 3,079 2,810 5,506

Service Charges 42,443

Interest and Penalties 3,554 6,237

Miscellaneous 7,499 5,119 3,730 45

Total Operating Revenues 416,622 433,738 416,778 389,589 469,880

Operating Expenditures:

Personal Services 84,737 131,961 127,560 91,285 101,392

Contractual Expenses 188,072 211,814 234,576 152,553 176,614

Purification 3,584

Plant , Transmission and Distribution 61,131

Employee Benefits 60,394 89,197 80,618 50,498 57,303

Depreciation 20,974 20,614 20,863 19,289 17,820

Interest Expense 625 289 56

Total Operating Expenditures 418,892 454,211 463,906 313,681 353,129

Operating Income (2,270) (20,473) (47,128) 75,908 116,751

Nonoperating Revenues (Expenses)

Interest Revenue (expense) 3,940

Elimination of sick time accrual 10,445

Operating Transfers Out 0 0

Total Non-Operating Revenues 14,385 0 0 0 0

Net Income (Loss) 12,115 (20,473) (47,128) 75,908 116,751

Net Assets - Beginning of Year 1,256,042 1,268,157 1,247,684 1,200,556 1,276,464

Other Changes in Net Assets

Net Assets Equity - End of Year $ 1,268,157 $ 1,247,684 $ 1,200,556 $ 1,276,464 $ 1,393,215

Sources: Audited Annual Financial Reports of the Village, 2007 - 2011

Note: This schedule NOT audited

Village of GreenportA 5

Page 37: Greenport Village Refunding Official Statement

Statement of Revenues, Expenditures and Changes in Fund Net Assets

Sewer Fund

Fiscal Years Ending May 31:

2007 2008 2009 2010 2011

Operating Revenues:

Sewer Rents $ 885,416 $ 1,076,674 $ 1,195,675 $ 1,148,182 $ 1,089,653

Use of Money and Property 13,977 13,458 1,013

Sales Tax Revenues 26,984 26,984

Interest and Penalties 12,853 22,677

Miscellaneous 1,613 1,266 1,295 42,385 2,762

Other General Government Aid 110,361 621,679 531,399

Total Operating Revenues 899,882 1,100,617 1,348,292 1,825,704 1,651,811

Operating Expenditures:

Personal Services 227,248 402,094 249,477 349,576 389,328

Purification 157,224

Contractual 217,843 556,651 629,162 434,672 319,045

Employee Benefits 115,565 131,233 119,828 168,353 164,797

Depreciation 175,823 175,823 176,233 178,486 177,097

Interest Expense 34,242 31,503 33,116 41,596

Total Operating Expenditures 893,703 1,300,043 1,206,203 1,164,203 1,091,863

Operating Income 6,179 (199,426) 142,089 661,501 559,948

Nonoperating Revenues (Expenses)

Interest Revenue 28,070

Interest Expense (38,255)

Elimination of sick time accrual 10,490

Operating Transfers In (Out)

Total Non-Operating Revenues 305 0 0 0 0

Net Income (Loss) 6,484 (199,426) 142,089 661,501 559,948

Other Changes in Net Assets 0 0 0

Net Assets - Beginning of Year 2,104,828 2,111,312 1,911,886 2,053,975 2,632,099

Adjustment to Prior Year's Net Assets (83,377)

Net Assets - End of Year $ 2,111,312 $ 1,911,886 $ 2,053,975 $ 2,632,099 $ 3,192,047

Sources: Audited Annual Financial Reports of the Village, 2007 - 2011

* Note: reflects adjustment of 2009 ending fund balance presented in 2010 AUD (not audited)

This schedule NOT audited

Village of GreenportA 6

Page 38: Greenport Village Refunding Official Statement

Budget SummariesFiscal Year Ending May 31, 2012

General Recreation Sewer Water LightFund Fund Fund Fund Fund

Revenues: Real Property Taxes $ 942,547 $ $ $ $ Other Real Property Tax Items 52,000 Departmental Income 13,800 1,343,685 1,263,500 430,100 3,467,950 Public Safety 714,592 Intergovernmental Income 18,000 Use of Money and Property 832,205 Licenses & Permits 18,150 Miscellaneous 13,200 State Aid 81,200 Interfund Revenues 248,000

Total Revenues $ 2,933,694 $ 1,343,685 $ 1,263,500 $ 430,100 $ 3,467,950

Expenditures: General & Miscellaneous Expenses $ 355,677 $ 652,750 1,129,000 419,736 3,167,972 Public Safety 42,350 Health 1,045,129 Transportation 660,600 Culture & Recreation 110,511 Home & Community Service 150,115 Employee Benefits 521,465 69,315 49,000 10,364 72,278 Debt Service 47,847 621,620 85,500 227,700

Total Expenditures $ 2,933,694 $ 1,343,685 $ 1,263,500 $ 430,100 $ 3,467,950

Source: Adopted Budget of the Village

Village of Greenport

A 7

Page 39: Greenport Village Refunding Official Statement

Budget SummariesFiscal Year Ending May 31, 2013

General Recreation Sewer Water LightFund Fund Fund Fund Fund

Revenues: Real Property Taxes $ 960,547 $ $ $ $ Other Real Property Tax Items 53,500 Departmental Income 16,960 1,559,765 1,265,450 412,400 3,452,450 Public Safety 713,357 Home & Community Services 82,000 Use of Money and Property 750,000 Licenses & Permits 18,000 Miscellaneous 17,200 Recreational Revenue 115,000 State Aid 81,200

Total Revenues $ 2,807,764 $ 1,559,765 $ 1,265,450 $ 412,400 $ 3,452,450

Expenditures: General & Miscellaneous Expenses $ 342,849 $ 834,000 854,970 326,660 3,324,950 Public Safety 1,036,505 Health 3,500 Transportation 655,200 Culture & Recreation 6,200 Home & Community Service 193,130 Employee Benefits 540,436 92,630 234,480 85,740 127,500 Debt Service 29,944 633,135 176,000

Total Expenditures $ 2,807,764 $ 1,559,765 $ 1,265,450 $ 412,400 $ 3,452,450

Source: Adopted Budget of the Village

Village of Greenport

A 8

Page 40: Greenport Village Refunding Official Statement

VILLAGE OF GREENPORT

APPENDIX B

AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED MAY 31, 2011

NOTE: SUCH FINANCIAL REPORT AND OPINIONS WERE PREPARED AS OF THE DATE THEREOF AND HAVE NOT BEEN REVIEWED AND/OR UPDATED IN CONNECTION WITH THE PREPARATION AND DISSEMINATION OF THIS OFFICIAL STATEMENT. CONSENT OF THE AUDITORS HAS NOT BEEN REQUESTED OR OBTAINED.

Page 41: Greenport Village Refunding Official Statement

APPENDIX C

CONTINUING DISCLOSURE UNDERTAKING

Page 42: Greenport Village Refunding Official Statement

Continuing Disclosure Undertaking

A. Definitions. As used in this Undertaking, the following terms have the meanings ascribed to such terms below:

“Bonds” means the Issuer’s $4,730,000 Village of Greenport, Suffolk County, New York Refunding Serial Bonds - 2012, dated , 2012.

“Issuer” means the Village of Greenport, Suffolk County, New York.

“MSRB” means the Municipal Securities Rulemaking Board.

“Rule” means SEC Rule 15c2-12, as amended from time to time.

“SEC” means the United States Securities and Exchange Commission.

“Undertaking” means this Continuing Disclosure Undertaking.

B. Annual Reports. The Issuer shall provide annually to the MSRB, (1) within six months after the end of each fiscal year ending after the date hereof, financial information and operating data with respect to the Issuer of the general type contained in or cross referenced in the Issuer’s final Official Statement, dated , 2011 under the headings “Village of Greenport”, “Economic and Demographic Information”, “Indebtedness of the Village”, “Finances of the Village”, “Tax Information”, “Litigation” and “Appendix A: Financial Information”, and (2) if not provided as part such financial information and operating data, audited financial statements of the Issuer, when and if available. Any financial statements so to be provided shall be prepared in accordance with the accounting principles as the Issuer may be required to employ from time to time pursuant to state law or regulation, and (ii) audited, if the Issuer commissions an audit of such statements and the audit is completed within the period during which they must be provided.

If the Issuer changes its fiscal year, it will notify the MSRB of the change (and of the date of the new fiscal year end) prior to the next date by which the Issuer otherwise would be required to provide financial information and operating data pursuant to this Undertaking.

The financial information and operating data to be provided pursuant to this Undertaking may be set forth in full in one or more documents or may be included by specific reference to any document available to the public on the MSRB’s Internet Web site or filed with the SEC.

C. Event Notices. The Issuer shall provide notice of any of the following events with respect to the Bonds to the MSRB in a timely manner and not more than 10 business days after occurrence of the event:

(1) principal and interest payment delinquencies;

(2) non-payment related defaults, if material;

(3) unscheduled draws on debt service reserves reflecting financial difficulties;

(4) unscheduled draws on credit enhancements reflecting financial difficulties;

(5) substitution of credit or liquidity providers, or their failure to perform;

Page 43: Greenport Village Refunding Official Statement

(6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB), or other material notices or determinations with respect to the tax-exempt status of the Bonds, or other material events affecting the tax status of the Bonds;

(7) modifications to rights of holders of the Bonds, if material;

(8) bond calls, if material, and tender offers;

(9) defeasances;

(10) release, substitution, or sale of property securing repayment of the Bonds, if material;

(11) rating changes;

(12) bankruptcy, insolvency, receivership, or similar event of the Issuer, which shall occur as described below;

(13) the consummation of a merger, consolidation, or acquisition involving the Issuer or the sale of all or substantially all of its assets, other than in the ordinary course of business, the entry into of a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and

(14) appointment of a successor or additional trustee or the change of name of a trustee, if material.

For these purposes, any event described in the immediately preceding paragraph (12) is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the Issuer in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Issuer, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Issuer.

The Issuer shall notify the MSRB, in a timely manner, of any failure by the Issuer to provide a notice described in “B”, above, by the time required by this Undertaking.

C. Filings with the MSRB. All notices and other documents provided to the MSRB in accordance with this Undertaking shall be provided in an electronic format prescribed by the MSRB and shall be accompanied by identifying information as prescribed by the MSRB.

D. Limitations, Disclaimers, and Amendments. The Issuer shall be obligated to observe and perform the covenants specified in this Undertaking for so long as, but only for so long as, the Issuer remains an “obligated person” with respect to the Bonds within the meaning of the Rule.

The provisions of this Undertaking are for the sole benefit of the holders and beneficial owners of the Bonds, and nothing in this Undertaking, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The Issuer undertakes to provide only the notices which it has expressly agreed to provide pursuant to this Undertaking and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the Issuer’s financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Undertaking or otherwise, except as expressly provided herein. The Issuer does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Bonds at any future date.

Page 44: Greenport Village Refunding Official Statement

UNDER NO CIRCUMSTANCES SHALL THE ISSUER BE LIABLE TO THE HOLDER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE ISSUER, WHETHER NEGLIGENT OR WITH OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS UNDERTAKING, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE.

No default by the Issuer in observing or performing its obligations under this Undertaking shall constitute a breach of or default on the Bonds.

Nothing in this Undertaking is intended or shall act to disclaim, waive, or otherwise limit the duties of the Issuer under federal and state securities laws.

The provisions of this Undertaking may be amended by the Issuer from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the Issuer, but only if (1) the provisions of this Undertaking, as so amended, would have permitted an underwriter to purchase or sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (2) either (a) the holders of the Bonds consent to such amendment or (b) a person that is unaffiliated with the Issuer (such as nationally recognized bond counsel) determines that such amendment will not materially impair the interests of the holders and beneficial owners of the Bonds. The Issuer may also repeal or amend the provisions of this Undertaking if the SEC amends or repeals the applicable provisions of the Rule or any court of final jurisdiction enters judgment that such provisions of the Rule are invalid, and the Issuer also may amend the provisions of this Undertaking in its discretion in any other manner or circumstance, but in either case only if and to the extent that the provisions of this sentence would not have prevented an underwriter from lawfully purchasing or selling Bonds in the primary offering of the Bonds, giving effect to (i) such provisions as so amended and (ii) any amendments or interpretations of the Rule. If the Issuer so amends the provisions of this Undertaking, the Issuer shall include with any amended financial information or operating data next provided in accordance with this Undertaking an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information or operating data so provided.

VILLAGE OF GREENPORT

By: _____________________________ Name: Title:

[End of Appendix C]

Page 45: Greenport Village Refunding Official Statement

APPENDIX D

FORM OF OPINION OF FULBRIGHT & JAWORSKI L.L.P.