romeo community schools

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NEW ISSUE Ratings ¹†: Moody’s: Aa2/Aa3 Book-Entry-Only TAX STATUS: In the opinion of Clark Hill PLC, Bond Counsel, assuming continued compliance by the School District with certain requirements of the Internal Revenue Code of 1986, as amended the (the “Code”), interest on the Bonds is excluded from gross income for federal income tax purposes, as described in the opinion; the Bonds and interest thereon are exempt from all taxation in the State of Michigan, except inheritance and estate taxes and taxes on gains realized from the sale, payment or other disposition thereof; and interest on the Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. See “TAX MATTERS” herein. $14,260,000 ROMEO COMMUNITY SCHOOLS Counties of Macomb and Oakland State of Michigan 2015 Refunding Bonds (General Obligation - Unlimited Tax) PURPOSE AND SECURITY: The Bonds are being issued pursuant to a resolution adopted on July 21, 2014 by the Board of Education of the Romeo Community Schools (the “School District”) for the purpose of currently refunding a portion of the prior bond issue of the School District and paying the costs of issuing the Bonds. The Bonds will pledge the full faith and credit of the School District for payment of the principal of and interest on the Bonds, and will be payable from ad valorem taxes, which may be levied without limitation as to rate or amount, as provided by Article IX, Section 6 and Article IX, Section 16 of the Michigan Constitution of 1963, in such amounts as shall be necessary to pay when due the principal of and interest on the Bonds. The rights or remedies of Bondholders may be affected by bankruptcy laws or other creditor’s rights legislation now existing or hereafter enacted. STATE QUALIFICATION: The Bonds are expected to be fully qualified as of delivery pursuant to Act 92, Public Acts of Michigan, 2005, as amended, enacted pursuant to Article IX, Section 16, of the Michigan Constitution of 1963. Under the terms of said constitutional and statutory provisions, if for any reason the School District will be or is unable to pay the principal and interest on the Bonds when due, then the School District shall borrow, and the State of Michigan shall lend to it, an amount sufficient to enable the School District to make the payment. BOOK-ENTRY-ONLY: The Bonds are issuable only as fully registered bonds without coupons, and when issued, will be registered in the name of Cede & Co., as Bondholder and nominee for The Depository Trust Company (“DTC”), New York, New York. DTC will act as securities depository for the Bonds. Purchases of beneficial interests in the Bonds will be made in book-entry only form, in the denominations of $5,000 or any integral multiple thereof. Purchasers will not receive certificates representing their beneficial interest in Bonds purchased. So long as Cede & Co. is the Bondholder, as nominee of DTC, references herein to the Bondholders or registered owners shall mean Cede & Co., as aforesaid, and shall not mean the Beneficial Owners of the Bonds. See “BOOK-ENTRY ONLY SYSTEM” herein. PAYMENT OF BONDS: Interest on the Bonds will be payable semiannually on May 1 and November 1 of each year commencing on November 1, 2015. The Bonds will be registered Bonds, of the denomination of $5,000 or multiples thereof not exceeding for each maturity the principal amount of such maturity. The principal and interest shall be payable at the corporate trust office of The Huntington National Bank, Grand Rapids, Michigan (the “Paying Agent”) or such other Paying Agent as the School District may hereafter designate by notice mailed to the registered owner not less than sixty (60) days prior to any interest payment date. So long as DTC or its nominee, Cede & Co., is the Bondholder, such payments will be made directly to such Bondholder. Disbursement of such payments to the Beneficial Owners is the responsibility of DTC Participants and Indirect Participants, as more fully described herein. Interest shall be paid when due by check or draft mailed to the registered owner as shown on the registration books as of the fifteenth day of the month preceding the payment date for each interest payment. Dated: March 19, 2015 Principal Due: May 1 of each year as shown below MATURITY SCHEDULE (Base CUSIP§: 776134) Year Amount Interest Rate Yield CUSIP§ Year Amount Interest Rate Yield CUSIP§ 2016 $3,760,000 2.00% 0.60% MU9 2019 $2,805,000 3.00% 1.35% MX3 2017 2,115,000 2.00 0.78 MV7 2020 2,810,000 3.00 1.55 MY1 2018 2,770,000 3.00 1.15 MW5 Raymond James & Associates, Inc. PRIOR REDEMPTION: Bonds of this issue are not subject to redemption prior to maturity. See “PRIOR REDEMPTION -No Redemption” herein. BOND COUNSEL: The Bonds will be offered when, as and if issued by the School District subject to the approving legal opinion of Clark Hill PLC, Birmingham, Michigan, Bond Counsel. THIS COVER PAGE CONTAINS INFORMATION FOR A QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THIS ISSUE. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION. Additional information relative to this Bond issue may be obtained from Stauder, BARCH & ASSOCIATES, Inc. Municipal Bond Financial and Marketing Consultants 3989 Research Park Drive Ann Arbor, Michigan 48108 734-668-6688 OFFICIAL STATEMENT DATED: FEBRUARY 25, 2015 ¹ For an explanation of ratings, see “CREDIT RATING” herein. As of the date of delivery § Copyright 2015, American Bankers Association. CUSIP data herein is provided by Standard & Poor’s CUSIP Service Bureau, a division of the McGraw-Hill Companies, Inc. The School District shall not be responsible for the selection of CUSIP numbers, nor any representation made as to their correctness on the Bonds or as indicated above.

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Page 1: Romeo Community Schools

NEW ISSUE Ratings ¹†: Moody’s: Aa2/Aa3Book-Entry-Only

TAX STATUS: In the opinion of Clark Hill PLC, Bond Counsel, assuming continued compliance by the School District with certain requirements of the Internal Revenue Code of 1986, as amended the (the “Code”), interest on the Bonds is excluded from gross income for federal income tax purposes, as described in the opinion; the Bonds and interest thereon are exempt from all taxation in the State of Michigan, except inheritance and estate taxes and taxes on gains realized from the sale, payment or other disposition thereof; and interest on the Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. See “TAX MATTERS” herein.

$14,260,000ROMEO COMMUNITY SCHOOLS

Counties of Macomb and Oakland State of Michigan

2015 Refunding Bonds(General Obligation - Unlimited Tax)

PURPOSE AND SECURITY: The Bonds are being issued pursuant to a resolution adopted on July 21, 2014 by the Board of Education of the Romeo Community Schools (the “School District”) for the purpose of currently refunding a portion of the prior bond issue of the School District and paying the costs of issuing the Bonds. The Bonds will pledge the full faith and credit of the School District for payment of the principal of and interest on the Bonds, and will be payable from ad valorem taxes, which may be levied without limitation as to rate or amount, as provided by Article IX, Section 6 and Article IX, Section 16 of the Michigan Constitution of 1963, in such amounts as shall be necessary to pay when due the principal of and interest on the Bonds. The rights or remedies of Bondholders may be affected by bankruptcy laws or other creditor’s rights legislation now existing or hereafter enacted.

STATE QUALIFICATION: The Bonds are expected to be fully qualified as of delivery pursuant to Act 92, Public Acts of Michigan, 2005, as amended, enacted pursuant to Article IX, Section 16, of the Michigan Constitution of 1963. Under the terms of said constitutional and statutory provisions, if for any reason the School District will be or is unable to pay the principal and interest on the Bonds when due, then the School District shall borrow, and the State of Michigan shall lend to it, an amount sufficient to enable the School District to make the payment.

BOOK-ENTRY-ONLY: The Bonds are issuable only as fully registered bonds without coupons, and when issued, will be registered in the name of Cede & Co., as Bondholder and nominee for The Depository Trust Company (“DTC”), New York, New York. DTC will act as securities depository for the Bonds. Purchases of beneficial interests in the Bonds will be made in book-entry only form, in the denominations of $5,000 or any integral multiple thereof. Purchasers will not receive certificates representing their beneficial interest in Bonds purchased. So long as Cede & Co. is the Bondholder, as nominee of DTC, references herein to the Bondholders or registered owners shall mean Cede & Co., as aforesaid, and shall not mean the Beneficial Owners of the Bonds. See “BOOK-ENTRY ONLY SYSTEM” herein.

PAYMENT OF BONDS: Interest on the Bonds will be payable semiannually on May 1 and November 1 of each year commencing on November 1, 2015. The Bonds will be registered Bonds, of the denomination of $5,000 or multiples thereof not exceeding for each maturity the principal amount of such maturity. The principal and interest shall be payable at the corporate trust office of The Huntington National Bank, Grand Rapids, Michigan (the “Paying Agent”) or such other Paying Agent as the School District may hereafter designate by notice mailed to the registered owner not less than sixty (60) days prior to any interest payment date. So long as DTC or its nominee, Cede & Co., is the Bondholder, such payments will be made directly to such Bondholder. Disbursement of such payments to the Beneficial Owners is the responsibility of DTC Participants and Indirect Participants, as more fully described herein. Interest shall be paid when due by check or draft mailed to the registered owner as shown on the registration books as of the fifteenth day of the month preceding the payment date for each interest payment.

Dated: March 19, 2015 Principal Due: May 1 of each year as shown below

MATURITY SCHEDULE(Base CUSIP§: 776134)

Year AmountInterest

Rate Yield CUSIP§ Year AmountInterest

Rate Yield CUSIP§2016 $3,760,000 2.00% 0.60% MU9 2019 $2,805,000 3.00% 1.35% MX32017 2,115,000 2.00 0.78 M V 7 2020 2,810,000 3.00 1.55 MY12018 2,770,000 3.00 1.15 MW5

Raymond James & Associates, Inc.PRIOR REDEMPTION: Bonds of this issue are not subject to redemption prior to maturity. See “PRIOR REDEMPTION -No Redemption” herein.

BOND COUNSEL: The Bonds will be offered when, as and if issued by the School District subject to the approving legal opinion of Clark Hill PLC, Birmingham, Michigan, Bond Counsel.

This cover page conTains informaTion for a quick reference only. iT is noT a summary of This issue. invesTors musT read The enTire official sTaTemenT To obTain informaTion essenTial To The making of an informed invesTmenT decision.

Additional information relative to this Bond issue may be obtained from

Stauder, BARCH & ASSOCIATES, Inc.Municipal Bond Financial and Marketing Consultants

3989 Research Park DriveAnn Arbor, Michigan 48108

734-668-6688

official sTaTemenT daTed: february 25, 2015

¹ For an explanation of ratings, see “CREDIT RATING” herein.† As of the date of delivery§ Copyright 2015, American Bankers Association. CUSIP data herein is provided by Standard & Poor’s CUSIP Service Bureau, a division of the McGraw-Hill

Companies, Inc. The School District shall not be responsible for the selection of CUSIP numbers, nor any representation made as to their correctness on the Bonds or as indicated above.

Page 2: Romeo Community Schools

ROMEO COMMUNITY SCHOOLS316 North Main Street

Romeo, Michigan 48065Phone: (586) 752-0200Fax: (586) 752-0227

BOARD OF EDUCATION

PRESIDENTChris Giancarli Term Expires 2016

VICE PRESIDENTDr. Gus DemasTerm Expires 2018

SECRETARYMichael AntoineTerm Expires 2020

TREASURERAnita Banach

Term Expires 2020

TRUSTEESWayne Conner IITerm Expires 2020

Ed SosnoskiTerm Expires 2016

Chris YoungTerm Expires 2018

SUPERINTENDENTDr. Nancy J. Campbell

EXECUTIVE DIRECTOR OF BUSINESS SERVICESDavid Massoglia

PROFESSIONAL SERVICES

PAYING AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Huntington National Bank

BOND COUNSEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Clark Hill PLC

FINANCIAL CONSULTANT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stauder, BARCH & ASSOCIATES, Inc.

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TABLE OF CONTENTS

Page

INFORMATION FOR BIDDERS . . . . . . . . . . . . . . . . . 1PURPOSE AND SECURITY . . . . . . . . . . . . . . . . . 1QUALIFICATION BY THE STATE OF

MICHIGAN . . . . . . . . . . . . . . . . . . . . . . . . . . . 1PRIOR REDEMPTION . . . . . . . . . . . . . . . . . . . . . 2NOTICE OF SALE . . . . . . . . . . . . . . . . . . . . . . . . . 2BOOK-ENTRY ONLY SYSTEM . . . . . . . . . . . . . 2TAX PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . 3TRANSFER OUTSIDE BOOK-ENTRY-ONLY

SYSTEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4SOURCES OF SCHOOL OPERATING

REVENUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5MICHIGAN PROPERTY TAX REFORM . . . . . . . 6LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

State of Michigan . . . . . . . . . . . . . . . . . . . . . . . 7Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Original Issue Premium . . . . . . . . . . . . . . . . . . 8Future Developments . . . . . . . . . . . . . . . . . . . . 8

QUALIFIED BY THE MICHIGAN DEPARTMENT OF TREASURY . . . . . . . . . . 8

CONTINUING DISCLOSURE . . . . . . . . . . . . . . . 8BOND COUNSEL’S RESPONSIBILITY . . . . . . . 9FINANCIAL CONSULTANT’S OBLIGATION . . 9CREDIT RATING . . . . . . . . . . . . . . . . . . . . . . . . 10PLAN OF REFUNDING . . . . . . . . . . . . . . . . . . . 11ESTIMATED SOURCES AND

USES OF FUNDS . . . . . . . . . . . . . . . . . . . . . 11

GENERAL FINANCIAL INFORMATION . . . . . . . . 12AREA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12POPULATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 12PROPERTY VALUATIONS . . . . . . . . . . . . . . . . 12

Historical Valuations . . . . . . . . . . . . . . . . . . . 12Per Capita Valuation . . . . . . . . . . . . . . . . . . . 13Industrial Facilities Tax (IFT) . . . . . . . . . . . . 13

TAX BASE COMPOSITION . . . . . . . . . . . . . . . . 14MAJOR TAXPAYERS . . . . . . . . . . . . . . . . . . . . . 14TAX RATES - (Per $1,000 of Valuation) . . . . . . . 15

Other Major Taxing Units . . . . . . . . . . . . . . . 15STATE AID PAYMENTS . . . . . . . . . . . . . . . . . . 15TAX LEVIES AND COLLECTIONS . . . . . . . . . 16LABOR FORCE . . . . . . . . . . . . . . . . . . . . . . . . . . 16PENSION FUND . . . . . . . . . . . . . . . . . . . . . . . . . 17OTHER POST-EMPLOYMENT BENEFITS . . . 18

DEBT STATEMENT . . . . . . . . . . . . . . . . . . . . . . 18DIRECT DEBT . . . . . . . . . . . . . . . . . . . . . . . . . . . 18OVERLAPPING DEBT . . . . . . . . . . . . . . . . . . . . 18DEBT RATIOS . . . . . . . . . . . . . . . . . . . . . . . . . . . 18DEBT HISTORY . . . . . . . . . . . . . . . . . . . . . . . . . 19FUTURE FINANCING . . . . . . . . . . . . . . . . . . . . 19OTHER BORROWING . . . . . . . . . . . . . . . . . . . . 19LEGAL DEBT MARGIN . . . . . . . . . . . . . . . . . . . 19SCHOOL BOND QUALIFICATION AND LOAN

PROGRAM . . . . . . . . . . . . . . . . . . . . . . . . . . 19

GENERAL ECONOMIC INFORMATION . . . . . . . . 20LOCATION AND AREA . . . . . . . . . . . . . . . . . . . 20POPULATION BY AGE . . . . . . . . . . . . . . . . . . . 20INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20EMPLOYMENT CHARACTERISTICS . . . . . . . 21EMPLOYMENT BREAKDOWN . . . . . . . . . . . . 22UNEMPLOYMENT . . . . . . . . . . . . . . . . . . . . . . . 22BANKING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

GENERAL SCHOOL INFORMATION . . . . . . . . . . . 23DESCRIPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . 23BOARD OF EDUCATION . . . . . . . . . . . . . . . . . 23SCHOOL ENROLLMENT . . . . . . . . . . . . . . . . . . 23

Historical Enrollment . . . . . . . . . . . . . . . . . . . 23Enrollment by Grade . . . . . . . . . . . . . . . . . . . 23Projected Enrollment . . . . . . . . . . . . . . . . . . . 23

EXISTING SCHOOL FACILITIES . . . . . . . . . . . 24OTHER SCHOOLS . . . . . . . . . . . . . . . . . . . . . . . 24OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . 25

APPENDIX A - BUDGET . . . . . . . . . . . . . . . . . . . . . A-1

APPENDIX B - AUDIT . . . . . . . . . . . . . . . . . . . . . . . B-1

APPENDIX C - STATE QUALIFICATION . . . . . . . C-1

APPENDIX D - FORM OF CONTINUINGDISCLOSURE AGREEMENT . . . . . . . . . . . . . . D-1

APPENDIX E - DRAFT LEGAL OPINION . . . . . . . E-1

APPENDIX F - DRAFT OFFICIAL NOTICE OF SALE . . . . . . . . . . . . . . . . . . . . . . . F-1

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Page 5: Romeo Community Schools

INFORMATION FOR BIDDERS

$14,260,000ROMEO COMMUNITY SCHOOLSCounties of Macomb and Oakland

State of Michigan2015 Refunding Bonds

(General Obligation - Unlimited Tax)

DATED: March 19, 2015

FIRST INTEREST: November 1, 2015

REGISTRATION: Principal and Interest

PURCHASE PRICE: Not less than 99% nor more than 104% of the par value

PAYING AGENT: The Huntington National Bank, Grand Rapids, Michigan

QUALIFICATION: THE BONDS ARE EXPECTED TO BE FULLY QUALIFIED FORPARTICIPATION IN THE MICHIGAN SCHOOL LOAN REVOLVING FUND asof delivery pursuant to Act 92, Public Acts of Michigan, 2005, as amended.

PRINCIPAL DUE: May 1, annually as shown the front cover

PURPOSE AND SECURITY

The Bonds are being issued pursuant to a resolution adopted on July 21, 2014 by the Board of Education ofthe Romeo Community Schools (the "School District") for the purpose of currently refunding a portion of the SchoolDistrict’s 2005 Refunding Bonds, dated April 11, 2005 (the “Prior Bonds”) and paying the costs of issuing the Bonds. The Bonds will pledge the full faith and credit of the School District for payment of the principal of and interest on theBonds, and will be payable from ad valorem taxes, which may be levied without limitation as to rate or amount, asprovided by Article IX, Section 6 and Article IX, Section 16 of the Michigan Constitution of 1963, in such amounts asshall be necessary to pay when due the principal of and interest on the Bonds. The rights or remedies of Bondholdersmay be affected by bankruptcy laws or other creditor's rights legislation now existing or hereafter enacted.

QUALIFICATION BY THE STATE OF MICHIGAN

The Bonds are expected to be fully qualified as of the date of delivery of the Bonds pursuant to Act 92, PublicActs of Michigan, 2005, as amended (“Act 92 ”), the purpose of which is to implement Article IX, Section 16, of theMichigan Constitution of 1963 (the “State Constitution”). Under the terms of said constitutional and statutoryprovisions, if for any reason the School District will be or is unable to pay the principal of and interest on the Bondswhen due, then the School District shall borrow and the State of Michigan (the “State”) shall lend to it from the SchoolLoan Revolving Fund (the “School Loan Revolving Fund”) established by the State an amount sufficient to enable theSchool District to make the payment. Article IX, Section 16, of the State Constitution, as also implemented by Act 112,Public Acts of Michigan, 1961, as amended, authorizes the State, without approval of its electors, to borrow from timeto time such amounts as shall be required, to pledge its faith and credit and to issue its notes or bonds therefor, for thepurpose of making loans to school districts as provided under such Section. Loans to school districts for such purposesare made from the proceeds of such State borrowings. See also APPENDIX C - “STATE QUALIFICATION,” in thisOfficial Statement.

Complete financial statements of all of the State’s funds as included in the State’s Comprehensive AnnualFinancial Report (“CAFR”) prepared by the State’s Department of Management and Budget are available upon requestfrom the Department of Management and Budget, Office of Financial Management, P. O. Box 30026, Lansing, Michigan48909, Telephone: (517) 373-1011. The State has agreed to file its CAFR with the Nationally Recognized MunicipalSecurities Information Repositories and the State Information Depository (as described in Rule 15c2-12(b)(5) of theSecurities and Exchange Commission) annually, so long as any bonds qualified for participation in the School LoanRevolving Fund remain outstanding.

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PRIOR REDEMPTION

No Redemption.

The Bonds are not subject to redemption prior to maturity.

NOTICE OF SALE

See APPENDIX F - “DRAFT OFFICIAL NOTICE OF SALE,” for further information regarding this issue.

BOOK-ENTRY ONLY SYSTEM

The information in this section has been furnished by The Depository Trust Company, New York, New York("DTC"). No representation is made by The Huntington National Bank, Grand Rapids, Michigan (the “Paying Agent”)as to the completeness or accuracy of such information or as to the absence of material adverse changes in such informationsubsequent to the date hereof. No attempt has been made by the School District or the Paying Agent to determine whetherDTC is or will be financially or otherwise capable of fulfilling its obligations. Neither the School District nor the PayingAgent will have any responsibility or obligation to Direct Participants, Indirect Participants (both as defined below) or thepersons for which they act as nominees with respect to the Bonds, or for any principal, premium, if any, or interest paymentthereof.

The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the securities (the"Securities"). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC'spartnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registeredSecurity certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, andwill be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificatewill be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respectto any remaining principal amount of such issue.

DTC, the world's largest securities depository, is a limited-purpose trust company organized under the New YorkBanking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the FederalReserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearingagency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds andprovides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues,and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions indeposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants'accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S.and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations.DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holdingcompany for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which areregistered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is alsoavailable to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearingcorporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly("Indirect Participants"). DTC has a Standard & Poor's rating of AA+. The DTC Rules applicable to its Participants areon file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receivea credit for the Securities on DTC's records. The ownership interest of each actual purchaser of each Security ("BeneficialOwner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive writtenconfirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmationsproviding details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participantthrough which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are tobe accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners.Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event thatuse of the book-entry system for the Securities is discontinued.

To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in thename of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representativeof DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nomineedo not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities;DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may

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or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account oftheir holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to IndirectParticipants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangementsamong them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Ownersof Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respectto the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example,Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreedto obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their namesand addresses to the registrar and request that copies of notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed,DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unlessauthorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails anOmnibus Proxy to School District as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'sconsenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date(identified in a listing attached to the Omnibus Proxy).

Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., orsuch other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit DirectParticipants' accounts upon DTC's receipt of funds and corresponding detail information from School District or PayingAgent, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participantsto Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securitiesheld for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of suchParticipant and not of DTC, Paying Agent, or School District, subject to any statutory or regulatory requirements as maybe in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co.(or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of SchoolDistrict or Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, anddisbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through itsParticipant, to Paying Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer theParticipant's interest in the Securities, on DTC's records, to Paying Agent. The requirement for physical delivery ofSecurities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownershiprights in the Securities are transferred by Direct Participants on DTC's records and followed by a book-entry credit oftendered Securities to Paying Agent's DTC account.

DTC may discontinue providing its services as depository with respect to the Securities at any time by givingreasonable notice to the School District or Paying Agent. Under such circumstances, in the event that a successordepository is not obtained, Security certificates are required to be printed and delivered.

The School District may decide to discontinue use of the system of book-entry-only transfers through DTC (ora successor securities depository). In that event, Security certificates will be printed and delivered to DTC.

The information in this section concerning DTC and DTC's book-entry system has been obtained from sourcesthat the School District believes to be reliable, but the School District takes no responsibility for the accuracy thereof.

TAX PROCEDURES

Article IX, Section 3, of the Michigan Constitution provides that the proportion of true cash value at whichproperty shall be assessed shall not exceed 50% of true cash value. The Michigan Legislature by statute has providedthat property shall be assessed at 50% of its true cash value, except as described below. The Michigan Legislature or theelectorate may at some future time reduce the percentage below 50% of true cash value.

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On March 15, 1994, the electors of the State approved an amendment to the Michigan Constitution permittingthe Legislature to authorize ad valorem taxes on a non-uniform basis. The legislation implementing this constitutionalamendment added a new measure of property value known as "Taxable Value." Beginning in 1995, taxable property hastwo valuations -- State equalized valuation ("SEV") and Taxable Value. Property taxes are levied on Taxable Value.Generally, Taxable Value of property is the lesser of (a) the Taxable Value of the property in the immediately precedingyear, adjusted for losses, and increased or reduced by the lesser of the inflation rate or 5%, plus additions, or (b) theproperty's current SEV. Under certain circumstances, therefore, the Taxable Value of property may be different fromthe same property's SEV.

When property is sold or transferred, Taxable Value is adjusted to the SEV, which under existing law is 50%of the current true cash value. The Taxable Value of new construction is equal to current SEV. Taxable Value and SEVof existing property are also adjusted annually for additions and losses.

Responsibility for assessing taxable property rests with the local assessing officer of each township and city.Any property owner may appeal the assessment to the local assessor, to the local board of review and ultimately to theMichigan Tax Tribunal.

The Michigan Constitution also mandates a system of equalization for assessments. Although the assessors foreach local unit of government within a county are responsible for actually assessing at 50% of true cash value, adjustedfor Taxable Value purposes, the final SEV and Taxable Value are arrived at through several steps. Assessments areestablished initially by the municipal assessor. Municipal assessments are then equalized to the 50% levels as determinedby the county's department of equalization. Thereafter, the State equalizes the various counties in relation to each other.SEV is important, aside from its use in determining Taxable Value for the purpose of levying ad valorem property taxes,because of its role in the spreading of taxes between overlapping jurisdictions, the distribution of various State aidprograms, State revenue sharing and in the calculation of debt limits.

Property that is exempt from property taxes, e.g., churches, government property, public schools, is not includedin the SEV and Taxable Value data in the Official Statement. Property granted tax abatements under Act 198, Public Actsof Michigan, 1974, amended, is recorded on a separate tax roll while subject to tax abatement. The valuation oftax-abated property is based upon SEV but is not included in either the SEV or Taxable Value data in the OfficialStatement except as noted. Under limited circumstances, other state laws permit the partial abatement of certain taxesfor other types of property for periods of up to 12 years.

TRANSFER OUTSIDE BOOK-ENTRY-ONLY SYSTEM

In the event that the book-entry-only system is discontinued, the following provisions would apply to the Bonds. The Paying Agent shall keep the registration books for the Bonds (the Bond Register) at its corporate trust office. Subject to the further conditions contained in the Resolution, the Bonds may be transferred or exchanged for one or moreBonds in different authorized denominations upon surrender thereof at the corporate trust office of the Paying Agent bythe registered owners or their duly authorized attorneys; upon surrender of any Bonds to be transferred or exchanged,the Paying Agent shall record the transfer or exchange in the Bond Register and shall authenticate replacement bondsin authorized denominations; during the fifteen (15) days immediately preceding the date of mailing (Record Date) ofany notice of redemption or any time following the mailing of any notice of redemption, the Paying Agent shall not berequired to effect or register any transfer or exchange of any Bond which has been selected for such redemption, exceptthe Bonds properly surrendered for partial redemption may be exchanged for new Bonds in authorized denominationsequal in the aggregate to the unredeemed portion; the School District and Paying Agent shall be entitled to treat theregistered owners of the Bonds, as their names appear in the Bond Register as of the appropriate dates, as the ownersof such Bonds for all purposes under the Resolution. No transfer or exchange made other than as described above andin the Resolution shall be valid or effective for any purposes under the Resolution.

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SOURCES OF SCHOOL OPERATING REVENUE

On March 15, 1994, the electors of the State of Michigan approved a ballot proposition to amend the StateConstitution of 1963, in part, to increase the State sales tax from 4% to 6% as part of a complex plan to restructure thesource of funding of public education (K-12) in order to reduce reliance on local property taxes for school operatingpurposes and to reduce the per pupil finance resource disparities among school districts. The Legislature hasappropriated funds to establish a base foundation allowance in 2014/15 ranging from $7,126 to $8,099 per pupil,depending upon the district's 1993/94 revenue. In the future, the foundation allowance may be adjusted annually by anindex based upon the change in revenues to the State school aid fund and change in the total number of pupils statewideand the spread between the high and low per pupil allowance is reduced. The foundation allowance is funded by locallyraised property taxes plus State aid. The revenues for the State's contribution to the foundation allowance are derivedfrom a mix of taxing sources, including, but not limited to, a statewide property tax of 6 mills on all taxable property¹,a State sales and use tax, a real estate transfer tax and a cigarette tax. See "STATE AID PAYMENTS" in this OfficialStatement for further information.

School districts are required to levy a local property tax of not more than 18 mills or the number of mills leviedin 1993 for school operating purposes, whichever is less, on non-homestead properties² in order for the school districtto receive its per pupil foundation allowance. An intermediate school district may seek voter approval for threeenhancement mills for distribution to local constituent school districts on a per pupil basis. Proceeds of the enhancementmills are not counted toward the foundation allowance. Furthermore, school districts whose per pupil foundationallowance in 2014/15 calculates to an amount in excess of $8,099 are authorized to levy additional millage to obtain thefoundation allowance, first by levying such amount of the 18 mills against homestead property³ as is necessary to holdthemselves harmless and, if the 18 mills is insufficient, to then levy such additional mills against all property uniformlyas is necessary to obtain the foundation allowance. The School District's per pupil foundation allowance does not exceed$8,099, and the School District does not levy such additional millage. State aid appropriations and the payment schedulefor state aid may be changed by the Legislature at any time. See “STATE AID PAYMENTS” in this Official Statementfor further information.

Public Act 60 of 2013 ("Act 60") amended the State School Aid Act for the 2013/14 fiscal year which increasedthe School District's per pupil foundation allowance to $7,429. Act 60 included a one-time payment to the School Districtto partially offset increases in the retirement plan contribution rate for the period October 1, 2013 to September 30, 2014.Act 60 also included grant funding equal to $52 per pupil (identical to the per pupil amount in 2012/13) for schooldistricts if they satisfy the 7 out of the 8 "best practices" relating to health and other benefits coverage, competitivebidding for certain vendor services, schools of choice, pupil academic growth monitoring and technology infrastructureto monitor and assess public academic growth, post-secondary academic credit opportunities, online instruction programsor blended learning opportunities, a dashboard/report card of the School District's financial management efforts, andphysical or health education. The Board and Administration satisfied such "best practices" requirements and the SchoolDistrict has included and received such grant funding in its 2013/14 General Fund Budget.

¹ “Taxable property” does not include industrial personal property.

² “Non-homestead property” includes all taxable property other than principal residence, qualified agricultural property, qualified forestryproperty, supportive housing property, property occupied by a public school academy and industrial personal property. Commercialpersonal property is exempt from the first 12 mills of not more than 18 mills levied by school districts.

³ “Homestead property”, in this context, means principal residence, qualified agricultural property, qualified forestry property, supportivehousing property, property occupied by a public school academy, industrial personal property and commercial personal property.

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Public Act 196 of 2014 ("Act 196") amended the State School Aid Act for the 2014/15 fiscal year and increasedthe School District's per pupil foundation allowance to $7,479. Act 196 also included grant funding equal to $50 perpupil (a $2 decline in the per pupil amount as compared to 2013/14) for school districts if they satisfy 7 out of 9 "bestpractices" relating to health and other benefits coverage, competitive bidding for certain vendor services, schools ofchoice, online instruction programs or blended learning opportunities, a dashboard/report card of the School District'sfinancial management efforts, compensation methods for teachers and administrators that significantly factorperformance and accomplishments, use of collective bargaining agreements that omit statutorily prohibited subjects ofbargaining, implementation of a comprehensive guidance and counseling program, and opportunities for K to 8 pupilsto complete coursework or other learning experiences equivalent to 1 credit in a language other than English. The Boardand Administration satisfied such "best practices" requirements and the School District has included such grant fundingin its 2014/15 General Fund Budget.

THE SOURCES OF THE SCHOOL DISTRICT'S OPERATING REVENUE DO NOT IMPACT THE TAXINGAUTHORITY OF THE SCHOOL DISTRICT FOR PAYMENT OF GENERAL OBLIGATION UNLIMITED TAXSCHOOL BONDS AND DO NOT AFFECT THE OBLIGATION OF THE SCHOOL DISTRICT TO LEVY TAXES FORPAYMENT OF DEBT SERVICE ON GENERAL OBLIGATION UNLIMITED TAX BONDS OF THE SCHOOLDISTRICT, INCLUDING THE BONDS OFFERED HEREIN.

MICHIGAN PROPERTY TAX REFORM

On November 5, 2013, March 28, 2014, and April 1, 2014, Governor Snyder signed into law a package of billsamending and replacing legislation enacted in 2012 to phase-out most personal property taxes in Michigan. The bills werecontingent on Michigan voters approving a ballot question authorizing a new municipal entity, the Local CommunityStabilization Authority ("LCSA"), to levy a local component of the statewide use tax and distribute that revenue to localunits of government to offset their revenue losses resulting from the personal property tax reform. On August 5, 2014,voters approved that ballot question.

The bill package, together with the original 2012 legislation, created two new exemptions from the personalproperty tax. Under the "small taxpayer exemption," the commercial and industrial personal property of each owner witha combined true cash value in a local tax collecting unit of less than $80,000 is exempt from ad valorem taxes in thatcollecting unit beginning in 2014. For businesses that do not qualify for the "small taxpayer exemption," all "eligiblemanufacturing personal property" (personal property used more than 50% of the time in industrial processing or directintegrated support) purchased and placed into service before 2006 or during or after 2013 becomes exempt beginning in2016. Taxation on "eligible manufacturing personal property" placed into service after 2006 but before 2013 will bephased-out over time; with the exemption taking effect after the property has been in service for the immediately preceding10 years. The legislation extends certain personal property tax exemptions and tax abatements for technology parks,industrial facilities and enterprise zones that were to expire after 2012, until the voter-approved personal property taxexemptions take effect.

Pursuant to voter approval in August 2014, the legislation also includes a formula to reimburse school districtsfor 100% of their lost operating millage revenue and lost sinking fund millage revenue. To provide the reimbursement, thelegislation reduces the state share of the use tax and authorizes the LCSA to levy a local component of the use tax anddistribute that revenue to qualifying local units. However, the reimbursement for the school district's operating millage willcome from the state use tax component, which is deposited into the school state aid fund.¹ While the legislation providesreimbursement for prospective school operating losses, school districts will only be reimbursed for debt losses attributableto debt obligations that voters approved before January 1, 2013 or were incurred before January 1, 2013. For the 2014-2015and 2015-2016 fiscal years, the State of Michigan will appropriate sufficient funds to the LCSA to reimburse schooldistricts for such debt losses.

Because the Bonds are associated with debt obligations that received voter approval before January 1, 2013, theSchool District will be reimbursed for debt millage revenue it could have otherwise generated, without the exemptions,to make payments on the Bonds.²

¹ Because the reimbursement funds are deposited into the state school aid fund, the legislature may, in the future, change the funding formulas in theState School Aid Act of 1979 or appropriate funds therein for other purposes.

² A school district that increases its millage rate, without voter approval, to replace debt millage revenue loss would not be eligible to receivereimbursement distributions.

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LITIGATION

The School District has not been served with any litigation, administrative action or proceeding, nor, to theknowledge of the School District, is there threatened any litigation restraining or enjoining the issuance or delivery ofthe Bonds or in any manner questioning the proceedings and authority under which the Bonds are to be issued oraffecting the validity of the Bonds.

TAX MATTERS

State of Michigan

In the opinion of Clark Hill PLC, Birmingham, Michigan (“Bond Counsel”), based on its examination of thedocuments described in its opinion, under existing State statutes, regulations and court decisions, the Bonds and theinterest thereon are exempt from all taxation in the State of Michigan, except inheritance and estate taxes and taxes ongains realized from the sale, payment or other disposition thereof.

Federal

In the opinion of Bond Counsel based upon its examination of the documents described in its opinion, underexisting statutes, regulations, rulings and court decisions, the interest on the Bonds is excluded from gross income forfederal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum taximposed on individuals and corporations. It should be noted, however, that certain corporations must take into accountinterest on the Bonds in determining adjusted net current earnings for the purpose of computing the alternative minimumtax imposed on such corporations. The opinions set forth in the preceding sentences are subject to the condition that theSchool District comply with all requirements of the Internal Revenue Code of 1986, as amended (the “Code”), that mustbe satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excluded fromgross income for federal income tax purposes. Failure to comply with certain of such requirements may cause theinclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date ofissuance of the Bonds. Bond Counsel will express no opinion regarding other federal tax consequences arising withrespect to the Bonds.

There are additional federal tax consequences relative to the Bonds and the interest thereon. The following isa general description of some of these consequences but is not intended to be complete or exhaustive and investorsshould consult with their tax advisors with respect to these matters. Prospective purchasers of the Bonds should be awarethat (i) interest on the Bonds is included in the effectively connected earnings and profits of certain foreign corporationsfor purposes of calculating the branch profits tax imposed by Section 884 of the Code, (ii) interest on the Bonds maybe subject to a tax on excess net passive income of certain S Corporations imposed by Section 1375 of the Code, (iii)interest on the Bonds is included in the calculation of modified adjusted gross income for purposes of determining thetaxability of social security or railroad retirement benefits, (iv) the receipt of interest on the Bonds by life insurancecompanies may affect the federal tax liability of such companies, (v) in the case of property and casualty insurancecompanies, the amount of certain loss deductions otherwise allowed is reduced by a specific percentage of, among otherthings, interest on the Bonds, (vi) holders of the Bonds may not deduct interest on indebtedness incurred or continuedto purchase or carry the Bonds, and (vii) commercial banks, thrift institutions and other financial institutions may notdeduct their costs of carrying certain obligations such as the Bonds.

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Original Issue Premium

For federal income tax purposes, the difference between the initial offering prices to the public (excludingbondhouses and brokers) at which certain Bonds, as set forth on the cover of this Official Statement, are sold and theamounts payable at maturity thereof (the “Premium Bonds”), constitutes for the original purchasers of the PremiumBonds an amortizable bond premium. Such amortizable bond premium is not deductible from gross income but is takeninto account by certain corporations in determining adjusted current earnings for the purpose of computing the alternativeminimum tax, which may also affect liability for the branch profits tax imposed by Section 884 of the Code. The amountof amortizable bond premium allocable to each taxable year is generally determined on the basis of a taxpayer’s yieldto maturity determined by using the taxpayer’s basis (for purposes of determining loss on sale or exchange) of suchPremium Bonds and compounding at the close of each six-month accrual period. The amount of amortizable bondpremium allocable to each taxable year is deducted from the taxpayer’s adjusted basis of such Premium Bonds todetermine taxable gain upon disposition (including sale, redemption or payment on maturity) of such Premium Bonds.

Future Developments

No assurance can be given that any future legislation or clarifications or amendments to the Code, if enactedinto law, will not contain proposals which could cause the interest on the Bonds to be subject directly or indirectly tofederal or state income taxation, adversely affect the market price or marketability of the Bonds, or otherwise preventbondholders from realizing the full current benefit of the status of the interest thereon.

It is to be understood that the rights of the holders of the Bonds and the enforceability thereof may be subjectto bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights heretofore orhereafter enacted to the extent constitutionally applicable and that their enforcement may also be subject to the exerciseof judicial discretion in appropriate cases.

INVESTORS SHOULD CONSULT WITH THEIR TAX ADVISORS AS TO THE TAX CONSEQUENCESOF THEIR ACQUISITION, HOLDING OR DISPOSITION OF THE BONDS, INCLUDING THE TREATMENT OFORIGINAL ISSUE PREMIUM.

QUALIFIED BY THE MICHIGAN DEPARTMENT OF TREASURY

The School District has received a letter from the Department of Treasury of the State of Michigan stating thatthe School District is in material compliance with the criteria of the Revised Municipal Finance Act, Act No. 34, PublicActs of Michigan, 2001 (“Act 34”) for a municipality to be granted “qualified status” to issue municipal securitieswithout further approval by the Michigan Department of Treasury.

CONTINUING DISCLOSURE

Prior to delivery of the Bonds the School District will execute a Continuing Disclosure Agreement (the“Agreement”) for the benefit of the holders of the Bonds and Beneficial Owners to send certain information annuallyand to provide notice of certain events to certain information repositories pursuant to the requirements of Rule 15c2-12(b)(5) (the “Rule”) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934. The information to be provided on an annual basis, the events which will be noticed on an occurrence basis, and the otherterms of the Agreement are set forth in “APPENDIX D - FORM OF CONTINUING DISCLOSURE AGREEMENT.” Additionally, the School District shall provide certain annual financial information and operating data, generallyconsistent with the information in the tables under the headings “PROPERTY VALUATIONS - Historical Valuations”“MAJOR TAXPAYERS”, “TAX RATES - Romeo Community Schools”, “STATE AID PAYMENTS”, “TAX LEVIESAND COLLECTIONS”, “LABOR FORCE”, “PENSION FUND”, “DEBT STATEMENT - DIRECT DEBT”,“SCHOOL BOND QUALIFICATION AND LOAN PROGRAM”, “SCHOOL ENROLLMENT” and “GENERALFUND BUDGET SUMMARY” herein.

A failure by the School District to comply with the Agreement will not constitute an event of default under theResolutions authorizing issuance of the Bonds and holders of the Bonds or Beneficial Owners are limited to the remediesdescribed in the Agreement. A failure by the School District to comply with the Agreement must be reported inaccordance with the Rule and must be considered by any broker, dealer or municipal securities dealer beforerecommending the purchase or sale of the Bonds in the secondary market. Consequently, such failure may adverselyaffect the transferability and liquidity of the Bonds and their market price.

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Except as disclosed below, the School District has not in the previous five years, failed to comply, in all materialrespects, with any previous continuing disclosure agreements executed by the School District pursuant to the Rule. Whilethe School District filed its audited financial statements and annual disclosure information timely over the past five yearsin compliance, in all material respects, with the previous continuing disclosure agreements executed by the SchoolDistrict, the School District filed late material event notices of credit rating changes of its underlying rating, the ratingon its bonds qualified for the State School Bond Qualification and Loan Program and ratings affecting the bond insurerfor certain prior bond issues of the School District. To the best of the School District’s knowledge, the School Districtdid not receive notification from bond insurers or the rating agencies of the rating changes for the bond insurer or theState School Bond Qualification and Loan Program. The School District has put systems in place to identify and filematerial event notices in a timely manner in the future.

BOND COUNSEL’S RESPONSIBILITY

The fees of Clark Hill PLC, Birmingham, Michigan (“Bond Counsel”) for services rendered in connection withits approving opinion are expected to be paid from Bond proceeds. Except to the extent necessary to issue its approvingopinion as to the validity of the Bonds and tax matters relating to the Bonds and the interest thereon, and except as statedbelow, Bond Counsel has not been retained to examine or review, and has not examined or reviewed any financialdocuments, statements or materials that have been or may be furnished in connection with the authorization, issuanceor marketing of the Bonds and accordingly will not express any opinion with respect to the accuracy or completenessof any such financial documents, statements or materials.

Bond Counsel has reviewed the statements made in this Official Statement on the cover page and under theheading “Information for Bidders”. insofar as such statements summarize the language and effect of the Resolution, theBonds, the Continuing Disclosure Agreement, the Constitution of the State of Michigan, the laws of the State ofMichigan and federal income tax laws and, further, the statements under such headings are fair and accurate summariesthereof in all material respects. Except as otherwise disclosed on pages herein, Bond Counsel has not been retained toreview and has not reviewed any other portion of this Official Statement for accuracy or completeness, and has not madeinquiry of any official or employee of the School District or any other person and has made no independent verificationof such other portions hereof, and further has not expressed and will not express an opinion as to any portions hereof.

FINANCIAL CONSULTANT’S OBLIGATION

Stauder, BARCH & ASSOCIATES, Inc., Ann Arbor, Michigan (the “Financial Consultant”) has been retainedby the School District to provide certain financial consultant services including, among other things, preparation of thedeemed “final” Preliminary Official Statement and the final Official Statement (the “Official Statements”). Theinformation contained in the Official Statements was prepared in part by the Financial Consultant and is based oninformation supplied by various officials from records, statements and reports required by various local county or stateagencies of the State of Michigan in accordance with constitutional or statutory requirements.

To the best of the Financial Consultant’s knowledge, all of the information contained in the Official Statements,which it assisted in preparing, while it may be summarized is (i) complete and accurate; (ii) does not contain any untruestatement of material fact; and (iii) does not omit any material fact, or make any statement which would be misleadingin light of the circumstances under which these statements are being made. However, the Financial Consultant has notand will not independently verify the completeness and accuracy of the information contained in the Official Statement.

The Financial Consultant’s duties, responsibilities and fees arise solely from that as financial consultant to theSchool District and they have no secondary obligations or other responsibility. The Financial Consultants’s fees areexpected to be paid from Bond proceeds.

Further information concerning the Bonds may be secured from Stauder, BARCH & ASSOCIATES, Inc., 3989Research Park Drive, Ann Arbor, Michigan 48108. Telephone: (734) 668-6688.

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CREDIT RATING

Moody’s, has assigned, as of the date of delivery of the Bonds, its municipal bond rating of "Aa2" to the Bondsbased upon the fact that each Bond are expected to be fully qualified for participation in the Michigan School BondQualification and Loan Program as of its date of delivery. See "QUALIFICATION BY THE STATE OF MICHIGAN,""LEVY AND COLLECTION OF TAXES FOR PAYMENT OF THE BONDS AND BONDHOLDERS' REMEDIES"and APPENDIX C, "State Qualification," herein.

Moody’s has also assigned, as the of the date of delivery of the Bonds, its underlying municipal bond ratings of“Aa3”, to the Bonds.

An explanation of the significance of each rating may be obtained from the rating agency furnishing the same atthe following addresses Moody’s Investors Service, 7 World Trade Center, 250 Greenwich Street, New York, New York10007.

The aforementioned ratings will reflect the sole view of each rating agency and there is no assurance that suchratings will be continued for any period of time, or that they will not be revised upwards or downwards or be withdrawn;a revision, suspension, or withdrawal of the ratings may have an effect on the market price of these securities and shouldbe noted.

A brief description of the Moody’s rating definitions reads as follows:

Moody’s Investors Service, Inc.

Bonds which are rated ‘Aaa’ are judged to be of the best quality. They carry the smallestdegree of investment risk and are generally referred to as ‘gilt edge.’ Interest payments are protectedby a large or by an exceptionally stable margin and principal is secure. While the various protectiveelements are likely to change, such changes as can be visualized are most unlikely to impair thefundamentally strong position of such issues.

Bonds which are rated ‘Aa’ are judged to be of a high quality by all standards. Together withthe ‘Aaa’ group, they comprise what are generally known as high grade Bonds. They are rated lowerthan the best Bonds because margins of protection may not be as large as in ‘Aaa’ securities orfluctuation of protective elements may be of great amplitude or there may be other elements presentwhich make the long-term risks appear somewhat larger than in the ‘Aaa’ securities.

Bonds which are rated ‘A’ possess many favorable investment attributes and are to beconsidered as upper medium grade obligations. Factors giving security to principal and interest areconsidered adequate, but elements may be present which suggest a susceptibility to impairment sometime in the future.

Bonds which are rated ‘Baa’ are considered as medium grade obligations; i.e., they areneither highly protected nor poorly secured. Interest payments and principal security appear adequatefor the present but certain protective elements may be lacking or may be characteristically unreliableover any great length of time. Such bonds lack outstanding investment characteristics and in fact havespeculative characteristics as well.

General Note: Those Bonds in the ‘Aa’, ‘A’, and ‘Baa’ groups which Moody’s believes possess the strongestinvestment attributes are designated by the symbols ‘Aa1', ‘A1' and ‘Baa1'. Under the expanded ratingscale adopted by Moody’s January 7, 1997 the numerical rating modifiers 2 and 3 have been added forlong-term debt. The numerical modifier 2 indicates that the security is in the mid-range of its category,while the modifier 3 indicates that the issue is in the lower end of its generic category. A triple-A (Aaa)rating will have no numerical modifier; it remains Moody’s highest bond rating.

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PLAN OF REFUNDING

A portion of the proceeds of the Bonds, together with other available funds of the School District, will be usedto currently refund a portion of the Prior Bonds and to establish an escrow fund (the “Escrow Fund”) composed of cashand non-callable direct obligations of, or obligations the principal of and interest on which are unconditionallyguaranteed by, the United States of America or other obligations the principal of and interest on which are fully securedby the foregoing. The Escrow Fund will be held by The Huntington National Bank, Grand Rapids, Michigan as escrowagent (the “Escrow Agent”) and will be used to pay the principal of and interest on the Prior Bonds when due or at callfor redemption. The Escrow Fund will be held by the Escrow Agent pursuant to an escrow agreement (the “EscrowAgreement”) which irrevocably directs the Escrow Agent to make the payment of the principal of and interest on thePrior Bonds when due or at call for redemption. The Escrow Fund will be such that the cash and the principal andinterest payments received on the investments will be sufficient, without reinvestment, except as may be provided inthe Escrow Agreement, to pay the principal of and interest on the Prior Bonds as they become due or are called forearlier redemption, as set forth in the table below.

Principal of and Interest on thePrior Bonds to paid from the Escrow Fund

Date Principal Interest Total05/01/2015 $15,675,000.00 $391,875.00 16,066,875.00

TOTAL $15,675,000.00 $391,875.00 16,066,875.00

The accuracy of the mathematical computations of the adequacy of cash and certain obligations to be held inthe Escrow Fund and used, together with the earnings thereon, to pay the principal of and interest on the Prior Bondsat call for redemption supporting the conclusion of Bond Counsel that the interest on the Bonds is excluded from grossincome for federal income tax purposes as indicated under the caption “TAX MATTERS” below, will be verified byRobert Thomas CPA, LLC, Shawnee Mission, Kansas. Such verification of the accuracy of the computations shall bebased upon information supplied by the School District’s Financial Advisor and on interpretations of Section 148 ofthe Internal Revenue Code of 1986, as amended, as provided by Bond Counsel.

ESTIMATED SOURCES AND USES OF FUNDS

Sources of FundsPar Amount of Bonds $14,260,000.00 Original Issue Premium 653,259.85 Contribution from Prior Bonds Debt Retirement Fund 1,332,000.00Total Sources $16,245,259.85

Uses of FundsDeposit to Escrow Account $16,066,687.00 Underwriter's Discount 81,867.85 Costs of Issuance 96,705.00 Total Uses $16,245,259.85

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ROMEO COMMUNITY SCHOOLSGENERAL FINANCIAL INFORMATION¹

AREA

The School District encompasses an area of approximately 94 square miles.

POPULATION

The estimated population for the School District is as follows:

2010 34,011 2000 28,5931990 22,000

* Estimated based on an extrapolation of the U.S. Census figures of the local units within the School District.

PROPERTY VALUATIONS

In accordance with Act 539, Public Acts of Michigan, 1982, as amended, and Article IX, Section 3 of theMichigan Constitution, the ad valorem State Equalized Valuation (SEV) represents 50% of true cash value. SEV doesnot include any value of tax exempt property (e.g. churches, governmental property) or property granted tax abatementsunder Act 198, Public Acts of Michigan, 1974, as amended. As a result of Proposal A, ad valorem property taxesare assessed on the basis of taxable value, which is subject to assessment caps. SEV is used in the calculationof debt margin and true cash value. See “TAX PROCEDURES” herein for more information.

Taxable property in the School District is assessed by the local municipal assessor and is subject to reviewby the County Equalization Department.

Historical Valuations*

Principal Non-Principal Total State EqualizedYear Residence Residence Taxable Value Valuation

2014 $1,212,308,686 $349,564,732 $1,561,873,418 $1,719,868,8532013 1,169,939,316 339,286,189 1,509,225,505 1,616,672,4442012 1,147,306,351 338,485,393 1,485,791,744 1,555,165,6202011 1,166,777,670 355,561,396 1,522,339,066 1,608,482,1382010 1,359,065,058 222,399,848 1,581,464,906 1,882,261,033

* See "MICHIGAN PROPERTY TAX REFORM" herein for information regarding tax changes taking effect in the 2014 and 2016 tax years.

¹ Information included in this Official Statement under the headings “General Financial Information, “General Economic Information,” and “GeneralSchool Information” was obtained from the School District, unless otherwise noted.

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$ 0

$ 2 0 0

$ 4 0 0

$ 6 0 0

$ 8 0 0

$ 1 , 0 0 0

$ 1 , 2 0 0

$ 1 , 4 0 0

$ 1 , 6 0 0

$ 1 , 8 0 0

$ 2 , 0 0 0

M i l l i o n s

2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4Y e a r

H is to ric a l V a lu a t io n s

T a x a b le V a lu a t io n S t a t e E q u a liz e d V a lu a t io n

2014 Taxable Value $1,561,873,418Plus: 2014 IFT Taxable Valuation* 35,290,331Total Equivalent Valuation $1,597,163,749

* Millage is levied at half rate against the amount listed. See “PROPERTY VALUATIONS - Industrial Facilities Tax (IFT)” herein.

Per Capita Valuation

2014 Per Capita Taxable Value $45,922.602014 Per Capita State Equalized Valuation $50,568.022014 Per Capita Estimated True Cash Valuation $101,136.04

Industrial Facilities Tax (IFT)

Under the provisions of Act 198 of the Public Acts of Michigan, 1974 (“Act 198"), plant rehabilitationdistricts and/or industrial development districts may be established. Businesses in these districts are offered certainproperty tax incentives to encourage restoration or replacement of obsolete facilities and to attract new facilities to thearea. An industrial facilities tax (“IFT”) is paid, at a lesser effective rate and in lieu of ad valorem property taxes, onsuch facilities for a period of up to 12 years. Qualifying facilities are issued abatement certificates for specific periods.

After expiration of the abatement certificate, the then-current SEV of the facility is returned to the ad valoremtax roll. The owner of such facility may obtain a new certificate, provided it has complied with the provisions of Act198.

The 2014 Taxable Value for the properties which have been granted IFT abatements within the SchoolDistrict’s boundaries is $35,290,331 which is subsequently taxed at half rate. For further information see "PROPERTYVALUATIONS - Historical Valuations" herein.

As part of the phase-out of Michigan's property tax on personal property, if a facility and personal propertywithin that facility were subject to an industrial facilities exemption on December 31, 2011, that exemption will remainintact and continue to be subject to the industrial facilities tax until the expiration of the exemption at which time theeligible personal property associated with the industrial facilities exemption becomes exempt under the new law. See"MICHIGAN PROPERTY TAX REFORM" above.

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Taxable Valuation by Use

Personal Industrial

4.99%

Personal Utility4.33%

Residential76.05%

Personal Commercial

1.15%

Agricultural1.91%

Commercial7.76%

Industrial3.81%

TAX BASE COMPOSITION†

A breakdown of the School District’s 2014 Taxable Value by municipality, class and use are as follows:

Principal¹ Non-Principal¹ Total Taxable Percent ofMunicipality Residence Residence Value TotalMacomb County

Armada Township $18,867,525 $8,554,621 $27,422,146 1.76%Bruce Township 293,193,429 85,539,702 378,733,131 24.25Ray Township 56,664,572 15,623,674 72,288,246 4.63Shelby Township 38,869,020 25,054,980 63,924,000 4.09Washington Township 722,655,170 199,306,565 921,961,735 59.03

Oakland CountyAddison Township 54,984,450 7,364,230 62,348,680 3.99Oakland Charter Township 27,074,520 8,120,960 35,195,480 2.25

TOTAL $1,212,308,686 $349,564,732 $1,561,873,418 100.00%

¹ See “SOURCES OF SCHOOL OPERATING REVENUE” in this Official Statement for further details.

Taxable Percent ofClass Value TotalReal Property $1,398,332,612 89.53%Personal Property 163,540,806 10.47TOTAL $1,561,873,418 100.00%

UseAgricultural $29,807,324 1.91%Commercial 121,186,678 7.76Industrial 59,531,513 3.81Residential 1,187,807,097 76.05Personal Commercial 18,030,702 1.15Personal Industrial 77,935,264 4.99Personal Utility 67,574,840 4.33TOTAL $1,561,873,418 100.00%

† See "MICHIGAN PROPERTY TAX REFORM" herein for information regarding tax changes taking effect in the 2014 and 2016 tax years.

Source: Respective Counties

MAJOR TAXPAYERS

The ten largest taxpayers in the School District and their 2014 Taxable Value totals and Industrial FacilitiesTax Valuation totals are as follows:

Taxable IFT TotalTaxpayer Product/Service Value + Valuation = Valuation

Ford Motor Company Automotive $43,489,260 $24,216,350 $67,705,610Washington 10 Storage Utility 35,771,550 0 35,771,550Detroit Edison Utility 24,208,077 0 24,208,077Vector Pipeline Utility 10,872,373 0 10,872,373L & L Products, Inc. Adhesives, sealants 9,943,524 0 9,943,524International Transmission Utility 8,672,604 0 8,672,604Romeo Rim, Inc. Mold injections 4,597,903 2,796,453 7,394,356Semco Utility 5,826,512 0 5,826,512Consumers Utility 5,670,712 0 5,670,712Good Will Co Inc /Meijer, Inc. Retail 5,338,430 0 5,338,430TOTAL $154,390,945 $27,012,803 $181,403,748

The Taxable Valuations of the major taxpayers represent 9.88% of the School District's 2014 TaxableValuation of $1,561,873,418 and their Total Valuations represent 11.36% of the School District's Total EquivalentValuation of $1,597,163,749.Source: Respective municipalities

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TAX RATES - (Per $1,000 of Valuation)†

Each school district, county, township, special authority and city has a geographical definition whichconstitutes a tax district. Since local school districts and the county overlap either a township or a city, and intermediateschool districts overlap local school districts and county boundaries, the result is many different tax rate districts.

Romeo Community Schools 2014 2013 2012 2011 2010Voted 18.0000 18.0000 18.0000 18.0000 18.0000Sinking Fund 1.2500 1.2500 1.2500 1.2500 1.2500Debt 4.0500 4.0500 4.2000 4.0000 3.8000

TOTAL PRINCIPAL RESIDENCE 5.3000 5.3000 5.4500 5.2500 5.0500TOTAL NON-PRINCIPAL RESIDENCE 23.0500 23.1550 23.9050 23.9186 24.6590

The School District levies 18 mills for operating purposes on non-homestead property and authorized sinkingfund and debt millage on all homestead and non-homestead property located within the School District. The SchoolDistrict’s operating millage expires with the July 2017 levy. The sinking fund millage expires with the July 2016 levy. See “SOURCES OF SCHOOL OPERATING REVENUE” in this Official Statement.† See "MICHIGAN PROPERTY TAX REFORM" herein for information regarding tax changes taking effect in the 2014 and 2016 tax years.

Other Major Taxing Units 2014 2013State Education Tax¹ 6.0000 6.0000Macomb County - Operating 4.6135 4.5685Macomb County - Drain 0.0050 0.0050 Macomb County I/S/D 2.9430 2.9430 Macomb Community College 1.5262 1.5262¹ The State of Michigan levies 6.00 mills for school operating purposes on all principal residence and non-principal residence property located

within the School District.

Source: Respective municipalities

STATE AID PAYMENTS

The School District's primary source of funding for operating costs is the State School Aid per pupil foundationallowance. The base foundation allowance has been set from $7,126 to $8,099 per pupil for fiscal year 2014/2015. In future years, this allowance may be adjusted by an index based upon the change in revenues to the state school aidfund and the change in the total number of pupils statewide. The State may reduce State School Aid appropriationsat any time if the State's revenues do not meet budget expectations. See "SOURCES OF SCHOOL OPERATINGREVENUE" herein for additional information.

The following table shows a history and current estimates of the School District's total State School Aidrevenues, including categoricals and other amounts, the State Amount Received per Pupil and the FoundationAllowance per Pupil.

State Amount FoundationReceived Allowance

Year Total per Pupil per Pupil2014/15 (February estimate) $39,851,184 $6,279 $7,4792013/14 39,410,730 6,321 7,4292012/13 38,296,029 6,267 7,3762011/12 36,888,383 6,204 7,3762010/11 36,590,134 6,580 7,846*

*Adjustment was offset by ARRA stabilization funds Source: Michigan Department of Education

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TAX LEVIES AND COLLECTIONS

The School District’s fiscal year begins July 1 and ends June 30. School District property taxes are due July1 of each fiscal year and are payable without interest on or before the following September 14 and without penalty onor before the following February 14. All real property taxes remaining unpaid on March 1st of the year following thelevy are turned over to the County Treasurers for collection. Macomb and Oakland Counties (the “Counties”) annuallypay from their Tax Payment Funds delinquent taxes on real property to all taxing units in the Counties, including theSchool District, shortly after the date delinquent taxes are returned to the County Treasurers for collection.

A history of tax levies and collections for the School District is as follows:

Levy Operating Collections to Collections Plus FundingYear Tax Levy March 1 of Following Year To June 30 of Following Year2014 $6,331,766 (In process of collection) N/A2013 5,844,865 $5,516,980 94.39% $5,827,40 99.70%2012 5,620,285 5,195,955 92.45 5,609,044 99.802011 6,347,724 5,900,226 92.95 6,337,970 99.852010 7,001,888 6,412,329 91.58 6,977,381 99.65

The Tax Payment Fund is financed through the issuance of General Obligation Limited Tax Notes (GOLTNs)by the Counties. Although the School District anticipates the continuance of this program by the Counties, the abilityof the Counties to issue such GOLTNs is subject to market conditions at the time of offering. In addition, Act 206, PublicActs of Michigan, 1893, as amended, provides in part that: “The primary obligation to pay to the county the amount oftaxes and interest on the taxes shall rest with the local taxing units and the state for the state education tax under the stateeducation tax act... If the delinquent taxes that are due and payable to the county are not received by the county for anyreason, the county has full right of recourse against the taxing unit or to the state for the state education tax... to recoverthe amount of the delinquent taxes and interest...” On the third Tuesday in July in each year, a tax sale is held by theCounties at which lands delinquent for taxes assessed in the third year preceding the sale, or in a prior year, are sold forthe total of the unpaid taxes of those years. Pursuant to Act 123, Public Acts of Michigan, 1999, as amended, property owners with taxes that are two years delinquent will be foreclosed and the property will be sold at public auction. Forexample, property owners who fail to pay their 2015 delinquent property taxes will lose their property in March 2018.

LABOR FORCE

A breakdown of the number of salaried employees of the School District and their affiliations with organizedgroups are as follows:

ContractEmployees Number Bargaining Unit ExpirationAdministrators 20 Non-Affiliated 06/30/2015Teachers 294 MEA 08/31/2015Clerical 22 MEA 06/30/2015Teaching Assistants 45 MEA 06/30/2015Maintenance. 33 AFSCME 08/31/2015Transportation 36 AFSCME 08/31/2015Food Service 28 AFSCME 08/31/2015Child Care 26 AFSCME 06/30/2005Supervisors 13 Non-Affiliated 06/30/2015Pupil Service Support ¹ 148 Non-Affiliated n/aTOTAL STAFF 665

The School District has not experienced a strike by any of its bargaining units within the past ten years.

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PENSION FUND

For the period October 1 through September 30, the School District pays an amount equal to a percentage of itsemployees' wages to the Michigan Public School Employees Retirement System ("MPSERS"), which is administered bythe State of Michigan. These contributions are required by law and are calculated by using the contribution rates andperiods provided in the table below of the employees' wages. The employer contribution rate for employees who firstworked July 1, 2010 or later (Pension Plus members) for the time period July 1, 2010 to September 30, 2010 was 15.44%.For other employees, the rate was 16.94% through September 30, 2010. Effective October 1, 2010, the employercontribution rate for all employees except Pension Plus members increased to 19.41%. For Pension Plus members, theemployer contribution rate was 17.91%.

On June 28, 2010, the Michigan Court of Claims issued an injunction in response to a challenge to Public Act25 of 2010 (“Act 25”) which requires employees who began working before July 1, 2010, to make a mandatorycontribution of 3% of reportable wages to the retiree health care trust at MPSERS. As a result, the State has adjusted thecontribution rate due on employees wages paid between November 1, 2010 and September 30, 2011 to 20.66% formembers who first worked prior to July 1, 2010 and 19.16% for Pension Plus members. In March 2011, the Court ofClaims granted the plaintiffs' motions for summary disposition finding that the mandatory 3% contribution violated boththe U.S. and Michigan Constitutions. The State appealed the ruling to the Michigan Court of Appeals. In August of2012, the Court of Appeals affirmed the decision of the Court of Claims. The State of Michigan subsequently filed anApplication for Leave to Appeal with the Michigan Supreme Court. However, the Michigan Supreme Court has orderedthat the Application of Leave to Appeal be held in abeyance pending the decision in the litigation regarding Act 300discussed below.

On September 4, 2012, the governor signed Public Act 300 of 2012 ("Act 300") to reform MPSERS. The Actmakes changes to employee contributions to their pensions and retiree health benefits, shifting the 3% pensioncontribution to retiree health benefits. Act 300 increases the amount retirees contribute to their health insurance, andemployees are required to choose to increase contributions to their pension plan, maintain current contribution rates andfreeze existing benefits, or freeze existing pension benefits and move into a defined contribution plan. In addition, thelegislation will end retiree health benefits for new hires. On November 29, 2012, the Ingham County Circuit Court, sittingas the Court of Claims, ruled that the substantive provisions of the Act 300 were constitutional except for one particularprovision relating to an "election window" for healthcare benefits. The Legislature promptly adopted legislation whichwas signed into law by the Governor addressing the constitutional concerns of the election window raised by the Courtof Claims. Two public school employee unions appealed the Court of Claims decision to the Michigan Court of Appeals,which affirmed the Court of Claims' ruling on January 14, 2014. The unions filed an Application for Leave to Appeal withthe Michigan Supreme Court which was granted on May 21, 2014. Oral arguments before the Supreme Court on this casewere held on October 9, 2014, but no decision has been issued to date. The ultimate impact of a decision by the MichiganSupreme Court on the implementation of Act 25 and Act 300 is unknown at this time.

The School District's estimated contribution to MPSERS for 2014/15 and the contributions for the previous fouryears are shown below.

Contribution Period Contribution Rate Pension PlusOct. 1, 2014-Sept. 30, 2015 25.78 - 27.27% 25.70 - 27.19%Oct. 1, 2013-Sept. 30, 2014 24.79 - 26.96 25.56 - 26.63Feb. 1, 2013-Sept. 30, 2013 24.32 - 26.96 25.13 - 26.20Oct. 1, 2012-Jan. 31, 2013 25.36 24.13Oct. 1, 2011-Sept. 30, 2012 24.46 23.23Nov. 1, 2010-Sept. 30, 2011 20.66 19.16

Fiscal Year Ending Contributions toJune 30 MPSERS

2015 (estimate) $8,166,7502014 7,853,1322013 6,720,9312012 6,396,0712011 5,408,653

Source: Audited financial statements.Note: Effective for fiscal years beginning after June 15, 2014, GASB Statement 68 requires all reporting units in a multi-employer cost sharingpension plan to record a balance sheet liability for their proportionate share of the net pension liability of the plan. The School District will berequired to implement GASB 68 in their year ended June 30, 2015 financial statements. Preliminary unaudited estimates from the State for fiscalyear 2013 indicate a potential pension liability of approximately $74,003,119. (Net pension liability 8% discount rate per ORS)

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OTHER POST-EMPLOYMENT BENEFITS

MPSERS is a cost-sharing, multi-employer, statewide plan. Pension benefits and retiree health benefits areestablished by law and funded through employer contributions. The cost of retiree health benefits is funded annuallyon a pay-as-you-go basis, with retirees paying some of the costs. Current year liability for retiree health benefits isreflected in the figures provided above. Further information regarding MPSERS, including retiree health benefits, canbe found at: www.michigan.gov/orsschools.

DEBT STATEMENT (As of February 26, 2015 and including the Bonds described herein)

DIRECT DEBT

Dated Interest AmountDate Purpose Type Spread Maturities Outstanding

05/17/00 Energy LTNQ 5.70% 5/1/15 $235,00004/11/05 Refunding UTQ 5.00 5/1/15-20 18,540,00002/20/13 Building & Site Bonds UTQ 1.00 - 2.00 5/1/15-21 10,600,00002/19/14 Building & Site Bonds UTQ 1.93 5/1/15-22 3,100,000

TOTAL DIRECT DEBT $32,475,000

Less: Prior Bonds - UTQ ($15,675,000)Plus: 2015 Refunding Bonds - UTQ 14,260,000 ($1,415,000)

NET DIRECT DEBT $31,060,000

OVERLAPPING DEBTAmount District

Percent Municipality Outstanding Share91.92% Bruce Township $4,040,000 $3,673,168

3.17 Oakland Township 5,000,748 158,5242.23 Shelby Township 30,855,611 688,080

80.47 Washington Township 6,662,708 5,361,481100.00 Village of Romeo 5,365,000 5,365,000

5.96 Macomb County 48,459,771 2,888,2020.19 Oakland County 448,667,894 852,4695.96 Macomb Community College 15,625,000 931,250

NET OVERLAPPING DEBT $19,918,174NET DIRECT AND OVERLAPPING DEBT $50,978,174

Source: Municipal Advisory Council of Michigan.

DEBT RATIOS

Per Capita (34,011)Net Direct Debt $913.23

Net Direct and Overlapping Debt $1,498.87

Ratio to 2014 Taxable Valuation ($1,561,873,418)Net Direct Debt 1.99%Net Direct and Overlapping Debt 3.26%

Ratio to 2014 State Equalized Valuation ($1,719,868,853)Net Direct Debt 1.81%Net Direct and Overlapping Debt 2.96%

Ratio to 2014 Estimated True Cash Valuation ($3,439,737,706)Net Direct Debt 0.90%Net Direct and Overlapping Debt 1.48%

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DEBT HISTORY

The School District has no record of default.

FUTURE FINANCING

The School District does not anticipate additional capital financing in the foreseeable future.

OTHER BORROWING

The School District has no other borrowing outstanding.

LEGAL DEBT MARGIN

2014 State Equalized Valuation $1,719,868,853Debt Limit (15% of 2014 State Equalized Valuation) $257,980,328

Debt Outstanding, including Bonds described herein $31,060,000

Less Bonds not subject to Debt Limit* (30,825,000)

Total Subject to Debt Limit $235,000

Additional Debt Which Could Be Legally Incurred $257,745,328

* Section 1351(3) of Act 451, Public Acts of Michigan, 1976, as amended, provides that the bonded indebtedness of a school district shall notexceed 15% of the total assessed valuation of the district. Bonds not included in the computation of the legal debt margin are (1) any bondqualified under Article IX, Section 16 of the Michigan Constitution of 1963, and (2) deficit budget bonds as authorized under Section 1356. Inaddition, Section 605 of Act 34, Public Acts of Michigan, 2001, as amended, provides, in relevant part, that debt evidenced by a refundingsecurity shall not be deemed to be within any statutory or charter limitation of outstanding debt limit.

SCHOOL BOND QUALIFICATION AND LOAN PROGRAM

The School District does not currently have a School Loan Revolving Fund balance under the School BondQualification and Loan Program.

Source: State of Michigan Department of Treasury

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GENERAL ECONOMIC INFORMATION

LOCATION AND AREA

The School District occupies approximately 94 square miles and includes all of the Village of Romeo andportions of five townships in Macomb County and portions of two townships in Oakland County.

The School District is located the following distances from these commercial and industrial areas:

15 miles northeast of Pontiac32 miles northwest of Detroit50 miles northeast of Ann Arbor50 miles southeast of Flint55 miles southwest of Port Huron

100 miles east of Lansing

POPULATION BY AGE

The 2010 U.S. Census estimate of population by age for Macomb County is as follows:

Number PercentTotal Population 840,979 100.00%0 through 19 years 214,625 25.5220 through 64 years 506,173 60.1965 years and over 120,181 14.29

Median age 39.9 years

INCOME

The 2010 U.S. Census estimate of household income for Macomb County is as follows:

Number PercentHOUSEHOLDS BY INCOME 332,626 100.00%Less than $10,000 20,290 6.10$10,000 to $14,999 18,627 5.60$15,000 to $24,999 38,252 11.50$25,000 to $34,999 38,917 11.70$35,000 to $49,999 52,555 15.80$50,000 to $74,999 60,538 18.20$75,000 to $99,999 46,901 14.10$100,000 to $149,999 39,915 12.00$150,000 to $199,999 11,309 3.40$200,000 or more 5,322 1.60

Median Income $49,160 Mean Income $61,113

Source: www.census.gov

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EMPLOYMENT CHARACTERISTICS*

The following employers located within the School District’s boundaries and surrounding communities offeremployment opportunities.

Approx. No.Employer Product/Service EmployedWithin the School District (100 or more employed)Ford Motor Company Engines 700Romeo Community Schools Education 665L & L Products, Inc. (2 plants) Adhesives 400Rubber Enterprises, Inc. Headquarters & rubber products 274Stant USA Corp. Automotive tubing 230Romeo Rim, Inc. Plastic compressive mold machines 200Ford Proving Grounds Automotive testing 200Meijers Retail 200Target Retail 200Shelby Enterprises, Inc. Automotive tubing 190Alco Plastics Inc. Plastics 120Home Depot Retail 150K-Mart Retail 135Link Technologies Wire forms 120D&N Bending Corp Stamping facility 111Novak & Associates Corp., J. B. Pretzels & contract packaging 100ETC, Inc. Plastic injection 100Kohls Retail 100

Macomb County (725 or more employed)General Motors Auto manufacturer 12,668Chrysler Group LLC Auto manufacturer 10,406U.S. Government Federal government 6,671Ford Motor Company Auto manufacturer 4,135St. John Providence Health System Health care 3,558Henry Ford Health System Health care 3,328Utica Community Schools Education 2,516Macomb County County government 2,218General Dynamics Land System Military vehicles 2,079McLaren Macomb Health care 1,561Chippewa Valley Schools Education 1,481Warren Consolidated Schools Education 1,404State of Michigan State government 1,343Faurecia North America Auto supplier 1,220L'Anse Creuse Public Schools Education 1,169Art Van Furniture Inc. Furniture mfg. 1,016Macomb Intermediate School District Education 924U.S. Postal Service Postal service 849Asset Acceptance Capital Financial management 729Johnson Controls Auto supplier 725

*The approximate number of employees listed above are as reported in the sources indicated below. Because of reporting time lags and other factorsinherent in collecting and reporting such information, the numbers may not reflect recent changes in employment levels, if any.

Source: 2014 Michigan Manufacturers Directory, 2014 Crain’s Book of Lists, Manta Company Intelligence website, the Michigan EconomicDevelopment Council (“MEDC”), and individual employers.

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EMPLOYMENT BREAKDOWN

The 2010 U. S. Census reports the occupational breakdown of persons 16 years and over for Macomb Countyas follows:

Number PercentPERSONS BY OCCUPATION 368,730 100.00%Professional Specialty Occupations 120,977 32.81Service Occupations 65,615 17.79Sales & Office Occupations 105,299 28.56Natural Resources, Construction, and Maintenance Occupations 26,606 7.22Transportation & Material Moving Occupations 50,233 13.62

The breakdown by industry for persons 16 years and over in Macomb County is as follows:

Number PercentPERSONS BY INDUSTRY 368,730 100.00%Agriculture, Forestry, Fishing, Hunting & Mining 369 0.10Construction 16,962 4.60Manufacturing 70,059 19.00Wholesale Trade 9,587 2.60Retail Trade 47,935 13.00Transportation 12,537 3.40Information 6,268 1.70Finance, Insurance, & Real Estate 22,861 6.20Professional & Management Services 35,398 9.60Educational, Health & Social Services 78,908 21.40Arts, Entertainment, Recreation and Food Services 34,292 9.30Other Professional and Related Services 18,068 4.90Public Administration 15,487 4.20

Source: www.census.gov

UNEMPLOYMENT*

The Michigan Department of Technology, Management & Budget Information, reports unemploymentaverages for Macomb County as compared to the State of Michigan are as follows:

County of State ofMacomb Michigan

2014 Year to Date (December) 6.5% 5.6%2014 Annual Average 8.0 7.22013 Annual Average 9.1 8.82012 Annual Average 10.4 9.12011 Annual Average 11.6 10.4

*not seasonally adjusted

BANKING

The following banks have branches located within the School District’s boundaries. Deposits are as reportedin the Accuity American Financial Directory, July - December 2014.

Total State-WideBank Main Office Deposits FirstMerit Bank Akron, OH N/A Fifth Third Bank Cincinnati, OH N/A Bank of America Charlotte, NC N/A PNC Bank Pittsburgh, PA N/A JPMorgan Chase Bank New York, NY N/A

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GENERAL SCHOOL INFORMATION

DESCRIPTION

The School District currently operates six elementary schools, two middle schools and two high schools. TheSchool District’s 2014/15 student enrollment is 5,237. A staff of 294 teachers, 20 administrators and 351 supportpersonnel are employed by the School District.

BOARD OF EDUCATION

The Board of Education consists of seven members who are elected at large for six-year overlapping terms. The Board annually elects a President, Vice President, Treasurer and Secretary. The Board is responsible for theselection and appointment of the Superintendent of Schools. The Board meets as a single body to set or amend policy,develop long range educational goals and act upon recommendations of the Superintendent of Schools. The Board isalso responsible for adopting and periodically amending the operating budget and evaluating school programs inaccordance with governing laws.

SCHOOL ENROLLMENT

Historical Enrollment

The School District’s historical enrollment totals (Fall Pupil Count Day) are as follows:

School Year Enrollment School Year Enrollment2014/15 5,237 2009/10 5,6042013/14 5,422 2008/09 5,6802012/13 5,434 2007/08 5,7502011/12 5,519 2006/07 5,7742010/11 5,593 2005/06 5,720

Enrollment by Grade

The enrollment by grade for the school year 2014/15 (Fall Pupil Count Day) are as follows:

Kindergarten 389 Ninth 427First 377 Tenth 424Second 339 Eleventh 413Third 354 Twelfth 461Fourth 376Fifth 404 Sixth 411Seventh 430Eighth 432 TOTAL 5,237

Projected Enrollment

The projected enrollment totals for 2019/20 are as follows:

K-6 2,6007-8 7759-12 1,600

TOTAL 4,950

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EXISTING SCHOOL FACILITIES

Year Remodeling/ Type ofSchool Grades Completed Additions ConstructionElementary

Amanda More PreK-5 1970 1971/91/2003 MasonryCroswell PreK-5 1951 1954/63/69/73/92/96/2003 MasonryHamilton-Parsons PreK-5 1975 1990/2003 MasonryHevel PreK-5 2002 – MasonryIndian Hills K-5 1965 1967/91/2003 MasonryWashington PreK-5 1951 1954/71/91/2003 Masonry

Middle SchoolPowell 6-8 1973 1990/2002 MasonryRomeo 6-8 1927 1963/65/69/73/75/91 Masonry

High SchoolRomeo 9-12 1958 1963/65/68/71/74/91/92 MasonryRomeo Engineer Tech Ct 9-12 2003 Masonry

Additional FacilitiesCentral Administration 1917 1963/65/75/92 MasonryBus garage 1956 1972 MasonryMaintenance/Warehouse 1978 1992 Masonry/MetalPole Barn 2002 -- Steel

OTHER SCHOOLS

There are two private or parochial schools within the School District’s boundaries.

Grades ApproximateSchool Served EnrollmentCross of Glory P-8 39Krambrooke-Griffin Academy P-8 70

Total 109

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OTHER MATTERS

All information contained in this Official Statement is subject, in all respects, to the complete body ofinformation contained in the original source thereof and no guaranty, warranty or other representation is madeconcerning the accuracy or completeness of the information herein. In particular, no opinion or representation isrendered as to whether any projection will approximate actual results, and all opinions, estimates and assumptions,whether or not expressly identified as such, should not be considered statements of fact.

The School District certifies that to its best knowledge and belief, this Official Statement, insofar as it pertainsto the School District and its economic and financial condition, is true and correct as of the date of this OfficialStatement, and does not contain, nor omit, any material facts or information which would make the statementscontained herein misleading.

ROMEO COMMUNITY SCHOOLS

/s/ Dr. Nancy J. CampbellSUPERINTENDENT

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APPENDIX A - BUDGET

General Fund Budget SummaryFor Fiscal Year Ending June 30, 2015

2014/15Amended

REVENUE Budget Local Sources $7,086,559 State Sources 39,756,278 Federal Sources 2,263,912 Other Sources 834,917

TOTAL REVENUE $49,941,666EXPENDITURESINSTRUCTION: Basic Programs $25,827,073 Added Needs 6,617,060TOTAL INSTRUCTION 32,444,133SUPPORTING SERVICES: Pupil $3,009,497 Instructional 2,646,452 General Administration 519,386 School Administration 2,833,428 Business Services 798,000 Operations/Maintenance 5,566,759 Pupil Transportation 2,682,283 Support Services Central 424,679 Support Services Other 743,268 Community Services 11,810TOTAL SERVICES 19,235,562

TOTAL EXPENDITURES $51,679,695 Outgoing Transfers & Other Transactions 310,292

TOTAL EXPENDITURES $51,989,987

REVENUE OVER (UNDER) EXPENDITURES ($2,048,321)BEGINNING FUND BALANCE, JULY 1 3,826,435

ESTIMATED ENDING FUND BALANCE, JUNE 30 $1,778,114

Romeo Community Schools

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Independent Auditor's Report

To the Board of EducationRomeo Community Schools

Report on the Basic Financial Statements

We have audited the accompanying basic financial statements of the governmental activities, each majorfund, and the aggregate remaining fund information of Romeo Community Schools (the "School District")as of and for the year ended June 30, 2014 and the related notes to the basic financial statements, whichcollectively comprise Romeo Community Schools' basic financial statements as listed in the table ofcontents.

Management's Responsibility for the Basic Financial Statements

Management is responsible for the preparation and fair presentation of these basic financial statements inaccordance with accounting principles generally accepted in the United States of America; this includesthe design, implementation, and maintenance of internal control relevant to the preparation and fairpresentation of basic financial statements that are free from material misstatement, whether due to fraudor error.

Auditor's Responsibility

Our responsibility is to express an opinion on these basic financial statements based on our audit. Weconducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards,issued by the Comptroller General of the United States. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the basic financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures inthe basic financial statements. The procedures selected depend on the auditor's judgment, including theassessment of the risks of material misstatement of the basic financial statements, whether due to fraudor error. In making those risk assessments, the auditor considers internal control relevant to the entity'spreparation and fair presentation of the basic financial statements in order to design audit proceduresthat are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonableness of significantaccounting estimates made by management, as well as evaluating the overall presentation of the financialstatements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.

Opinion

In our opinion, the basic financial statements referred to above present fairly, in all material respects, therespective financial position of the governmental activities, each major fund, and the aggregate remainingfund information of Romeo Community Schools as of June 30, 2014 and the respective changes in itsfinancial position for the year then ended, in accordance with accounting principles generally accepted inthe United States of America.

1

To the Board of EducationRomeo Community Schools

Required Supplemental Information

Accounting principles generally accepted in the United States of America require that the management'sdiscussion and analysis and the General Fund budgetary comparison schedule, as identified in the table ofcontents, be presented to supplement the basic financial statements. Such information, although not apart of the basic financial statements, is required by the Governmental Accounting Standards Board,which considers it to be an essential part of financial reporting for placing the basic financial statements inan appropriate operational, economic, or historical context. We have applied certain limited proceduresto the required supplemental information in accordance with auditing standards generally accepted in theUnited States of America, which consisted of inquiries of management about the methods of preparingthe information and comparing the information for consistency with management's responses to ourinquiries, the basic financial statements, and other knowledge we obtained during our audit of the basicfinancial statements. We do not express an opinion or provide any assurance on the information becausethe limited procedures do not provide us with sufficient evidence to express an opinion or provide anyassurance.

Other Information

Our audit was conducted for the purpose of forming an opinion on the financial statements thatcollectively comprise the School District's basic financial statements. The nonmajor governmental fundscombining balance sheet and combining statement of revenue, expenditures, and changes in fundbalances and the schedule of bonded indebtedness are presented for the purpose of additional analysisand are not a required part of the basic financial statements.

The nonmajor governmental funds combining balance sheet and combining statement of revenue,expenditures, and changes in fund balances and the schedule of bonded indebtedness are theresponsibility of management and were derived from and relate directly to the underlying accounting andother records used to prepare the basic financial statements. Such information has been subjected tothe accounting procedures applied in the audit of the basic financial statements and certain additionalprocedures, including comparing and reconciling such information directly to the underlying accountingand other records used to prepare the basic financial statements or to the basic financial statementsthemselves, and other additional procedures in accordance with auditing standards generally accepted inthe United States of America. In our opinion, the nonmajor governmental funds combining balance sheetand combining statement of revenue, expenditures, and changes in fund balances and the schedule ofbonded indebtedness are fairly stated in all material respects in relation to the basic financial statementsas a whole.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated October 24,2013 on our consideration of Romeo Community Schools' internal control over financial reporting and onour tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, andother matters. The purpose of that report is to describe the scope of our testing of internal control overfinancial reporting and compliance and the results of that testing, and not to provide an opinion on theinternal control over financial reporting or on compliance. That report is an integral part of an auditperformed in accordance with Government Auditing Standards in considering Romeo Community Schools'internal control over financial reporting and compliance.

October 24, 2014

2

The auditor has not examined or reviewed any financial documents, statements or materials that have been or may befurnished in connection with the authorization, issuance or marketing of the Bonds and accordingly will not express anyopinion with respect to the accuracy or completeness of any such financial documents, statements or materials.

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Romeo Community Schools

Management’s Discussion and Analysis

3

This section of Romeo Community Schools’ (the “School District”) annual financial report presents our discussion and analysis of the School District’s financial performance during the year ended June 30, 2014. Please read it in conjunction with the School District’s financial statements, which immediately follow this section.

Using this Annual Report

This annual report consists of a series of financial statements and notes to those statements. These statements are organized so the reader can understand Romeo Community Schools financially as a whole. The government-wide financial statements provide information about the activities of the whole School District, presenting both an aggregate view of the School District’s finances and a longer-term view of those finances. The fund financial statements provide the next level of detail. For governmental activities, these statements tell how services were financed in the short term as well as what remains for future spending. The fund financial statements look at the School District’s operations in more detail than the government-wide financial statements by providing information about the School District’s most significant funds - the General Fund and Technology Bond Fund, with all other funds presented in one column as nonmajor funds. The remaining statement, the statement of fiduciary assets and liabilities, presents financial information about activities for which the School District acts solely as an agent for the benefit of students and parents. The format of the annual report is as follows:

Management’s Discussion and Analysis (MD&A) (Required Supplemental Information)

Basic Financial Statements

Government-wide Financial Statements Fund Financial Statements

Notes to the Basic Financial Statements

Budgetary Information for Major Funds (Required Supplemental Information)

Other Supplemental Information

Romeo Community Schools Management’s Discussion and Analysis (Continued)

4

Reporting the School District as a Whole - Government-wide Financial Statements

One of the most important questions asked about the School District is, “As a whole, what is the School District’s financial condition as a result of the year’s activities?” The statement of net position and the statement of activities, which appear first in the School District’s financial statements, report information on the School District as a whole and its activities in a way that helps you answer this question. We prepare these statements to include all assets and liabilities, using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. All of the current year’s revenues and expenses are taken into account regardless of when cash is received or paid. These two statements report the School District’s net position - the difference between assets and liabilities, as reported in the statement of net position - as one way to measure the School District’s financial health or financial position. Over time, increases or decreases in the School District’s net position - as reported in the statement of activities - are indicators of whether its financial health is improving or deteriorating. The relationship between revenues and expenses is the School District’s operating results. However, the School District’s goal is to provide services to our students, not to generate profits as commercial entities do. One must consider many other nonfinancial factors, such as the quality of the education provided and the safety of the schools, to assess the overall health of the School District. The statement of net position and the statement of activities report the governmental activities for the School District, which encompass all of the School District’s services, including instruction, support services, community services, athletics, and food services. Property taxes, unrestricted state aid (foundation allowance revenue), and state and federal grants finance most of these activities.

Reporting the School District’s Most Significant Funds - Fund Financial Statements

The School District’s fund financial statements provide detailed information about the most significant funds - not the School District as a whole. Some funds are required to be established by state law and by bond covenants. However, the School District establishes many other funds to help it control and manage money for particular purposes (food services is an example) or to show that it is meeting legal responsibilities for using certain taxes, grants, and other money (such as bond-funded construction funds used for voter-approved capital projects). The governmental funds of the School District use the following accounting approach:

� Governmental funds - All of the School District’s services are reported in governmental funds. Governmental fund reporting focuses on showing how money flows into and out of funds and the balances left at year end that are available for spending. They are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the operations of the School District and the services it provides. Governmental fund information helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance the School District’s programs. We describe the relationship (or differences) between governmental activities (reported in the statement of net position and the statement of activities) and governmental funds in a reconciliation.

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Romeo Community Schools Management’s Discussion and Analysis (Continued)

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The School District as Trustee - Reporting the School District’s Fiduciary Responsibilities

The School District is the trustee, or fiduciary, for its student activity funds. All of the School District’s fiduciary activities are reported in a separate statement of fiduciary assets and liabilities. We exclude these activities from the School District’s other financial statements because the School District cannot use these assets to finance its operations. The School District is responsible for ensuring that the assets reported in these funds are used for their intended purposes.

The School District as a Whole

Recall that the statement of net position provides the perspective of the School District as a whole. Table 1 provides a summary of the School District’s net position as of June 30, 2014 and 2013:

TABLE 1

2014 2013

AssetsCurrent and other assets 12.5$ 11.2$ Restricted assets 11.6 14.5 Capital assets 75.8 70.8

Total assets 99.9 96.5

Deferred Outflows - Deferred charges on bond refunding 0.9 2.0

Total assets 100.8 98.5

LiabilitiesCurrent liabilities 14.7 12.9 Long-term liabilities 29.9 32.1

Total liabilities 44.6 45.0

Net AssetsInvested in capital assets - Net of related debt 51.1 48.2 Restricted 2.9 2.7 Unrestricted 2.2 2.6

Total net assets 56.2$ 53.5$

Governmental Activities

(in millions)

June 30

Romeo Community Schools Management’s Discussion and Analysis (Continued)

6

The above analysis focuses on the net position (see Table 1). The change in net position (see Table 2) of the School District’s governmental activities is discussed below. The School District’s net position was $56.2 million at June 30, 2014. Net investment in capital assets totaling $51.1 million, compares the original cost less depreciation of the School District’s capital assets to long-term debt used to finance the acquisition of those assets. Most of the debt will be repaid from voter-approved property taxes collected as the debt service comes due. Restricted net position is reported separately to show legal constraints from debt covenants and enabling legislation that limit the School District’s ability to use that net position for day-to-day operations. The remaining amount of net position ($2.2 million) was unrestricted.

The $2.2 million in unrestricted net position of governmental activities represents the accumulated results of all past years’ operations. The unrestricted net position balance enables the School District to meet working capital and cash flow requirements as well as to provide for future uncertainties. The operating results of the General Fund will have a significant impact on the change in unrestricted net position from year to year.

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Romeo Community Schools Management’s Discussion and Analysis (Continued)

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The results of this year’s operations for the School District as a whole are reported in the statement of activities (Table 2), which shows the changes in net position for fiscal years 2014 and 2013.

TABLE 22014 2013

RevenueProgram revenue:

Charges for services 1.7$ 1.7$ Operating grants and contributions 7.1 7.2

General revenue:Property taxes 13.9 13.7 State foundation allowance 36.3 35.1 Other 0.5 0.7

Total revenue 59.5 58.4

Functions/Program ExpensesInstruction 25.5 30.3 Support services 23.0 16.7 Athletics 0.7 0.7 Food services 1.2 1.4 Community services 0.6 0.6 Other 0.2 2.7 Interest on long-term debt and other 2.4 0.1 Depreciaton (unallocated) 3.2 2.5

Total functions/program expenses 56.8 55.0

Increase in Net Assets 2.7 3.4

Net Assets - Beginning of year 53.5 50.1

Net Assets - End of year 56.2$ 53.5$

(in millions)

Governmental Activities

As reported in the statement of activities, the cost of all of our governmental activities this year was $56.8 million. Certain activities were partially funded from those who benefited from the programs ($1.7 million) or by other governments and organizations that subsidized certain programs with grants and contributions ($7.1 million). We paid for the remaining “public benefit” portion of our governmental activities with $13.9 million in taxes, $36.3 million in state foundation allowance, and $0.5 million in other revenues, i.e., interest and general entitlements.

Romeo Community Schools Management’s Discussion and Analysis (Continued)

8

The School District experienced an increase in net position of $2.7 million. Key reasons for the change in net position were increases in capital assets from the technology and bus bonds along with long-term debt maturities. As discussed above, the net cost shows the financial burden that was placed on the state and the School District’s taxpayers by each of these functions. Since property taxes for operations and unrestricted state aid constitute the vast majority of School District operating revenue sources, the Board of Education and administration must annually evaluate the needs of the School District and balance those needs with state-prescribed available unrestricted resources.

The School District’s Funds

As we noted earlier, the School District uses funds to help it control and manage money for particular purposes. Looking at funds helps the reader consider whether the School District is being accountable for the resources taxpayers and others provide to it and may provide more insight into the School District’s overall financial health.

As the School District completed this year, the governmental funds reported a combined fund balance of $15.3 million, which is a decrease of $3.0 million from last year. The primary reason for the decrease was the spending of the technology bond for technology upgrades, reducing the Technology Bond Fund balance.

In the General Fund, our principal operating fund, the fund balance decreased by $.6 million to $3.8 million. The change is mainly due to a continuation of a large state funding decrease in a previous fiscal year and fewer cuts in expenditures than the revenue decrease experienced. General Fund fund balance is available to fund costs related to allowable school operating purposes.

Our special revenue funds had a net increase of approximately $68,000 in fund balance. The Food Services Fund decrease was due to primarily to funding food service equipment upgrades. The Community Services Fund, which includes community facility use services and child care, had an increase in fund balance due to planned service revenue exceeding planned expenditures. Service revenues are planned to exceed expenditures in the Community Services Fund in the event of unexpected costs, which would cause the School District to use the fund balance.

Combined, the debt service funds showed a fund balance increase of approximately $360,000. The increase was mainly due to a planned increase of property tax revenue over debt expenditures to maintain the fund balance at a moderate level.

The School District collected approximately $1.9 million in a voter-approved Sinking Fund millage. This millage is available to fund specific capital projects allowed by state law and approved by the voters.

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Romeo Community Schools Management’s Discussion and Analysis (Continued)

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General Fund Budgetary Highlights

Over the course of the year, the School District revises its budget as it attempts to deal with unexpected changes in revenues and expenditures. State law requires that the budget be amended to ensure that expenditures do not exceed appropriations. The final amendment to the budget was adopted just before year end. A schedule showing the School District’s original and final budget amounts compared with amounts actually paid and received is provided in required supplemental information of these financial statements.

There were revisions made to the 2013-2014 General Fund original budget. Budgeted revenue was amended to adjust for an increase in state revenue due to a change in accounting for MPSERS (state retirement) revenues and expenditures.

Budgeted expenditures were also increased to align with projected actual expenditures and the MPSERS accounting change noted directly above net of other savings.

There were variances between the final budget and actual amounts. Federal revenues were below budget due to carrying over potential federal sources of revenue. Total instructional and support services expenditures were lower than the amended budget. This was due to the School District closely monitoring expenditures and budgeting conservatively.

Capital Assets and Debt Administration

Capital Assets

As of June 30, 2014, the School District had $75.8 million invested in a broad range of capital assets, including land, buildings, vehicles, furniture, and equipment. This amount represents a net increase (including additions, disposals, and depreciation) of $4,974,000, or 7 percent, from last year.

2014 2013

Land 461,702$ 461,702$ Construction in progress 493,248 1,213,420 Buildings and building improvements 89,369,964 87,938,263 Land improvements 5,351,412 4,861,339 Buses and other vehicles 4,432,935 4,795,005 Furniture and equipment 18,548,158 15,844,864

Total capital assets 118,657,419 115,114,593

Less accumulated depreciation 42,899,122 44,330,479

Net capital assets 75,758,297$ 70,784,114$

Romeo Community Schools Management’s Discussion and Analysis (Continued)

10

This year’s net additions of $4.9 million primarily included technology upgrades, bus purchases, and building renovations. These increases were net of significant technology equipment disposals and sales of old buses. We present more detailed information about our capital assets in the notes to the financial statements.

Debt

At the end of this year, the School District had $32.475 million in bonds outstanding versus $34.095 million in the previous year - a decrease of 4.8 percent. Those bonds consisted of the following:

2014 2013

General obligation bonds 32,475,000$ 34,095,000$ The School District’s general obligation bond rating is Aa2 by Moody’s Investors Service. The School District’s rating by Standard & Poor’s is A+. The state limits the amount of general obligation debt that schools can issue to 15 percent of the assessed value of all taxable property within the School District’s boundaries. If the School District issues “qualified debt,” i.e., debt backed by the State of Michigan, such obligations are not subject to this debt limit. The School District’s outstanding unqualified general obligation debt of $32.475 million does not approach the state limit.

Other obligations include accrued compensated absences and workers’ compensation claims. We present more detailed information about our long-term liabilities in the notes to the financial statements.

Economic Factors and Next Year’s Budgets and Rates

Our elected officials and administration considered many factors when setting the School District’s 2014-2015 fiscal year budget. One of the most important factors affecting the budget is our student count. The state foundation revenue is determined by multiplying the blended student count by the foundation allowance per pupil. The blended count for the 2015 fiscal year is 90 percent and 10 percent of the October 2014 and February 2015 student counts, respectively. The 2014-2015 budget was adopted in June 2014, based on an estimate of students that will be enrolled in September 2014. Approximately 75 percent of total General Fund revenue is from the foundation allowance. Under state law, the School District cannot assess additional property tax revenue for general operations. As a result, District funding is heavily dependent on the state’s ability to fund local school operations. Based on early enrollment data at the start of the 2014-2015 school year, we anticipate that the fall student count will be slightly above the estimates used in creating the 2014-2015 budget. Once the final student count and related per-pupil funding is validated, state law requires the School District to amend the budget if actual district resources are not sufficient to fund original appropriations.

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Romeo Community Schools Management’s Discussion and Analysis (Continued)

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Since the School District’s revenue is heavily dependent on state funding and the health of the state’s School Aid Fund, the actual revenue received depends on the State’s ability to collect revenues to fund its appropriation to school districts. The State periodically holds a revenue-estimating conference to estimate revenues. Based on the results of the most recent conference, the State estimates funds are sufficient to fund the appropriation (including a net increase of per pupil funding of $50 per pupil). Due to increases in the state-required contribution to the retirement system and increases in healthcare costs, the School District estimates that the net increase in per-pupil funding to fund other operating costs will be $4 per pupil.

The School District has put forth a bond proposal to the voters. The proposal is scheduled to be put to a vote on November 4, 2014. The proposal is for $7.0 million and will be used to refurbish Barnabo stadium, replace athletic equipment and repair tennis courts at Romeo High School, and refurbish Memorial Field. The proposal is designed to help the School District refurbish or replace athletic fields and equipment.

During the 2012-2013 fiscal year, the School District settled labor contracts with the following unions: REA (teachers), AFSCME (bus drivers, custodians, food service), ROSPA (secretaries), RASPA (teacher assistants), and Child Care. The financial impact on School District operations is estimated by the School District to be an increase in expenditures of $550,000 in 2013-2014 and an additional $400,000 in 2014-2015.

RRomeo Community Schools

Statement of Net PositionJune 30, 2014

GovernmentalActivities

AssetsCash and investments (Note 3) $ 3,885,178Receivables - Net (Note 4) 8,393,102Inventories 67,976Prepaid costs 111,007Restricted assets (Notes 1 and 3) 11,631,096Capital assets - Net (Note 5) 75,758,297

Total assets 99,846,656

Deferred Outflows of Resources -Deferred charges on bond refunding (Note 7) 952,372

Total assets and deferred outflows of resources 100,799,028

LiabilitiesAccounts payable 2,095,610Accrued payroll and other liabilities 5,059,633Accrued interest 190,240Retainage payable 94,464Line of credit (Note 9) 1,500,000Unearned revenue (Note 4) 54,291Noncurrent liabilities (Note 7):

Due within one year 5,732,700Due in more than one year 29,882,338

Total liabilities 44,609,276

Net PositionNet investment in capital assets 51,066,084Restricted:

Debt service 1,090,728Capital projects 1,690,493Food services 159,748

Unrestricted 2,182,699

Total net position $ 56,189,752

The Notes to Financial Statements are anIntegral Part of this Statement. 12

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RRomeo Community Schools

Statement of ActivitiesYear Ended June 30, 2014

Program Revenue

Net (Expense)Revenue and

Changes in NetPosition

ExpensesCharges for

Services

OperatingGrants and

ContributionsGovernmental

Activities

Functions/ProgramsPrimary government - Governmental

activities:Instruction $ 25,361,193 $ 29,999 $ 3,982,072 $ (21,349,122)Support services 22,995,203 92,312 2,316,682 (20,586,209)High school store 18,973 10,531 - (8,442)Athletics 710,647 257,051 - (453,596)Food services 1,233,446 570,314 769,450 106,318Community services 647,754 731,410 - 83,656Payments to instate governments 218,581 - - (218,581)Interest on long-term debt and other 2,422,596 - - (2,422,596)Depreciation expense (unallocated) 3,200,898 - - (3,200,898)

Total primary government $ 56,809,291 $ 1,691,617 $ 7,068,204 (48,049,470)

General revenues:Taxes:

Property taxes - Levied for general purposes 5,844,865Property taxes - Levied for debt service 6,179,769Property taxes - Levied for capital projects 1,906,730

State aid not restricted to specific purposes 36,294,022Interest and investment earnings 37,518Loss on the sale of capital assets (567,538)Other 1,018,104

Total general revenues 50,713,470

Change in Net Position 2,664,000

Net Position - Beginning of year 53,525,752

Net Position - End of year $ 56,189,752

The Notes to Financial Statements are anIntegral Part of this Statement. 13

RRomeo Community Schools

Governmental FundsBalance SheetJune 30, 2014

General FundTechnologyBond Fund

NonmajorGovernmental

Funds

TotalGovernmental

FundsAssets

Cash and investments (Note 3) $ 2,995,493 $ - $ 889,685 $ 3,885,178Receivables (Note 4) 8,382,599 - 10,503 8,393,102Due from other funds (Note 6) 546,004 - 3,384 549,388Inventories 50,336 - 17,640 67,976Prepaid costs 111,007 - - 111,007Restricted assets (Notes 1 and 3) - 6,452,405 5,178,691 11,631,096

Total assets $12,085,439 $ 6,452,405 $ 6,099,903 $ 24,637,747

Liabilities and Fund Balances

LiabilitiesAccounts payable $ 1,641,697 $ 100,576 $ 372,079 $ 2,114,352Accrued payroll and other liabilities 5,059,633 - 54,885 5,114,518Retainage payable - 11,737 27,842 39,579Line of credit (Note 9) 1,500,000 - - 1,500,000Due to other funds (Note 6) 3,384 333,696 193,566 530,646Unearned revenue (Note 4) 54,291 - - 54,291

Total liabilities 8,259,005 446,009 648,372 9,353,386Fund Balances

Nonspendable -Inventories 161,345 - 17,640 178,985

Restricted:Capital projects - 6,006,396 3,510,343 9,516,739Debt service - - 1,280,968 1,280,968Food services - - 151,163 151,163

Assigned:Budgeted use of fund balance in

subsequent year 2,604,467 - - 2,604,467Community service - - 482,747 482,747High school store - - 8,670 8,670

Unassigned 1,060,622 - - 1,060,622

Total fund balances 3,826,434 6,006,396 5,451,531 15,284,361

Total liabilities and fund balances $12,085,439 $ 6,452,405 $ 6,099,903 $ 24,637,747

The Notes to Financial Statements are anIntegral Part of this Statement. 14

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RRomeo Community Schools

Governmental FundsReconciliation of the Balance Sheet of Governmental Funds to the

Statement of Net PositionJune 30, 2014

Fund Balance Reported in Governmental Funds $ 15,284,361

Amounts reported for governmental activities in the statementof net position are different because:

Capital assets used in governmental activities arenot financial resources and are not reportedin the funds:

Cost of capital assets $ 118,657,419Accumulated depreciation (42,899,122) 75,758,297

Long-term liabilities are not due and payable inthe current period and are not reported inthe governmental funds:

Bonds payable including premium - Net ofamortization (33,470,831)

Compensated absences (1,909,317)Workers' compensation claims (234,890) (35,615,038)

Accrued interest payable is not included as aliability in governmental funds (190,240)

Deferred outflows of resources (deferredinterest) that do not benefit the currentperiod are not reported in the governmentalfunds 952,372

Net Position of Governmental Activities $ 56,189,752

The Notes to Financial Statements are anIntegral Part of this Statement. 15

RRomeo Community Schools

Governmental FundsStatement of Revenue, Expenditures, and

Changes in Fund BalancesYear Ended June 30, 2014

General FundTechnologyBond Fund

NonmajorGovernmental

Funds

TotalGovernmental

Funds

RevenueLocal sources $ 6,950,569 $ 24,733 $ 9,509,530 $ 16,484,832State sources 39,631,478 - 54,147 39,685,625Federal sources 2,148,095 - 715,303 2,863,398Interdistrict sources 813,203 - - 813,203

Total revenue 49,543,345 24,733 10,278,980 59,847,058

ExpendituresCurrent:

Instruction 31,256,400 - - 31,256,400Support services 17,274,946 - 82,360 17,357,306High school store - - 18,973 18,973Athletics 710,647 - - 710,647Food services - - 1,225,622 1,225,622Community services 8,456 - 639,298 647,754

Debt service:Principal - - 4,720,000 4,720,000Interest - - 1,350,505 1,350,505Other - - 639 639

Capital outlay 509,670 4,669,012 3,307,364 8,486,046Payments to other instate governments 218,581 - - 218,581

Total expenditures 49,978,700 4,669,012 11,344,761 65,992,473

Excess of Revenue Under Expenditures (435,355) (4,644,279) (1,065,781) (6,145,415)

Other Financing Sources (Uses)Transfers in 130,000 - 258,665 388,665Transfers out (258,665) - (130,000) (388,665)Proceeds from issuance of bonds - - 3,100,000 3,100,000

Total other financing (uses)sources (128,665) - 3,228,665 3,100,000

Net Change in Fund Balances (564,020) (4,644,279) 2,162,884 (3,045,415)

Fund Balances - Beginning of year 4,390,454 10,650,675 3,288,647 18,329,776

Fund Balances - End of year $ 3,826,434 $ 6,006,396 $ 5,451,531 $ 15,284,361

The Notes to Financial Statements are anIntegral Part of this Statement. 16

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RRomeo Community Schools

Governmental FundsReconciliation of the Statement of Revenue, Expenditures,

and Changes in Fund Balances of Governmental Fundsto the Statement of Activities

Year Ended June 30, 2014

Net Change in Fund Balances - Total Governmental Funds $ (3,045,415)

Amounts reported for governmental activities in the statementof activities are different because:

Governmental funds report capital outlays asexpenditures; however, in the statement of activities,these costs are allocated over their estimated usefullives as depreciation:

Depreciation expense $ (3,200,898)Capitalized capital outlay 8,742,619 5,541,721

Governmental funds report proceeds from sale of assetsas revenue; in the statement of activities, these arerecorded net of carrying value of the disposed assets (567,538)

Deferred interest is reported as an expenditure in thegovernmental funds, but is capitalized and amortized inthe statement of activities (1,065,297)

Bond proceeds provide financial resources togovernmental funds, but issuing debt and premiumsincreases long-term liabilities in the statement ofactivities (3,100,000)

Underwriter's premium reported as revenue in the fundsand amortized in the statement of activities 193,771

Repayment of bond principal is an expenditure in thegovernmental funds, but not in the statement ofactivities (where it reduces long-term debt) 4,720,000

Interest expense is recorded in the statement of activitieswhen incurred; it is not reported in governmentalfunds until paid (6,155)

Compensated absences and self-insured liability claims arerecorded when earned in the statement of activities. In the current year, more was earned than was paidout (7,087)

Change in Net Position of Governmental Activities $ 2,664,000

The Notes to Financial Statements are anIntegral Part of this Statement. 17

RRomeo Community Schools

Fiduciary FundsStatement of Fiduciary Assets and Liabilities

June 30, 2014

Agency Funds

Assets $ 821,226

LiabilitiesDue to student groups and other $ 802,484Due to other funds (Note 6) 18,742

Total liabilities $ 821,226

The Notes to Financial Statements are anIntegral Part of this Statement. 18

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RRomeo Community Schools

Notes to Financial StatementsJune 30, 2014

Note 1 - Summary of Significant Accounting Policies

The accounting policies of Romeo Community Schools (the “School District”) conformto accounting principles generally accepted in the United States of America (GAAP) asapplicable to governmental units. The following is a summary of the significantaccounting policies used by the School District:

Reporting Entity

The School District is governed by an elected seven-member Board of Education. Theaccompanying financial statements have been prepared in accordance with criteriaestablished by the Governmental Accounting Standards Board for determining thevarious governmental organizations to be included in the reporting entity. These criteriainclude significant operational financial relationships that determine which of thegovernmental organizations are a part of the School District's reporting entity and whichorganizations are legally separate component units of the School District. Based on theapplication of the criteria, the School District does not contain any component units.

Government-wide and Fund Financial Statements

The government-wide financial statements (i.e., the statement of net position and thestatement of activities) report information on all of the nonfiduciary activities of theprimary government. For the most part, the effect of interfund activity has beenremoved from these financial statements. Governmental activities, which normally aresupported by taxes and intergovernmental revenue, are reported separately frombusiness-type activities, which rely to a significant extent on fees and charges forsupport. All of the School District's government-wide activities are consideredgovernmental activities.

The statement of activities demonstrates the degree to which the direct expenses of agiven function or segment are offset by program revenue. Direct expenses are thosethat are clearly identifiable with a specific function. Program revenue includes(1) charges to customers or applicants who purchase, use, or directly benefit fromgoods, services, or privileges provided by a given function and (2) grants andcontributions that are restricted to meeting the operational or capital requirements of aparticular function. Taxes, intergovernmental payments, and other items not properlyincluded among program revenue are reported instead as general revenue.

Separate financial statements are provided for governmental funds and fiduciary funds,even though the latter are excluded from the government-wide financial statements.Major individual governmental funds are reported as separate columns in the fundfinancial statements.

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Notes to Financial StatementsJune 30, 2014

Note 1 - Summary of Significant Accounting Policies (Continued)

Measurement Focus, Basis of Accounting, and Financial StatementPresentation

Government-wide Financial Statements - The government-wide financialstatements are reported using the economic resources measurement focus and theaccrual basis of accounting. Revenue is recorded when earned and expenses arerecorded when a liability is incurred, regardless of the timing of related cash flows.Property taxes are recognized as revenue in the year for which they are levied. Grants,categorical aid, and similar items are recognized as revenue as soon as all eligibilityrequirements imposed by the provider have been met.

As a general rule, the effect of interfund activity has been eliminated from thegovernment-wide financial statements.

When an expense is incurred for purposes for which both restricted and unrestrictednet position or fund balance are available, the School District's policy is to first applyrestricted resources. When an expense is incurred for purposes which amounts in anyof the unrestricted fund balance classifications could be used, it is the School District'spolicy to spend funds in this order: committed, assigned, and then unassigned fundbalance.

Amounts reported as program revenue include charges to customers or applicants forgoods, services, or privileges provided and operating grants and contributions.Internally dedicated resources are reported as general revenue rather than as programrevenue. Likewise, general revenue includes all taxes and unrestricted state and federalaid.

Fund Financial Statements - Governmental fund financial statements are reportedusing the current financial resources measurement focus and the modified accrual basisof accounting. Revenue is recognized as soon as it is both measurable and available.Revenue is considered to be available if it is collected within the current period or soonenough thereafter to pay liabilities of the current period. Revenue not meeting thisdefinition is classified as a deferred inflow of resources. For this purpose, the SchoolDistrict considers revenues to be available if they are collected within 60 days of the endof the current fiscal period. Expenditures generally are recorded when a liability isincurred, as under accrual accounting. However, debt service expenditures, as well asexpenditures related to compensated absences and claims and judgments, are recordedonly when payment is due.

Property taxes, unrestricted state aid, intergovernmental grants, and interest associatedwith the current fiscal period are all considered to be susceptible to accrual and so havebeen recognized as revenue of the current fiscal period. All other revenue items areconsidered to be available only when cash is received by the School District.

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Note 1 - Summary of Significant Accounting Policies (Continued)

Fiduciary fund statements are also reported using the economic resources measurementfocus and the accrual basis of accounting.

The School District reports the following major governmental funds:

General Fund - The General Fund is the School District's primary operating fund. Itaccounts for all financial resources of the School District, except those required to beaccounted for in another fund.

Technology Bond Fund - The Technology Bond Capital Projects Fund is used torecord bond proceeds or other revenue and the disbursement of invoices specificallydesignated for acquiring and installing technology equipment and technologyinfrastructure in school buildings and other facilities, and remodeling, equipping, and re-equipping school buildings and other facilities with respect to the installation oftechnology equipment and infrastructure. The fund operates until the purpose for whichit was created is accomplished.

Additionally, the School District reports the following fund types:

Debt Service Funds - The School District's debt service funds are used to record tax,interest, and other revenue for payment of interest, principal, and other expenditureson various bond issues.

Special Revenue Funds - Special revenue funds are used to account for the proceedsof specific revenue sources that are restricted to expenditure for specified purposes.The School District's special revenue funds include the Food Services, High SchoolStore, and Community Services Funds. Any operating deficit generated by theseactivities is the responsibility of the General Fund.

Sinking Fund - The Sinking Fund is used to record tax levy revenue and thedisbursement of monies specifically designated for acquiring new school sites andbuildings and for major remodeling. The fund operates until the purpose for which itwas created is accomplished.

Bus Bond Fund - The Bus Bond Capital Projects Fund is used to record bond proceedsor other revenue and the disbursement of invoices specifically designated for acquiringschool buses. The fund operates until the purpose for which it was created isaccomplished.

Trust and Agency Fund - The Agency Fund is used to record the transactions ofstudent, staff, and School District groups for schools and school-related purposes. Thefund is segregated and held in trust for the groups and is not available for School Districtpurposes.

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Notes to Financial StatementsJune 30, 2014

Note 1 - Summary of Significant Accounting Policies (Continued)

Assets, Liabilities, and Net Position or Equity

Cash and Cash Equivalent Investments - Cash and cash equivalent investmentsinclude cash on hand, demand deposits, and short-term investments with a maturity ofthree months or less when acquired. Investments are stated at fair value. To the extentthat cash from various funds has been pooled in an investment, related investmentincome has been allocated to each fund based on relative participation in the pool.

Receivables and Payables - In general, outstanding balances between funds arereported as “due to/from other funds.” Activities between funds that are representativeof lending/borrowing arrangements outstanding at the end of the fiscal year are referredto as “advances to/from other funds.”

All trade and property tax receivables are shown net of an allowance for uncollectibleamounts. The School District considers all receivables to be fully collectible; accordingly,no allowance for uncollectible amounts is recorded. Property taxes are assessed as ofDecember 31 and the related property taxes become a lien on December 1 of thefollowing year. These taxes are due on September 14 with a final collection ofFebruary 28, at which time penalties and interest are assessed and the total obligation isadded to the county tax rolls.

Inventories and Prepaid Costs - Inventories are valued at cost, on a first-in, first-outbasis. Inventories of governmental funds are recorded as expenditures when consumedrather than when purchased. Certain payments to vendors reflect costs applicable tofuture fiscal years and are recorded as prepaid costs in both government-wide and fundfinancial statements.

Restricted Assets - The unspent property taxes and related interest in the SinkingFund and the unspent bond proceeds and related interest of the capital projects fundsrequire amounts to be set aside for capital expenditures. In addition, the unspentproperty taxes levied in the debt service funds are required to be set aside for futurebond principal and interest payments. These amounts have been classified as restrictedassets.

Capital Assets - Capital assets, which include land, buildings and improvements, landimprovements, furniture and equipment, and vehicles, are reported in the applicablegovernmental column in the government-wide financial statements. Capital assets aredefined by the School District as assets with an initial individual cost of more than $1,000and an estimated useful life in excess of one year. Such assets are recorded at historicalcost or estimated historical cost if purchased or constructed. Donated capital assets arerecorded at estimated fair market value at the date of donation. Costs of normal repairand maintenance that do not add to the value or materially extend asset life are notcapitalized. The School District does not have infrastructure-type assets.

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Notes to Financial StatementsJune 30, 2014

Note 1 - Summary of Significant Accounting Policies (Continued)

Buildings, land improvements, vehicles, and furniture are depreciated using the straight-line method over the following useful lives:

Buildings and building improvements 20 to 50 yearsLand improvements 20 yearsBuses and other vehicles 5 to 10 yearsFurniture and other equipment 5 to 15 yearsSoftware 5 years

Compensated Absences - The liability for compensated absences reported in thegovernment-wide statements consists of earned but unused accumulated vacation andsick leave benefits. A liability for these amounts is reported in governmental funds as itcomes due for payment. The liability has been calculated using the vesting method, inwhich leave amounts for both employees who are currently eligible to receivetermination payments at normal retirement age and other employees who are expectedto become eligible in the future to receive such payments upon normal retirement areincluded.

Long-term Obligations - In the government-wide financial statements, long-term debtand other long-term obligations are reported as liabilities in the statement of netposition. Bond premiums and discounts are deferred and amortized over the life of thebonds using the effective interest method. Bonds payable are reported net of theapplicable bond premium or discount. Bond issuance costs are reported as debt serviceexpenditures.

In the fund financial statements, governmental fund types recognize bond premiums anddiscounts, as well as bond issuance costs, during the current period.

The face amount of debt issued is reported as other financing sources. Premiumsreceived on debt issuances are reported as other financing sources while discounts arereported as other financing uses. Issuance costs are reported as debt serviceexpenditures.

Deferred Outflows of Resources - In addition to assets, the statement of net positionreports a separate section for deferred outflows of resources, which represents aconsumption of net position that applies to future periods and will be recognized as anoutflow of resources in the future. This category consists of the deferred charge onrefunding reported in the government-wide statement of net position. A deferredcharge on refunding results from the difference in the carrying value of refunded debtand its reacquisition price. This amount is deferred and amortized over the shorter ofthe life of the refunded or refunding debt.

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Notes to Financial StatementsJune 30, 2014

Note 1 - Summary of Significant Accounting Policies (Continued)

Fund Balance - Fund balance classifications comprise a hierarchy based primarily onthe extent to which a government is bound to observe constraints imposed on the useof the resources reported in governmental funds. Under this standard, the fund balanceclassifications are comprised of the following - nonspendable, restricted, committed,assigned, and unassigned.

In the fund financial statements, governmental funds report the following components offund balance:

! Nonspendable: Amounts that are not in spendable form or are legally orcontractually required to be maintained intact

! Restricted: Amounts that are legally restricted by outside parties, constitutionalprovisions, or enabling legislation for use for a specific purpose

! Committed: Amounts that have been formally set aside by the Board of Educationfor use for use for specific purposes. Commitments are made and can be rescindedonly via resolution of the Board of Education. Committed fund balance does notlapse at year end.

! Assigned: Intent to spend resources on specific purposes expressed by the Boardof Education or superintendent, who is authorized by resolution approved by theBoard of Education to make assignments. Assigned fund balance does not lapse atyear end.

! Unassigned: Amounts that do not fall into any other category above. This is theresidual classification for amounts in the General Fund and represents fund balancethat has not been assigned to other funds and has not been restricted, committed,or assigned to specific purposes in the General Fund. In other governmental funds,only negative unassigned amounts are reported, if any, and represent expendituresincurred for specific purposes exceeding the amounts previously restricted,committed, or assigned to those purposes.

Comparative Data/Reclassifications - Comparative data is not included in the SchoolDistrict's financial statements.

Note 2 - Stewardship, Compliance, and Accountability

Budgetary Information - Annual budgets are adopted on a basis consistent withgenerally accepted accounting principles and state law for the General Fund and allspecial revenue funds, except that capital outlay expenditures are budgeted in otherexpenditure categories. All annual appropriations lapse at fiscal year end.

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Note 2 - Stewardship, Compliance, and Accountability (Continued)

The budget document presents information by fund and function. The legal level ofbudgetary control adopted by the governing body (i.e., the level at which expendituresmay not legally exceed appropriations) is the function level. State law requires theSchool District to have its budget in place by July 1. Expenditures in excess of amountsbudgeted are a violation of Michigan law. State law permits districts to amend theirbudgets during the year. During the year, the budget was amended twice in a legallypermissible manner.

Amounts encumbered for purchase orders, contracts, etc. are not tracked during theyear. Budget appropriations are considered to be spent once the goods are delivered orthe services rendered.

The School District budgets and reports capital outlay expenditures within the relatedfunction in the General Fund - budgetary comparison schedule. In accordance withgenerally accepted accounting principles, the School District reports capital outlayseparately in the statement of revenue, expenditures, and changes in fund balances.

Excess of Expenditures Over Appropriations in Budgeted Funds - During theyear, the School District incurred expenditures in the General Fund which were inexcess of amounts budgeted, as follows:

Budget Actual

Support services - Pupil $ 2,950,309 $ 2,978,260Support Services - School administration 2,690,938 2,697,825Athletics 706,849 710,647Payments to other public schools (ISDs, LEAs) 186,997 218,581

Capital Projects Fund Compliance - The Sinking Fund records capital projectactivities funded with the Sinking Fund millage. For this fund, the School District hascomplied with the applicable provisions of §1212(1) of the State of Michigan SchoolCode and the State of Michigan Department of Treasury Letter No. 01-95.

The Technology Bond and Bus Bond Capital Projects Funds include capital projectactivities funded with the bonds issued after May 1, 1994. For these capital projects, theSchool District has complied with the applicable provisions of §1351a of the State ofMichigan's School Code.

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Notes to Financial StatementsJune 30, 2014

Note 3 - Deposits and Investments

State statutes and the School District's investment policy authorize the School District tomake deposits in the accounts of federally insured banks, credit unions, and savings andloan associations that have offices in Michigan. The School District is allowed to invest inU.S. Treasury or agency obligations, U.S. government repurchase agreements, bankers'acceptances, commercial paper rated prime at the time of purchase that matures notmore than 270 days after the date of purchase, mutual funds, and investment pools thatare composed of authorized investment vehicles. The School District's deposits are inaccordance with statutory authority.

The School District has designated one bank for the deposit of its funds.

The School District's cash and investments are subject to several types of risk, which areexamined in more detail below:

Custodial Credit Risk of Bank Deposits - Custodial credit risk of bank deposits is therisk that, in the event of a bank failure, the School District's deposits may not bereturned to it. The School District's investment policy requires that financial institutionsbe evaluated and only those with an acceptable risk level be used for the SchoolDistrict's deposits for custodial credit risk. At year end, the School District's depositbalance of $15,793,601 included $15,543,601 of bank deposits (certificates of deposit,checking, and savings accounts) that were uninsured and uncollateralized. The SchoolDistrict believes that due to the dollar amounts of cash deposits and the limits of FDICinsurance, it is impractical to insure all deposits. As a result, the School Districtevaluates each financial institution with which it deposits funds and assesses the level ofrisk of each institution; only those institutions with an acceptable estimated risk level areused as depositories.

Custodial Credit Risk of Investments - Custodial credit risk of investments is the riskthat, in the event of the failure of the counterparty, the School District will not be ableto recover the value of its investments or collateral securities that are in the possessionof an outside party. The School District's policy for custodial credit risk states thatcustodial credit risk will be minimized by limiting investments to the types of securitiesallowed by state law and by pre-qualifying the financial institutions, brokers/dealers,intermediaries, and advisors with which the School District will do business using thecriteria established in the investment policy. The School District does not haveinvestments with custodial credit risk.

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Notes to Financial StatementsJune 30, 2014

Note 3 - Deposits and Investments (Continued)

Interest Rate Risk - Interest rate risk is the risk that the value of investments willdecrease as a result of a rise in interest rates. The School District's investment policydoes not restrict investment maturities, other than commercial paper which can only bepurchased with a 270-day maturity. The School District's policy minimizes interest raterisk by requiring the structuring of the investment portfolio so that securities mature tomeet cash requirements for ongoing operations, thereby avoiding the need to sellsecurities in the open market, investing operating funds primarily in shorter-termsecurities, liquid asset funds, money market mutual funds, or similar investment pools,and limiting the average maturity in accordance with the School District's cashrequirements.

Credit Risk - State law limits investments in commercial paper to the top two ratingsissued by nationally recognized statistical rating organizations. The School District'sinvestment policy does not further limit its investment choices.

At year end, the maturities of investments and the credit quality ratings of debtsecurities (other than the U.S. government) are as follows:

Investment Fair Value Maturities RatingRating

Organization

Michigan Liquid Asset Fund(MILAF + MAX) $ 576,506 N/A AAAm S&P

Concentration of Credit Risk - The School District places no limit on the amount theSchool District may invest in any one issuer. The School District's policy minimizesconcentration of credit risk by requiring diversification of the investment portfolio sothat the impact of potential losses from any one type of security or issuer will beminimized. The School District does not have any investments in commercial paper.

Foreign Currency Risk - Foreign currency risk is the risk that an investmentdenominated in the currency of a foreign country could reduce its U.S. dollar value as aresult of changes in foreign currency exchange rates. State law and the School District'spolicy prohibit investment in foreign currency.

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Notes to Financial StatementsJune 30, 2014

Note 4 - Receivables and Unavailable/Unearned Revenue

Receivables as of year end for the School District's individual major funds and nonmajorfunds are as follows:

General FundCommunity

Services Fund Total

Receivables:Accounts receivable $ 662,095 $ 10,503 $ 672,598Due from other governmental units 7,720,504 - 7,720,504

Total receivables $ 8,382,599 $ 10,503 $ 8,393,102

Governmental funds report unavailable revenue in connection with receivables forrevenue that is not considered to be available to liquidate liabilities of the currentperiod. Governmental funds also report unearned revenue recognition in connectionwith resources that have been received but not yet earned. At the end of the currentfiscal year, there is $54,291 in unearned revenue related to grant dollars received beforebeing earned.

Note 5 - Capital Assets

Capital asset activity of the School District was as follows: Balance

June 30, 2013 Reclassifications Additions DisposalsBalance

June 30, 2014Governmental Activities

Capital assets not being depreciated:Land $ 461,702 $ - $ - $ - $ 461,702Construction in progress 1,213,420 (1,213,420) 493,248 - 493,248

Subtotal 1,675,122 (1,213,420) 493,248 - 954,950

Capital assets being depreciated:Buildings and building improvements 87,938,263 183,981 1,250,787 3,067 89,369,964Land improvements 4,861,339 62,842 427,231 - 5,351,412Buses and other vehicles 4,795,005 178,186 1,211,389 1,751,645 4,432,935Furniture and equipment 15,844,864 788,411 5,359,964 3,445,081 18,548,158

Subtotal 113,439,471 1,213,420 8,249,371 5,199,793 117,702,469

Accumulated depreciation:Building and building improvements 26,283,357 - 1,566,369 540 27,849,186Land improvements 2,115,989 - 201,214 - 2,317,203Buses and other vehicles 3,895,384 - 180,173 1,558,814 2,516,743Furniture and equipment 12,035,749 - 1,253,142 3,072,901 10,215,990

Subtotal 44,330,479 - 3,200,898 4,632,255 42,899,122

Net capital assets being depreciated 69,108,992 1,213,420 5,048,473 567,538 74,803,347

Net capital assets $ 70,784,114 $ - $ 5,541,721 $ 567,538 $ 75,758,297

Depreciation expense of $3,200,898 was not charged to activities as the School Districtconsiders its assets to impact multiple activities and allocation is not practical.

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Note 6 - Interfund Receivables, Payables, and Transfers

The composition of interfund balances is as follows:

Fund Due From

Fund Due To General FundTechnologyBond Fund

NonmajorGovernmental

Funds Fiduciary Fund Total

General Fund $ - $ 333,696 $ 193,566 $ 18,742 $ 546,004Nonmajor governmental funds 3,384 - - - 3,384

Total $ 3,384 $ 333,696 $ 193,566 $ 18,742 $ 549,388

Interfund balances owed to the General Fund represent routine and temporary cashflow assistance from the General Fund until amounts are transferred from other funds'accounts. Interfund balances owed to other funds represent reimbursements forallocated expenditures or timing of receipts of tax collections which are deposited intoone centralized General Fund cash account and then allocated to the debt service fundsand the Sinking Fund accordingly.

Interfund transfers reported in the fund financial statements are comprised of thefollowing:

Fund Transferred From

Fund Transferred To General Fund

NonmajorGovernmental

Funds Total

General Fund $ - $ 130,000 $ 130,000Nonmajor governmental funds 258,665 - 258,665

Total $ 258,665 $ 130,000 $ 388,665

Transfers from the Food Services Fund and the Community Services Fund to theGeneral Fund were for overhead cost reimbursement. A transfer was made from theGeneral Fund to the debt service fund for the Energy Bond, and a transfer from theGeneral Fund to the Food Services Fund was made in relation to the $10 per-studentallowance for breakfast and lunch from the state at-risk grant.

Note 7 - Long-term Debt

The School District issues bonds and other contractual commitments to provide for theacquisition and construction of major capital facilities and the acquisition of certainequipment. General obligation bonds are direct obligations and pledge the full faith andcredit of the School District. Other long-term obligations include compensated absencesand certain risk liabilities.

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Notes to Financial StatementsJune 30, 2014

Note 7 - Long-term Debt (Continued)

Long-term debt activity is summarized as follows:

BeginningBalance Additions Reductions

EndingBalance

Due WithinOne Year

Governmental Activities

Bonds $ 34,095,000 $ 3,100,000 $ 4,720,000 $ 32,475,000 $ 5,175,000Issuance premiums 1,189,602 - 193,771 995,831 167,309Deferred outflow - Deferred

refunding charges(2,017,669) - (1,065,297) (952,372) -

Total 33,266,933 3,100,000 3,848,474 32,518,459 5,342,309

Other obligations 2,137,120 88,940 81,853 2,144,207 390,391

Total governmentalactivities $ 35,404,053 $ 3,188,940 $ 3,930,327 $ 34,662,666 $ 5,732,700

Governmental ActivitiesYears Ending

June 30 Principal Interest Total

2015 $ 5,175,000 $ 1,204,441 $ 6,379,4412016 5,130,000 1,014,150 6,144,1502017 5,220,000 822,970 6,042,9702018 4,750,000 627,868 5,377,8682019 4,860,000 438,595 5,298,595

2020-2022 7,340,000 387,877 7,727,877

Total $ 32,475,000 $ 4,495,901 $ 36,970,901

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Notes to Financial StatementsJune 30, 2014

Note 7 - Long-term Debt (Continued)

Governmental Activities

General obligation bonds consist of the following:

2000 Energy Conservation Bonds - $2,500,000 issued, due in oneremaining installment of $235,000 on May 1, 2015; interest at 5.65percent to 5.70 percent $ 235,000

2005 Refunding Bonds - $29,010,000 issued, due in annualinstallments of $2,865,000 to $3,290,000 through May 1, 2020;interest at 5.00 percent, callable at par on or after May 1, 2015 18,540,000

Technology Bonds - $11,900,000 issued, due in annual installments of$1,250,000 to $2,075,000 through May 1, 2021; interest at 1.00percent to 2.00 percent 10,600,000

Bus Bonds - $3,100,000 issued due in annual installments of $100,000to $925,000 through May 1, 2022; interest at 1.93 percent 3,100,000

Total bonded debt $ 32,475,000

Other governmental activities long-term obligations include the following:

Employee compensated absences $ 1,909,317Workers' compensation claims 234,890

Total $ 2,144,207

Defeased Bonds - In prior years, the School District defeased certain bonds by placingthe proceeds of new bonds in an irrevocable trust to provide for all future debt servicepayments on the old bonds. Accordingly, the trust account's assets and liabilities for thedefeased bonds are not included in the basic financial statements. At June 30, 2014,$19,613,162 of bonds outstanding are considered defeased.

Note 8 - Risk Management

The School District is exposed to various risks of loss related to property loss, torts,errors and omissions, and employee injuries (workers' compensation), as well as medicalbenefits provided to employees. The School District has purchased commercialinsurance for property, errors and omissions, and medical claims. The School District isuninsured for workers' compensation claims; however, the School District has stop-losscoverage of $300,000 per occurrence and $5,000,000 of annual aggregate claims.Settled claims relating to the commercial insurance have not exceeded the amount ofinsurance coverage in any of the past three fiscal years.

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Notes to Financial StatementsJune 30, 2014

Note 8 - Risk Management (Continued)

The School District estimates the liability for workers' compensation claims that havebeen incurred through the end of the fiscal year, including both those claims that havebeen reported as well as those that have not yet been reported. These estimates arerecorded in the government-wide statements.

Changes in the estimated liability for the past two fiscal years were as follows:

2014 2013

Estimated liability - Beginning of year $ 271,710 $ 265,200

Estimated claims incurred - Including changes inestimates 33,642 118,343

Claim payments (70,462) (111,833)

Estimated liability - End of year $ 234,890 $ 271,710

Note 9 - Line of Credit

In August 2013, the School District entered into a revolving line of credit to borrow upto $3,500,000 to assist with operating cash flow. The line of credit is collateralized by apledge of anticipated state aid payments from the State of Michigan. Interest is payablemonthly and will be charged at 70 percent of the bank's daily LIBOR. The line of creditmatured on August 22, 2014. During the year, the School District drew $3,500,000 onthe line. As of June 30, 2014, $1,500,000 remained outstanding.

Subsequent to year end, the School District entered into a revolving line of credit toborrow up to $3,500,000 to assist with operating cash flow. The line of credit iscollateralized by a pledge of anticipated 2014-2015 state aid payments from the State ofMichigan. Interest is payable monthly and will be charged at 70 percent of the bank'sdaily LIBOR plus one percent. The line of credit will mature on August 20, 2015.

Note 10 - Defined Benefit Pension Plan and Postemployment Benefits

Plan Description - The School District participates in the Michigan Public SchoolEmployees Retirement System (MPSERS), a statewide, cost-sharing, multiple-employerdefined benefit public employee retirement system governed by the State of Michiganthat covers substantially all employees of the School District. The system providesretirement, survivor, and disability benefits to plan members and their beneficiaries.The system also provides postemployment healthcare benefits to retirees andbeneficiaries who elect to receive those benefits.

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Note 10 - Defined Benefit Pension Plan and Postemployment Benefits(Continued)

The Michigan Public School Employees Retirement System issues a publicly availablefinancial report that includes financial statements and required supplemental informationfor the pension and postemployment healthcare plans. That report is available on theweb at http://www.michigan.gov/orsschools, or by writing to the Office of RetirementServices at 7150 Harris Drive, P.O. Box 30171, Lansing, MI 48909.

Pension Benefits - Employer contributions to the pension system result from theimplementing effects of the School Finance Reform Act. Under these procedures, eachschool district is required to contribute the full actuarial funding contribution amount tofund pension benefits. The employer contribution rate for basic plan members was15.96 percent of covered payroll for the period from July 1, 2012 through September30, 2012. The employer contribution rate for pension plus plan members was 14.73percent for the period from July 1, 2012 through September 30, 2012. BeginningOctober 1, 2012 through January 31, 2013, employees were given the following planoptions with the corresponding employer contribution rates:

First WorkedBefore July 1,

2010*

First Worked onor After July 1,2010, ThroughSeptember 3,

2012**

First Worked onor After

September 4,2012 and Remain

Pension Plus

First Workedon or After

September 4,2012 and Elect

DC

Pension contributions %16.25 %15.02 %15.02 %12.78Health contributions %9.11 %9.11 %8.18 %8.18

* Basic, MIP Fixed, MIP Graded, MIP Plus** Pension Plus

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Notes to Financial StatementsJune 30, 2014

Note 10 - Defined Benefit Pension Plan and Postemployment Benefits(Continued)

For the period from February 1, 2013 through June 30, 2013, employees couldtransition to a defined contribution plan (DC), and could also elect out of the healthcarepremium subsidy and into the Personal Healthcare Fund (PHF), depending upon theirdate of hire and retirement plan election. Employees had the following plan optionswith the corresponding employer contribution rates:

Basic MIPPension

PlusPension

Plus PHF*

PensionPlus to

DC withPHF*

BasicMIP DBto DC

with DBHealth

BasicMIP DBto DCwithPHF

BasicMIP with

PHF

Pension Contributions %15.21 %15.02 %15.02 %12.78 %12.78 %12.78 %15.21

Health Contributions %9.11 %9.11 %8.18 %8.18 %9.11 %8.18 %8.18

Defined ContributionPlan EmployerContributions

DC employercontributions %0.00 %1.00 %1.00 %3.00 %4.00 %4.00 %0.00

Personal HealthcareFund %0.00 %0.00 %2.00 %2.00 %0.00 %2.00 %2.00

* First worked September 4, 2012 or later

Depending on the plan selected, plan member contributions range from 0 percent up to7.0 percent of gross wages. Plan members electing into the defined contribution planare not required to make additional contributions.

The School District's required and actual contributions to the plan for the years endedJune 30, 2014, 2013, and 2012 were $5,874,965, $4,283,823, and $4,081,043,respectively.

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Notes to Financial StatementsJune 30, 2014

Note 10 - Defined Benefit Pension Plan and Postemployment Benefits(Continued)

Postemployment Benefits - Under the MPSERS Act, all retirees participating in theMPSERS pension plan have the option of continuing health, dental, and vision coveragethrough MPSERS. Retirees electing this coverage contribute an amount equivalent tothe monthly cost for Part B Medicare and 10 percent of the monthly premium amountfor the health, dental, and vision coverage at the time of receiving the benefits. TheMPSERS board of trustees annually sets the employer contribution rate to fund thebenefits on a pay-as-you-go basis. Participating employers are required to contribute atthat rate. The employer contribution rate was 8.5 percent of covered payroll for theperiod from July 1, 2012 through September 30, 2012. For the period from October 1,2012 through June 30, 2013, the employer contribution rate ranged from 8.18 percentto 9.11 percent dependent upon the employee's date of hire and plan election as notedabove. Effective February 1, 2013, members can choose to contribute 3 percent oftheir covered payroll to the Retiree Healthcare Fund and keep this premium subsidybenefit, or they can elect not to pay the 3 percent contribution and instead choose thePersonal Healthcare Fund, which can be used to pay healthcare expenses in retirement.Members electing the Personal Healthcare Fund will be automatically enrolled in a2 percent employee contribution into their 457 account as of their transition date andcreate a 2 percent employer match into the employee's 401(k) account.

The School District's required and actual contributions to the plan for retiree healthcarebenefits for the years ended June 30, 2014, 2013, and 2012 were $1,978,167,$2,437,108, and $2,315,028, respectively.

Note 11 - Upcoming Accounting Pronouncements

In June 2012, the Governmental Accounting Standards Board (GASB) issued StatementNo. 68, Accounting and Financial Reporting for Pensions. Statement No. 68 requiresgovernments providing defined benefit pensions to recognize their unfunded pensionbenefit obligation as a liability for the first time, and to more comprehensively andcomparably measure the annual costs of pension benefits. This net pension liability thatwill be recorded on the government-wide, proprietary, and discretely presentedcomponent units statements will be computed differently than the current unfundedactuarial accrued liability, using specific parameters set forth by the GASB. Thestatement also enhances accountability and transparency through revised notedisclosures and required supplemental information. The School District is currentlyevaluating the impact this standard will have on the financial statements when adopted.The provisions of this statement are effective for financial statements for the year endingJune 30, 2015.

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RRequired Supplemental Information

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RRomeo Community Schools

Required Supplemental InformationBudgetary Comparison Schedule - General Fund

Year Ended June 30, 2014

OriginalBudget

FinalBudget Actual

Over (Under)Final Budget

RevenueLocal sources $ 6,551,238 $ 6,504,646 $ 6,950,569 $ 445,923State sources 38,075,694 39,402,910 39,631,478 228,568Federal sources 2,436,848 2,285,490 2,148,095 (137,395)Intergovernmental 856,289 834,917 813,203 (21,714)

Total revenue 47,920,069 49,027,963 49,543,345 515,382

ExpendituresCurrent:

Instruction:Basic program 24,896,139 24,834,634 24,821,154 (13,480)Added needs 6,742,217 6,616,312 6,476,889 (139,423)

Total instruction 31,638,356 31,450,946 31,298,043 (152,903)

Support services:Pupil 2,802,767 2,950,309 2,978,260 27,951Instructional staff 2,433,440 2,735,384 2,682,719 (52,665)General administration 505,472 503,759 494,562 (9,197)School administration 2,742,809 2,690,938 2,697,825 6,887Business 797,044 799,934 772,758 (27,176)Operations and maintenance 5,128,016 5,321,993 4,966,124 (355,869)Pupil transportation services 2,990,192 2,699,642 2,609,537 (90,105)Central 421,238 547,724 541,188 (6,536)

Total support services 17,820,978 18,249,683 17,742,973 (506,710)

Athletics 657,402 706,849 710,647 3,798Community services 9,354 11,310 8,456 (2,854)

Payments to other public schools (ISDs,LEAs) 198,427 186,997 218,581 31,584

Total expenditures 50,324,517 50,605,785 49,978,700 (627,085)

Excess of Expenditures Over Revenue (2,404,448) (1,577,822) (435,355) 1,142,467

Other Financing Sources (Uses)Transfers in 50,000 50,000 130,000 80,000Transfers out (273,201) (258,165) (258,665) (500)

Total other financing uses (223,201) (208,165) (128,665) 79,500

Net Change in Fund Balance (2,627,649) (1,785,987) (564,020) 1,221,967

Fund Balance - Beginning of year 4,390,454 4,390,454 4,390,454 -

Fund Balance - End of year $ 1,762,805 $ 2,604,467 $ 3,826,434 $ 1,221,967

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STATE QUALIFICATION

ARTICLE IX, SECTION 16 OF THE 1963 STATE OF MICHIGAN CONSTITUTION

State loans to school districts.

Sec. 16. The state, in addition to any other borrowing power, may borrow from time to time such amounts as shall be required, pledge its faith and credit and issue its notes or bonds therefor, for the purpose of making loans to school districts as provided in this section.

Amount of loans.

If the minimum amount which would otherwise be necessary for a school district to levy in any year to pay principal and interest on its qualified bonds, including any necessary allowances for estimated tax delinquencies, exceeds 13 mills on each dollar of its assessed valuation as finally equalized, or such lower millage as the legislature may prescribe, then the school district may elect to borrow all or any part of the excess from the state. In that event the state shall lend the excess amount to the school district for the payment of principal and interest. If for any reason any school district will be or is unable to pay the principal and interest on its qualified bonds when due, then the school district shall borrow and the state shall lend to it an amount sufficient to enable the school district to make the payment.

Qualified bonds.

The term "qualified bonds" means general obligation bonds of school districts issued for capital expenditures, including refunding bonds, issued prior to May 4, 1955, or issued thereafter and qualified as provided by law pursuant to Section 27 or Section 28 of Article X of the Constitution of 1908 or pursuant to this section.

Repayment of loans, tax levy by school district.

After a school district has received loans from the state, each year thereafter it shall levy for debt service, exclusive of levies for nonqualified bonds, not less than 13 mill or such lower millage as the legislature may prescribe, until the amount loaned has been repaid, and any tax collections therefrom in any year over and above the minimum requirements for principal and interest on qualified bonds shall be used toward the repayment of state loans. In any year when such levy would produce an amount in excess of the requirements and the amount due to the state, the levy may be reduced by the amount of the excess.

Bonds, state loans, repayment.

Subject to the foregoing provisions, the legislature shall have the power to prescribe and to limit the procedure, terms and conditions for the qualification of bonds, for obtaining and making state loans, and for the repayment of loans.

Power to tax unlimited.

The power to tax for the payment of principal and interest on bonds hereafter issued which are the general obligations of any school district, including refunding bonds, and for repayment of any state loans made to school districts, shall be without limitations as to rate or amount.

Rights and obligations to remain unimpaired.

All rights acquired under Sections 27 and 28 of Article X of the Constitution of 1908, by holders of bonds heretofore issued, and all obligations assumed by the state or any school district under these sections, shall remain unimpaired.

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SCHOOL BOND QUALIFICATION, APPROVAL, AND LOAN ACTAct 92 of 2005

AN ACT to prescribe the procedures, terms, and conditions for the qualification or approval of schoolbonds and other bonds; to authorize this state to make loans to certain school districts for the payment ofcertain bonds and to authorize schools to borrow from this state for that purpose; to prescribe the terms andconditions of certain loans to school districts; to prescribe the powers and duties of certain state agencies andcertain state and local officials; to provide for certain fees; to prescribe certain penalties; and to repeal actsand parts of acts.

History: 2005, Act 92, Imd. Eff. July 20, 2005.

The People of the State of Michigan enact:

388.1921 Short title.Sec. 1. This act shall be known and may be cited as the "school bond qualification, approval, and loan act".History: 2005, Act 92, Imd. Eff. July 20, 2005.

388.1922 Purpose of act.Sec. 2. The purpose of this act is to implement section 16 of article IX of the state constitution of 1963 and

to provide for loans to school districts.History: 2005, Act 92, Imd. Eff. July 20, 2005.

388.1923 Definitions.Sec. 3. As used in this act:(a) "Computed millage" means the number of mills in any year, not less than 7 mills and not more than 13

mills, determined on the date of issuance of the order qualifying the bonds or on a later date if requested bythe school district and approved by the state treasurer, that, if levied by the school district, will generatesufficient annual proceeds to pay principal and interest on all the school district's qualified bonds plusprincipal and interest on all qualified loans related to those qualified bonds no later than the final mandatoryrepayment date. Based on changes of circumstances, including, but not limited to, additional bondqualification, refundings, changes in qualified loan interest rates, changes in taxable values, and assumptionscontained in any then currently effective guidelines issued by the state treasurer pursuant to section 5(2)(c),the school district shall not less than annually, beginning on October 1, 2013, using methods prescribed in thisact, recalculate the computed millage necessary to generate sufficient annual levy proceeds to pay principaland interest on all of the school district's qualified bonds and principal and interest on all qualified loansrelated to those qualified bonds not later than the final mandatory repayment date. If the school districtdetermines that the recalculated computed millage is lower than its current millage levy rate, the schooldistrict shall promptly notify the state treasurer in writing of the recalculated computed millage. Immediatelythereafter, the school district shall decrease its millage levy rate to the recalculated computed millage, but notbelow the computed millage established pursuant to the most recent order qualifying bonds for that schooldistrict, or to the minimum levy prescribed by law for receipt of qualified loans, whichever rate is higher. Ifthe school district determines that the recalculated computed millage is higher than its current millage levyrate, the school district shall promptly notify the state treasurer in writing of the recalculated computedmillage. Immediately thereafter, the school district shall increase its millage levy rate to the recalculatedcomputed millage, subject to 1 of the following exceptions, and subject to any maximum millage levy rateotherwise prescribed for by law:

(i) For each school district's first recalculated computed millage required as of October 1, 2013, increase itsmillage levy by a percentage amount equal to the equivalent percentage of taxable value change for thatschool district over the immediately preceding 5 years, but not higher than the recalculated computed millage.

(ii) For each school district's subsequent recalculated computed millage beginning October 1, 2014 andeach year thereafter, increase its millage levy by a percentage amount equal to the percentage of taxable valuedecline for the immediately preceding year ending September 30, but not to a rate higher than the recalculatedcomputed millage.

(iii) If it is determined that a district's current computed millage is sufficient to pay all qualified loans bythe mandatory final loan repayment date, no recalculation of the computed millage is required.

(b) "Final mandatory repayment date" means the final mandatory repayment date determined by the statetreasurer under section 9.

(c) "Michigan finance authority" means the Michigan finance authority created under Executive

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Reorganization Order No. 2010-2, MCL 12.194.(d) "Qualified bond" means a bond that is qualified under this act for state loans as provided in section 16

of article IX of the state constitution of 1963. A qualified bond includes the interest amount required forpayment of a school district's net interest obligation under an interest rate exchange or swap, hedge, or otheragreement entered into pursuant to the revised municipal finance act, 2001 PA 34, MCL 141.2101 to141.2821, but does not include a termination payment or similar payment related to the termination orcancellation of an interest rate exchange or swap, hedge, or other similar agreement. A qualified bond mayinclude a bond issued to refund loans owed to the state under this act.

(e) "Qualified loan" means a loan made under this act or former 1961 PA 108 from this state to a schooldistrict to pay debt service on a qualified bond.

(f) "Revolving loan fund" means the school loan revolving fund created under section 16c of the sharedcredit rating act, 1985 PA 227, MCL 141.1066c.

(g) "School district" means a general powers school district organized under the revised school code, 1976PA 451, MCL 380.1 to 380.1852, or a school district of the first class as described in the revised school code,1976 PA 451, MCL 380.1 to 380.1852, having the power to levy ad valorem property taxes.

(h) "State treasurer" means the state treasurer or his or her duly authorized designee.(i) "Taxable value" means the value determined under section 27a of the general property tax act, 1893 PA

206, MCL 211.27a.History: 2005, Act 92, Imd. Eff. July 20, 2005;⎯Am. 2012, Act 437, Eff. Mar. 28, 2013.

388.1924 Qualification of new bonds; terms and conditions applicable to outstandingqualified bonds; application for prequalification.Sec. 4. (1) A school district may issue and market bonds as qualified bonds if the state treasurer has issued

an order granting qualification under this act.(2) Except with regard to qualification of new bonds, nothing in this act shall be construed to alter the

terms and conditions applicable to outstanding qualified bonds issued in accordance with former 1961 PA108. Unless otherwise amended as permitted by this act, outstanding qualified loans incurred in associationwith outstanding qualified bonds described in this subsection shall bear interest as provided in section 9(8) butotherwise shall be due and payable as provided in the repayment agreements entered into between the schooldistrict and the state before the effective date of this act.

(3) The state treasurer may qualify bonds for which the state treasurer has received an application forprequalification on or before May 25, 2005 without regard to the requirements of section 5(2)(f) if the electorsof the school district approve the bonds at an election held during 2005.

History: 2005, Act 92, Imd. Eff. July 20, 2005;⎯Am. 2012, Act 437, Eff. Mar. 28, 2013.

388.1925 Preliminary qualification; application.Sec. 5. (1) A school district may apply to the state treasurer for preliminary qualification of a proposed

school bond issue by filing an application in the form and containing the information required by this act.(2) An application for preliminary qualification of a school bond shall contain all of the following

information:(a) The proposed ballot language to be submitted to the electors.(b) A description of the project or projects proposed to be financed.(c) A pro forma debt service projection showing the estimated mills the school district will levy to provide

revenue the school district will use to pay the qualified bonds, any outstanding qualified bonds, and anyoutstanding or projected qualified loans of the school district. For the purpose of the pro forma debt serviceprojection, the school district may assume for the first 5 years following the date of the application theaverage growth or decline in taxable value for the 5 years or such other period of time requested by the schooldistrict if approved by the state treasurer preceding the date of the application and the average growth ordecline rate for the 20 years immediately preceeding the date of the application but not more than 3% or lessthan 0% growth rate, for the remaining term of the proposed bonds.

(d) Evidence that the rate of utilization of each project to be financed will be at least 85% for newbuildings and 60% for renovated facilities. If the projected enrollment of the district would not otherwisesupport utilization at the rates described in this subsection, the school district may include an explanation ofthe actions the school district intends to take to address the underutilization, including, if applicable, actions toclose school buildings or other actions designed to assure continued assured use of the facilities beingfinanced.

(e) Evidence that the cost per square foot of the project or projects will be reasonable in light of economicconditions applicable to the geographic area in which the school district is located.

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(f) Evidence that the school district will repay all outstanding qualified bonds, the proposed qualifiedbonds, all outstanding qualified loans, and all qualified loans expected to be incurred with respect to allqualified bonds of the school district, including the proposed qualified bond issue, not later than theapplicable final mandatory repayment date.

(g) The overall utilization rate of all school buildings in the school district, excluding special educationpurposes.

(h) The total bonded debt outstanding of the school district and the total taxable value of property in theschool district for the school district fiscal year in which the application is filed.

(i) A statement describing any environmental or usability problems to be addressed by the project orprojects.

(j) An architect's analysis of the overall condition of the facilities to be renovated or replaced as a part ofthe project or projects.

(k) An amortization schedule demonstrating that the weighted average maturity of the qualified bond issuedoes not exceed 120% of the average reasonably expected useful life of the facilities, excluding land and siteimprovements, being financed or refinanced with the proceeds of the qualified bonds, determined as of thelater of the date on which the qualified bonds will be issued or the date on which each facility is expected tobe placed in service.

(l) An agreement that the school district will keep books and records detailing the investment andexpenditure of the proceeds of the qualified bonds and, at the request of the state treasurer, the school districtwill promptly, but not later than the date specified in the request, which date shall be not less than 5 businessdays after the date of the request, submit information requested by the state treasurer related to the detailedinformation maintained by the school district as to the investment and expenditure of the proceeds of itsqualified bonds.

History: 2005, Act 92, Imd. Eff. July 20, 2005;⎯Am. 2012, Act 437, Eff. Mar. 28, 2013.

388.1926 Prequalification of bonds; determination by state treasurer.Sec. 6. The state treasurer shall prequalify bonds of a school district if the state treasurer determines all of

the following:(a) The issuance of additional qualified bonds will not prevent the school district from repaying its

outstanding qualified bonds, the proposed bonds, all outstanding qualified loans, and all qualified loansexpected to be incurred with respect to all qualified bonds of the school district, including the proposed bondissue, not later than the applicable final mandatory repayment date.

(b) The form and language of the ballot conforms with the requirements of this act.(c) The school district has filed an application complying with the requirements of section 5.(d) If the proposed bond issue is approved by the voters after September 30, 2012 and will result in

additional qualified loans, the outstanding balance of all qualified loans on the most recent May 1 orNovember 1 did not exceed $1,800,000,000.00. The $1,800,000,000.00 limitation described in theimmediately preceding sentence does not apply after June 30, 2016.

(e) The issuance of additional qualified bonds approved by voters after September 30, 2012 will not havean adverse financial impact on the school district, this state, or the school loan revolving fund. In making thisdetermination, the state treasurer shall consider relevant factors, including, but not limited to, whether theissuance of the proposed bond issue will cause the aggregate outstanding amount of qualified andnonqualified bonds, including the proposed bond issue, and currently outstanding qualified loans of the schooldistrict to exceed 25% of the taxable value of the school district at the time the proposed bonds are issued.

History: 2005, Act 92, Imd. Eff. July 20, 2005;⎯Am. 2012, Act 437, Eff. Mar. 28, 2013.

388.1927 Qualification of bonds; determination by state treasurer; order; specifications; loanagreement; reapplication; qualification of refunding bonds; requirements.Sec. 7. (1) The state treasurer shall qualify bonds of a school district if the state treasurer determines all of

the following:(a) A majority of the school district electors have approved the bonds.(b) The terms of the bond issue comply with applicable provisions of the revised school code, 1976 PA

451, MCL 380.1 to 380.1852.(c) The school district is in compliance with the revised municipal finance act, 2001 PA 34, MCL

141.2101 to 141.2821.(d) The weighted average maturity of the qualified bond issue does not exceed 120% of the average

reasonably expected useful life of the facilities, excluding land and site improvements, being financed orrefinanced with the proceeds of the bonds, determined as of the later of the date on which the qualified bonds

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will be issued or the date on which each facility is expected to be placed in service.(e) The school district has filed any information necessary to update the contents of the original application

to reflect changes in any of the information approved in the preliminary qualification process.(f) The school district has agreed that the school district will keep books and records detailing the

investment and expenditure of the proceeds of the qualified bonds and, at the request of the state treasurer, theschool district will promptly, but not later than the date specified in the request, which date shall be not lessthan 5 business days after the date of the request, submit information requested by the state treasurer related tothe detailed information maintained by the school district as to the investment and expenditure of the proceedsof its qualified bonds.

(2) An order qualifying bonds shall specify the principal and interest payment dates for all the bonds, themaximum principal amount of and maximum interest rate on the bonds, the computed millage, if any, thefinal mandatory repayment date, and other matters as the state treasurer shall determine or as are required bythis act.

(3) If the application for prequalification demonstrates that the school district will borrow from this state inaccordance with this act, the state treasurer and the school district shall enter into a loan agreement settingforth the terms and conditions of any qualified loans to be made to the school district under this act.

(4) If a school district does not issue its qualified bonds within 180 days after the date of the orderqualifying bonds, the order shall no longer be effective. However, the school district may reapply forqualification by filing an application and information necessary to update the contents of the originalapplication for prequalification or qualification.

(5) The state treasurer shall qualify refunding bonds issued to refund qualified loans or qualified bonds ifthe state treasurer finds that all of the following are met:

(a) The refunding bonds comply with the provisions of the revised municipal finance act, 2001 PA 34,MCL 141.2101 to 141.2821.

(b) That the school district will repay all outstanding qualified bonds, the proposed qualified bonds, alloutstanding qualified loans, and all qualified loans expected to be incurred with respect to all qualified bondsof the school district, including the proposed qualified bond issue, not later than the applicable finalmandatory repayment date.

History: 2005, Act 92, Imd. Eff. July 20, 2005;⎯Am. 2012, Act 437, Eff. Mar. 28, 2013.

388.1928 Submission of ballot to electors; ballot.Sec. 8. A ballot submitted to the school electors of a school district after November 8, 2005 requesting

authorization to issue unlimited tax general obligations that will be guaranteed by this state in accordancewith section 16 of article IX of the state constitution of 1963 shall inform the electors that if the school districtexpects to borrow from this state to pay debt service on the bonds, the estimated total amount of the principalof that borrowing and the interest to be paid on that borrowing, the estimated duration of the millage levy, andthe estimated computed millage rate for that levy. The ballot shall also inform the electors of the total amountof qualified bond and loan debt currently outstanding and that the estimated computed millage rate maychange based on changes in certain circumstances.

History: 2005, Act 92, Imd. Eff. July 20, 2005;⎯Am. 2012, Act 437, Eff. Mar. 28, 2013.

388.1929 Amount of borrowing; limitation; payment date for outstanding qualified loans;order; maintenance of separate accounts for each school district; duration of millage levy;amended and restated repayment agreements; waiver of portion of millage levy; findings;interest; final or later mandatory repayment date.Sec. 9. (1) Except as otherwise provided in this act, a school district may borrow from the state an amount

not greater than the difference between the proceeds of the school district's computed millage and the amountnecessary to pay principal and interest on its qualified bonds, including any necessary allowances forestimated tax delinquencies.

(2) For school districts having qualified loans outstanding as of July 20, 2005, the state treasurer shallreview information relating to each school district regarding the taxable value of the school district and theactual debt service of outstanding qualified bonds as of July 20, 2005 and shall issue an order establishing thepayment date for all those outstanding qualified loans and any additional qualified loans expected to beincurred by those school districts related to qualified bonds issued before July 20, 2005. The payment dateshall be not later than 72 months after the date on which the qualified bonds most recently issued by theschool district are due and payable. The payment date established pursuant to this subsection for a schooldistrict is a final mandatory repayment date.

(3) For qualified loans related to qualified bonds issued after July 20, 2005, the qualified loans shall be due

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72 months after the date on which the qualified bonds for which the school borrowed from this state are dueand payable. The due date determined pursuant to this subsection for a school district is a final mandatoryrepayment date. This section does not preclude early repayment of qualified bonds or qualified loans.

(4) The state treasurer shall maintain separate accounts for each school district on the books and accountsof this state noting the qualified bond, the related qualified loans, the final payment date of the bonds, thefinal mandatory repayment date of the qualified loans, and the interest rate accrued on the loans.

(5) For qualified loans relating to qualified bonds issued after July 20, 2005, a school district shall continueto levy the computed millage until it has completely repaid all principal and interest on its qualified loans.

(6) For qualified loans relating to qualified bonds issued before July 20, 2005, a school district shallcontinue to comply with the levy and repayment requirements imposed before July 20, 2005. Not less than 90days after July 20, 2005, the state treasurer and the school district shall enter into amended and restatedrepayment agreements to incorporate the levy and repayment requirements applicable to qualified loansissued before July 20, 2005.

(7) Upon the request of a school district made before June 1 of any year, the state treasurer annually maywaive all or a portion of the millage required to be levied by a school district to pay principal and interest onits qualified bonds or qualified loans under this section if the state treasurer finds all of the following:

(a) The school board of the school district has applied to the state treasurer for permission to levy less thanthe millage required to be levied to pay the principal and interest on its qualified bonds or qualified loansunder subsection (1).

(b) The application specifies the number of mills the school district requests permission to levy.(c) The waiver will be financially beneficial to this state, the school district, or both.(d) The waiver will not reduce the millage levied by the school district to pay principal and interest on

qualified bonds or qualified loans under this act to less than 7 mills.(e) The board of the school district, by resolution, has agreed to comply with all conditions that the state

treasurer considers necessary.(8) All qualified loans shall bear interest at 1 of the following rates:(a) The greater of 3% or the average annual cost of funds used to make qualified loans plus 0.125%, but

not less than the cost of funds on outstanding qualified notes and bonds issued by the Michigan financeauthority to finance loans computed by the state treasurer not less often than annually.

(b) A lesser rate determined by the state treasurer to be necessary to maintain the exemption from federalincome tax of interest on any bonds or notes issued to fund qualified loans.

(c) A higher rate determined by the state treasurer to be necessary to prevent the impairment of anycontract of this state or the Michigan finance authority in existence on the effective date of the amendatory actthat added this subdivision.

(9) A payment date determined under subsection (2) or a due date determined under subsection (3) is afinal mandatory repayment date. Once established for a school district as provided in this section, a finalmandatory repayment date shall apply to all qualified loans of the school district, whenever made, until 30days after the date the school district has no outstanding qualified loans and no outstanding debt incurred torefund qualified loans. Notwithstanding this subsection, the state treasurer may determine a later mandatoryrepayment date for a school district that agrees to levy a higher millage, acceptable to the state treasurer, notto exceed 13 mills, than its existing computed millage.

History: 2005, Act 92, Imd. Eff. July 20, 2005;⎯Am. 2006, Act 71, Imd. Eff. Mar. 20, 2006;⎯Am. 2009, Act 50, Imd. Eff. June 18,2009;⎯Am. 2012, Act 437, Eff. Mar. 28, 2013.

388.1930 Certificates of qualification or approval; file; delivery.Sec. 10. The state treasurer shall keep all certificates of qualification or approval in a permanent file and

shall deliver copies of the certificates to the school district.History: 2005, Act 92, Imd. Eff. July 20, 2005.

388.1931 Rules; bulletins.Sec. 11. The state treasurer may promulgate rules to implement this act pursuant to the administrative

procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328, and may issue bulletins as authorized by thisact.

History: 2005, Act 92, Imd. Eff. July 20, 2005;⎯Am. 2012, Act 437, Eff. Mar. 28, 2013.

388.1932 Failure to apply for prequalification, qualification, or approval of bond beforeissuance.Sec. 12. If a school district does not apply for prequalification or qualification or approval of a bond issue

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before the issuance of those bonds, the state treasurer shall not approve or qualify those bonds as qualifiedbonds under this act.

History: 2005, Act 92, Imd. Eff. July 20, 2005.

388.1933 School district owing revolving loan fund; filing annual loan activity applicationrequired; borrowing for debt service on qualified bonds; draw request; duties of statetreasurer upon receipt of qualified loan confirmation; notification of no need to borrow byschool district; invoice for repayment amount; remittance.Sec. 13. (1) If a school district owes a balance due to the revolving loan fund or has been identified as a

potential borrower, the school district shall file an annual loan activity application with the state treasurer noless than 60 days before certifying its annual tax levy. The annual loan activity application shall be submittedin a format prescribed by the state treasurer and shall provide the taxable value, debt service, and any otherinformation necessary to determine the proper required millage levy required under this act. The applicationshall contain a resolution passed by the local school board authorizing a designated school district official tocomplete all necessary documents to obtain a loan from the revolving loan fund or for making repayment tothe revolving loan fund for the year.

(2) If a school district is eligible to borrow for debt service on qualified bonds, the school district shall filea draw request with the state treasurer not less than 30 days before each date on which the school district owesthe debt service. The draw request shall include all of the following:

(a) A statement of the debt service owed in the next 6 months.(b) A copy of the most recent bank statement showing the amount on hand in the debt service accounts for

all qualified bonds.(c) A statement of any revenue received for payment of the debt service since the date of the bank

statement.(d) A statement of any withdrawals made from the debt service account since the date of the bank

statement.(3) Not more than 7 days before the date established by the state treasurer for making qualified loans, the

school district shall confirm in writing the final qualified loan amount to be drawn on a certificate in the formprescribed by the state treasurer.

(4) Upon receipt of a qualified loan confirmation described in subsection (3), the state treasurer shalldetermine the amount of the draw, which shall be the difference between the funds on hand in all debt serviceaccounts and the amount of the debt service, and shall make a qualified loan in that amount to the schooldistrict no later than 6 days before the date the debt service is due.

(5) When a school district's current computed millage levy is sufficient to pay principal and interest on itsqualified bonds, a school district shall notify the state treasurer in writing of no need to borrow no later than30 days before the date set for payment of the qualified bonds.

(6) Within 30 days after receipt of the annual activity application under subsection (1), the state treasurershall send an invoice to the school district for the amount of repayment the school district owes on itsoutstanding qualified loans, which shall be the difference between the debt service payable or paid tobondholders and the funds on hand at the school district, less a reasonable amount of funds on hand, asdetermined by the state treasurer, to cover minimum balance requirements or potential tax disputes. Theschool district shall remit the amount specified in the invoice within 30 days after the dated date of theinvoice.

History: 2005, Act 92, Imd. Eff. July 20, 2005;⎯Am. 2012, Act 437, Eff. Mar. 28, 2013.

388.1934 Failure of school district to pay principal and interest due on qualified bonds;notice; payment by state treasurer; billing of school district for amount paid; remittance.Sec. 14. (1) If any paying agent for a school district’s qualified bonds notifies the state treasurer that the

school district has failed to deposit sufficient funds to pay principal and interest due on the qualified bondswhen due, or if a bondholder notifies the state treasurer that the school district has failed to pay principal orinterest on qualified bonds when due, whether or not the school district has filed a draw request with the statetreasurer, the state treasurer shall promptly pay the principal or interest on the qualified bond when due.

(2) If the state treasurer pays any amount described in this section, the state treasurer shall bill the schooldistrict for the amount paid and the school district shall immediately remit the amount to the state treasurer. Ifthe school district would have been eligible to borrow the debt service in accordance with the terms of thisact, the school district shall enter into a loan agreement establishing the terms of the qualified loan asprovided in this act. If the state treasurer directs the Michigan municipal bond authority to pay any amountdescribed in this section, the state treasurer shall cause the Michigan municipal bond authority to bill the

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school district for the amount paid and the school district shall immediately remit the amount to the Michiganmunicipal bond authority.

History: 2005, Act 92, Imd. Eff. July 20, 2005.

388.1935 Default; repayment.Sec. 15. (1) If a school district that owes this state loan repayments relating to qualified bonds fails to levy

at least the computed millage upon its taxable value for debt retirement purposes for qualified bonds and forrepayment of a qualified loan made under this act while any part of the qualified loan is unpaid or defaults inits agreement to repay a qualified loan or any installment of a qualified loan, the school district shall increaseits debt levy in the next succeeding year to obtain the amount necessary to repay this state the amount of thedefault plus a late charge of 3% and shall pay that amount to this state together with any other amounts owedduring the next tax year. The school district may use other funds to repay this state including a transfer ofgeneral funds of the school district, if approved by the state treasurer. The state treasurer shall not disbursestate school aid to the school district until the school district has made satisfactory arrangements with the statetreasurer for the payment of the amount in default.

(2) If a school district fails to process any report, application, confirmation, or repayment as required underthis act, the state treasurer may withhold a school district's state aid funds until the school district complieswith the requirements under this act.

History: 2005, Act 92, Imd. Eff. July 20, 2005.

388.1936 Charging and disposition of fees.Sec. 16. (1) The state treasurer may charge a prequalification application fee, a qualification application

fee, and an annual loan activity fee in the amounts determined by the state treasurer to be required to pay theestimated administrative expenses incurred under this act for the fiscal year in which the state treasurerimposes the fee.

(2) The state treasurer shall deposit all fees collected under this act into a separate fund established withinthe state treasury, and shall use the proceeds of the fees solely for the purpose of administering and enforcingthis act. The unexpended and unobligated balance of this fund at the end of each state fiscal year shall becarried forward over to the succeeding state fiscal year and shall not lapse to the general fund but shall beavailable for reappropriation for the next state fiscal year.

History: 2005, Act 92, Imd. Eff. July 20, 2005;⎯Am. 2012, Act 437, Eff. Mar. 28, 2013.

388.1937 False statement or unauthorized use of proceeds; violation as felony; penalty.Sec. 17. A person who knowingly makes a false statement or conceals material information for the purpose

of obtaining qualification of a bond issue under this act or for the purpose of obtaining a qualified loan underthis act, or who knowingly uses all or part of the proceeds of a qualified loan obtained under this act for anypurpose not authorized by this act, is guilty of a felony punishable by imprisonment for not more than 4 yearsor a fine of not more than $5,000.00, or both.

History: 2005, Act 92, Imd. Eff. July 20, 2005.

388.1938 Use of remaining proceeds.Sec. 18. If a school district has completed the projects approved by the school electors of the school district

to be funded from proceeds of qualified bonds, a school district may use any remaining proceeds of thequalified bonds as follows:

(a) To pay debt service on the qualified bonds.(b) To repay this state.(c) If in the opinion of the school district's bond counsel use of the remaining proceeds for the purposes

described in subdivisions (a) and (b) would adversely affect the federal tax treatment of interest on thequalified bonds, to pay for enhancements to the projects approved by the school electors as described in theballot language proposing the qualified bonds.

History: 2005, Act 92, Imd. Eff. July 20, 2005;⎯Am. 2012, Act 437, Eff. Mar. 28, 2013.

388.1939 Actions by designee.Sec. 19. The state treasurer may designate in writing a person or persons to take any actions required to be

taken by the state treasurer under this act. The signature of any designee shall have the same force and effectas the signature of the state treasurer for all purposes of this act.

History: 2005, Act 92, Imd. Eff. July 20, 2005.

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OPINION #4422 OF THE ATTORNEY GENERAL, STATE OF MICHIGAN DATED MARCH 12, 1965

CONSTITUTIONAL LAW: SCHOOL BONDS: MUNICIPAL FINANCE COMMISSION:

Article 9, § 16, Michigan Constitution of 1963, requires school districts to borrow and State to lend sufficient sum to cover debt service payments on qualified bonds of school districts. Although this is not a pledge of full faith and credit of the State, the Municipal Finance Commission may and must enforce the duty of the district to borrow and the State to lend such sum.

No. 4422 March 12, 1965.

Hon. Sanford A. Brown State Treasurer Lansing, Michigan

You have asked in your letter of February 5 whether Article IX, § 16 of the Michigan Constitution of 1963 pledges the full faith and credit of the State to the payment of principal and interest of qualified school bonds.

Article IX, § 16 of the Michigan Constitution of 1963 provides in pertinent part as follows:

"The state * * * may borrow from time to time such amounts as shall be required, pledge its faith and credit and issue its notes or bonds therefor, for the purpose of making loans to school districts as provided in this section.

"If the minimum amount which would otherwise be necessary for a school district to levy in any year to pay principal and interest on its qualified bonds, including any necessary allowances for estimated tax delinquencies, exceeds 13 mills on each dollar of its assessed valuation as finally equalized, or such lower millage as the legislature may prescribe, then the school district may elect to borrow all or any part of the excess from the state. In that event the state shall lend the excess amount to the school district for payment of principal and interest. If for any reason any school district will be or is unable to pay the principal and interest on its qualified bonds when due, then the school district shall borrow and the state shall lend to it an amount sufficient to enable the school district to make the payment.

"The term 'qualified bonds' means general obligation bonds of school districts issued for capital expenditures, including refunding bonds, issued prior to May 4, 1955, or issued thereafter and qualified as provided by law pursuant to Section 27 or Section 28 of Article X of the Constitution of 1908 or pursuant to this section."

Thus, the school district is required to borrow and the State to lend an amount sufficient to enable the school district to make payments of principal and interest due on qualified bonds, and the state is empowered to borrow and to issue its notes or bonds for the purpose of making such loans, and to pledge its full faith and credit for such state bonds or notes.

The constitutional provision quoted does not pledge the full faith and credit of the state to all qualified bonds. The state is not primarily liable on qualified bonds of a school district. Rather, the state is required to lend whatever the school district needs, from time to time, to meet debt service requirements on such bonds.

You ask what remedies are available to enforce the obligation of the state.

The quoted language makes it mandatory upon the school district to borrow and upon the state to lend "an amount necessary to enable the school district to make the payment." Under Chapter II, Section 2(f) of the Municipal Finance Act [C.L. 1948 § 132.2; M.S.A. 1958 Rev. Vol. § 5.3188(4)f], the Municipal Finance Commission has power to enforce compliance with any law by, inter alia, the "institution of appropriate proceedings in the courts of the state, including those for writs of mandamus and injunction."

The Commission could and indeed must enforce the duty of the district to borrow and the state to lend. The bondholders also would have an action to enforce the duty of the district to borrow and of the state to lend.

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Thus the bondholders are assured of the availability of state funds where needed to meet debt service requirements on qualified bonds. This is not a pledge of full faith and credit, but gives the bondholders as much or more protection as would such a pledge.

FRANK J. KELLEY, Attorney General

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OPINION #4508 OF THE ATTORNEY GENERAL, STATE OF MICHIGAN DATED AUGUST 29, 1966

BONDS: Qualified bonds of school districts. CONSTITUTION OF 1963: School Bond Loan Fund. SCHOOLS: Bond Loans. STATE TREASURER: Payment of principal and interest on qualified school district bonds.

Authority of State Treasurer and procedures to be followed in paying from the School Bond Loan Fund principal and interest on qualified school bonds upon presentment by a bondholder.

No. 4508 Hon. Allison Green August 29, 1966. State Treasurer Capitol Building Lansing, Michigan

You have requested my opinion on what procedures should be followed by the state treasurer preparatory to making loans to local school districts which are unable to make payments on principal and interest of qualified school district bonds.1

Loans to bonded school districts are authorized by Article IX, Section 16, Constitution of 1963, which in part contains pertinent language:

"If the minimum amount which would otherwise be necessary for a school district to levy in any year to pay principal and interest on its qualified bonds, including any necessary allowances for estimated tax delinquencies, exceeds 13 mills on each dollar of its assessed valuation as finally equalized, or such lower millage as the legislature may prescribe, then the school district may elect to borrow all or any part of the excess from the state. In that event the state shall lend the excess amount to the school district for the payment of principal and interest. If for any reason any school district will be or is unable to pay the principal and interest on its qualified bonds when due, then the school district shall borrow and the state shall lend to it an amount sufficient to enable the school district to make the payment.

"The term 'qualified bonds' means general obligation bonds of school districts issued for capital expenditures, including refunding bonds, issued prior to May 4, 1955, or issued thereafter and qualified as provided by law pursuant to Section 27 or Section 28 of Article X of the Constitution of 1908 or pursuant to this section."

Article IX, Section 16, Constitution of 1963, is a continuation with minor revisions of the provisions relating to school bond financing which appeared in Sections 27 and 28 of Article X, Constitution of 1908. Section 27, Article X, Constitution of 1908, was proposed by joint resolution of the legislature in 1955 and approved by the people at the regular election of April 4, 1955. The loan provisions of Section 27 ceased to have effectiveness after July 1, 1962, and were replaced by the provisions of Section 28, Article X, Constitution of 1908, which was proposed by joint resolution of the legislature in 1960 and approved by the people at the general election of November 8, 1960. Section 28 by its own terms took effect on July 1, 1962.

Section 28, Article X, Constitution of 1908, was implemented by the legislature by the enactment of Act 108, P.A. 1961, which took effect September 8, 1961. The first section of Act 108, P.A. 1961, stated that the purpose of the act was to implement Section 28 of Article X of the Constitution of 1908. The Constitution of 1963 took effect on January 1, 1964. In anticipation of the effectiveness of that Constitution, the legislature passed Act 33, P.A. 1963, Second Extra Session, such act to take effect on January 1, 1964. Act 33, P.A. 1963, Second Extra Session, amended Sections 1, 3, 8 and 9 of Act 108, P.A. 1961, and further amended section 7 of Act 108, P.A. 1961, as amended by Act 131, P.A. 1962. The first section of amendatory Act 33 stated that the act's purpose was to implement Section 16 of Article IX of the Constitution of 1963. Subsequent amendment has been made to Sections 2, 4, 6, 9 and 10 of Act 108, P.A. 1961, by Act 169, P.A. 1964, which act also added a new Section 4a.2.

1In your letter of request you stated that you were familiar with Opinion No. 4422 issued by me on March 12, 1965, in which it was ruled that

Article IX, Section 16, Constitution of 1963, requires school districts to borrow and the state to lend sufficient sums to cover debt service payments on qualified bonds of school districts but that this requirement is not a pledge of the full faith and credit of the state; the Municipal Finance Commission however may and must enforce the duty of the school district to borrow and have the state to lend the necessary amounts. 2Act 108, P.A. 1961, in its present amended form appears in M.S.A. 1965 Cum. Supp. § S 3.424(111) et seq.

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Answer to your question is to be found in amended Sections 6, 7 and 8 of the act. These sections present two situations in which you may become involved as state treasurer. The first situation is where a loan is to be made to the school district to permit the district to meet the principal and interest requirements on its bonds without a default in payment; the second is where the principal or interest on the bonds has not been paid when due upon proper presentation because of inadequate funds resulting in a default in payment.

Under amended Section 6 of the act, in any school district where the amount necessary to be levied in any year for principal and interest on qualified bonds exceeds 7 mills on each dollar of the assessed valuation of the school district as last equalized by the state, such school district on or before 60 days prior to the time of certification of its tax levy to the assessing officer shall file with the superintendent of public instruction3 a preliminary application for a loan from the state in the amount of any part of such excess over 7 mills which the school district does not propose to levy in such year.4 Amended Section 6 specifies the information to be supplied in the application. The superintendent of public instruction if he finds the application in proper form shall approve or deny the application in whole or in part and notify the school district of his action. Amended Section 7 of the act provides that if a loan from the state shall become necessary for the payment of principal and interest on qualified bonds in accordance with an approved preliminary application to the superintendent of public instruction or by virtue of a supplemental application, it shall be the duty of the superintendent of public instruction after audit to forward to the state treasurer a statement setting forth the amount to be loaned to the school district for the payment of principal and interest and the date on or before which loan shall be made.5 The superintendent shall prepare a voucher as a basis for the issuance of a warrant and upon receipt of such statement and warrant, it shall be the duty of the state treasurer to loan to the school district from the school bond loan fund the amount set forth in the statement of the superintendent of public instruction on or before the date specified therein. The state treasurer upon making such loan shall obtain from the school district a receipt for the amount so loaned which receipt shall specify the terms of repayment in accordance with the provisions of Section 16 of Article IX, Constitution of 1963 and the act. The school district treasurer upon receipt of the loan is required to deposit the same in the debt retirement fund to be used solely for the payment of principal and interest on qualified bonds.

The foregoing summaries of the procedures prescribed by amended Section 6 and 7 relate to the first situation above-described where the loan to the school district is to be made before the school district has defaulted in the payment of the principal or interest on its bonds.

The second situation described above is covered by amended Section 8 of the act which prescribes that in the event the principal or interest on any qualified bond is not paid when due, upon proper presentation of the bond or interest coupon to the agent or officer charged with making payment thereof, the state treasurer shall forthwith pay such principal or interest upon presentation of the bond or coupon to him. Any amount so paid by the state treasurer shall be deemed a loan to the school district made pursuant to the requirements of Section 16, Article IX, Constitution of 1963, and the act and the school district shall give a receipt therefor and repay the loan in the manner provided in the act for the repayment of loans.

The method of processing loans to school districts under amended Sections 6 and 7 before default in payment of principal or interest is adequately spelled out in those sections and no additional comment from me is necessary. Your real concern is in regard to the applicable procedures which you should follow in the situation where the school district has defaulted in the payment of principal or interest on its bonds and the bond or bonds and the interest coupons have not been paid when due by the paying agent because of lack of funds. In the event of such a happening it is assumed for the purposes of this opinion that the holder of the bond or of the interest coupon will make demand on you as state treasurer for the prompt payment of the obligation thereunder. Should such demand be made on you as state treasurer, you would be entitled to take the following action before making payment:

a. Ascertaining from the superintendent of public instruction or from the records in your own office that the bonds involved are duly qualified bonds as defined and described in amended Section 3 of the act;

b. Requiring proof reasonably satisfactory to you that the bond or bonds or the interest coupons have been properly presented for payment to the paying agent or officer charged with the responsibility for making payment thereof and that payment has been refused because sufficient monies had not been deposited by the school district for that purpose; such proof of nonpayment may be furnished you in the form of a certificate from the paying agent.

3Article VIII, Section 3, Constitution of 1963 requires the state board of education to appoint a superintendent of public instruction who shall be

the principal executive officer of the department of education and who shall have powers and duties provided by law. Section 14 of Act 287, P.A. 1964 (M.S.A. 1965 Cum. Supp. § 15.1023(14)) specifies that after June 30, 1965, a reference in any law to the powers and duties of the superintendent of public instruction shall be deemed to be made to the state board of education, subject to exceptions not pertinent here, and that the state board of education may delegate any of its functions to the superintendent. Section 300 of Act 380, P.A. 1965, creates a department of education. Section 301 of that act provides that the head of the department of education is the state board of education. Section 303 of that act transfers by a Type III transfer all powers, duties and functions then vested by law in the superintendent of public instruction to the department of education. Section 305 of the act specifies that the principal executive officer of the department of education is the superintendent of public instruction. Act 380 appears in M.S.A. 1965 Cum. Supp. at § 3.29(1) et seq. Act 380, P.A. 1965, was amended without regard to the sections involved here by Act 407, P.A. 1965. Without doubt, under the foregoing provisions the state board of education could delegate to the superintendent of public instruction the performance of all of the functions and duties imposed on the board in connection with the School Bond Loan Fund. 4Other details set forth in amended Section 6 have been omitted.

5Other details set forth in amended Section 7 have been omitted.

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c. Notification to the school district given by you or your designee of the action taken by paying agent in refusing payment of the bonds or interest coupons on presentment because of the failure of the school district to have deposited funds with the paying agent for that purpose and verification from the school district of the fact of such failure to supply the required funds; notification to the school district by you or your designee that payment of the required amounts were to be made from the school bond loan fund by you as state treasurer and that such payment would be in the form of a loan to the school district which the school district would be required to be repay to the school bond loan fund in the manner required by law; the school district will be required to furnish you as state treasurer with a receipt evidencing the loan and specifying the terms of repayment, as required by law.

Upon the fulfillment of the above conditions in a manner reasonably acceptable to you, you would be authorized to make payment of the amounts due on the bonds and interest coupons and thereupon to demand their surrender and delivery to you as state treasurer.

Because of the safeguards built into the Michigan Constitution and statutes there should be no default of Michigan qualified school bonds. The School Loan Fund Program will have afforded the school district access to loan funds prior to the due date of the principle [sic] and interest on such bonds. In order to advise of the procedures in the remote possibility of nonpayment, however, I have set forth the foregoing guide lines [sic].

FRANK J. KELLEY, Attorney General

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FORM OF CONTINUING DISCLOSURE AGREEMENT

$14,260,000 ROMEO COMMUNITY SCHOOLS

Counties of Macomb and Oakland, State of Michigan 2015 Refunding Bonds

(General Obligation – Unlimited Tax)

THIS CONTINUING DISCLOSURE AGREEMENT (“Agreement”) is executed and delivered by Romeo Community Schools, Counties of Macomb and Oakland, State of Michigan (the “School District”) in connection with the issuance of its 2015 Refunding Bonds (General Obligation – Unlimited Tax) (the “Bonds”). The Bonds are being issued pursuant to a Resolution adopted by the Board of Education of the School District on July 21, 2014 (the “Resolution”). The School District covenants and agrees as follows:

SECTION 1. Purpose of the Disclosure Agreement. This Agreement is being executed and delivered by the School District for the benefit of the Bondholders and in order to assist the Participating Underwriters in complying with the Rule. The School District acknowledges that this Agreement does not address the scope of any application of Rule 10b-5, promulgated by the SEC pursuant to the 1934 Act, to the Annual Reports or notices of the Listed Events provided or required to be provided by the School District pursuant to this Agreement.

SECTION 2. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized term used in this Agreement unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:

(a) “Annual Report” shall mean any annual report provided by the School District pursuant to, and as described in, Sections 3 and 4 of this Agreement.

(b) “Bondholder” means the registered owner of a Bond or any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of any Bonds (including any person holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bond for federal income tax purposes.

(c) “Dissemination Agent” means any agent designated as such in writing by the School District and which has filed with the School District a written acceptance of such designation, and such agent’s successors and assigns.

(d) “EMMA” shall mean the MSRB’s Electronic Municipal Market Access system accessible at http://emma.msrb.org.

(e) “Listed Events” shall mean any of the events listed in Section 5(a) of this Agreement.

(f) “MSRB” shall mean the Municipal Securities Rulemaking Board (www.msrb.org).

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(g) “1934 Act” shall mean the Securities Exchange Act of 1934, as amended.

(h) “Official Statement” shall mean the final Official Statement for the Bonds, dated February 25, 2015, as amended or supplemented.

(i) “Participating Underwriter” shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with the offering of the Bonds.

(j) “Repository” shall mean each repository designated by the SEC in accordance with the Rule, as of the date hereof the sole Repository shall be EMMA.

(k) “Rule” shall mean Rule 15c2-12 promulgated by the SEC pursuant to the Securities Exchange Act of 1934, as amended.

(l) “SEC” shall mean the Securities and Exchange Commission.

(m) “State” shall mean the State of Michigan.

SECTION 3. Provision of Annual Reports.

(a) Each year, the School District shall provide or cause to be provided, or shall cause the Dissemination Agent to provide or to cause to be provided, on or prior to the 180th day after the end of the fiscal year of the School District commencing with the fiscal year ending June 30, 2015, to the Repository an Annual Report for the preceding fiscal year which is consistent with the requirements of Section 4 of this Agreement. Currently, the School District's fiscal year ends on June 30. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by specific reference other information as provided in Section 4 of this Agreement; provided, however, that if the audited financial statements of the School District are not available by the deadline for filing the Annual Report, they shall be provided when and if available, and unaudited financial statements in a format similar to the financial statements contained in the Official Statement shall be included in the Annual Report.

(b) If the School District is unable to provide to the Repository an Annual Report by the date required in subsection (a), the School District shall send a notice in a timely manner to the Repository.

(c) If the School District's fiscal year changes, the School District shall send a notice of such change to the Repository. If such change will result in the School District's fiscal year ending on a date later than the ending date prior to such change, the School District shall provide notice of such change to the Repository on or prior to the deadline for filing the Annual Report in effect when the School District operated under its prior fiscal year. Such notice may be provided to the Repository along with the Annual Report, provided that it is filed at or prior to the deadline described above.

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SECTION 4. Content of Annual Reports. The School District’s Annual Report shall contain or include by reference the following:

(a) Audited financial statements of the School District prepared pursuant to State laws, administrative rules and guidelines and pursuant to accounting and reporting policies conforming in all material respects to generally accepted accounting principles as applicable to governmental units as such principles are prescribed, in part, by the Financial Accounting Standards Board and modified by the Government Accounting Standards Board.

(b) Additional annual financial information and operating data as set forth in the Official Statement under “CONTINUING DISCLOSURE”.

Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the School District or related public entities, which previously have been provided to the Repository or filed with the SEC. If the document included by specific reference is a final official statement, it must be available from the MSRB. The School District shall clearly identify each document so included by reference.

SECTION 5. Reporting of Significant Events.

(a) The School District covenants to provide, or cause to be provided, notice of the occurrence of any of the following Listed Events with respect to the Bonds in a timely manner not in excess of ten (10) business days after the occurrence of the Listed Event, in accordance with the Rule:

1. Principal and interest payment delinquencies;

2. Non-payment related defaults, if material;

3. Unscheduled draws on debt service reserves reflecting financial difficulties;

4. Unscheduled draws on credit enhancements reflecting financial difficulties;

5. Substitution of credit or liquidity providers, or their failure to perform;

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

7. Modifications to rights of Bondholders, if material;

8. Bond calls, if material, and tender offers;

9. Defeasance;

10. Release, substitution, or sale of property securing repayment of the Bonds, if material;

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11. Rating changes;

12. Bankruptcy, insolvency, receivership or similar event of the School District;

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

14. Appointment of a successor or additional trustee or the change of name of a trustee, if material.

(b) Whenever the School District obtains knowledge of the occurrence of a Listed Event, the School District shall as soon as possible determine if such event would constitute material information for the Bondholders with regard to any event under Sections 5(a)(2), (7), (8), (10), (13) and (14).

(c) The School District shall promptly cause a notice of the occurrence of a Listed Event, including any event under Sections 5(a)(2), (7), (8), (10), (13) and (14) determined to be material in accordance with the Rule, to be filed with the Repository, together with a Material Event Notice Cover Sheet. In connection with providing a notice of the occurrence of a Listed Event described in Section 5(a)(9) above, the School District shall include in the notice explicit disclosure as to whether the Bonds have been escrowed to maturity or escrowed to call, as well as appropriate disclosure of the timing of maturity or call.

(d) The School District acknowledges that the “rating changes” referred to above in Section 5(a)(11) of this Agreement may include, without limitation, any change in any rating on the Bonds or other indebtedness for which the School District is liable.

(e) For the purposes of an event identified in Section 5(a)(12), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the School District in a proceeding under the U.S. 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 School District, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers of the School District 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 School District.

(f) The School District acknowledges that it is not required to provide a notice of a Listed Event with respect to credit enhancement when the credit enhancement is added after the primary offering of the Bonds, the School District does not apply for or participate in obtaining such credit enhancement, and such credit enhancement is not described in the Official Statement.

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SECTION 6. Termination of Reporting Obligation.

(a) The School District’s obligations under this Agreement shall terminate upon the legal defeasance of the Bonds or the prior redemption or payment in full of all of the Bonds.

(b) This Agreement, or any provision hereof, shall be null and void in the event that the School District: (i) receives an opinion of nationally recognized bond counsel, addressed to the School District, to the effect that those portions of the Rule, which require such provisions of this Agreement, do not or no longer apply to the Bonds, whether because such portions of the Rule are invalid, have been repealed, amended or modified, or are otherwise deemed to be inapplicable to the Bonds, as shall be specified in such opinion; and (ii) delivers notice to such effect to the Repository.

SECTION 7. Dissemination Agent. The School District, from time to time, may appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent.

SECTION 8. Amendment. Notwithstanding any other provision of this Agreement, this Agreement may be amended, and any provision of this Agreement may be waived to the effect that:

(a) Such amendment or waiver is made in connection with a change in circumstances that arises from a change in legal requirements, a change in law or a change in the identity, nature or status of the School District, or the types of business in which the School District is engaged;

(b) This Agreement as so amended or taking into account such waiver, would have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances, in the opinion of independent legal counsel; and

(c) Such amendment or waiver does not materially impair the interests of the Bondholders, in the opinion of independent legal counsel.

If the amendment or waiver results in a change to the annual financial information required to be included in the Annual Report pursuant to Section 4 of this Agreement, the first Annual Report that contains the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment and the impact of such change in the type of operating data or financial information being provided. If the amendment or waiver involves a change in the accounting principles to be followed in preparing financial statements, the Annual Report for the year in which the change is made shall present a comparison between the financial statements or information prepared based on the new accounting principles and those prepared based on the former accounting principles. The comparison should include a qualitative discussion of such differences and the impact of the changes on the presentation of the financial information. To the extent reasonably feasible, the comparison should also be quantitative. A

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CONTINUING DISCLOSURE AGREEMENT

Romeo Community Schools 2015 Refunding Bonds

notice of the change in the accounting principles should be sent by the School District to the Repository. Further, if the annual financial information required to be provided in the Annual Report can no longer be generated because the operations to which it related have been materially changed or discontinued, a statement to that effect shall be included in the first Annual Report that does not include such information.

SECTION 9. Additional Information. Nothing in this Agreement shall be deemed to prevent the School District from disseminating any other information, using the means of dissemination set forth in this Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Agreement. If the School District chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Agreement, the School District shall have no obligation under this Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.

SECTION 10. Default. In the event of a failure of the School District to comply with any provision of this Agreement, any Bondholder may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the School District to comply with its obligations under this Agreement. A default under this Agreement shall not be deemed an Event of Default under the Resolution or the Bonds, and the sole remedy under this Agreement in the event of any failure of the School District to comply with the Agreement shall be an action to compel performance.

SECTION 11. Duties of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Agreement.

SECTION 12. Beneficiaries. This Agreement shall inure solely to the benefit of the School District, the Dissemination Agent, the Participating Underwriters, and the Bondholders and shall create no rights in any other person or entity.

SECTION 13. Governing Law. This Agreement shall be construed and interpreted in accordance with the laws of the State, and any suits and actions arising out of this Agreement shall be instituted in a court of competent jurisdiction in the State. Notwithstanding the foregoing, to the extent this Agreement addresses matters of federal securities laws, including the Rule, this Agreement shall be construed and interpreted in accordance with such federal securities laws and official interpretations thereof.

Executed and delivered on this March 19, 2015.

ROMEO COMMUNITY SCHOOLS By: ______________________________ Dr. Nancy J. Campbell Its: Superintendent

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APPENDIX E - DRAFT LEGAL OPINION

Clark Hill PLC 151 S. Old Woodward Suite 200 Birmingham, MI 48009

T (248) 642-9692 F (248) 642-2174 clarkhill.com

March 19, 2015 Romeo Community Schools Counties of Macomb and Oakland State of Michigan

We have acted as bond counsel in connection with the issuance by Romeo Community Schools, Counties of Macomb and Oakland, State of Michigan (the “School District”), of its 2015 Refunding Bonds (General Obligation – Unlimited Tax), dated March 19, 2015, in the original principal amount of $14,260,000 (the “Bonds”). The Bonds have been issued in fully registered form in denominations of $5,000, or integral multiples of that sum not exceeding for each maturity the aggregate principal amount of the Bonds maturing at any one time, bear interest and mature as shown on the faces of the Bonds. The Bonds are not subject to redemption prior to maturity. The Bonds have been issued pursuant to Act 451, Public Acts of Michigan, 1976, as amended, and Act 34, Public Acts of Michigan, 2001, as amended, and the proceeds will be used for the purpose of currently refunding a portion of the School District’s outstanding 2005 Refunding Bonds, dated April 11, 2005, and to pay costs of issuing the Bonds.

We have examined the law, a specimen of the bond certificate and such certified proceedings and other papers as we have deemed necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon the certified proceedings and other certifications of public officials furnished to us without undertaking to verify the same by independent investigation.

The opinions expressed in the first sentence of Paragraph 3 below are subject to the condition that the School District comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be (or continue to be) excluded from gross income for federal income tax purposes. The School District has covenanted to comply with each requirement. Failure to comply with certain of such requirements may cause the inclusion of the interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds.

Based on the foregoing, under existing law, we are of the opinion that:

1. The Bonds have been duly authorized, executed and delivered by the School District and are valid and binding obligations of the School District enforceable against the School District in accordance with its terms.

2. The Bonds are general obligations of the School District, secured by its full faith, credit and resources and are payable in the first instance from the collection of

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Romeo Community Schools March 19, 2015 Page 2

taxes levied without limitation as to rate or amount, in addition to all other taxes that the School District is authorized to levy, on all taxable property in the School District and which taxes are to be levied in an amount sufficient to pay the principal of and interest on the Bonds coming due before the next collection of taxes.

3. The interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. However, it should be noted that, for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings. We express no opinion regarding other federal tax consequences arising with respect to the Bonds.

4. The Bonds and interest thereon are exempt from all taxation provided by the laws of the State of Michigan except inheritance and estate taxes, and taxes on gains realized from the sale, payment or other disposition of the Bonds.

5. The Bonds have been qualified for purposes of Article IX, Section 16 of the Michigan Constitution of 1963 and Act 92, Public Acts of Michigan, 2005, as amended, and if the School District shall be unable to pay the principal of and interest on the Bonds when due, the School District will be obligated to borrow from the State of Michigan, and the State will be obligated to lend to the School District, an amount sufficient to make the payment.

The rights of bondholders may be affected by bankruptcy, reorganization, moratorium, receivership or other similar laws affecting the enforceability of creditors' rights now existing or hereafter enacted to the extent constitutionally applicable and their enforcement may be subject to the exercise of judicial discretion in appropriate cases.

CLARK HILL PLC JMC:lam

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OFFICIAL NOTICE OF SALE

$14,975,000 ROMEO COMMUNITY SCHOOLS

COUNTIES OF MACOMB AND OAKLAND, STATE OF MICHIGAN 2015 REFUNDING BONDS

(General Obligation-Unlimited Tax)

SEALED BIDS: Sealed bids for the purchase of the above Bonds will be received by the undersigned at the offices of the Romeo Community Schools (the “School District”) located at 316 North Main Street, Romeo, MI 48065, on Wednesday, February 25, 2015, until 11:30 a.m., prevailing Eastern time, at which time and place the bids will be publicly opened and read. In the alternative, sealed bids will also be received on the same date and until the same time by an agent of the undersigned at the Municipal Advisory Council of Michigan (the “MAC”), 535 Griswold, Suite 1850, Detroit, Michigan 48226, where they will be opened and read. The award or rejection of bids will be made by the School District on that date.

FAXED BIDS: Bidders may submit signed bids via facsimile transmission to the School District at (586) 752-0227 or the MAC at (313) 963-0943 provided that the faxed bids are received prior to the time and date fixed for receipt of bids, Bidders submitting faxed bids bear the full risk of failed or untimely transmission of their bids. Bidders are encouraged to confirm the timely receipt of their full and complete bids by telephoning the School District at (586) 752-0200 or the MAC at (313) 963-0420. Bidders submitting bids by fax must satisfy the requirements of the section captioned “GOOD FAITH” below.

ELECTRONIC BIDS: Electronic bids may be presented via PARITY on the dates and at the times shown above provided that such bidders must also comply with the good faith deposit requirements provided under the section captioned “GOOD FAITH” below. To the extent any instructions or directions set forth in PARITY conflict with this Notice, the terms of this Notice shall control. For further information about PARITY, potential bidders may contact Stauder, Barch & Associates, Inc. at (734) 668-6688 or PARITY at (212) 849-5021.

BOND DETAILS: The Bonds will be fully registered Bonds of the denomination of $5,000 each or any whole multiple thereof within any maturity, dated as of the date of delivery, numbered in order of their registration, and will bear interest from their date payable on November 1, 2015, and semi-annually thereafter on the first day of May and November of each year.

The Bonds will mature on the first day of May in each year as follows:

YEAR AMOUNT* YEAR AMOUNT* 2016 $ 3,950,000 2019 $ 2,930,000 2017 2,250,000 2020 2,955,000 2018 2,890,000

ADJUSTMENT IN PRINCIPAL AMOUNT: The aggregate principal amount of the Bonds is believed to be the amount necessary to provide adequate funds to refund the School District’s 2005 Refunding Bonds, dated April 11, 2005 (the “Prior Bonds”) and to pay transactional costs. The School District reserves the right to increase or decrease the aggregate principal amount of

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the Bonds by not more than $700,000 after receipt of the bids and prior to final award. Such adjustment if necessary, will be made in increments of $5,000, will not exceed $175,000 per maturity and may be made in any maturity. The purchase price of the Bonds will be adjusted proportionately to the adjustment in principal amount of the Bonds and in such manner as to maintain as comparable an underwriter spread as possible to that bid. The interest rates specified by the successful bidder for all maturities will not change. The successful bidder may not withdraw the bid as a result of any change made within these limits.

If no bid results in debt service savings acceptable to the School District when the proceeds of the Bonds are used to refund the Prior Bonds, the School District may reject all bids and negotiate with one or more bidders for the sale of the Bonds on terms which will enable the School District to achieve debt service savings acceptable to the School District.

ADJUSTMENT IN DISCOUNT OR PREMIUM: In the event the principal amount of this issue is increased or decreased, the discount or premium bid, if any, will be adjusted so that it is the same percent as the discount or premium originally bid.

TERM BOND OPTION: The initial purchaser of the Bonds shall have the option of designating any one or more maturities of Bonds as serial bonds or term bonds, or both. If a bidder designates Bonds as term bonds, the principal amounts shown above for the designated years shall represent a mandatory redemption requirement for a term bond or a term bond maturity as designated by the bidder. In any event, the principal amounts set forth above shall be represented by either serial bond maturities or mandatory redemption requirements for term bonds or a combination of both, in the years and in the amounts set forth, at par. If the winning bidder does not designate Bonds as term bonds within twenty-four (24) hours of the sale, then the maturities shown above shall be serial maturities.

PRIOR REDEMPTION:

A. Mandatory Redemption. Bonds designated as term bonds shall be subject to mandatory redemption at par and accrued interest on the dates and in the amounts corresponding to the annual principal maturities hereinbefore set forth. The Bonds or portions of Bonds to be redeemed shall be selected by lot.

B. No Optional Redemption. The Bonds are not subject to redemption prior to maturity.

INTEREST RATE AND BIDDING DETAILS: The Bonds shall bear interest at a rate or rates not exceeding 4% per annum, to be fixed by the bids therefor, expressed in multiples of 1/8 or 1/20 of 1%, or both. Interest shall be computed using a 360 day year consisting of twelve 30 day months. The interest on any one Bond shall be at one rate only. All Bonds maturing in any one year must carry the same interest rate. The difference between the highest and lowest interest rate on the Bonds shall not exceed 1% per annum. No proposal for the purchase of less than all of the Bonds or at a price less than 99% or more than 104% of their par value will be considered. THE INTEREST RATE BORNE BY BONDS MATURING IN ANY ONE YEAR SHALL NOT BE LESS THAN THE INTEREST RATE BORNE BY BONDS MATURING IN THE RESPECTIVE PRECEDING YEAR.

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BOOK ENTRY ELIGIBLE: At the option of the initial purchaser of the Bonds, the Bonds may be issued in book-entry only form as one fully registered bond per maturity and will be registered in the name of Cede & Co., as bondholder and nominee for The Depository Trust Company (“DTC”), New York, New York; if this option is selected, DTC will act as securities depository for the Bonds, purchase of the Bonds will be made in book-entry only form, in the denomination of $5,000 or any integral multiple thereof, and purchasers will not receive certificates representing their interest in Bonds purchased. Payment of principal and interest will be made by the Paying Agent to DTC. As long as Cede & Co. is the Registered Owner of the Bonds as nominee of DTC, payments of principal and interest will be made directly to such Registered Owner which will in turn remit such payments to the DTC participants for subsequent distribution to the Beneficial Owners. It will be the responsibility of the purchaser to obtain DTC eligibility. Failure of the purchaser to obtain DTC eligibility shall not constitute cause for a failure or refusal by the purchaser to accept delivery of and pay for the Bonds.

PAYING AGENT AND REGISTRATION: Principal shall be payable at the designated office of The Huntington National Bank, Grand Rapids, Michigan, as Paying Agent (which shall also act as Transfer Agent and Bond Registrar if the Bonds cease to be held in book-entry-only format) or such other Paying Agent as the School District may from time to time hereafter designate by notice mailed to the Registered Owner not less than 60 days prior to the next interest payment date. Interest shall be paid when due to the Registered Owner as shown by the registration books of the School District as of the 15th day of the month prior to any interest payment date. The Bonds will be transferable only upon the registration books of the School District kept by the Paying Agent.

PURPOSE AND SECURITY: The Bonds are being issued pursuant to a resolution adopted by the School District on July 21, 2014, for the purpose of refunding the Prior Bonds and paying the costs of issuing the Bonds. The Bonds will pledge the full faith and credit of the School District for payment of the principal of and interest on the Bonds, and will be payable from ad valorem taxes, levied without limitation as to rate or amount, as provided by Article IX, Section 6 and Article IX, Section 16 of the Michigan Constitution of 1963, in such amounts as shall be necessary to pay when due the principal of and interest on the Bonds. The rights or remedies of Bondholders may be affected by bankruptcy laws or other creditor’s rights legislation now existing or hereafter enacted.

STATE QUALIFICATION. The Bonds are expected to be fully qualified pursuant to Act 92, Public Acts of Michigan, 2005, as amended, enacted pursuant to Article IX, Section 16 of the Michigan Constitution of 1963. Under the terms of such constitutional and statutory provisions, if for any reason the School District will be or is unable to pay the principal and interest on the Bonds when due, then the School District shall borrow, and the State of Michigan shall lend to it, an amount sufficient to enable the School District to make such principal and interest payments.

GOOD FAITH: A cashier's check in the amount of two percent (2%) of the final aggregate principal amount of the Bonds (the “Good Faith Deposit”) may be submitted contemporaneously with the bid or, in the alternative, a deposit in the amount of the Good Faith Deposit shall be made by the winning bidder by federal wire transfer as directed by Stauder, Barch & Associates, Inc., to be received by the School District not later than Noon, prevailing Eastern time, on the next business day following the award as a guarantee of good

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faith on the part of the bidder, to be forfeited as liquidated damages if such bid be accepted and the bidder fails to take up and pay for the Bonds. Any award made to the low bidder is conditional upon receipt of the Good Faith Deposit. The Good Faith Deposit will be applied to the purchase price of the Bonds. In the event the Purchaser fails to honor its accepted bid, the Good Faith Deposit will be retained by the School District. No interest shall be allowed on the Good Faith Deposit. Payment for the balance of the purchase price of the Bonds shall be made at the closing. Good Faith Deposit checks of unsuccessful bidders will be returned by overnight delivery for next day receipt sent not later than the first business day following the sale.

AWARD OF BONDS – TRUE INTEREST COST: The Bonds will be awarded to the bidder whose bid produces the lowest true interest cost determined in the following matter: the lowest true interest cost will be the single interest rate (compounded on November 1, 2015 and semi-annually thereafter) necessary to discount the debt service payments from their respective payment dates to March 19, 2015 (expected closing date), in an amount equal to the price bid, excluding accrued interest.

LEGAL OPINION: Bids shall be conditioned upon the approving opinion of Clark Hill PLC, Birmingham, Michigan (“Bond Counsel”), the original of which will be furnished without expense to the purchaser of the Bonds at the delivery thereof. The fees of Clark Hill PLC for services rendered in connection with such approving opinion are expected to be paid from Bond proceeds. Except to the extent necessary to issue its approving opinion as to the validity of the Bonds, Clark Hill PLC has made no inquiry as to any financial information, statements or material contained in any financial documents, statements or materials that have been or may be furnished in connection with the authorization, issuance or marketing of the Bonds, including specifically the Official Statement, and accordingly will not express any opinion with respect to the accuracy or completeness of any such financial information, statements or materials.

TAX MATTERS: The approving opinion of Bond Counsel will include an opinion that, under existing laws, regulations, rulings and judicial decisions, existing on the date of closing and as presently interpreted, and assuming compliance with certain covenants by the School District, interest on the Bonds: (a) will be excluded from gross income for federal income tax purposes; and (b) will not be an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. However, it should be noted that certain corporations must take into account interest on the Bonds in determining adjusted net current earnings for purposes of calculating the federal alternative minimum tax imposed on such corporations. The opinion of Bond Counsel will be subject to the condition that the School District comply with all requirements of the Internal Revenue Code of 1986, as amended (the “Code”) that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be (or continue to be) excluded from gross income for federal income tax purposes. Failure to comply with such requirements could cause the interest on the Bonds to be included in gross income retroactive to the date of issuance of the Bonds. The School District has covenanted to comply with all such requirements. Bond Counsel will express no opinion regarding other federal tax consequences arising with respect to the Bonds and the interest thereon.

The opinion of Bond Counsel will also include an opinion that based on existing State of Michigan statutes, regulations, rulings and court decisions, as presently interpreted, the Bonds

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and the interest on the Bonds are exempt from all taxation presently in effect in the State of Michigan, except for inheritance and estate taxes and taxes on gains realized from the sale, payment or other disposition thereof.

DELIVERY OF BONDS: The School District will furnish Bonds ready for execution at its expense. Bonds will be delivered without expense to the purchaser through DTC (payment for the Bonds shall be made in Federal Reserve Funds). The usual closing documents, including a certificate that no litigation is pending affecting the issuance of the Bonds, will be delivered at the time of the delivery of the Bonds. If the Bonds are not tendered for delivery by twelve o’clock noon, Michigan time, on the 45th day following the date of sale, or the first business day thereafter if the 45th day is not a business day, the successful bidder may on that day or any time thereafter until delivery of the Bonds, withdraw his proposal by serving notice of cancellation, in writing, on the undersigned in which event the School District shall promptly return the good faith deposit. Accrued interest to the date of delivery of the Bonds shall be paid by the purchaser at the time of delivery.

CERTIFICATE REGARDING “ISSUE PRICE”: Prior the delivery of the Bonds, the successful bidder will be required to furnish a certificate, in form acceptable to Bond Counsel, as to the “issue price” of the Bonds within the meaning of Section 1273 of the Code. In addition, if the successful bidder will obtain a municipal bond insurance policy of other credit enhancement for the Bonds in connection with their original issuance, the successful bidder will be required, as a condition of delivery of the Bonds, to certify whether the premium therefor will be less than the present value of the interest expected to be saved as a result of such insurance or other credit enhancement. The form of an acceptable certificate(s) will be provided by Bond Counsel.

CUSIP NUMBERS: It is anticipated that CUSIP identification numbers will be printed on the Bonds, but neither the failure to print such numbers on any Bonds or any error with respect thereto shall constitute cause for a failure or refusal by the purchaser thereof to accept delivery of and pay for the Bonds in accordance with the terms of the bid therefor. All expenses in relation to the printing of CUSIP numbers on the Bonds shall be paid for by the School District and all other charges shall be the responsibility of the purchaser.

OFFICIAL STATEMENT: Copies of the Preliminary Official Statement may be obtained by contacting the Financial Advisor at the address referred to below. The Preliminary Official Statement is in a form deemed final as of its date by the School District for purposes of SEC Rule 15c2-12 (the “Rule”), but is subject to revision, amendment and completion of a final Official Statement.

The successful bidder shall supply to the School District, within twenty-four (24) hours after the award of the Bonds, all pricing information and any underwriter identification determined by Bond Counsel to be necessary to complete the final Official Statement. The School District will furnish a reasonable number of final official statements to the managing underwriter at no cost. Additional copies will be supplied upon the bidder’s agreement to pay the costs incurred by the School District for those additional copies. Requests for additional copies of the Official Statement must be made to the Financial Advisor within twenty-four (24) hours of the award of the Bonds.

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The School District shall deliver, at closing, an executed certificate to the effect that as of the date of delivery of the Bonds, the information contained in the Official Statement, including revisions, amendments and completions as necessary, relating to the School District and the Bonds is true and correct in all material respects, and that such Official Statement does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

CONTINUING DISCLOSURE: As described more fully in the Official Statement, the School District agrees to provide or cause to be provided, in accordance with the requirements of the Rule, (i) on or prior to the 180th day after the end of the fiscal year of the School District, commencing with the fiscal year ended June 30, 2015, certain annual financial information and operating data, including audited financial statements for the preceding fiscal year (or if audited financial statements are not available, unaudited financial statements), generally consistent with the information contained or cross-referenced in the Official Statement relating to the Bonds, (ii) timely notice of the occurrence of certain material events with respect to the Bonds, and (iii) timely notice of a failure by the School District to provide the required annual financial information on or before the date specified in (i) above.

BOND INSURANCE: At the option of the bidder/purchaser, if the Bonds qualify for issuance of a policy of municipal bond insurance or commitment therefore, the purchaser may purchase such insurance policy or cause the issuance of such commitment, at its option and sole expense. Any increased costs of issuance of the Bonds resulting from such purchase of insurance shall be paid by the purchaser. Any rating agency fees, except for a rating on the Bonds requested by the School District, shall be the responsibility of the purchaser. FAILURE OF THE MUNICIPAL BOND INSURER TO ISSUE THE POLICY AFTER THE BONDS HAVE BEEN AWARDED TO THE PURCHASER SHALL NOT CONSTITUTE CAUSE FOR FAILURE OR REFUSAL BY THE PURCHASER TO ACCEPT DELIVERY OF THE BONDS FROM THE SCHOOL DISTRICT.

BOND RATING: Application has been made to Standard & Poor’s Ratings Services for a rating on the Bonds. No application was made to any other rating agency for a rating on the Bonds.

FINANCIAL CONSULTANT: Further information with respect to the Bonds may be obtained from Stauder, Barch & Associates, Inc., 3989 Research Park Drive, Ann Arbor, Michigan 48108, telephone: (734) 668-6688. THE RIGHT IS RESERVED TO REJECT ANY OR ALL BIDS.

ENVELOPES containing the bids should be plainly marked “Proposal for Romeo Community Schools 2015 Refunding Bonds”

Michael Antoine Secretary, Board of Education

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NOTES

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NOTES

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Additional information relative to this Bond issue may be obtained from

Stauder, BARCH & ASSOCIATES, Inc.Municipal Bond Financial and Marketing Consultants

3989 Research Park DriveAnn Arbor, Michigan 48108

734-668-6688 Facsimile: 734-668-6723

$14,260,000ROMEO COMMUNITY SCHOOLS

Counties of Macomb and Oakland State of Michigan

2015 Refunding Bonds(General Obligation - Unlimited Tax)