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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Romeo Community SchoolsNEW 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
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 M V 7 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.
ROMEO COMMUNITY SCHOOLS 316 North Main Street
Romeo, Michigan 48065 Phone: (586) 752-0200 Fax: (586) 752-0227
BOARD OF EDUCATION
VICE PRESIDENT Dr. Gus Demas Term Expires 2018
SECRETARY Michael Antoine Term Expires 2020
TREASURER Anita Banach
Term Expires 2020
Ed Sosnoski Term Expires 2016
Chris Young Term Expires 2018
SUPERINTENDENT Dr. Nancy J. Campbell
EXECUTIVE DIRECTOR OF BUSINESS SERVICES David Massoglia
PROFESSIONAL SERVICES
BOND COUNSEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Clark Hill PLC
FINANCIAL CONSULTANT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stauder, BARCH & ASSOCIATES, Inc.
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Page
INFORMATION FOR BIDDERS . . . . . . . . . . . . . . . . . 1 PURPOSE AND SECURITY . . . . . . . . . . . . . . . . . 1 QUALIFICATION BY THE STATE OF
MICHIGAN . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 PRIOR REDEMPTION . . . . . . . . . . . . . . . . . . . . . 2 NOTICE OF SALE . . . . . . . . . . . . . . . . . . . . . . . . . 2 BOOK-ENTRY ONLY SYSTEM . . . . . . . . . . . . . 2 TAX PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . 3 TRANSFER OUTSIDE BOOK-ENTRY-ONLY
SYSTEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 SOURCES OF SCHOOL OPERATING
REVENUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 MICHIGAN PROPERTY TAX REFORM . . . . . . . 6 LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
State of Michigan . . . . . . . . . . . . . . . . . . . . . . . 7 Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Original Issue Premium . . . . . . . . . . . . . . . . . . 8 Future Developments . . . . . . . . . . . . . . . . . . . . 8
QUALIFIED BY THE MICHIGAN DEPARTMENT OF TREASURY . . . . . . . . . . 8
CONTINUING DISCLOSURE . . . . . . . . . . . . . . . 8 BOND COUNSEL’S RESPONSIBILITY . . . . . . . 9 FINANCIAL CONSULTANT’S OBLIGATION . . 9 CREDIT RATING . . . . . . . . . . . . . . . . . . . . . . . . 10 PLAN OF REFUNDING . . . . . . . . . . . . . . . . . . . 11 ESTIMATED SOURCES AND
USES OF FUNDS . . . . . . . . . . . . . . . . . . . . . 11
GENERAL FINANCIAL INFORMATION . . . . . . . . 12 AREA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 POPULATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 PROPERTY VALUATIONS . . . . . . . . . . . . . . . . 12
Historical Valuations . . . . . . . . . . . . . . . . . . . 12 Per Capita Valuation . . . . . . . . . . . . . . . . . . . 13 Industrial Facilities Tax (IFT) . . . . . . . . . . . . 13
TAX BASE COMPOSITION . . . . . . . . . . . . . . . . 14 MAJOR TAXPAYERS . . . . . . . . . . . . . . . . . . . . . 14 TAX RATES - (Per $1,000 of Valuation) . . . . . . . 15
Other Major Taxing Units . . . . . . . . . . . . . . . 15 STATE AID PAYMENTS . . . . . . . . . . . . . . . . . . 15 TAX LEVIES AND COLLECTIONS . . . . . . . . . 16 LABOR FORCE . . . . . . . . . . . . . . . . . . . . . . . . . . 16 PENSION FUND . . . . . . . . . . . . . . . . . . . . . . . . . 17 OTHER POST-EMPLOYMENT BENEFITS . . . 18
DEBT STATEMENT . . . . . . . . . . . . . . . . . . . . . . 18 DIRECT DEBT . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 OVERLAPPING DEBT . . . . . . . . . . . . . . . . . . . . 18 DEBT RATIOS . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 DEBT HISTORY . . . . . . . . . . . . . . . . . . . . . . . . . 19 FUTURE FINANCING . . . . . . . . . . . . . . . . . . . . 19 OTHER BORROWING . . . . . . . . . . . . . . . . . . . . 19 LEGAL DEBT MARGIN . . . . . . . . . . . . . . . . . . . 19 SCHOOL BOND QUALIFICATION AND LOAN
PROGRAM . . . . . . . . . . . . . . . . . . . . . . . . . . 19
GENERAL ECONOMIC INFORMATION . . . . . . . . 20 LOCATION AND AREA . . . . . . . . . . . . . . . . . . . 20 POPULATION BY AGE . . . . . . . . . . . . . . . . . . . 20 INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 EMPLOYMENT CHARACTERISTICS . . . . . . . 21 EMPLOYMENT BREAKDOWN . . . . . . . . . . . . 22 UNEMPLOYMENT . . . . . . . . . . . . . . . . . . . . . . . 22 BANKING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
GENERAL SCHOOL INFORMATION . . . . . . . . . . . 23 DESCRIPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 BOARD OF EDUCATION . . . . . . . . . . . . . . . . . 23 SCHOOL ENROLLMENT . . . . . . . . . . . . . . . . . . 23
Historical Enrollment . . . . . . . . . . . . . . . . . . . 23 Enrollment by Grade . . . . . . . . . . . . . . . . . . . 23 Projected Enrollment . . . . . . . . . . . . . . . . . . . 23
EXISTING SCHOOL FACILITIES . . . . . . . . . . . 24 OTHER SCHOOLS . . . . . . . . . . . . . . . . . . . . . . . 24 OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . 25
APPENDIX A - BUDGET . . . . . . . . . . . . . . . . . . . . . A-1
APPENDIX B - AUDIT . . . . . . . . . . . . . . . . . . . . . . . B-1
APPENDIX D - FORM OF CONTINUING DISCLOSURE AGREEMENT . . . . . . . . . . . . . . D-1
APPENDIX E - DRAFT LEGAL OPINION . . . . . . . E-1
APPENDIX F - DRAFT OFFICIAL NOTICE OF SALE . . . . . . . . . . . . . . . . . . . . . . . F-1
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INFORMATION FOR BIDDERS
State of Michigan 2015 Refunding Bonds
(General Obligation - Unlimited Tax)
DATED: March 19, 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 FOR PARTICIPATION IN THE MICHIGAN SCHOOL LOAN REVOLVING FUND as of 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 of the Romeo Community Schools (the "School District") for the purpose of currently refunding a portion of the School District’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 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.
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, Public Acts of Michigan, 2005, as amended (“Act 92 ”), the purpose of which is to implement Article IX, Section 16, of the Michigan Constitution of 1963 (the “State Constitution”). 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 of and interest on the Bonds when due, then the School District shall borrow and the State of Michigan (the “State”) shall lend to it from the School Loan Revolving Fund (the “School Loan Revolving Fund”) established by the State an amount sufficient to enable the School 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 time to time such amounts as shall be required, to pledge its faith and credit and to issue its notes or bonds therefor, for the purpose of making loans to school districts as provided under such Section. Loans to school districts for such purposes are made from the proceeds of such State borrowings. See also APPENDIX C - “STATE QUALIFICATION,” in this Official Statement.
Complete financial statements of all of the State’s funds as included in the State’s Comprehensive Annual Financial Report (“CAFR”) prepared by the State’s Department of Management and Budget are available upon request from the Department of Management and Budget, Office of Financial Management, P. O. Box 30026, Lansing, Michigan 48909, Telephone: (517) 373-1011. The State has agreed to file its CAFR with the Nationally Recognized Municipal Securities Information Repositories and the State Information Depository (as described in Rule 15c2-12(b)(5) of the Securities and Exchange Commission) annually, so long as any bonds qualified for participation in the School Loan Revolving Fund remain outstanding.
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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 information subsequent to the date hereof. No attempt has been made by the School District or the Paying Agent to determine whether DTC is or will be financially or otherwise capable of fulfilling its obligations. Neither the School District nor the Paying Agent will have any responsibility or obligation to Direct Participants, Indirect Participants (both as defined below) or the persons for which they act as nominees with respect to the Bonds, or for any principal, premium, if any, or interest payment thereof.
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's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.
DTC, the world's largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.
Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's records. The ownership interest of each actual purchaser of each Security ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued.
To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may
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or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to 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 agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.
Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to School District as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from School District or Paying Agent, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, Paying Agent, or School District, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of School District or Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to Paying Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant's interest in the Securities, on DTC's records, to Paying Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records and followed by a book-entry credit of tendered Securities to Paying Agent's DTC account.
DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the School District or Paying Agent. Under such circumstances, in the event that a successor depository 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 (or a 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 sources that 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 which property shall be assessed shall not exceed 50% of true cash value. The Michigan Legislature by statute has provided that property shall be assessed at 50% of its true cash value, except as described below. The Michigan Legislature or the electorate 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 permitting the Legislature to authorize ad valorem taxes on a non-uniform basis. The legislation implementing this constitutional amendment added a new measure of property value known as "Taxable Value." Beginning in 1995, taxable property has two 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 preceding year, adjusted for losses, and increased or reduced by the lesser of the inflation rate or 5%, plus additions, or (b) the property's current SEV. Under certain circumstances, therefore, the Taxable Value of property may be different from the 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 SEV of 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 the Michigan Tax Tribunal.
The Michigan Constitution also mandates a system of equalization for assessments. Although the assessors for each local unit of government within a county are responsible for actually assessing at 50% of true cash value, adjusted for Taxable Value purposes, the final SEV and Taxable Value are arrived at through several steps. Assessments are established initially by the municipal assessor. Municipal assessments are then equalized to the 50% levels as determined by 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 aid programs, 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 included in the SEV and Taxable Value data in the Official Statement. Property granted tax abatements under Act 198, Public Acts of Michigan, 1974, amended, is recorded on a separate tax roll while subject to tax abatement. The valuation of tax-abated property is based upon SEV but is not included in either the SEV or Taxable Value data in the Official Statement except as noted. Under limited circumstances, other state laws permit the partial abatement of certain taxes for 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 more Bonds in different authorized denominations upon surrender thereof at the corporate trust office of the Paying Agent by the 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 bonds in authorized denominations; during the fifteen (15) days immediately preceding the date of mailing (Record Date) of any notice of redemption or any time following the mailing of any notice of redemption, the Paying Agent shall not be required to effect or register any transfer or exchange of any Bond which has been selected for such redemption, except the Bonds properly surrendered for partial redemption may be exchanged for new Bonds in authorized denominations equal in the aggregate to the unredeemed portion; the School District and Paying Agent shall be entitled to treat the registered owners of the Bonds, as their names appear in the Bond Register as of the appropriate dates, as the owners of such Bonds for all purposes under the Resolution. No transfer or exchange made other than as described above and in 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 State Constitution of 1963, in part, to increase the State sales tax from 4% to 6% as part of a complex plan to restructure the source of funding of public education (K-12) in order to reduce reliance on local property taxes for school operating purposes and to reduce the per pupil finance resource disparities among school districts. The Legislature has appropriated 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 an index based upon the change in revenues to the State school aid fund and change in the total number of pupils statewide and the spread between the high and low per pupil allowance is reduced. The foundation allowance is funded by locally raised property taxes plus State aid. The revenues for the State's contribution to the foundation allowance are derived from 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 Official Statement for further information.
School districts are required to levy a local property tax of not more than 18 mills or the number of mills levied in 1993 for school operating purposes, whichever is less, on non-homestead properties² in order for the school district to receive its per pupil foundation allowance. An intermediate school district may seek voter approval for three enhancement mills for distribution to local constituent school districts on a per pupil basis. Proceeds of the enhancement mills are not counted toward the foundation allowance. Furthermore, school districts whose per pupil foundation allowance in 2014/15 calculates to an amount in excess of $8,099 are authorized to levy additional millage to obtain the foundation allowance, first by levying such amount of the 18 mills against homestead property³ as is necessary to hold themselves harmless and, if the 18 mills is insufficient, to then levy such additional mills against all property uniformly as 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 schedule for state aid may be changed by the Legislature at any time. See “STATE AID PAYMENTS” in this Official Statement for further information.
Public Act 60 of 2013 ("Act 60") amended the State School Aid Act for the 2013/14 fiscal year which increased the School District's per pupil foundation allowance to $7,429. Act 60 included a one-time payment to the School District to 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 school districts if they satisfy the 7 out of the 8 "best practices" relating to health and other benefits coverage, competitive bidding for certain vendor services, schools of choice, pupil academic growth monitoring and technology infrastructure to monitor and assess public academic growth, post-secondary academic credit opportunities, online instruction programs or blended learning opportunities, a dashboard/report card of the School District's financial management efforts, and physical or health education. The Board and Administration satisfied such "best practices" requirements and the School District 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 forestry property, supportive housing property, property occupied by a public school academy and industrial personal property. Commercial personal 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, supportive housing 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 increased the School District's per pupil foundation allowance to $7,479. Act 196 also included grant funding equal to $50 per pupil (a $2 decline in the per pupil amount as compared to 2013/14) for school districts if they satisfy 7 out of 9 "best practices" relating to health and other benefits coverage, competitive bidding for certain vendor services, schools of choice, online instruction programs or blended learning opportunities, a dashboard/report card of the School District's financial management efforts, compensation methods for teachers and administrators that significantly factor performance and accomplishments, use of collective bargaining agreements that omit statutorily prohibited subjects of bargaining, implementation of a comprehensive guidance and counseling program, and opportunities for K to 8 pupils to complete coursework or other learning experiences equivalent to 1 credit in a language other than English. The Board and Administration satisfied such "best practices" requirements and the School District has included such grant funding in its 2014/15 General Fund Budget.
THE SOURCES OF THE SCHOOL DISTRICT'S OPERATING REVENUE DO NOT IMPACT THE TAXING AUTHORITY OF THE SCHOOL DISTRICT FOR PAYMENT OF GENERAL OBLIGATION UNLIMITED TAX SCHOOL BONDS AND DO NOT AFFECT THE OBLIGATION OF THE SCHOOL DISTRICT TO LEVY TAXES FOR PAYMENT OF DEBT SERVICE ON GENERAL OBLIGATION UNLIMITED TAX BONDS OF THE SCHOOL DISTRICT, 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 bills amending and replacing legislation enacted in 2012 to phase-out most personal property taxes in Michigan. The bills were contingent on Michigan voters approving a ballot question authorizing a new municipal entity, the Local Community Stabilization Authority ("LCSA"), to levy a local component of the statewide use tax and distribute that revenue to local units 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 personal property tax. Under the "small taxpayer exemption," the commercial and industrial personal property of each owner with a combined true cash value in a local tax collecting unit of less than $80,000 is exempt from ad valorem taxes in that collecting unit beginning in 2014. For businesses that do not qualify for the "small taxpayer exemption," all "eligible manufacturing personal property" (personal property used more than 50% of the time in industrial processing or direct integrated support) purchased and placed into service before 2006 or during or after 2013 becomes exempt beginning in 2016. Taxation on "eligible manufacturing personal property" placed into service after 2006 but before 2013 will be phased-out over time; with the exemption taking effect after the property has been in service for the immediately preceding 10 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 tax exemptions take effect.
Pursuant to voter approval in August 2014, the legislation also includes a formula to reimburse school districts for 100% of their lost operating millage revenue and lost sinking fund millage revenue. To provide the reimbursement, the legislation reduces the state share of the use tax and authorizes the LCSA to levy a local component of the use tax and distribute that revenue to qualifying local units. However, the reimbursement for the school district's operating millage will come from the state use tax component, which is deposited into the school state aid fund.¹ While the legislation provides reimbursement for prospective school operating losses, school districts will only be reimbursed for debt losses attributable to debt obligations that voters approved before January 1, 2013 or were incurred before January 1, 2013. For the 2014-2015 and 2015-2016 fiscal years, the State of Michigan will appropriate sufficient funds to the LCSA to reimburse school districts for such debt losses.
Because the Bonds are associated with debt obligations that received voter approval before January 1, 2013, the School 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 the State 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 receive reimbursement distributions.
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LITIGATION
The School District has not been served with any litigation, administrative action or proceeding, nor, to the knowledge of the School District, is there threatened any litigation restraining or enjoining the issuance or delivery of the Bonds or in any manner questioning the proceedings and authority under which the Bonds are to be issued or affecting 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 the documents described in its opinion, under existing State statutes, regulations and court decisions, the Bonds and the 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.
Federal
In the opinion of Bond Counsel based upon its examination of the documents described in its opinion, under existing statutes, regulations, rulings and court decisions, 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. It should be noted, however, that certain corporations must take into account interest on the Bonds in determining adjusted net current earnings for the purpose of computing the alternative minimum tax imposed on such corporations. The opinions set forth in the preceding sentences are 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 certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. Bond Counsel will express no opinion regarding other federal tax consequences arising with respect to the Bonds.
There are additional federal tax consequences relative to the Bonds and the interest thereon. The following is a general description of some of these consequences but is not intended to be complete or exhaustive and investors should consult with their tax advisors with respect to these matters. Prospective purchasers of the Bonds should be aware that (i) interest on the Bonds is included in the effectively connected earnings and profits of certain foreign corporations for purposes of calculating the branch profits tax imposed by Section 884 of the Code, (ii) interest on the Bonds may be 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 the taxability of social security or railroad retirement benefits, (iv) the receipt of interest on the Bonds by life insurance companies may affect the federal tax liability of such companies, (v) in the case of property and casualty insurance companies, the amount of certain loss deductions otherwise allowed is reduced by a specific percentage of, among other things, interest on the Bonds, (vi) holders of the Bonds may not deduct interest on indebtedness incurred or continued to purchase or carry the Bonds, and (vii) commercial banks, thrift institutions and other financial institutions may not deduct 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 (excluding bondhouses and brokers) at which certain Bonds, as set forth on the cover of this Official Statement, are sold and the amounts payable at maturity thereof (the “Premium Bonds”), constitutes for the original purchasers of the Premium Bonds an amortizable bond premium. Such amortizable bond premium is not deductible from gross income but is taken into account by certain corporations in determining adjusted current earnings for the purpose of computing the alternative minimum tax, which may also affect liability for the branch profits tax imposed by Section 884 of the Code. The amount of amortizable bond premium allocable to each taxable year is generally determined on the basis of a taxpayer’s yield to maturity determined by using the taxpayer’s basis (for purposes of determining loss on sale or exchange) of such Premium Bonds and compounding at the close of each six-month accrual period. The amount of amortizable bond premium allocable to each taxable year is deducted from the taxpayer’s adjusted basis of such Premium Bonds to determine 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 enacted into law, will not contain proposals which could cause the interest on the Bonds to be subject directly or indirectly to federal or state income taxation, adversely affect the market price or marketability of the Bonds, or otherwise prevent bondholders 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 subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights heretofore or hereafter enacted to the extent constitutionally applicable and that their enforcement may also be subject to the exercise of judicial discretion in appropriate cases.
INVESTORS SHOULD CONSULT WITH THEIR TAX ADVISORS AS TO THE TAX CONSEQUENCES OF THEIR ACQUISITION, HOLDING OR DISPOSITION OF THE BONDS, INCLUDING THE TREATMENT OF ORIGINAL 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 that the School District is in material compliance with the criteria of the Revised Municipal Finance Act, Act No. 34, Public Acts of Michigan, 2001 (“Act 34”) for a municipality to be granted “qualified status” to issue municipal securities without 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 annually and 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 other terms 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, generally consistent with the information in the tables under the headings “PROPERTY VALUATIONS - Historical Valuations” “MAJOR TAXPAYERS”, “TAX RATES - Romeo Community Schools”, “STATE AID PAYMENTS”, “TAX LEVIES AND COLLECTIONS”, “LABOR FORCE”, “PENSION FUND”, “DEBT STATEMENT - DIRECT DEBT”, “SCHOOL BOND QUALIFICATION AND LOAN PROGRAM”, “SCHOOL ENROLLMENT” and “GENERAL FUND BUDGET SUMMARY” herein.
A failure by the School District to comply with the Agreement will not constitute an event of default under the Resolutions authorizing issuance of the Bonds and holders of the Bonds or Beneficial Owners are limited to the remedies described in the Agreement. A failure by the School District to comply with the Agreement must be reported in accordance with the Rule and must be considered by any broker, dealer or municipal securities dealer before recommending the purchase or sale of the Bonds in the secondary market. Consequently, such failure may adversely affect 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 material respects, with any previous continuing disclosure agreements executed by the School District pursuant to the Rule. While the School District filed its audited financial statements and annual disclosure information timely over the past five years in compliance, in all material respects, with the previous continuing disclosure agreements executed by the School District, the School District filed late material event notices of credit rating changes of its underlying rating, the rating on its bonds qualified for the State School Bond Qualification and Loan Program and ratings affecting the bond insurer for certain prior bond issues of the School District. To the best of the School District’s knowledge, the School District did not receive notification from bond insurers or the rating agencies of the rating changes for the bond insurer or the State School Bond Qualification and Loan Program. The School District has put systems in place to identify and file material 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 with its 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 and tax matters relating to the Bonds and the interest thereon, and except as stated below, Bond Counsel has not been retained to examine or review, and has not examined or reviewed any financial documents, statements or materials that have been or may be furnished in connection with the authorization, issuance or marketing of the Bonds and accordingly will not express any opinion with respect to the accuracy or completeness of any such financial documents, statements or materials.
Bond Counsel has reviewed the statements made in this Official Statement on the cover page and under the heading “Information for Bidders”. insofar as such statements summarize the language and effect of the Resolution, the Bonds, the Continuing Disclosure Agreement, the Constitution of the State of Michigan, the laws of the State of Michigan and federal income tax laws and, further, the statements under such headings are fair and accurate summaries thereof in all material respects. Except as otherwise disclosed on pages herein, Bond Counsel has not been retained to review and has not reviewed any other portion of this Official Statement for accuracy or completeness, and has not made inquiry of any official or employee of the School District or any other person and has made no independent verification of 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 retained by the School District to provide certain financial consultant services including, among other things, preparation of the deemed “final” Preliminary Official Statement and the final Official Statement (the “Official Statements”). The information contained in the Official Statements was prepared in part by the Financial Consultant and is based on information supplied by various officials from records, statements and reports required by various local county or state agencies 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 untrue statement of material fact; and (iii) does not omit any material fact, or make any statement which would be misleading in light of the circumstances under which these statements are being made. However, the Financial Consultant has not and 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 the School District and they have no secondary obligations or other responsibility. The Financial Consultants’s fees are expected to be paid from Bond proceeds.
Further information concerning the Bonds may be secured from Stauder, BARCH & ASSOCIATES, Inc., 3989 Research 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 Bonds based upon the fact that each Bond are expected to be fully qualified for participation in the Michigan School Bond Qualification 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 at the following addresses Moody’s Investors Service, 7 World Trade Center, 250 Greenwich Street, New York, New York 10007.
The aforementioned ratings will reflect the sole view of each rating agency and there is no assurance that such ratings 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 should be 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 smallest degree of investment risk and are generally referred to as ‘gilt edge.’ Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues.
Bonds which are rated ‘Aa’ are judged to be of a high quality by all standards. Together with the ‘Aaa’ group, they comprise what are generally known as high grade Bonds. They are rated lower than the best Bonds because margins of protection may not be as large as in ‘Aaa’ securities or fluctuation of protective elements may be of great amplitude or there may be other elements present which 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 be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment some time in the future.
Bonds which are rated ‘Baa’ are considered as medium grade obligations; i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well.
General Note: Those Bonds in the ‘Aa’, ‘A’, and ‘Baa’ groups which Moody’s believes possess the strongest investment attributes are designated by the symbols ‘Aa1', ‘A1' and ‘Baa1'. Under the expanded rating scale adopted by Moody’s January 7, 1997 the numerical rating modifiers 2 and 3 have been added for long-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 used to currently refund a portion of the Prior Bonds and to establish an escrow fund (the “Escrow Fund”) composed of cash and non-callable direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America or other obligations the principal of and interest on which are fully secured by the foregoing. The Escrow Fund will be held by The Huntington National Bank, Grand Rapids, Michigan as escrow agent (the “Escrow Agent”) and will be used to pay the principal of and interest on the Prior Bonds when due or at call for redemption. The Escrow Fund will be held by the Escrow Agent pursuant to an escrow agreement (the “Escrow Agreement”) which irrevocably directs the Escrow Agent to make the payment of the principal of and interest on the Prior Bonds when due or at call for redemption. The Escrow Fund will be such that the cash and the principal and interest payments received on the investments will be sufficient, without reinvestment, except as may be provided in the Escrow Agreement, to pay the principal of and interest on the Prior Bonds as they become due or are called for earlier redemption, as set forth in the table below.
Principal of and Interest on the Prior Bonds to paid from the Escrow Fund
Date Principal Interest Total 05/01/2015 $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 in the Escrow Fund and used, together with the earnings thereon, to pay the principal of and interest on the Prior Bonds at call for redemption supporting the conclusion of Bond Counsel that the interest on the Bonds is excluded from gross income for federal income tax purposes as indicated under the caption “TAX MATTERS” below, will be verified by Robert Thomas CPA, LLC, Shawnee Mission, Kansas. Such verification of the accuracy of the computations shall be based upon information supplied by the School District’s Financial Advisor and on interpretations of Section 148 of the Internal Revenue Code of 1986, as amended, as provided by Bond Counsel.
ESTIMATED SOURCES AND USES OF FUNDS
Sources of Funds Par Amount of Bonds $14,260,000.00 Original Issue Premium 653,259.85 Contribution from Prior Bonds Debt Retirement Fund 1,332,000.00 Total Sources $16,245,259.85
Uses of Funds Deposit 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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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 28,593 1990 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 the Michigan Constitution, the ad valorem State Equalized Valuation (SEV) represents 50% of true cash value. SEV does not include any value of tax exempt property (e.g. churches, governmental property) or property granted tax abatements under Act 198, Public Acts of Michigan, 1974, as amended. As a result of Proposal A, ad valorem property taxes are assessed on the basis of taxable value, which is subject to assessment caps. SEV is used in the calculation of 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 review by the County Equalization Department.
Historical Valuations*
2014 $1,212,308,686 $349,564,732 $1,561,873,418 $1,719,868,853 2013 1,169,939,316 339,286,189 1,509,225,505 1,616,672,444 2012 1,147,306,351 338,485,393 1,485,791,744 1,555,165,620 2011 1,166,777,670 355,561,396 1,522,339,066 1,608,482,138 2010 1,359,065,058 222,399,848 1,581,464,906 1,882,261,033
* See "MICHIGAN PROPERTY TAX REFORM" herein for information regarding tax changes taking effect in the 2014 and 2016 tax years.
¹ Information included in this Official Statement under the headings “General Financial Information, “General Economic Information,” and “General School Information” was obtained from the School District, unless otherwise noted.
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$ 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 4 Y 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 $1,561,873,418 Plus: 2014 IFT Taxable Valuation* 35,290,331 Total 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 $45,922.60 2014 Per Capita State Equalized Valuation $50,568.02 2014 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 rehabilitation districts and/or industrial development districts may be established. Businesses in these districts are offered certain property tax incentives to encourage restoration or replacement of obsolete facilities and to attract new facilities to the area. An industrial facilities tax (“IFT”) is paid, at a lesser effective rate and in lieu of ad valorem property taxes, on such 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 valorem tax roll. The owner of such facility may obtain a new certificate, provided it has complied with the provisions of Act 198.
The 2014 Taxable Value for the properties which have been granted IFT abatements within the School District’s boundaries is $35,290,331 which is subsequently taxed at half rate. For further information see "PROPERTY VALUATIONS - Historical Valuations" herein.
As part of the phase-out of Michigan's property tax on personal property, if a facility and personal property within that facility were subject to an industrial facilities exemption on December 31, 2011, that exemption will remain intact and continue to be subject to the industrial facilities tax until the expiration of the exemption at which time the eligible personal property associated with the industrial facilities exemption becomes exempt under the new law. See "MICHIGAN PROPERTY TAX REFORM" above.
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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 of Municipality Residence Residence Value Total Macomb 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 24.25 Ray Township 56,664,572 15,623,674 72,288,246 4.63 Shelby Township 38,869,020 25,054,980 63,924,000 4.09 Washington Township 722,655,170 199,306,565 921,961,735 59.03
Oakland County Addison Township 54,984,450 7,364,230 62,348,680 3.99 Oakland 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 of Class Value Total Real Property $1,398,332,612 89.53% Personal Property 163,540,806 10.47 TOTAL $1,561,873,418 100.00%
Use Agricultural $29,807,324 1.91% Commercial 121,186,678 7.76 Industrial 59,531,513 3.81 Residential 1,187,807,097 76.05 Personal Commercial 18,030,702 1.15 Personal Industrial 77,935,264 4.99 Personal Utility 67,574,840 4.33 TOTAL $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 Facilities Tax Valuation totals are as follows:
Taxable IFT Total Taxpayer Product/Service Value + Valuation = Valuation
Ford Motor Company Automotive $43,489,260 $24,216,350 $67,705,610 Washington 10 Storage Utility 35,771,550 0 35,771,550 Detroit Edison Utility 24,208,077 0 24,208,077 Vector Pipeline Utility 10,872,373 0 10,872,373 L & L Products, Inc. Adhesives, sealants 9,943,524 0 9,943,524 International Transmission Utility 8,672,604 0 8,672,604 Romeo Rim, Inc. Mold injections 4,597,903 2,796,453 7,394,356 Semco Utility 5,826,512 0 5,826,512 Consumers Utility 5,670,712 0 5,670,712 Good Will Co Inc /Meijer, Inc. Retail 5,338,430 0 5,338,430 TOTAL $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 Taxable Valuation of $1,561,873,418 and their Total Valuations represent 11.36% of the School District's Total Equivalent Valuation 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 which constitutes a tax district. Since local school districts and the county overlap either a township or a city, and intermediate school districts overlap local school districts and county boundaries, the result is many different tax rate districts.
Romeo Community Schools 2014 2013 2012 2011 2010 Voted 18.0000 18.0000 18.0000 18.0000 18.0000 Sinking Fund 1.2500 1.2500 1.2500 1.2500 1.2500 Debt 4.0500 4.0500 4.2000 4.0000 3.8000
TOTAL PRINCIPAL RESIDENCE 5.3000 5.3000 5.4500 5.2500 5.0500 TOTAL 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 sinking fund and debt millage on all homestead and non-homestead property located within the School District. The School District’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 2013 State Education Tax¹ 6.0000 6.0000 Macomb County - Operating 4.6135 4.5685 Macomb County - Drain 0.0050 0.0050 Macomb County I/S/D 2.9430 2.9430 Macomb Community College 1.5262 1.5262 ¹ 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 foundation allowance. 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 aid fund and the change in the total number of pupils statewide. The State may reduce State School Aid appropriations at any time if the State's revenues do not meet budget expectations. See "SOURCES OF SCHOOL OPERATING REVENUE" herein for additional information.
The following table shows a history and current estimates of the School District's total State School Aid revenues, including categoricals and other amounts, the State Amount Received per Pupil and the Foundation Allowance per Pupil.
State Amount Foundation Received Allowance
Year Total per Pupil per Pupil 2014/15 (February estimate) $39,851,184 $6,279 $7,479 2013/14 39,410,730 6,321 7,429 2012/13 38,296,029 6,267 7,376 2011/12 36,888,383 6,204 7,376 2010/11 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 July 1 of each fiscal year and are payable without interest on or before the following September 14 and without penalty on or before the following February 14. All real property taxes remaining unpaid on March 1st of the year following the levy are turned over to the County Treasurers for collection. Macomb and Oakland Counties (the “Counties”) annually pay from their Tax Payment Funds delinquent taxes on real property to all taxing units in the Counties, including the School 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 Funding Year Tax Levy March 1 of Following Year To June 30 of Following Year 2014 $6,331,766 (In process of collection) N/A 2013 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 99.80 2011 6,347,724 5,900,226 92.95 6,337,970 99.85 2010 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 ability of the Counties to issue such GOLTNs is subject to market conditions at the time of offering. In addition, Act 206, Public Acts of Michigan, 1893, as amended, provides in part that: “The primary obligation to pay to the county the amount of taxes and interest on the taxes shall rest with the local taxing units and the state for the state education tax under the state education tax act... If the delinquent taxes that are due and payable to the county are not received by the county for any reason, the county has full right of recourse against the taxing unit or to the state for the state education tax... to recover the amount of the delinquent taxes and interest...” On the third Tuesday in July in each year, a tax sale is held by the Counties at which lands delinquent for taxes assessed in the third year preceding the sale, or in a prior year, are sold for the 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. For example, 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 organized groups are as follows:
Contract Employees Number Bargaining Unit Expiration Administrators 20 Non-Affiliated 06/30/2015 Teachers 294 MEA 08/31/2015 Clerical 22 MEA 06/30/2015 Teaching Assistants 45 MEA 06/30/2015 Maintenance. 33 AFSCME 08/31/2015 Transportation 36 AFSCME 08/31/2015 Food Service 28 AFSCME 08/31/2015 Child Care 26 AFSCME 06/30/2005 Supervisors 13 Non-Affiliated 06/30/2015 Pupil Service Support ¹ 148 Non-Affiliated n/a TOTAL 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 its employees' wages to the Michigan Public School Employees Retirement System ("MPSERS"), which is administered by the State of Michigan. These contributions are required by law and are calculated by using the contribution rates and periods provided in the table below of the employees' wages. The employer contribution rate for employees who first worked 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 employer contribution rate for all employees except Pension Plus members increased to 19.41%. For Pension Plus members, the employer contribution rate was 17.91%.
On June 28, 2010, the Michigan Court of Claims issued an injunction in response to a challenge to Public Act 25 of 2010 (“Act 25”) which requires employees who began working before July 1, 2010, to make a mandatory contribution of 3% of reportable wages to the retiree health care trust at MPSERS. As a result, the State has adjusted the contribution rate due on employees wages paid between November 1, 2010 and September 30, 2011 to 20.66% for members who first worked prior to July 1, 2010 and 19.16% for Pension Plus members. In March 2011, the Court of Claims granted the plaintiffs' motions for summary disposition finding that the mandatory 3% contribution violated both the U.S. and Michigan Constitutions. The State appealed the ruling to the Michigan Court of Appeals. In August of 2012, the Court of Appeals affirmed the decision of the Court of Claims. The State of Michigan subsequently filed an Application for Leave to Appeal with the Michigan Supreme Court. However, the Michigan Supreme Court has ordered that the Application of Leave to Appeal be held in abeyance pending the decision in the litigation regarding Act 300 discussed below.
On September 4, 2012, the governor signed Public Act 300 of 2012 ("Act 300") to reform MPSERS. The Act makes changes to employee contributions to their pensions and retiree health benefits, shifting the 3% pension contribution to retiree health benefits. Act 300 increases the amount retirees contribute to their health insurance, and employees are required to choose to increase contributions to their pension plan, maintain current contribution rates and freeze existing benefits, or freeze existing pension benefits and move into a defined contribution plan. In addition, the legislation will end retiree health benefits for new hires. On November 29, 2012, the Ingham County Circuit Court, sitting as the Court of Claims, ruled that the substantive provisions of the Act 300 were constitutional except for one particular provision relating to an "election window" for healthcare benefits. The Legislature promptly adopted legislation which was signed into law by the Governor addressing the constitutional concerns of the election window raised by the Court of 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 with the Michigan Supreme Court which was granted on May 21, 2014. Oral arguments before the Supreme Court on this case were held on October 9, 2014, but no decision has been issued to date. The ultimate impact of a decision by the Michigan Supreme 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 four years are shown below.
Contribution Period Contribution Rate Pension Plus Oct. 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 - 26.63 Feb. 1, 2013-Sept. 30, 2013 24.32 - 26.96 25.13 - 26.20 Oct. 1, 2012-Jan. 31, 2013 25.36 24.13 Oct. 1, 2011-Sept. 30, 2012 24.46 23.23 Nov. 1, 2010-Sept. 30, 2011 20.66 19.16
Fiscal Year Ending Contributions to June 30 MPSERS
2015 (estimate) $8,166,750 2014 7,853,132 2013 6,720,931 2012 6,396,071 2011 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 sharing pension plan to record a balance sheet liability for their proportionate share of the net pension liability of the plan. The School District will be required to implement GASB 68 in their year ended June 30, 2015 financial statements. Preliminary unaudited estimates from the State for fiscal year 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 are established by law and funded through employer contributions. The cost of retiree health benefits is funded annually on a pay-as-you-go basis, with retirees paying some of the costs. Current year liability for retiree health benefits is reflected in the figures provided above. Further information regarding MPSERS, including retiree health benefits, can be found at: www.michigan.gov/orsschools.
DEBT STATEMENT (As of February 26, 2015 and including the Bonds described herein)
DIRECT DEBT
Dated Interest Amount Date Purpose Type Spread Maturities Outstanding
05/17/00 Energy LTNQ 5.70% 5/1/15 $235,000 04/11/05 Refunding UTQ 5.00 5/1/15-20 18,540,000 02/20/13 Building & Site Bonds UTQ 1.00 - 2.00 5/1/15-21 10,600,000 02/19/14 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 DEBT Amount District
3.17 Oakland Township 5,000,748 158,524 2.23 Shelby Township 30,855,611 688,080
80.47 Washington Township 6,662,708 5,361,481 100.00 Village of Romeo 5,365,000 5,365,000
5.96 Macomb County 48,459,771 2,888,202 0.19 Oakland County 448,667,894 852,469 5.96 Macomb Community College 15,625,000 931,250
NET OVERLAPPING DEBT $19,918,174 NET DIRECT AND OVERLAPPING DEBT $50,978,174
Source: Municipal Advisory Council of Michigan.
DEBT RATIOS
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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FUTURE FINANCING
The School District does not anticipate additional capital financing in the foreseeable future.
OTHER BORROWING
LEGAL DEBT MARGIN
2014 State Equalized Valuation $1,719,868,853 Debt 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 not exceed 15% of the total assessed valuation of the district. Bonds not included in the computation of the legal debt margin are (1) any bond qualified under Article IX, Section 16 of the Michigan Constitution of 1963, and (2) deficit budget bonds as authorized under Section 1356. In addition, Section 605 of Act 34, Public Acts of Michigan, 2001, as amended, provides, in relevant part, that debt evidenced by a refunding security 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 Bond Qualification 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 and portions 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 Pontiac 32 miles northwest of Detroit 50 miles northeast of Ann Arbor 50 miles southeast of Flint 55 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 Percent Total Population 840,979 100.00% 0 through 19 years 214,625 25.52 20 through 64 years 506,173 60.19 65 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 Percent HOUSEHOLDS 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
EMPLOYMENT CHARACTERISTICS*
The following employers located within the School District’s boundaries and surrounding communities offer employment opportunities.
Approx. No. Employer Product/Service Employed Within the School District (100 or more employed) Ford Motor Company Engines 700 Romeo Community Schools Education 665 L & L Products, Inc. (2 plants) Adhesives 400 Rubber Enterprises, Inc. Headquarters & rubber products 274 Stant USA Corp. Automotive tubing 230 Romeo Rim, Inc. Plastic compressive mold machines 200 Ford Proving Grounds Automotive testing 200 Meijers Retail 200 Target Retail 200 Shelby Enterprises, Inc. Automotive tubing 190 Alco Plastics Inc. Plastics 120 Home Depot Retail 150 K-Mart Retail 135 Link Technologies Wire forms 120 D&N Bending Corp Stamping facility 111 Novak & Associates Corp., J. B. Pretzels & contract packaging 100 ETC, Inc. Plastic injection 100 Kohls Retail 100
Macomb County (725 or more employed) General Motors Auto manufacturer 12,668 Chrysler Group LLC Auto manufacturer 10,406 U.S. Government Federal government 6,671 Ford Motor Company Auto manufacturer 4,135 St. John Providence Health System Health care 3,558 Henry Ford Health System Health care 3,328 Utica Community Schools Education 2,516 Macomb County County government 2,218 General Dynamics Land System Military vehicles 2,079 McLaren Macomb Health care 1,561 Chippewa Valley Schools Education 1,481 Warren Consolidated Schools Education 1,404 State of Michigan State government 1,343 Faurecia North America Auto supplier 1,220 L'Anse Creuse Public Schools Education 1,169 Art Van Furniture Inc. Furniture mfg. 1,016 Macomb Intermediate School District Education 924 U.S. Postal Service Postal service 849 Asset Acceptance Capital Financial management 729 Johnson 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 factors inherent 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 Economic Development 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 County as follows:
Number Percent PERSONS BY OCCUPATION 368,730 100.00% Professional Specialty Occupations 120,977 32.81 Service Occupations 65,615 17.79 Sales & Office Occupations 105,299 28.56 Natural Resources, Construction, and Maintenance Occupations 26,606 7.22 Transportation & Material Moving Occupations 50,233 13.62
The breakdown by industry for persons 16 years and over in Macomb County is as follows:
Number Percent PERSONS BY INDUSTRY 368,730 100.00% Agriculture, Forestry, Fishing, Hunting & Mining 369 0.10 Construction 16,962 4.60 Manufacturing 70,059 19.00 Wholesale Trade 9,587 2.60 Retail Trade 47,935 13.00 Transportation 12,537 3.40 Information 6,268 1.70 Finance, Insurance, & Real Estate 22,861 6.20 Professional & Management Services 35,398 9.60 Educational, Health & Social Services 78,908 21.40 Arts, Entertainment, Recreation and Food Services 34,292 9.30 Other Professional and Related Services 18,068 4.90 Public Administration 15,487 4.20
Source: www.census.gov
UNEMPLOYMENT*
The Michigan Department of Technology, Management & Budget Information, reports unemployment averages for Macomb County as compared to the State of Michigan are as follows:
County of State of Macomb Michigan
2014 Year to Date (December) 6.5% 5.6% 2014 Annual Average 8.0 7.2 2013 Annual Average 9.1 8.8 2012 Annual Average 10.4 9.1 2011 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 reported in the Accuity American Financial Directory, July - December 2014.
Total State-Wide Bank 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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DESCRIPTION
The School District currently operates six elementary schools, two middle schools and two high schools. The School District’s 2014/15 student enrollment is 5,237. A staff of 294 teachers, 20 administrators and 351 support personnel 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 the selection 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 is also responsible for adopting and periodically amending the operating budget and evaluating school programs in accordance 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 Enrollment 2014/15 5,237 2009/10 5,604 2013/14 5,422 2008/09 5,680 2012/13 5,434 2007/08 5,750 2011/12 5,519 2006/07 5,774 2010/11 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 427 First 377 Tenth 424 Second 339 Eleventh 413 Third