POS - Ross Sinclaire and Associates

This Preliminary Official Statement and the information contained herein are subject to completion or amendment. Under no circumstances shall
this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sales of these Bonds in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the laws of any such jurisdiction.
PRELIMINARY OFFICIAL STATEMENT
DATED MARCH 15, 2016
NEW ISSUE
Electronic Bidding via Parity®
NOT Bank Interest Deduction Eligible
BOOK-ENTRY-ONLY SYSTEM
RATING
Moody’s: " "
In the opinion of Bond Counsel, under existing law (i) interest on the Bonds will be excludable from gross income of the holders thereof for purposes of federal taxation and (ii) interest
on the Bonds will not be a specific item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, all subject to the qualifications described herein
under the heading "Tax Exemption." The Bonds and interest thereon are exempt from income taxation and ad valorem taxation by the Commonwealth of Kentucky and political subdivisions thereof
(see "Tax Exemption" herein).
$14,570,000*
WARREN COUNTY SCHOOL DISTRICT FINANCE CORPORATION
SCHOOL BUILDING REVENUE BONDS,
SERIES OF 2016
Dated: April 1, 2016
Due: as shown below
Interest on the Bonds is payable each April 1 and October 1, beginning October 1, 2016. The Bonds will mature as to
principal on April 1, 2017, and each April 1 thereafter as shown below. The Bonds are being issued in Book-Entry-Only Form and
will be available for purchase in principal amounts of $5,000 and integral multiples thereof.
Maturing
April 1
Amount
Interest
Rate
Reoffering
Yield
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
$360,000
$360,000
$365,000
$370,000
$595,000
$605,000
$620,000
$635,000
$655,000
$675,000
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
CUSIP
Maturing
April 1
Amount
Interest
Rate
Reoffering
Yield
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
$695,000
$715,000
$740,000
$920,000
$955,000
$990,000
$1,025,000
$1,060,000
$1,095,000
$1,135,000
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
CUSIP
The Bonds are subject to redemption prior to their stated maturity as described herein.
Notwithstanding the foregoing, the Corporation reserves the right, upon thirty (30) days notice, to call the Bonds in whole
or in part for redemption on any date at par upon the total destruction by fire, lightning, windstorm or other hazard of any of the
building(s) constituting the Project(s) and apply casualty insurance proceeds to such purpose.
The Bonds constitute a limited indebtedness of the Warren County School District Finance Corporation and are payable
from and secured by a pledge of the gross income and revenues derived by leasing the Project on an annual renewable basis to the
Warren County Board of Education.
The Warren County (Kentucky) School District Finance Corporation will until March 22, 2016, at 11:00 A.M., E.D.S.T.,
receive competitive bids for the Bonds at the office of the Executive Director of the Kentucky School Facilities Construction
Commission, 229 West Main Street, Suite 102, Frankfort, Kentucky 40601.
*As set forth in the "Official Terms and Conditions of Bond Sale," the principal amount of Bonds sold to the
successful bidder is subject to a Permitted Adjustment by increasing or decreasing the amount not to exceed $2,915,000.
PURCHASER'S OPTION: The Purchaser of the Bonds, within 24 hours of the sale, may specify to the Financial Advisor
that any Bonds may be combined immediately succeeding sequential maturities into a Term Bond(s), bearing a single rate of interest,
with the maturities set forth above (or as may be adjusted as provided herein) being subject to mandatory redemption in such
maturities for such Term Bond(s).
The Bonds will be delivered utilizing the BOOK-ENTRY-ONLY-SYSTEM administered by The Depository Trust
Company.
The Corporation deems this preliminary Official Statement to be final for purposes of the Securities and Exchange
Commission Rule 15c2-12(b)(1), except for certain information on the cover page hereof which has been omitted in accordance
with such Rule and which will be supplied with the final Official Statement.
WARREN COUNTY, KENTUCKY
BOARD OF EDUCATION
Kerry Young, Chairman
Amy Duvall, Member
Don Basham, Member
Garry Chaffin, Member
Becky Evans, Member
Rob Clayton, Superintendent/Secretary
WARREN COUNTY SCHOOL DISTRICT
FINANCE CORPORATION
Kerry Young, President
Amy Duvall, Member
Don Basham, Member
Garry Chaffin, Member
Becky Evans, Member
Rob Clayton, Secretary
Chris McIntyre, Treasurer
BOND COUNSEL
Steptoe & Johnson PLLC
Louisville, Kentucky
FINANCIAL ADVISOR
Ross, Sinclaire & Associates, LLC
Lexington, Kentucky
PAYING AGENT AND REGISTRAR
The Huntington National Bank
Cincinnati, Ohio
BOOK-ENTRY-ONLY-SYSTEM
i
REGARDING USE OF THIS OFFICIAL STATEMENT
This Official Statement does not constitute an offering of any security other than the original offering of
the Warren County School District Finance Corporation School Building Revenue Bonds, Series of 2016, identified
on the cover page hereof. No person has been authorized by the Corporation or the Board to give any information
or to make any representation other than that contained in the Official Statement, and if given or made such other
information or representation must not be relied upon as having been given or authorized. This Official Statement
does not constitute an offer to sell or the solicitation of an offer to buy, and there shall not be any sale of the Bonds
by any person in any jurisdiction in which it is unlawful to make such offer, solicitation or sale.
The information and expressions of opinion herein are subject to change without notice, and neither the
delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any
implication that there has been no change in the affairs of the Corporation or the Board since the date hereof.
Neither the Securities and Exchange Commission nor any other federal, state or other governmental entity
or agency, except the Corporation will pass upon the accuracy or adequacy of this Official Statement or approve the
Bonds for sale.
The Official Statement includes the front cover page immediately preceding this page and all Appendices
hereto.
ii
TABLE OF CONTENTS
Page
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Book-Entry-Only System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Kentucky School Facilities Construction Commission;
No Participation in this Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Biennial Budget For Period Ending June 30, 2016 . . . . . . . . . . . . . . . . . . . . . . . 4
Outstanding Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
The Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Registration, Payment and Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
The Lease; Pledge of Rental Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
State Intercept . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
The Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Additional Parity Bonds for Completion of Project . . . . . . . . . . . . . . . . . . . . . . . 7
Estimated Bond Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Estimated Use of Bond Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
District Student Population . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
State Support of Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Support Education Excellence in Kentucky (SEEK) . . . . . . . . . . . . . . . . . . . 8
Capital Outlay Allotment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Facilities Support Program of Kentucky . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Local Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Homestead Exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Limitation on Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Local Thirty Cents Minimum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Additional 15% Not Subject to Recall . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Assessment Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Special Voted and Other Local Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Local Tax Rates, Property Assessments,
and Revenue Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Overlapping Bond Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SEEK Allotment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
State Budgeting Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Potential Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Continuing Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Tax Exemption; Not Bank Qualified . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Original Issue Premium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Original Issue Discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Absence of Material Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Approval of Legality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
No Legal Opinion Expressed as to Certain Matters . . . . . . . . . . . . . . . . . . . . . . 16
Bond Rating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Approval of Official Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Demographic and Economic Data . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX A
Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX B
Continuing Disclosure Agreement . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX C
Official Terms & Conditions of Bond Sale . . . . . . . . . . . . . . . . . . APPENDIX D
Official Bid Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX E
iii
OFFICIAL STATEMENT
Relating to the Issuance of
$14,570,000*
WARREN COUNTY SCHOOL DISTRICT FINANCE CORPORATION
SCHOOL BUILDING REVENUE BONDS,
SERIES OF 2016
* Subject to Permitted Adjustment
INTRODUCTION
The purpose of this Official Statement, which includes the cover page and Appendices hereto, is to set
forth certain information pertaining to the Warren County School District Finance Corporation (the "Corporation")
School Building Revenue Bonds, Series of 2016 (the "Bonds").
The Bonds are being issued to finance Phase II renovations at Warren East High School (the "Project").
The Bonds are revenue bonds and constitute a limited indebtedness of the Corporation. The Bonds will
be secured by a pledge of the rental income derived by the Corporation from leasing the Project to the Warren
County Board of Education (the "Board") on a year to year basis (see "Security" herein).
All financial and other information presented in this Official Statement has been provided by the Warren
County Board of Education from its records, except for information expressly attributed to other sources. The
presentation of financial and other information is not intended, unless specifically stated, to indicate future or
continuing trends in the financial position or other affairs of the Board. No representation is made that past
experience, as is shown by financial and other information, will necessarily continue or be repeated in the future.
This Official Statement should be considered in its entirety, and no one subject discussed should be
considered more or less important than any other by reason of its location in the text. Reference should be made
to laws, reports or other documents referred to in this Official Statement for more complete information regarding
their contents.
Copies of the Bond Resolution authorizing the issuance of the Bonds and the Lease Agreement dated
April 1, 2016, may be obtained at the office of Steptoe & Johnson PLLC, Bond Counsel, 700 N. Hurstbourne
Parkway, Ste. 115, Louisville, Kentucky 40222.
BOOK-ENTRY-ONLY-SYSTEM
The Bonds shall utilize the Book-Entry-Only System administered by The Depository Trust Company
(“DTC”).
The following information about the Book-Entry only system applicable to the Bonds has been supplied
by DTC. Neither the Corporation nor the Paying Agent and Registrar makes any representations, warranties or
guarantees with respect to its accuracy or completeness.
DTC will act as securities depository for the Bonds. 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.
DTC, the world's largest depository, is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member 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
1
1934. DTC holds and provides asset servicing for over 2 million issues of U.S. and non-U.S. equity issues,
corporate and municipal debt issues, and money market instruments from over 85 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, in turn, is owned by a number of Direct Participants
of DTC and Members of the National Securities Clearing Corporation, Government Securities Clearing
Corporation, MBS Clearing Corporation, and Emerging Markets Clearing Corporation, (NSCC, GSCC, MBSCC,
and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock
Exchange LLC, and the National Association of Securities Dealers, Inc. 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 Bonds under the DTC system must be made by or through Direct Participants, which will
receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners
will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to
receive written confirmations providing details of the transaction, as well as periodic statements of their holdings,
from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers
of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect
Participants acting on behalf of Beneficial Owners.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in
the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized
representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such
other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual
Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose
accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect
Participants will remain responsible for keeping 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 Bonds may wish to take certain steps to augment the transmission to them of notices
of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments
to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding
the Bonds 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 Paying Agent and 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 Bonds are being redeemed, DTC's practice
is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds
unless authorized by a Direct Participant in accordance with DTC's Procedures. Under its usual procedures, DTC
mails an Omnibus Proxy to the Corporation 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 Bonds are credited on the
record date (identified in a listing attached to the Omnibus Proxy).
Redemption proceeds, distributions, and interest payments on the Bonds will be made to Cede & Co., or
such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct
Participants' accounts upon DTC's receipt of funds and corresponding detail information from the Corporation or
the Paying Agent and Registrar, on payable date in accordance with their respective holdings shown on DTC's
records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary
practices, as is the case with Bonds held for the accounts of customers in bearer form or registered in "street name"
and will be the responsibility of such Participant and not of DTC or its nominee, the Paying Agent and Registrar
or the Corporation, subject to any statutory or regulatory requirements as may be in effect from time to time.
Payment of redemption proceeds, distributions, and interest payments to Cede & Co. (or such other nominee as
may be requested by an authorized representative of DTC) is the responsibility of the Corporation or the Paying
2
Agent and Registrar, disbursement of such payments to Direct Participants will be the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect
Participants.
DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving
reasonable notice the Corporation or the Paying Agent and Registrar. Under such circumstances, in the event that
a successor depository is not obtained, Bond certificates are required to be printed and delivered. The Corporation
may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities
depository). In that event, Bond certificates will be printed and delivered.
The information in this section concerning DTC and DTC's Book-Entry system has been obtained from
sources that the Corporation believes to be reliable but the Corporation takes no responsibility for the accuracy
thereof.
THE CORPORATION
The Corporation has been formed in accordance with the provisions of Sections 162.120 through 162.300
and Section 162.385 of the Kentucky Revised Statutes ("KRS"), and KRS Chapter 273 and KRS 58.180, as a
non-profit, non-stock corporation for the purpose of financing necessary school building facilities for and on behalf
of the Board. Under the provisions of existing Kentucky law, the Corporation is permitted to act as an agency and
instrumentality of the Board for financing purposes and the legality of the financing plan to be implemented by
the Board herein referred to has been upheld by the Kentucky Court of Appeals (Supreme Court) in the case of
White v. City of Middlesboro, Ky. 414 S.W.2d 569.
Any bonds, notes or other indebtedness issued or contracted by the Corporation shall, prior to the issuance
or incurrence thereon, be specifically approved by the Board. The members of the Board of Directors of the
Corporation are the members of the Board. Their terms expire when they cease to hold the office and any
successor members of the Board are automatically members of the Corporation upon assuming their public offices.
KENTUCKY SCHOOL FACILITIES CONSTRUCTION COMMISSION;
NO PARTICIPATION IN THIS ISSUE
The Commission is an independent corporate agency and instrumentality of the Commonwealth of
Kentucky established pursuant to the provisions of Sections 157.611 through 157.640 of the Kentucky Revised
Statutes, as repealed, amended, and reenacted (the "Act") for the purpose of assisting local school districts in
meeting the school construction needs of the Commonwealth in a manner which will ensure an equitable
distribution of funds based upon unmet need.
The Extraordinary Session of the General Assembly of the Commonwealth adopted the State's Budget
for the biennium ending June 30, 2016. Inter alia, the Budget provides $99,334,000 in FY 2014-15 and
$108,270,000 in FY 2015-16 to pay debt service on existing and future bond issues; $100,000,000 of the
Commission's previous Offers of Assistance made during the last biennium; and authorizes $100,000,000 in
additional Offers of Assistance for the current biennium to be funded in the Budget for the biennium ending June
30, 2018.
The 1986, 1988, 1990, 1992, 1994, 1996, 1998, 2000, 2003, 2005, 2006, 2008, 2010, 2012 and 2014
Regular Sessions of the Kentucky General Assembly appropriated funds to be used for debt service of participating
school districts. The appropriations for each biennium are shown in the following table:
3
Biennium
1986-88
1988-90
1990-92
1992-94
1994-96
1996-98
1998-00
2000-02
2002-04
2004-06
2006-08
2008-10
2010-12
2012-14
2014-16
Total
Appropriation
$18,223,200
14,050,700
13,542,800
3,075,300
2,800,000
4,996,000
12,141,500
8,100,000
9,500,000
14,000,000
9,000,000
10,968,000
12,656,200
8,469,200
8,764,000
$150,286,900
In addition to the appropriations for new financings as shown, appropriations subsequent to that for 1986
included additional funds to continue to meet the annual debt requirements for all bond issues involving
Commission participation issued in prior years.
BIENNIAL BUDGET FOR PERIOD ENDING JUNE 30, 2016
The Kentucky General Assembly, during its Regular Session, adopted a budget for the biennium ending
June 30, 2016 which was approved and signed by the Governor. Such budget is effective beginning July 1, 2014.
OUTSTANDING BONDS
The following table shows the outstanding Bonds of the Board by the original principal amount of each
issue, the current principal outstanding, the amount of the original principal scheduled to be paid with the
corresponding interest thereon by the Board or the School Facilities Construction Commission, the approximate
interest range; and, the final maturity date of the Bonds:
Bond
Series
Original
Principal
Current
Principal
Outstanding
Principal
Assigned to
Board
Principal
Assigned to
Commission
Approximate
Interest Rate
Range
Final
Maturity
2005-REF
2008
2009-QZAB
2010-REF
2011-REF
2012
2012-REF
2014A-REF
2014B-REF
2015
2015A-REF
2015B-REF
2016-REF
$15,120,000
$57,290,000
$6,096,000
$4,300,000
$5,870,000
$4,265,000
$5,080,000
$6,390,000
$27,080,000
$18,465,000
$6,235,000
$12,235,000
$35,855,000
$4,660,000
$8,100,000
$4,141,000
$1,685,000
$3,920,000
$4,130,000
$4,125,000
$5,300,000
$25,520,000
$18,465,000
$6,130,000
$12,000,000
$35,855,000
$14,454,457
$56,510,522
$6,096,000
$4,022,638
$5,539,242
$4,265,000
$5,080,000
$6,390,000
$25,786,077
$18,465,000
$5,952,298
$10,116,084
$35,344,383
$665,543
$779,478
$0
$277,362
$330,758
$0
$0
$0
$1,293,923
$0
$282,702
$2,118,916
$510,617
4.000%
3.6250% - 4.000%
2.090%
2.500% - 3.125%
2.000% - 2.625%
1.100% - 2.500%
1.000% - 1.750%
2.000% - 3.000%
2.000% - 3.500%
2.000% - 3.500%
2.000% - 3.000%
2.000% - 3.125%
0.050% - 3.000%
2019
2018
2025
2019
2022
2032
2023
2024
2029
2035
2026
2030
2028
TOTALS:
$204,281,000
$134,031,000
$198,021,701
$6,259,299
4
AUTHORITY
The Board of Directors of the Corporation has adopted a Bond Resolution which authorized among other
things:
i)
the issuance of approximately $14,570,000 of Bonds subject to a permitted adjustment of
$2,915,000;
ii)
the advertisement for the public sale of the Bonds;
iii)
the Official Terms and Conditions for the sale of the Bonds to the successful bidder; and,
iv)
the President and Secretary of the Corporation to execute certain documents relative to the sale
and delivery of the Bonds.
THE BONDS
General
The Bonds will be dated April 1, 2016, will bear interest from that date as described herein, payable
semi-annually on April 1 and October 1 of each year, commencing October 1, 2016 and will mature as to principal
on April 1, 2017 and each April 1 thereafter in the years and in the principal amounts as set forth on the cover page
of this Official Statement.
Registration, Payment and Transfer
The Bonds are to be issued in fully-registered form (both principal and interest). The Huntington National
Bank, Cincinnati, Ohio, the Bond Registrar and Paying Agent, shall remit interest on each semiannual due date
to Cede & Co., as the nominee of The Depository Trust Company. Please see Book-Entry-Only-System. Interest
on the Bonds will be paid at rates to be established upon the basis of competitive bidding as hereinafter set forth,
such interest to be payable on April 1 and October 1 of each year, beginning October 1, 2016 (Record Date is 15th
day of month preceding interest due date).
Redemption
The Bonds maturing on or after April 1, 2027 are subject to redemption at the option of the Corporation
prior to their stated maturity on any date falling on or after April 1, 2026, in any order of maturities (less than all
of a single maturity to be selected by lot),in whole or in part, upon notice of such prior redemption being given by
the Paying Agent in accordance with DTC requirements not less than thirty (30) days prior to the date of
redemption, upon terms of the face amount, plus accrued interest, but without redemption premium.
Redemption Date
April 1, 2026 and thereafter
Redemption
Price
100%
Notwithstanding the foregoing, the Corporation reserves the right, upon thirty (30) days notice, to call the
Bonds in whole or in part for redemption on any day at par upon the total destruction by fire, lightning, windstorm
or other hazard of any of the building(s) constituting the Project(s) and apply casualty insurance proceeds to such
purpose.
SECURITY
General
The Bonds are revenue bonds and constitute a limited indebtedness of the Corporation. The Bonds are
payable as to both principal and interest solely from the income and revenues derived from the leasing of the
Projects financed from the Bond proceeds from the Corporation to the Board. The Bonds are secured by pledges
5
of revenues on and from the sites of the Projects; provided, however, that the pledges securing the Bonds are
inferior and subordinate to the pledges securing the Corporation’s outstanding School Building Revenue Bonds
previously issued to improve or refinance the Project (the “Prior Lien Bonds”) but rank on the basis of parity with
the Corporation's School Building Revenue Bonds, Series of 2015, dated April 1, 2015 (the "Parity Bonds").
The Lease; Pledge of Rental Revenues
The Board has leased the school Projects securing the Bonds for an initial period from April 1, 2016
through June 30, 2016 with the option in the Board to renew said Lease from year to year for one year at a time,
at annual rentals, sufficient in each year to enable the Corporation to pay, solely from the rental due under the
Lease, the principal and interest on all of the Bonds as same become due. The Lease provides further that so long
as the Board exercises its annual renewal options, its rentals will be payable according to the terms and provisions
of the Lease until April 1, 2036, the final maturity date of the Bonds. Under the lease, the Corporation has pledged
the rental revenue to the payment of the Bonds.
STATE INTERCEPT
Under the terms of the Lease and any renewal thereof, so long as the Bonds remain outstanding and in
conformance with the intent and purpose of KRS 157.627(5) and KRS 160.160(5), in the event of a failure by the
Board to pay the rentals due under the Lease, and unless sufficient funds have been transmitted to the Paying
Agent, or will be so transmitted, for paying said rentals when due, the Board has granted under the terms of the
Lease and Participation Agreement to the Corporation the right to notify and request the Kentucky Department
of Education to withhold from the Board a sufficient portion of any undisbursed funds then held, set aside, or
allocated to the Board and to request said Department or Commissioner of Education to transfer the required
amount thereof to the Paying Agent for the payment of such rentals.
THE PROJECT
After payment of the Bond issuance costs, the Board plans to deposit the net Bond proceeds to finance
Phase II renovations at Warren East High School (the "Project").
The Board has reported construction bids have been let for the Projects and approval of the Kentucky
Department of Education, Buildings and Grounds, to award the construction contract is expected prior to the sale
and delivery of the Bonds.
Contractors for the Projects are required to furnish to the Board a one hundred percent completion bond
to assure their performance of the construction contract.
ADDITIONAL PARITY BONDS FOR COMPLETION OF PROJECT
The Corporation has reserved the right and privilege of issuing additional bonds from time to time payable
from the income and revenues of said lands and school building Projects and secured by the same pledges of
revenues, but only if and to the extent the issuance of such additional parity bonds may be necessary to pay the
costs, for which funds are not otherwise available, of completing the construction of said school building Projects
in accordance with the plans and specifications of the architect in charge of said Projects, which plans have been
completed, approved by the Board, Commissioner of Education, and filed in the office of the Secretary of the
Corporation.
6
ESTIMATED BOND DEBT SERVICE
The following table shows by fiscal year the current bond payments of the Board. The plan of financing
provides for the Board to pay 100% of the debt service of the Bonds.
Fiscal
Year
Ending
June 30
Current
Local
Bond
Payments
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
$12,986,293
$12,737,379
$12,728,821
$12,730,912
$12,725,565
$11,822,990
$11,649,796
$11,077,548
$10,696,841
$10,698,561
$10,005,517
$9,038,929
$9,038,456
$5,013,385
$2,668,772
$2,675,568
$1,884,238
$1,886,888
$1,562,300
$1,568,025
TOTALS:
$165,196,783
Series 2016 Refunding Revenue Bonds
Principal
Portion
Interest
Portion
Total
Payment
Total
Local
Bond
Payments
$360,000
$360,000
$365,000
$370,000
$595,000
$605,000
$620,000
$635,000
$655,000
$675,000
$695,000
$715,000
$740,000
$920,000
$955,000
$990,000
$1,025,000
$1,060,000
$1,095,000
$1,135,000
$439,820
$436,220
$431,720
$426,245
$419,770
$407,870
$394,258
$378,758
$361,295
$341,645
$321,395
$299,155
$275,918
$251,868
$219,668
$186,243
$151,593
$115,718
$78,618
$40,293
$799,820
$796,220
$796,720
$796,245
$1,014,770
$1,012,870
$1,014,258
$1,013,758
$1,016,295
$1,016,645
$1,016,395
$1,014,155
$1,015,918
$1,171,868
$1,174,668
$1,176,243
$1,176,593
$1,175,718
$1,173,618
$1,175,293
$12,986,293
$13,537,199
$13,525,041
$13,527,632
$13,521,810
$12,837,760
$12,662,666
$12,091,805
$11,710,598
$11,714,856
$11,022,162
$10,055,324
$10,052,611
$6,029,303
$3,840,640
$3,850,235
$3,060,480
$3,063,480
$2,738,018
$2,741,643
$1,175,293
$14,570,000
$5,978,065
$20,548,065
$185,744,848
Note: Numbers are rounded to the nearest $1.00. Estimated Net Interest Cost of 3.29%%
ESTIMATED USE OF BOND PROCEEDS
The table below shows the estimated sources of funds and uses of proceeds of the Bonds, other than any
portions thereof representing accrued interest:
Sources:
Par Amount of Bonds
$14,570,000.00
Total Sources
$14,570,000.00
Uses:
Deposit to Construction Fund
Underwriter's Discount (2%)
Cost of Issuance
Total Uses
$14,181,820.00
291,400.00
96,780.00
$14,570,000.00
7
DISTRICT STUDENT POPULATION
Selected school census and average daily attendance for the Warren County School District is as follows:
Year
Average Daily
Attendance
Year
Average Daily
Attendance
1989-90
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
8,872.0
9,117.4
9,073.4
9,200.4
9,289.1
9,390.6
9,425.6
9,542.9
9,509.5
9,575.9
9,666.0
9,811.0
9,954.7
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
10,068.7
10,082.6
10,355.6
10,789.9
10,987.7
11,491.0
11,747.5
11,811.9
12,470.0
12,486.5
12,765.1
12,738.6
13,182.5
Source: Kentucky State Department of Education.
STATE SUPPORT
Support Education Excellence in Kentucky (SEEK). In determining the cost of the program to Support
Education Excellence in Kentucky (SEEK), the statewide guaranteed base funding level is computed by dividing
the amount appropriated by the prior year's statewide average daily attendance. The SEEK fund is a guaranteed
amount of money per pupil in each school district of Kentucky. The current SEEK allotment is $3,866 per pupil.
The $100 capital outlay allotment per each average daily attendance is included within the guaranteed amounts.
Each district's base funding from the SEEK program is adjusted for the number of at-risk students, the number and
types of exceptional children in the district, and cost of transporting students from and to school in the district.
Capital Outlay Allotment. The per pupil capital outlay allotment for each district from the public school
fund and from local sources shall be kept in a separate account and may be used by the district only for capital
outlay projects approved by the State Department of Education. These funds shall be used for the following capital
outlay purposes:
a.
b.
c.
d.
e.
For direct payment of construction costs.
For debt service on voted and funding bonds.
For payment or lease-rental agreements under which the board will eventually acquire ownership
of the school plant.
For retirement of any deficit resulting from over-expenditure for capital construction, if such
deficit resulted from certain declared emergencies.
As a reserve fund for the above named purposes, to be carried forward in ensuing budgets.
The allotment for each school board of education in the Commonwealth for fiscal year 1978-79 was
$1,800 per classroom unit. The 1979 Session of the Kentucky General Assembly approved increases in this
allotment in 1979-80 to $1,900 per classroom unit. This rate remained unchanged in 1980-81. The 1981 Session
of the Kentucky General Assembly decreased the allotment per classroom to $1,800 and this allotment rate did
not change from the 1981-82 rate, until the 1990-91 school year. Beginning with 1990-91, the Capital Outlay
allotment for each district is based on $100 per average daily attendance.
The following table shows the computation of the capital outlay allotment for the Warren County School
District for certain preceding school years. Beginning 1990-91, the allotment is based on average daily attendance
as required by law.
8
Year
Capital
Outlay
Allotment
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
911,740.0
907,340.0
920,040.0
928,910.0
939,060.0
942,560.0
954,290.0
950,950.0
957,590.0
966,600.0
981,100.0
995,470.0
1,006,870.0
Year
Capital
Outlay
Allotment
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
1,008,260.0
1,035,560.0
1,078,990.0
1,098,770.0
1,149,100.0
1,174,750.0
1,181,194.0
1,246,995.0
1,248,653.0
1,276,508.0
1,273,857.0
1,318,254.0
If the school district has no capital outlay needs, upon approval from the State, the funds can be used for
school plant maintenance, repair, insurance on buildings, replacement of equipment, purchase of school buses and
purchase of modern technological equipment for educational purposes. If any district has a special levy for capital
outlay or debt service that is equal to the capital outlay allotment or a proportionate fraction thereof, and spends
the proceeds of the levy for eligible purposes, the State may authorize the district to use all or a proportionate
fraction of its capital outlay allotment for current expenses (school districts which use capital outlay allotments
to meet current expenses are not eligible to participate in the School Facilities Construction Commission funds).
Facilities Support Program of Kentucky. School districts may be eligible to participate in the Facilities
Support Program of Kentucky (FSPK), subject to the following requirements:
1)
The district must have unmet needs as set forth and approved by the State Department of
Education in a School Facilities Plan;
2)
The district must commit to establish an equivalent tax rate of at least 5 cents, in addition to the
30 cents minimum current equivalent tax rate; and,
3)
The new revenues generated by the 5 cent addition, must be placed in a restricted account for
school building construction bonding.
LOCAL SUPPORT
Homestead Exemption. Section 170 of the Kentucky Constitution was amended at the General Election
held November 2, 1971, to exempt from property taxes $6,500 of value of single unit residential property of
taxpayers 65 years of age or older. The 1972 General Assembly amended KRS Chapter 132 to permit counties
and school districts to adjust their local tax revenues lost through the application of this Homestead Exemption.
The "Single Unit" qualification has been enlarged to subsequent sessions of the General Assembly to provide that
such exemption shall apply to such property maintained as the permanent resident of the owner and the dollar
amount has been construed to mean $6,500 in terms of the purchasing power of the dollar in 1972. Every two years
thereafter, if the cost of living index of the U.S. Department of Labor has changed as much as 1%, the maximum
exemption shall be adjusted accordingly. Under the cost of living formula, the maximum was increased to $36,900
effective January 1, 2015.
Limitation on Taxation. The 1979 Special Session of the Kentucky General Assembly enacted House
Bill 44 which provides that no school district may levy a general tax rate, voted general tax rate, or voted building
tax rate which would generate revenues that exceeds the previous years revenues by four percent (4%).
The 1990 Regular Session of the Kentucky General Assembly in enacting the "School Reform" legislative
package amended the provisions of KRS 160.470 which prohibited school districts from levying ad valorem
property taxes which would generate revenues in excess of 4% of the previous year's revenues without said levy
9
subject to recall to permit exceptions to the referendum under (1) KRS 160.470(12) [a new section of the statute]
and (2) an amended KRS 157.440.
Under KRS 160.470(12)(a) for fiscal years beginning July 1, 1990 school districts are required to levy
a "minimum equivalent tax rate" of thirty cents ($.30) for general school purposes. The equivalent tax rate is
defined as the rate which results when the income collected during the prior year from all taxes (including
occupational or utilities) levied by the district for school purposes divided by the total assessed value of property
plus the assessment for motor vehicles certified by the State Revenue Cabinet. Failure to levy the minimum
equivalent rate subjects the board of the district to removal.
The exception provided by KRS 157.440(1)(a) permits school districts to levy an equivalent tax rate as
defined in KRS 160.470(12)(a) which will produce up to 15% of those revenues guaranteed by the program to
support education excellence in Kentucky. Levies permitted by this section of the statute are not subject to public
hearing or recall provisions as set forth in KRS 160.470.
Local Thirty Cents Minimum. Effective for school years beginning after June 30, 1990, the board of
education of each school district shall levy a minimum equivalent tax rate of thirty cents ($0.30) for general school
purposes. If a board fails to comply, its members shall be subject to removal from office for willful neglect of duty.
Additional 15% Not Subject to Recall. Effective with the school year beginning July 1, 1990, each school
district may levy an equivalent tax rate which will produce up to 15% of those revenues guaranteed by the SEEK
program. Effective with the 1990-91 school year, the State will equalize the revenue generated by this levy at one
hundred fifty percent (150%) of the statewide average per pupil equalized assessment. For 1993-94 and thereafter,
this level is set at $225,000. The additional 15% rate levy is not subject to the public hearing or recall provisions.
Assessment Valuation. No later than July 1, 1994, all real property located in the state and subject to local
taxation shall be assessed at one hundred percent (100%) of fair cash value.
Special Voted and Other Local Taxes. Any district may, in addition to other taxes for school purposes,
levy not less than four cents nor more than twenty cents on each one hundred dollars ($100) valuation of property
subject to local taxation, to provide a special fund for the purchase of sites for school buildings and the erection,
major alteration, enlargement, and complete equipping of school buildings. In addition, districts may levy taxes
on tangible and intangible property and on utilities, except generally any amounts of revenues generated above that
provided for by House Bill 44 is subject to voter recall.
10
Local Tax Rates, Property Assessments and Revenue Collections
Tax
Year
Combined
Equivalent
Rate
Total
Property
Assessment
Property
Revenue
Collections
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
54.5
55
54.2
55
59.5
59.5
55.8
55.8
55.4
54.6
55.4
54.6
54.6
60.1
59.9
59.3
59.9
58.1
58.1
57.1
58.2
59.3
60.3
62.5
1,613,272,928
1,692,408,923
1,860,615,080
2,110,192,727
2,399,981,813
2,767,077,774
2,991,936,312
3,163,172,834
3,322,394,747
3,559,675,245
3,803,148,658
3,934,791,360
4,106,256,814
4,359,135,951
4,816,336,342
5,287,427,165
5,764,233,871
6,254,732,283
6,377,613,852
6,543,148,652
6,648,773,027
6,907,042,810
7,184,324,187
7,471,300,746
8,792,337
9,308,249
10,084,534
11,606,060
14,279,892
16,464,113
16,695,005
17,650,504
18,406,067
19,435,827
21,069,444
21,483,961
22,420,162
26,198,407
28,849,855
31,354,443
34,527,761
36,339,995
37,053,936
37,361,379
38,695,859
40,958,764
43,321,475
46,695,630
The remainder of this page intentionally left blank.
11
Overlapping Bond Indebtedness
The following table shows any other overlapping bond indebtedness of the Warren County School District
or other issuing agency within the County as reported by the State Local Debt Officer for the period ending
June 30, 2013.
Issuer
Original
Principal
Amount
Amount
of Bonds
Redeemed
Current
Principal
Outstanding
Warren County
General Obligation
Water Revenue
Court Facility Public Corp.
County Jail Public Corp.
Hospital Revenue
College Project Revenue
Schools Revenue
Home Mortgage Revenue
Public Project Revenue
Housing Facilities Revenue
Economic Development Revenue
$96,614,795
$2,652,000
$52,435,000
$3,235,000
$194,535,000
$75,000,000
$9,970,000
$50,000,000
$22,155,000
$30,900,000
$6,300,000
$18,480,000
$1,108,000
$9,640,000
$2,045,000
$34,595,000
$0
$540,000
$0
$3,415,000
$0
$0
$78,134,795
$1,544,000
$42,795,000
$1,190,000
$159,940,000
$75,000,000
$9,430,000
$50,000,000
$18,740,000
$30,900,000
$6,300,000
City of Bowling Green
General Obligation
Electric Revenue
Public Project Public Corp.
Municipal Improvements Revenue
Water & Sewer Revenue
Refinancing Revenue
Health Care Facility Revenue
Lease Purchase Renewable
Train Depot Renewable
Fire Equipment Renewable
Improvement Project
Residential Special Assessment
Multiple Purposes
$215,463,153
$18,730,000
$12,333,000
$7,280,000
$9,690,000
$4,890,000
$3,000,000
$750,000
$1,000,000
$387,000
$300,000
$301,000
$11,035,000
$33,189,906
$10,365,000
$5,264,000
$5,390,000
$2,595,000
$4,095,000
$0
$728,000
$550,000
$256,263
$85,000
$70,000
$0
$182,273,247
$8,365,000
$7,069,000
$1,890,000
$7,095,000
$795,000
$3,000,000
$22,000
$450,000
$130,737
$215,000
$231,000
$11,035,000
$2,240,000
$188,555,000
$13,280,000
$64,000
$43,480,000
$0
$2,176,000
$145,075,000
$13,280,000
$3,595,000
$3,495,000
$25,890,381
$960,000
$170,000
$9,286,961
$2,635,000
$3,325,000
$16,603,420
$1,066,011,329 $186,372,130
$879,639,199
Special Districts
Bowling Green Ind. Schools
Kentucky Rural Water Finance Corp.
Warren County Downtown Economic
Dev. Authority
Warren County Justice Center Expansion
Warren County Public Library District
Warren County Water District
Totals:
______________
Source: 2013 Kentucky Local Debt Report.
12
SEEK Allotment
The Board has reported the following information as to the SEEK allotment to the District, and as
provided by the State Department of Education. These receipts are compared to the 1989-90 fiscal year funding
prior to enactment of the Kentucky Education Reform Act:
2014-15 SEEK
2013-14 SEEK
2012-13 SEEK
2011-12 SEEK
2010-11 SEEK
2009-10 SEEK
2008-09 SEEK
2007-08 SEEK
2006-07 SEEK
2005-06 SEEK
2004-05 SEEK
2003-04 SEEK
2002-03 SEEK
2001-02 SEEK
2000-01 SEEK
1999-00 SEEK
1998-99 SEEK
1997-98 SEEK
1996-97 SEEK
1995-96 SEEK
1994-95 SEEK
1993-94 SEEK
1992-93 SEEK
1991-92 SEEK
Base
Funding
Local
Tax Effort
Total State &
Local Funding
48,024,632
45,190,059
46,178,062
45,135,872
41,933,599
39,043,399
42,756,332
41,580,910
36,328,007
35,012,445
32,410,958
31,736,459
30,394,877
28,843,541
28,749,096
26,742,715
25,937,388
25,333,713
24,860,475
25,409,129
23,956,930
23,427,569
22,974,722
22,108,951
46,695,630
43,321,475
40,958,764
38,695,859
37,361,379
37,053,936
36,339,995
34,527,761
31,354,443
28,849,855
26,198,407
22,420,162
21,483,961
21,069,444
19,435,827
18,406,067
17,650,504
16,695,005
16,464,113
14,279,892
11,606,060
10,084,534
9,308,249
8,792,337
94,720,262
88,511,534
87,136,826
83,831,731
79,294,978
76,097,335
79,096,327
76,108,671
67,682,450
63,862,300
58,609,365
54,156,621
51,878,838
49,912,985
48,184,923
45,148,782
43,587,892
42,028,718
41,324,588
39,689,021
35,562,990
33,512,103
32,282,971
30,901,288
(1) Support Education Excellence in Kentucky (SEEK) replaces the minimum foundation program and
power equalization funding. Capital Outlay is now computed at $100 per average daily attendance
(ADA). Capital Outlay is included in the SEEK base funding.
(2) The Board established a current equivalent tax rate (CETR) of $0.625 for FY 2014-15. The equivalent
tax rate" is defined as the rate which results when the income from all taxes levied by the district for
school purposes is divided by the total assessed value of property plus the assessment for motor vehicles
certified by the Commonwealth of Kentucky Revenue Cabinet.
State Budgeting Process
i)
Each district board of education is required to prepare a general school budget on forms
prescribed and furnished by the Kentucky Board of Education, showing the amount of money
needed for current expenses, debt service, capital outlay, and other necessary expenses of the
school during the succeeding fiscal year and the estimated amount that will be received from all
sources.
ii)
By September 15 of each year, after the district receives its tax assessment data from the
Department of Revenue and the State Department of Education, 3 copies of the budget are
forwarded to the State Department for approval or disapproval.
iii)
The State Department of Education has adopted a policy of disapproving a school budget if it is
financially unsound or fails to provide for:
13
a)
payment of maturing principal and interest on any outstanding voted school
improvement bonds of the district or payment of rental in connection with any
outstanding school building revenue bonds issued for the benefit of the school district;
or
b)
fails to comply with the law.
POTENTIAL LEGISLATION
No assurance can be given that any future legislation, including amendments to the Code, if enacted into
law, or changes in interpretation of the Code, will not cause interest on the Bonds to be subject, directly or
indirectly, to federal income taxation, or otherwise prevent owners of the Bonds from realizing the full current
benefit of the tax exemption of such interest. In addition, current and future legislative proposals, if enacted into
law, may cause interest on state or local government bonds (whether issued before, on the date of, or after
enactment of such legislation) to be subject, directly or indirectly, to federal income taxation by, for example,
changing the current exclusion or deduction rules to limit the amount of interest on such bonds that may currently
be treated as tax exempt by certain individuals. Prospective purchasers of the Bonds should consult their own
tax advisers regarding any pending or proposed federal tax legislation.
Further, no assurance can be given that the introduction or enactment of any such future legislation, or
any action of the IRS, including but not limited to regulation, ruling, or selection of the Bonds for audit
examination, or the course or result of any IRS examination of the Bonds or obligations which present similar tax
issues, will not affect the market price for the Bonds.
CONTINUING DISCLOSURE
As a result of the Board and issuing agencies acting on behalf of the Board having outstanding at the time
the Bonds referred to herein are offered for public sale municipal securities in excess of $1,000,000, the
Corporation and the Board will enter into a written agreement for the benefit of all parties who may become
Registered or Beneficial Owners of the Bonds whereunder said Corporation and Board will agree to comply with
the provisions of the Municipal Securities Disclosure Rules set forth in Securities and Exchange Commission Rule
15c2-12 by filing annual financial statements and material events notices with the Electronic Municipal Market
Access (EMMA) System maintained by the Municipal Securities Rule Making Board.
The Board and Corporation have been late in making certain required filings under the terms of the
Continuing Disclosure Agreements between the Board and the Corporation executed in connection with previous
bond issues. The Board has filed Material Event Notices indicating its failure to file on a timely basis the
following information:
(1)
An upgrade in Moody's rating of its bonds from "Aa3" to "Aa2" on April 23, 2010;
(2)
A downgrade in Moody's rating of its bonds from "Aa2" to Aa3" on March 30, 2011; and,
(3)
Failure to file Annual Operating Data on a timely basis.
Operating Data for FYs ending June 30, 2009, 2010, 2011, 2012 and 2013 was filed on July 21, 2014.
In the past five years, there have been numerous rating actions reported by Moody's Investors Service,
Standard & Poor's Rating Corporation and Fitch Ratings affecting the municipal bond insurance companies, some
of which had insured bonds previously issued by the Corporation. Due to widespread knowledge of these rating
actions, material event notices were not filed by the Corporation.
The Board has adopted new procedures to assure timely and complete filings in the future with regard to
the Rule in order to provide required financial reports and operating data or notices of material events.
14
Financial information regarding the Board may be obtained from Superintendent, Warren County Board
of Education, 303 Lovers Lane, PO Box 51810, Bowling Green, Kentucky 42103 Telephone 270-781-5150.
TAX EXEMPTION; NOT BANK QUALIFIED
Bond Counsel is of the opinion that:
(A)
The Bonds and the interest thereon are exempt from income and ad valorem taxation by the
Commonwealth of Kentucky and all of its political subdivisions.
(B)
The interest income from the Bonds is excludable from the gross income of the recipient thereof
for Federal income tax purposes under existing law; provided, that the corporate entities noted below are advised
of certain tax consequences as follows:
(1)
In the computation of the corporate minimum tax, earnings and profits may include
otherwise tax-exempt interest on the Bonds; this provision applies to corporations only.
(2)
Property and casualty insurance companies may be denied certain loss reserve deductions
to the extent of otherwise tax-exempt interest on the Bonds.
(C)
As a result of designations and certifications by the Board and the Corporation, indicating the
issuance of more than $10,000,000 of tax-exempt obligations during the calendar year ending December 31, 2016,
the Bonds are NOT "qualified tax-exempt obligations" within the meaning of the Internal Revenue Code of 1986,
as amended.
(D)
The interest income from the Bonds is excludable from the gross income of the recipient thereof
for Federal income tax purposes under existing law for individuals; however, said income must be included in the
calculation of "modified adjusted gross income" in the determination of whether and to what extent Social Security
benefits are subject to Federal income taxation.
The Corporation will provide the purchaser the customary no-litigation certificate, and the final approving
Legal Opinions of Steptoe & Johnson PLLC, Bond Counsel and Special Tax Counsel, Louisville, Kentucky
approving the legality of the Bonds. These opinions will accompany the Bonds when delivered, without expense
to the purchaser.
Original Issue Premium
Certain of the Bonds are being initially offered and sold to the public at a premium (“Acquisition
Premium” from the amounts payable at maturity thereon. "Acquisition Premium" is the excess of the cost of a
bond over the stated redemption price of such bond at maturity or, for bonds that have one or more earlier call
dates, the amount payable at the next earliest call date. The Bonds that bear an interest rate that is higher than the
yield (as shown on the cover page hereof), are being initially offered and sold to the public at an Acquisition
Premium (the "Premium Bonds"). For federal income tax purposes, the amount of Acquisition Premium on each
bond the interest on which is excludable from gross income for federal income tax purposes ("tax-exempt bonds")
must be amortized and will reduce the bondholder's adjusted basis in that bond. However, no amount of amortized
Acquisition Premium on tax-exempt bonds may be deducted in determining bondholder's taxable income for
federal income tax purposes. The amount of any Acquisition Premium paid on the Premium Bonds, or on any of
the Bonds, that must be amortized during any period will be based on the "constant yield" method, using the
original bondholder's basis in such bonds and compounding semiannually. This amount is amortized ratably over
that semiannual period on a daily basis.
Holders of any Bonds, including any Premium Bonds, purchased at an Acquisition Premium should
consult their own tax advisors as to the actual effect of such Acquisition Premium with respect to their own tax
situation and as to the treatment of Acquisition Premium for state tax purposes.
15
Original Issue Discount
Certain of the Bonds (the "Discount Bonds") are being initially offered and sold to the public at a discount
("OID") from the amounts payable at maturity thereon. OID is the excess of the stated redemption price of a bond
at maturity (the face amount) over the "issue price" of such bond. The issue price is the initial offering price to the
public (other than to bond houses, brokers or similar persons acting in the capacity of underwriters or wholesalers)
at which a substantial amount of bonds of the same maturity are sold pursuant to that initial offering. For federal
income tax purposes, OID on each bond will accrue over the term of the bond. The amount accrued will be based
on a single rate of interest, compounded semiannually (the "yield to maturity") and, during each semi-annual
period, the amount will accrue ratably on a daily basis. The OID accrued during the period that an initial purchaser
of a Discount Bond at its issue price owns it is added to the purchaser's tax basis for purposes of determining gain
or loss at the maturity, redemption, sale or other disposition of that Discount Bond. In practical effect, accrued OID
is treated as stated interest, that is, as excludible from gross income for federal income tax purposes.
In addition, original issue discount that accrues in each year to an owner of a Discount Bond is included
in the calculation of the distribution requirements of certain regulated investment companies and may result in
some of the collateral federal income tax consequences discussed above. Consequently, owners of any Discount
Bond should be aware that the accrual of original issue discount in each year may result in an alternative minimum
tax liability, additional distribution requirements or other collateral federal income tax consequences although the
owner of such Discount Bond has not received cash attributable to such original issue discount in such year.
Holders of Discount Bonds should consult their own tax advisors as to the treatment of OID and the tax
consequences of the purchase of such Discount Bonds other than at the issue price during the initial public offering
and as to the treatment of OID for state tax purposes.
ABSENCE OF MATERIAL LITIGATION
There is no controversy or litigation of any nature now pending or threatened (i) restraining or enjoining
the issuance, sale, execution or delivery of the Bonds, or in any way contesting or affecting the validity of the
Bonds or any proceedings of the Board or Corporation taken with respect to the issuance or sale thereof or (ii)
which if successful would have a material adverse effect on the financial condition of the Board.
APPROVAL OF LEGALITY
Legal matters incident to the authorization and issuance of the Bonds are subject to the approving legal
opinion of Steptoe & Johnson PLLC, Bond Counsel. The form of the approving legal opinion of Bond Counsel
will appear on each printed Bond.
NO LEGAL OPINION EXPRESSED AS TO CERTAIN MATTERS
Bond Counsel has reviewed the information contained in the Official Statement describing the Bonds and
the provisions of the Bond Resolution and related proceedings authorizing the Bonds, but Bond Counsel has not
reviewed any of the financial data, computations, tabulations, balance sheets, financial projections, and general
information concerning the Corporation or District, and expresses no opinion thereon, assumes no responsibility
for same and has not undertaken independently to verify any information contained herein.
BOND RATING
As noted on the cover page of this Official Statement, Moody’s Investors Service has given the Bonds
the indicated rating. Such rating reflects only the respective views of such organization. Explanations of the
significance of the rating may be obtained from the rating agency. There can be no assurance that such rating will
be maintained for any given period of time or will not be revised or withdrawn entirely by the rating agency, if in
their judgement circumstances so warrant. Any such downward revision or withdrawal of such rating may have
an adverse effect on the market price of the Bonds.
16
FINANCIAL ADVISOR
Prospective bidders are advised that Ross, Sinclaire & Associates, LLC ("Ross Sinclaire") has been
employed as Financial Advisor in connection with the issuance of the Bonds. Ross Sinclaire's fee for services
rendered with respect to the sale of the Bonds is contingent upon the issuance and delivery thereof. Bidders may
submit a bid for the purchase of the Bonds at the time of the advertised public sale, either individually or as a
member of a syndicate organized to submit a bid for the purchase of the Bonds.
APPROVAL OF OFFICIAL STATEMENT
The Corporation has approved and caused this "Official Statement" to be executed and delivered by its
President. In making this "Official Statement" the Corporation relied upon information furnished to it by the Board
of Education of the Warren County School District and does not assume any responsibility as to the accuracy or
completeness of any of the information in this Official Statement except as to copies of documents denominated
"Official Terms and Conditions" and "Bid Form." The financial information supplied by the Board of Education
is represented by the Board of Education to be correct. The Corporation deems this preliminary Official Statement
to be final for purposes of Securities Exchange Commission Rule 15c2-12(b)(1) as qualified by the cover hereof.
No dealer, broker, salesman, or other person has been authorized by the Corporation, the Warren County
Board of Education or the Financial Advisor to give any information or representations, other than those contained
in this Official Statement, and if given or made, such information or representations must not be relied upon as
having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or the
solicitation of any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation
or sale. Except when otherwise indicated, the information set forth herein has been obtained from the Kentucky
Department of Education and the Warren County School District and is believed to be reliable; however, such
information is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation by
the Financial Advisor or by Counsel. The delivery of this Official Statement at any time does not imply that
information herein is correct as of any time subsequent to the date hereof.
This Official Statement does not, as of its date, contain any untrue statement of a material fact or omit to
state a material fact which should be included herein for the purpose for which the Official Statement is to be used
or which is necessary in order to make the statements contained herein, in the light of the circumstances under
which they were made, not misleading in any material respect.
By /s/
President
By /s/
Secretary
17
APPENDIX A
Warren County School District Finance Corporation
School Building Revenue Bonds
Series of 2016
Demographic and Economic Data
WARREN COUNTY, KENTUCKY
Bowling Green, the county seat of Warren County and a "Hall of Fame" Kentucky Certified City, is the
home of Western Kentucky University. Situated on the banks of the Barren River, Bowling Green is Kentucky's
fifth largest city with a 2013 estimated population of 61,488. The city is located 62 miles northeast of Nashville,
Tennessee; 117miles southwest of Louisville, Kentucky; and 274 miles southeast of St. Louis, Missouri.
Warren County covers a land area of 545 square miles in Kentucky's Pennyroyal Region. Warren County
had a 2013 estimated population of 118,370.
Transportation
Major highways directly serving Bowling Green include Interstate 65, the William H. Natcher Parkway
(a multilane toll road), and U.S. Highways 31W, 68, and 231. Access to the Cumberland Parkway (another
multilane toll road), is 20 miles northeast of Bowling Green via Interstate 65. Access to the Western Kentucky
Parkway is 37 miles northwest of Bowling Green via the William H. Natcher Parkway. Of the thirty-one trucking
companies providing interstate and/or intrastate service to Bowling Green, eight companies maintain local
terminals. CSX Transportation provides mail line rail service to Bowling Green. The Bowling Green-Warren
County Airport maintains two paved runways; 6,500 and 4,000 feet in length. The nearest scheduled commercial
airline service is available at the Nashville International Airport near Nashville, Tennessee, 68 miles southwest
of Bowling Green.
Power and Fuel
Electric power is provided to Bowling Green and a portion of Warren County by Bowling Green
Municipal Utilities. Warren County is also provided electric power by the Warren Rural Electric Cooperative
Corporation. Both Bowling Green Municipal Utilities and Warren Rural Electric Cooperative are supplied by the
Tennessee Valley Authority. Western Kentucky Gas Company provides natural gas service locally.
The Economic Framework
The total number of Warren County residents employed in 2013 averaged 58,888. Manufacturing firms
in the county reported 8,513 employees; trade, transportation and utilities provided 9,809 jobs; 24,834 people were
employed in service occupations; public administration accounted for 1,431 employees; contract construction firms
provided 2,423 jobs; 2,127 jobs were reported by financial activities; 645 people were employed in information
services; 123 people were employed in mining and quarrying; and agriculture, forestry and fishing provided 117
jobs.
Labor Supply
There is a current estimated labor supply of 19,514 persons available for industrial jobs in the labor market
area. In addition, from 2014 through 2017, 26,002 young persons in the area will become 18 years of age and
potentially available for industrial jobs.
LABOR MARKET STATISTICS
The Bowling Green Labor Market Area includes Warren County and the adjoining Kentucky counties
of Allen, Barren, Butler, Edmonson, Hart, Logan, Ohio, Simpson and Todd.
Population
2011
Labor Market Area
465,633
Warren County
115,371
Bowling Green
59,511
________________
Source: U.S. Department of Commerce, Bureau of the Census.
(A-1)
2012
2013
470,063
116,929
60,600
475,184
118,370
61,488
Population Projections
2020
2025
2030
Warren County
137,250
148,966
160,772
__________________
Source: Kentucky State Data Center, University of Louisville and Kentucky Cabinet for Economic Development.
LOCAL GOVERNMENT
Structure
Bowling Green is governed by a mayor, four commissioners, and a full-time city manager. The mayor
is elected to a four-year term while the commissioners each serve two-year terms. Warren County is governed by
a county judge/executive and six magistrates. Each county official serves a four-year term.
Planning and Zoning
The City - County Planning Commission of Warren County is charged with the zoning enforcement for
the Warren County area. Participating cities include Bowling Green, Plum Springs, Smith Grove, and Woodburn.
Subdivision regulations are enforced in all areas. Building and housing codes and state codes enforced include
Kentucky Plumbing Code, National Electric Code, Kentucky Boiler Regulations and Standards, Kentucky Building
Code (modeled after BOCA code).
Local Fees and Licenses
The City of Bowling Green levies a 1.85 percent occupational license tax on wages, salaries, and
commissions of individuals and on net profits of businesses within the city. A one time license registration fee
of $50.00 is charged each person engaged in any occupation, trade or profession, or other business activity
conducted for gain or profit in the city.
The Warren County School District levies a 0.5 percent occupational license tax on wages, salaries, and
commissions of individuals employed within the school district and on net profits of businesses within the district.
Non-residents employed within the school district are exempt from this tax.
Property Taxes
The Kentucky Constitution requires the state to tax all classes of taxable property, and state statutes allow
local jurisdictions to tax only a few classes. All locally taxed property is subject to county taxes, and school district
taxes (either a county school district or an independent school district). Property located inside of city limits may
also be subject to city property taxes.
Special local taxing jurisdictions (fire protection districts, watershed districts, and sanitation districts) levy
taxes within their operating areas (usually a small portion of community or county).
Property assessments in Kentucky are at 100% fair cash value. Accounts receivable are taxed at 85% of
face value.
EDUCATION
Primary and Secondary Education
Primary and secondary education is provided by the Bowling Green Independent School System and the
Warren County School System. Both school systems are accredited by the Southern Association of Colleges and
Schools. Western Kentucky University, located in Bowling Green, offers degrees in associate, bachelors, masters,
and specialist degree programs. Draughons Junior College is also located in Bowling Green and offers programs
(A-2)
in seven academic areas. In addition, eleven other colleges and universities are located within 65 miles of Bowling
Green. The Bowling Green Regional Technology Center and the Kentucky Advanced Technology Center, both
located in Bowling Green, and the Allen County Area Technology Center, in Scottsville, and the Russellville Area
Technology Center in Russellville offer vocational training in numerous course areas.
Public Schools
Total Enrollment (2013-2014)
Pupil-Teacher Ratio
Bowling Green Independent
3,946
15.3 - 1
Warren County
13,968
15.7 - 1
Vocational-Technical Training
Kentucky Tech schools are operated by the Cabinet for Workforce Development and provide secondary
(Sec) and post-secondary (P/S) vocational-technical training.
Enrollment
Technical Institutions
Location
(2013-2014)
Warren ATC
Bowling Green, KY
157
Russellville ATC
Russellville, KY
403
Barren County ATC
Glasgow, KY
593
Ohio County ATC
Hartford, KY
422
Monroe County ATC
Tompkinsville, KY
518
Breckinridge County ATC
Harned, KY
521
Green County ATC
Greensburg, KY
383
Allen County AVEC
Scottsville, KY
527
Butler County ATC
Morgantown, KY
236
Grayson County AVEC
Leitchfield, KY
695
Muhlenberg County CTC
Greenville, KY
249
Christian County CTC
Hopkinsville, KY
364
Customized Training
The Kentucky Tech system, through its Training and Development Coordinators, will provide technical
assistance and will identify and develop low-cost customized training programs and services for both established
and prospective businesses. Businesses needing customized training should contact a Training and Development
Coordinator located on the campus of the Bowling Green Regional Technology Center.
Assessment Services
Kentucky Tech Career Connections offers to business, education, and government agencies testing
packages for evaluating job applicants, selecting employees for promotional consideration and developing training
programs with the organization. A Career Connections Assessment Center is located on the campus of the
Bowling Green Regional Technology Center.
Adult Education Services
Adult education services are available to adults who want to develop new skills, improve basic skills, or
earn a high school equivalency diploma. In Warren County, adult literacy is provided by the Warren County
Council for Literacy and adult basic education is provided by the Bowling Green Adult Learning Center.
Bluegrass State Skills Corporation
The Bluegrass State Skills Corporation, an independent public corporation created and funded by the
Kentucky General Assembly, provides programs of skills training to meet the needs of business and industry from
entry level to advanced training, and from upgrading present employees to retraining experienced workers.
The Bluegrass State Skills Corporation is a major source for skills training assistance for a new or existing
company. The Corporation works in a partnership with other employment and job training resources and
programs, as well as Kentucky's economic development activities, to package a program customized to meet the
specific needs of a company.
(A-3)
Colleges and Universities
Institution
Western Kentucky University
Southcentral Community & Tech College
Elizabethtown Community & Tech College
Hopkinsville Community College
Location
Bowling Green, KY
Bowling Green, KY
Elizabethtown, KY
Hopkinsville, KY
Enrollment
(Fall 2012)
21,110
5,179
7,586
3,827
FINANCIAL INSTITUTIONS
Institution
Total Assets
Total Deposits
American Bak & Trust Company, Inc.
$260,080,000
$233,609,000
Citizens First Bank, Inc.
$429,948,000
$369,243,000
The Farmers National Bank
$255,416,000
$202,237,000
________________
Source: McFadden American Financial Institutions Directory, January-June 2016 Edition.
EXISTING INDUSTRY
Firm
Bowling Green
AFNI
American Howa Kentucky Inc.
Bando USA Inc.
Bendix Spicer Foundation Brake LLC
Bowling Green Metalforming LLC
Camping World
Country Oven Bakery
Dell Services
Fruit of the Loom
Fruit of the Loom
General Motors Corporation
Holley Performance Products
Kobe Aluminum Automotive Products
Lord Corp
NHK Associated Spring Suspension
Components, Inc.
Scotty's Contracting & Stone LLC
Sun Products Corporation
Trace Die Cast, Inc.
Product
Business solution/ call center
Manufacture dash insulators and headlines for auto
industry
Automotive power transmission & industrial Vbelts
Design, develop, manufacture & distribute products
used in air brake systems for commercial vehicles
Automotive parts
Headquarters
Frozen dough, cakes, iced cakes, parbaked rolls
Office consulting services and accounts receivable
management for the healthcare industry
Headquarters & distribution center
Administrative office
Automobiles
Automotive, marine parts & accessories:
carburetors, fuel injection & transmission
modulators
Aluminum forging plant
Bonded rubber parts-shock, noise, and vibration
control parts for the vehicle & equipment industry
Automotive coil suspension springs, trunk lid
torsion bars, stabilizer links
Asphalt & paving materials
Manufacture detergent and distribution center
Aluminum die castings & secondary specialty
machining
Oakland
Clark Beverage Group
Warehouse/distribution of carbonated beverages
_____________
Sources: Kentucky Cabinet for Economic Development (03/7/2016).
(A-4)
Total
Employment
369
200
190
399
1,064
200
587
170
1100
450
887
253
375
199
295
210
994
540
200
APPENDIX B
Warren County School District Finance Corporation
School Building Revenue Bonds
Series of 2016
Audited Financial Statement ending June 30, 2015
Financial Statements, Supplementary
Information and Reports Required
by the Single Audit Act
2015
Warren County School District
June 30, 2015
WARREN COUNTY SCHOOL DISTRICT
FINANCIAL STATEMENTS
TABLE OF CONTENTS
June 30, 2015
Independent Auditors’ Report ...........................................................................................................................
1
Management’s Discussion and Analysis (Unaudited) ....................................................................................
4
District-Wide Financial Statements
Statement of Net Position ..............................................................................................................................
12
Statement of Activities ....................................................................................................................................
13
Fund Financial Statements
Balance Sheet – Governmental Funds ..........................................................................................................
15
Reconciliation of the Governmental Funds – Balance Sheet to the District-Wide
Statement of Net Position ..............................................................................................................................
16
Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds .................
17
Reconciliation of the Governmental Funds – Statement of Revenues, Expenditures and
Changes in Fund Balances to the District-Wide Statement of Activities .......................................................
19
Statement of Net Position – Proprietary Funds ..............................................................................................
20
Statement of Revenues, Expenses and Changes in Fund Net Position – Proprietary Funds .......................
21
Statement of Cash Flows – Proprietary Funds ..............................................................................................
22
Statement of Fiduciary Net Position – Fiduciary Funds .................................................................................
23
Statement of Changes in Fiduciary Net Position – Fiduciary Funds ..............................................................
24
Notes to Financial Statements ..........................................................................................................................
25
Required Supplementary Information
Budgetary Comparison Schedule for the General Fund .................................................................................
50
Budgetary Comparison Schedule for the Special Revenue Fund ..................................................................
51
Schedule of the District’s Proportionate Share of the Net Pension Liability - CERS ......................................
52
Schedule of the District’s Proportionate Share of the Net Pension Liability - KTRS ......................................
53
Schedule of District Contributions – County Employees Retirement System.................................................
54
Schedule of District Contributions – Kentucky Teachers Retirement System ................................................
55
WARREN COUNTY SCHOOL DISTRICT
FINANCIAL STATEMENTS
TABLE OF CONTENTS
June 30, 2015
Other Supplementary Information
Combining Balance Sheet – Nonmajor Governmental Funds .......................................................................
56
Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor
Governmental Funds.......................................................................................................................................
57
Combining Balance Sheet - Governmental Fund – Capital Project Funds ....................................................
58
Combining Statement of Revenues, Expenditures and Changes in Fund Balance – Governmental
Fund – Capital Project Funds ........................................................................................................................
59
Combining Balance Sheet Governmental Fund – Capital Project Funds – Construction Funds ..................
60
Combining Statement of Revenues, Expenditures and Changes in Fund Balance – Governmental
Fund – Capital Project Funds – Construction Funds .....................................................................................
61
Combining Statement of Receipts, Disbursements and Due to Students School Activity Funds
(Agency Funds) ..............................................................................................................................................
62
Greenwood High School Activity Funds – Schedule of Receipts, Disbursements and Due to Students ......
63
South Warren High School Activity Funds – Schedule of Receipts, Disbursements and Due to Students ..
65
Warren Central High School Activity Funds – Schedule of Receipts, Disbursements and Due to Students .
67
Warren East High School Activity Funds – Schedule of Receipts, Disbursements and Due to Students .....
69
Schedule of Expenditures of Federal Awards .................................................................................................
71
Notes to Schedule of Expenditures and Federal Awards ...............................................................................
73
Reports Required by the Single Audit Act
Independent Auditors’ Report on Internal Control over Financial Reporting and on Compliance
and Other Matters Based on an Audit of Financial Statements Performed in Accordance with
Government Auditing Standards .....................................................................................................................
74
Independent Auditors’ Report on Compliance for Each Major Program
and on Internal Control Over Compliance Required by OMB Circular A-133 ..................................................
76
Schedule of Findings and Questioned Costs ..................................................................................................
78
Schedule of Prior Audit Findings .....................................................................................................................
80
Strothman and Company
Certified PlIblic ACCOllllta/lts alld Advisors
1600 Waterfront Plaza
325 West Main Street
Louisville, KY 40202
5025851600
Independent Auditors' Report
~
~ Strothman+Co
Members of the Board
Warren County School District
Bowling Green, Kentucky
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the Warren County School
District (the "District") as of and for the year ended June 30, 2015, and the related notes to financial
statements, which collectively comprise the District's basic financial statements as listed in the
accompanying table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditors' Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States; and the Kentucky Public School Districts' Audit Contract and
Requirements prescribed by the Kentucky State Committee for School District Audits. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditors' judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditors consider internal control relevant to the District's
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the District's internal control. Accordingly, we express no such opinion. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluating the overall presentation of the financial
statements.
www.strothman .com
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major fund, and
the aggregate remaining fund information of the District as of June 30, 2015, and the respective changes in
financial position and cash flows of its proprietary funds for the year then ended in accordance with
accounting principles generally accepted in the United States of America.
Emphasis of a Matter – Implementation of New GASB Accounting Standard
As discussed in Note R to the financial statements effective July 1, 2014, the District adopted Governmental
Accounting Standards Board Statement No. 68, Accounting and Financial Reporting for Pensions. Our
opinions are not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s
Discussion and Analysis (Unaudited) on pages 4 through 11, the budgetary comparison information on
pages 50 through 51 and the pension liability and contributions information on pages 52 through 55 be
presented to supplement the basic financial statements. Such information, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board, who considers it to be
an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the United States of
America, which consisted of inquires of management about the methods of preparing the information and
comparing the information for consistency with management’s responses to our inquiries, the basic financial
statements, and other knowledge we obtained during our audit of the basic financial statements. We do not
express an opinion or provide any assurance on the information because the limited procedures do not
provide us with sufficient evidence to express an opinion or to provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the District’s basic financial statements. The other supplementary information listed in the table of
contents is presented for purposes of additional analysis and is not a required part of the basic financial
statements. The Schedule of Expenditures of Federal Awards is presented for the purpose of additional
analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local
Governments, and Non-Profit Organizations, and is also not a required part of the basic financial
statements.
The other supplementary information and the Schedule of Expenditures of Federal Awards are the
responsibility of management and were derived from and relate directly to the underlying accounting and
other records used to prepare the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying accounting
and other records used to prepare the basic financial statements or to the basic financial statements
themselves, and other additional procedures in accordance with auditing standards generally accepted in
the United States of America. In our opinion, the other supplementary information and the Schedule of
Expenditures of Federal Awards are fairly stated, in all material respects, in relation to the basic financial
statements as a whole.
-2-
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated November 9,
2015, on our consideration of the District's internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of that report is to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing, and not to provide an opinion on internal control
over financial reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the District's internal control over
financial reporting and compliance.
;~
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Louisville, Kentucky
November 7,2015
-3-
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
WARREN COUNTY SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Year Ended June 30, 2015
The discussion and analysis of Warren County Board of Education’s (the “District”) financial performance provides
an overall review of the District’s financial activities for the fiscal year ending June 30, 2015. The intent of this
discussion and analysis is to review the District’s financial performance as a whole; readers should also review
the notes to the basic financial statements and the financial statements to enhance their understanding of the
District’s financial performance.
The Management’s Discussion and Analysis (“MD&A”) is an element of the reporting model adopted by the
Governmental Accounting Standards Board (“GASB”) in their Statement No. 34, Basic Financial Statements-and
Management’s Discussion and Analysis-for State and Local Government issued in June 1999.
Financial Highlights

In total, net position decreased by $14,114,438. The Net Position of governmental activities decreased
by $11,050,886, while the net position of business-type activity decreased by $3,063,552. While total
assets increased by $19,839,079 due primarily to an increase in cash on hand attributable to an increase
of cash in the Capital Projects Fund (i.e., bond sell) and the General Fund. However, total liabilities
increased significantly as a result of accounts payable within the Capital Projects Fund and the issuance
of bonds to fund the Warren Central High School and Warren East High School renovations.

General revenues accounted for $100,914,135 or 75% of all governmental revenues. Program specific
revenues in the form of operating grants and contributions accounted for $33,206,684 or 25% of total
governmental revenues of $134,120,819.

Governmental Activities: Total assets increased by $19,782,279. “Capital Assets” increased by
$2,425,659. This is a result of renovations, equipment, technology and adjustments to Construction Work
in Progress along with depreciation thereto. “Current and Other Assets” increased by $17,356,620 in
2015. The increase correlates to cash as a result of the property tax rate increase, capital outlay transfer
and bond sell for the Warren Central High School and Warren East High School renovation projects.

The District had $124,366,737 in expenses relating to governmental activities; of which $33,280,954, in
expenses, were offset by program specific charges for services, grants, and contributions. General
revenues (primarily local taxes and the State SEEK allocation), were adequate to provide these
programs.
Using this Annual Financial Report (AFR)
This annual report consists of three parts – management’s discussion and analysis (this part), the basic financial
statements, and the required supplementary information. These statements are organized in a manner so that the
reader can understand the District as a financial whole. The statements then proceed to provide an increasingly
detailed look at specific financial activities.
The Statement of Net Position and Statement of Activities provide information about the activities of the whole
District, presenting both an aggregate view of the District’s finances and a longer-term view of those finances.
Fund financial statements provide the next level of detail. For governmental funds, these statements tell how
services were financed in the short-term as well as what remains for future spending. The fund financial
statements also look at the District’s major funds with all other non-major funds presented in total in one column.
The major funds for the District are the general fund, special revenue fund, and the capital projects fund.
-4-
WARREN COUNTY SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Year Ended June 30, 2015
Reporting on the District as a Whole
One of the most important questions to ask is “how did the District perform financially during fiscal year 2015?”
The Statement of Net Position and the Statement of Activities, which appear first in the District’s financial
statements, report information on the District as a whole and is formatted in such a way that will assist a reader in
answering this question. These statements include all assets and liabilities using the accrual basis of accounting
and economic resources measurement focus, which is similar to the accounting used by most private-sector
companies.
These two statements report the District’s net position and the changes therein. This change in net position is
important because it tells the reader whether, for the District as a whole, the financial position of the District has
improved or diminished. However, the District’s goal is to provide services to our students, not to generate profits
as commercial entities do. One must consider many other non-financial factors, such as the District’s property tax
base, current property tax laws in Kentucky restricting revenue growth (4% maximum growth in revenue), required
educational programs and other factors.
In the Statement of Net Position and the Statements of Activities, the District is divided into two distinct
categories:

Government Activities - Most of the District’s basic services are included here, such as instructional
services (as it relates to elementary, middle and high school educational programs), support services
(guidance, attendance, health services, special needs services, etc.), debt service payments,
extracurricular activities (sports, band, etc.), operation and maintenance of plant, pupil transportation and
other activities.

Business-type Activities - These services are provided on a charge for goods or services basis to
recover all of the expenses of the goods provided. The District’s business-type activities are the food
service and day care operations.
Reporting the District’s Most Significant Funds
Fund Financial Statements
The analysis of the District’s major funds begins on page 14. Fund financial reports provide detailed information
about the District’s major funds. The District uses many funds to account for a multitude of financial transactions.
However, these fund financial statements focus on the District’s major funds.
Governmental Funds - Most of the District’s activities are reported in governmental funds, which focus on how
money flows into and out of those funds and the balances left at year-end that are available for spending in future
periods. These funds are reported using the accrual method of accounting, which measures cash and all other
financial assets that can readily be converted to cash. The governmental fund statements provide a detailed
short-term view of the District’s general government operations and the basic services it provides. Governmental
fund information helps determine whether there are more or fewer financial resources that can be spent in the
near future to finance educational programs. The relationship (or difference) between governmental activities
(reported in the statement of net position and the statement of activities) and governmental funds is reconciled in
the financial statements.
Proprietary Funds - Proprietary funds use the same basis of accounting as business-type activities; therefore,
the statements for the proprietary fund will essentially match.
Notes to Financial Statements - The notes provide additional information that is essential to a full understanding
of the data provided in the government-wide statements.
-5-
WARREN COUNTY SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Year Ended June 30, 2015
(Table 1)
Net Position
Governmental Activities
2015
Business-Type Activities
2014
2015
Total
2014
2015
2014
Assets
Current and Other Assets
$
Capital Assets
Total Assets
35,894,845
$
18,538,225
$
3,530,022
$
2,883,181
$
39,424,867
$
21,421,406
224,513,445
222,087,786
12,923,362
13,513,403
237,436,807
235,601,189
260,408,290
240,626,011
16,453,384
16,396,584
276,861,674
257,022,595
3,184,902
760,464
409,360
3,594,262
760,464
134,105,148
124,332,206
3,210,900
34,154
137,316,048
124,366,360
33,919,359
12,465,348
89,300
94,684
34,008,659
12,560,032
168,024,507
136,797,554
3,300,200
128,838
171,324,707
136,926,392
Deferred Outflows of
Resources
Liabilities
Long-Term Liabilities
Other Liabilities
Total Liabilities
Deferred Inflows of
Resources
2,030,650
Net Position
Invested in Capital Assets,
Net of Debt
358,350
2,389,000
85,948,527
94,169,956
12,923,362
13,513,403
98,871,889
107,683,359
Restricted
16,154,880
2,141,479
280,832
2,754,343
16,435,712
4,895,822
Unrestricted
(8,565,372)
8,277,486
Total Net Position
$
93,538,035
$
104,588,921
(8,565,372)
$
-6-
13,204,194
$ 16,267,746
$
106,742,229
8,277,486
$
120,856,667
WARREN COUNTY SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Year Ended June 30, 2015
(Table 2)
Change in Net Position
Governmental Activities
2015
Business-Type Activities
2014
2015
Total
2014
2015
2014
Program Revenues:
Charges for Services
$
Operating Grants/Contribution
74,270
$
33,206,684
133,325
31,588,785
$
2,460,356
$
2,618,691
$
2,534,626
$
2,752,016
6,541,578
6,373,107
39,748,262
37,961,892
48,104,329
45,909,126
50,732,671
47,539,798
Capital Grants/Contributions
General Revenues:
Taxes
48,104,329
45,909,126
State Aid-Formula Grants
50,648,681
47,457,722
83,990
82,076
10,483
8,983
Investment Earnings
Miscellaneous
88,282
120,772
98,765
129,755
1,998,573
971,957
1,998,573
971,957
211,778
410,921
211,778
410,921
134,332,597
126,592,608
143,429,004
135,675,465
78,188,237
77,723,434
78,188,237
77,723,434
Capital Contributions - District Support
Transfer from Proprietary Funds
State On-Behalf Payments
Total Revenue and Transfers
9,096,407
9,082,857
Program Expenses
Instruction
Support Services:
Student
6,898,407
5,589,975
6,898,407
5,589,975
Instructional Staff
2,993,015
2,498,328
2,993,015
2,498,328
District Administration
2,036,671
1,858,592
2,036,671
1,858,592
School Administration
6,415,744
5,698,718
6,415,744
5,698,718
Business
Plant Operations/Maintenance
Student Transportation
2,811,198
2,383,359
2,811,198
2,383,359
11,130,720
11,250,859
11,130,720
11,250,859
7,455,360
8,331,717
7,455,360
8,331,717
883,084
1,065,442
883,084
1,065,442
Central Office
Community Services
Other
759,818
759,818
Day Care
146,978
Interest on Long-Term Debt
4,794,483
135,912
5,287,873
-
146,978
135,912
4,794,483
5,287,873
Facilities Acquisition &
-
18,633
-
18,633
Bond Issuance Costs
-
632,196
-
632,196
Food Service
8,808,727
Loss on Sale/Disposal of Assets
Total Expenses and Transfers
Increase (Decrease) in Net Position
8,656,896
8,808,727
34,479
124,366,737
$
9,965,860
$
-
122,373,605
8,955,705
4,219,003
140,702
-7-
8,792,808
$
290,049
$
8,656,896
34,479
133,322,442
131,166,413
10,106,562
4,509,052
WARREN COUNTY SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Year Ended June 30, 2015
Governmental Activities
Governmental program expenses are broken down as follows: Instruction 63%, Support Services 33%, and 4%
Other.
The Statement of Activities shows the cost of program services and the charges for services and grants offsetting
the program service costs. Table 3 shows, for government activities, the total cost of services and the net cost of
services. In other words, it identifies the cost of these services supported by tax revenue and unrestricted State
entitlements. The total cost of services includes $22,342,489 that relates to the 2015 State On-Behalf Payments.
(Table 3)
Governmental Activities
Total Cost of Services
2015
Instruction
$
Support Services
78,188,237
$
40,624,199
Other
77,723,434
2015
$
38,676,990
52,969,494
2014
$
33,452,190
759,818
(22,596)
18,633
P&I on Long-Term Debt
4,794,483
Loss on Sale/Disposal of Assets
$
124,366,737
(316,995)
5,287,873
Bond Issuance Costs
$
55,502,574
29,275,476
759,818
Facilities Acquisition/Construction
Total Expenses
Net Cost of Services
2014
3,904,281
5,008,420
632,196
143,954
34,479
94,706
122,373,605
$
91,085,783
$
89,685,539
Business-Type Activities
The business-type activities are food service and day care. These programs had revenues of $9,096,407 and
expenses of $8,955,705 for fiscal year 2015. Of the revenues, $2,460,356 related to charges for services,
$6,541,578 was from State and Federal grants, $10,483 were from investment earnings, and there were no
capital contributions by the District. Business activities receive no support from tax revenues. The District will
continue to monitor the charges and costs of these activities. If it becomes necessary, the District will increase
the charges for these activities.
The District’s Funds
Information about the District’s major funds starts on page 15. These funds are accounted for using the modified
accrual basis of accounting. All governmental funds had total revenues and other financing sources of
$171,328,634 and expenditures and other financing uses of $156,446,395. The net change in total fund balances
was $14,114,438 from fiscal year 2014 to 2015. This is predominately a result of the issuance of bonds for the
Warren Central and Warren East High School renovation projects.
General Fund-Budget Highlights
The District’s budget is prepared according to Kentucky law and is based on accounting for certain transactions
on a basis of cash receipts, disbursements and encumbrances. The most significant budgeted fund is the
General Fund. The State Department of Education requires a zero-based budget with any budgeted remaining
fund balance shown as a contingency expense in the budget process.
A variance comparison is presented between the final budgeted amounts and the actual (GAAP Basis) amounts.
Revenues for the General Fund were budgeted at $101,055,760 with actual amounts totaling $106,226,688.
Budgeted expenditures were $103,485,558 (not including a contingency budget of $10,070,672) compared to
actual expenditures of $102,864,064. Budgeted “Other Financing Sources and Uses” reflected a net financing
source of $223,854 compared to an actual net financing source of $2,053,782. In total, an expected decrease in
the General Fund balance of $2,205,944 was budgeted compared to an actual net increase of $5,416,405.
-8-
WARREN COUNTY SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Year Ended June 30, 2015
Capital Assets and Debt Administration
Capital Assets
At the end of fiscal year 2015 the District had $237,436,807 invested in capital assets (see Table 4 below),
$224,513,445 being in governmental activities. Table 4 shows fiscal year 2015 balances compared to 2014.
(Table 4)
Capital Assets at June 30 (Net of Depreciation)
Governmental Activities
2015
Land
Land Improvements
Buildings and Improvements
$
8,495,692
$
12,452,552
12,827,873
180,686,691
185,676,501
2,272,649
3,001,164
Vehicles
3,730,104
4,858,108
Equipment
Total
2015
5,909,110
6,164,254
10,966,647
701,521
$ 224,513,445
$ 222,087,786
Total
2014
8,858,365
Technology
Construction in Progress
Business-Type Activities
2014
2015
$
$
2014
$
8,858,365
12,452,552
12,827,873
197,275,163
11,288,901
$ 11,598,662
191,975,592
22,141
29,842
2,294,790
3,031,006
3,730,104
4,858,108
7,521,430
8,049,153
1,612,320
$
8,495,692
12,923,362
1,884,899
$ 13,513,403
10,966,647
701,521
$ 237,436,807
$ 235,601,189
Debt
At June 30, 2015 the District had $138,564,918 in bonds outstanding, of this amount $4,735,108 are to be paid
from the KSFCC funding provided by the State of Kentucky. A total of $9,423,000 is due within one year. At June
30, 2014, the District had $127,917,830 in bonds outstanding, of this amount $4,697,771 were to be paid from
KSFCC funding.
The net change during 2015 fiscal year was primarily due to the structured principal payments.
District Challenges for the Future
The Warren County Public School system (District) is the fourth largest district within the State serving
approximately 15,000 students. The District has grown from a K-12 student membership of 10,923 in 2003 to
14,858 in 2015. This equates to a 36.02% growth in only twelve years. The District has prepared for this
increase in enrollment by building new schools and by renovating and expanding existing schools. The District
remains in good financial condition, however, there are challenges that the District will encounter: increase the
level of achievement of our students, Senate Bill 1, English Learner (EL) population, and adequate funding.
The most essential challenge is to continue to increase student achievement. On the most recent release of test
scores, Warren County Schools had ten distinguished schools and four proficient schools. Achievement Gaps
continue to exist in many of our schools, but these challenges and opportunities keep us focused on providing a
differentiated approach to teaching that serves the individual needs of our students. Prioritizing standards in
reading, math and science; providing academic-rich learning environments for our English Learner's and students
with disabilities; differentiating instruction for all students; providing good customer service to improve our school
climates; analyzing student data using various data points; utilizing interactive, 21st Century technology in our
classrooms, and engaging students in learning that is rigorous and relevant to life are all efforts that we have in
place to increase student achievement.
-9-
WARREN COUNTY SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Year Ended June 30, 2015
It is important for every educator in the District to feel that the students we serve can learn at a high level
according to their ability. Teachers must strive to recognize the impact they have on each student that enters their
classroom. With the resources available to all educators in Warren County, the ability to meet the needs of all
students is not impossible. Providing teachers with up-dated curriculum maps, content guides, and prioritized
standards is a process that is revisited routinely throughout our District. We have no choice but to move the
students to a higher level in order to ensure their ability to function and thrive in a global, 21st Century
marketplace. What the information does not tell us is the level of motivation for learning. It will also not inform us
as to the amount of parental/family involvement in the educational process. We will also be unable to discern what
happens in the life of a student outside the walls of our educational institutions. This information can be very
helpful in serving needs that can affect learning. The WCPS system encourages the building of relationships by
all to help remove as many barriers to learning as we possibly can. By providing a team approach to educating
our students, we are able to help the students be prepared and willing to learn in our classrooms.
The next challenge relates to the mandates prescribed in Senate Bill 1 otherwise known as Unbridled Learning.
The Bill is intended to ensure every student reaches his/her learning potential and graduates from high school
college and/or career ready. The mandates of Unbridled Learning continue to increase putting additional stress
and responsibilities on teachers and administrators working to guarantee that students continue on their path to
becoming college and/or career ready.
This year our biggest challenge with Senate Bill 1 continues to be the implementation of the Teacher and
Principal Professional Growth and Effectiveness System. This system is designed to measure teacher and
principal effectiveness and serve as a catalyst for professional growth and continuous
improvement. Implementation of this system has required many additional hours of training and observations and
the development of a newly revised district certified evaluation plan.
The population of students identified as English Learners (ELs) in the District has grown approximately 153%
since 2005, with ELs numbering 632 in 04-05 academic year and just over 1600 at the present time. The EL
student population currently represents 11% of the overall student population in the District. These students are
eligible for English language development programs (also known as EL or ESL programs) offered by the District.
We are also required to monitor students who exit from English language development programs for two full
academic years, and there are currently 446 students who fall within this category. Finally, there are
approximately 130 students in the District who were formerly served in English language development programs
and are now fully exited. These students also need continuing support to ensure that they become “college and
career ready” and successfully transition after graduation. When we consider the EL students who are currently
eligible for English language development programs, those who have just exited and are being monitored and
those who are completely out of English language development programs, there are just over 2100 students
being supported in one way or another by District administrators and teachers, 14% of our total enrollment.
The EL students in the District are a very diverse group, as they come from 30+ countries and speak 50
languages and dialects. Approximately 40% of our current ELs are refugees, and many are considered “students
with interrupted formal education” (SIFEs), because conditions in their former countries and refugee camps made
it difficult to provide consistent educational opportunities.
The EL students in the District face very significant language and content challenges. ELs in the U.S. are often
doing double the work of their English speaking class peers, because ELs are learning content at the same time
they are learning the language of instruction. Our administrators and teachers also face many challenge, one of
which being the requirement to meet federal and state accountability targets established under the No Child Left
Behind (NCLB) Act. The District has responded to these challenges in several ways, including dramatically
increasing the numbers of certified teachers with an English as a Second Language (ESL) endorsement.
-10-
WARREN COUNTY SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Year Ended June 30, 2015
Investments in staffing allow the District to leverage the training and experiences of these staff as we rise to meet
the language and academic content challenges of a large EL student population. However, maintaining and
recruiting qualified, well-trained staff remains a challenge. Meeting the language and content needs of EL
students is also the responsibility of general education teachers, yet these individuals are generally not well
prepared in pre-service programs to address these challenges. Thus, professional development becomes critical
to providing teachers with the knowledge and skills required. In fact, ensuring that on-going professional
development opportunities and appropriate instructional resources are being provided is absolutely critical to
meeting the challenges expressed above. While the size of the District and the EL student population create
some funding streams, we continually face financial challenges in a climate of budgetary constraints and reduced
federal and state support.
The final challenge as it relates to funding: Local, State and Federal. The District’s predominate local revenue
source is the real estate tax rate. In 2015, the District’s real estate tax rate ranked as the 153rd lowest in the
State. The Kentucky revised statue caps the amount of new revenue generated from real estate tax increases
4% a year. The failure of the legislature to adequately fund education has resulted in the Warren County School
District and districts across the Commonwealth to make significant cuts to their budgets and to personnel,
compelling school boards to increase property taxes in order that districts might continue to operate and serve the
students, who are the future of the Commonwealth. Fortunately, the Warren County has experienced positive
annual growth in property assessment and thereby property tax revenue. However, the SEEK formula has a
negative effect on districts that incur significant growth in assessment.
With careful planning, gains in efficiencies and monitoring of District finances, Warren County Public Schools’
goal is to continue to provide a quality education for our students and a secure financial future for the District.
Contacting the District’s Financial Management
This financial report is designed to provide our citizens, taxpayers, and investors and creditors with a general
overview of the District’s finances and to show the District’s accountability for the money it receives. If you have
any questions about this report or need additional information contact Chris McIntyre, Treasurer at Warren County
Board of Education, 303 Lovers Lane, P.O. Box 51810, Bowling Green, KY 42102-6810 or email at
[email protected]
-11-
DISTRICT-WIDE FINANCIAL STATEMENTS
WARREN COUNTY SCHOOL DISTRICT
DISTRICT-WIDE STATEMENT OF NET POSITION
June 30, 2015
Governmental
Activities
Assets
Cash and Cash Equivalents
Accounts and Grants Receivable
from Outside Sources, net
Taxes
Other
Grants
Due from Other Funds
Inventory
Prepaid Expenses
Nondepreciated Capital Assets
Depreciable Capital Assets
Less: Accumulated Depreciation
$
32,545,174
Business-type
Activities
$
3,085,038
1,048,859
920,557
1,007,866
Total Assets
262,359
110,030
19,462,339
303,109,043
(98,057,937)
260,408,290
Deferred Outflows of Resources
Deferred pension contribution after
measurement date
Deferred savings from refunding bonds
Less: Accumulated Amortization
Total Deferred Outflows of Resources
2,340,197
1,762,620
(917,915)
3,184,902
Liabilities
Accounts Payable
Accrued Liabilities
Due to Other Funds
Unearned Grant Revenue
Accrued Interest
Long-Term Obligations
Due Within One Year
Bond Obligations
Compensated Absences
Due Beyond One Year
Bond Obligations
Compensated Absences
Net pension liability
88,494
208,502
147,988
19,673,784
(6,750,422)
16,453,384
409,360
409,360
2,570,020
1,199,092
208,502
846,769
919,615
Total Liabilities
Deferred Inflows of Resources
Differences between projected and actual
earnings on plan investments
Net Position
Net investment in Capital Assets
Restricted for
Capital Projects
Purchase Obligations
SBDM
Technology Purposes
Debt service
Unrestricted (Deficit)
Net Position
$
19,238
70,062
$ 35,630,212
1,048,859
1,009,051
1,007,866
208,502
410,347
110,030
19,462,339
322,782,827
(104,808,359)
276,861,674
2,749,557
1,762,620
(917,915)
3,594,262
2,589,258
1,199,092
208,502
916,831
919,615
9,423,000
557,261
9,423,000
557,261
129,141,918
4,963,230
18,195,100
168,024,507
3,210,900
3,300,200
129,141,918
4,963,230
21,406,000
171,324,707
2,030,650
358,350
2,389,000
85,948,527
12,923,362
98,871,889
14,207,297
453,181
494,550
719,609
280,243
(8,565,372)
93,538,035
$
280,832
13,204,194
See Accompanying Notes to Financial Statements
-12-
Total
14,207,297
453,181
494,550
719,609
280,243
(8,284,540)
$ 106,742,229
Continued
Total School District
Business-type Activities
Food Services
Day Care
Total Business-type
Activities
Functions/Programs
Governmental Activities
Instruction
Support Services
Student
Instructional Staff
District Administration
School Administration
Business
Plant Operations &
Maintenance
Student Transportation
Community Services
Other
Interest on Long-term Debt
Total Governmental
Activities
$ 133,322,442
$ 2,534,626
2,460,356
8,955,705
-13-
$
39,748,262
6,541,578
6,314,589
226,989
33,206,684
74,270
124,366,737
2,337,695
122,661
890,202
8,808,727
146,978
433,237
887,624
1,036,080
25,165,893
21,420
$
11,130,720
7,455,360
883,084
759,818
4,794,483
52,850
1,748,534
796,780
90,866
1,583,634
573,834
$
6,898,407
2,993,015
2,036,671
6,415,744
2,811,198
$ 78,188,237
Expenses
Charges for
Services
Operating
Grants and
Contributions
Program Revenues
(91,085,783)
(91,085,783)
(10,676,063)
(6,567,736)
152,996
(759,818)
(3,904,281)
(5,149,873)
(2,196,235)
(1,945,805)
(4,832,110)
(2,237,364)
$ (52,969,494)
$
46,229
46,229
(156,443)
202,672
Business-type
Activities
Total
(91,039,554)
46,229
(156,443)
202,672
(91,085,783)
(10,676,063)
(6,567,736)
152,996
(759,818)
(3,904,281)
(5,149,873)
(2,196,235)
(1,945,805)
(4,832,110)
(2,237,364)
$ (52,969,494)
Net (Expense) Revenue
Governmental
Activities
WARREN COUNTY SCHOOL DISTRICT
DISTRICT-WIDE STATEMENT OF ACTIVITIES
For the Year Ended June 30, 2015
Charges for
Services
-14-
13,063,492
$ 13,204,194
94,473
140,702
211,778
101,051,643
9,965,860
83,572,175
$ 93,538,035
94,473
29,086,716
3,250,646
6,208,666
8,647,058
911,243
50,648,681
88,282
1,998,573
100,839,865
83,990
10,483
Business-type
Activities
211,778
101,146,116
10,106,562
29,086,716
3,250,646
6,208,666
8,647,058
911,243
50,732,671
98,765
1,998,573
100,934,338
Total
96,635,667
$ 106,742,229
Net (Expense) Revenue
Governmental
Activities
See Accompanying Notes to Financial Statements
Net Position - Beginning of Year, Restated
Net Position - End of Year
General Revenues
Taxes
Property
Motor Vehicle
Utilities
Occupational
Other
State Aid
Investment Earnings
Other
Total General Revenues
Transfers
From Proprietary Funds
Total General Revenues and Transfers
Change in Net Position
Expenses
Program-Specific
Operating
Grants and
Contributions
Program Revenues
WARREN COUNTY SCHOOL DISTRICT
DISTRICT-WIDE STATEMENT OF ACTIVITIES - Continued
For the Year Ended June 30, 2015
FUND FINANCIAL STATEMENTS
GOVERNMENTAL FUNDS FINANCIAL STATEMENTS
Total Liabilities and Fund Balances
Fund Balances
Nonspendable
Inventories
Permanent Fund Principal
Restricted
Capital Projects
Technology Purposes
Purchase Obligations
Debt Service
Committed
SBDM Carryforward
Sick Leave Payable
Assigned
Encumbrances
Unassigned
Total Fund Balances
Liabilities and Fund Balances
Liabilities
Accounts Payable
Accrued Liabilities
Due to Other Funds
Unearned Grant Revenue
Total Liabilities
Total Assets
Assets
Cash and Cash Equivalents
Accounts and Grants Receivable from
Outside Sources, net
Taxes
Other
Grants
Inventory
Prepaid Expenses
$ 11,566,486
9,609,375
$
$
-15-
See Accompanying Notes to Financial Statements
1,977,155
1,083,491
89,299
9,520,076
1,957,111
1,957,111
$
$
280,243
280,243
280,243
280,243
187,446
92,797
$
$
$
$
15,189
409,555
707,000
282,256
618
618
707,618
931
706,687
$
$
$
$
14,207,297
719,609
453,181
280,243
262,359
282,256
2,570,020
1,233,642
208,502
846,769
4,858,933
35,894,845
1,048,859
920,557
1,007,866
262,359
110,030
32,545,174
707,618
35,894,845
1,004,979
12,808,728
31,035,912
$
$ 11,566,486
$ 11,566,486
Total
Governmental
Funds
989,790
12,399,173
19,355,803
719,609
363,882
846,769
893,664
46,895
1,977,155
1,007,866
969,289
Nonmajor Funds
Governmental
Funds
494,550
522,710
$
$
$
$
Debt
Service
Fund
494,550
522,710
4,687,221
262,359
2,007,540
565,396
1,233,642
208,502
$ 21,363,343
$
$ 21,363,343
262,359
110,030
1,048,859
732,180
$ 19,209,915
General
Fund
Major Funds
Special
Capital
Revenue
Project
Fund
Funds
WARREN COUNTY SCHOOL DISTRICT
BALANCE SHEET
GOVERNMENTAL FUNDS
June 30, 2015
$
31,035,912
$
2,340,197
Deferred outflows from pension contributions after measurement date
are not financial resources and therefore are not reported as assets in
the Governmental Funds Balance Sheet.
-16-
See Accompanying Notes to Financial Statements
Total District-wide Net Position - Governmental Activities
93,538,035
(138,564,918)
(919,615)
(18,195,100)
(5,485,941)
(2,030,650)
Deferred inflows from differences between projected and actual pension
earnings are not financial resources and therefore are not reported as
assets in the Governmental Funds Balance Sheet.
Long-term liabilities, including bonds payable, are not due and payable in
the current period and therefore are not reported as liabilities in the
Governmental Funds Balance Sheet. Long-term liabilities at year-end
consist of:
Bonds Payable
Accrued Interest
Net Pension Liability
Compensated Absences
844,705
224,513,445
Deferred savings from refunding bonds are not financial resources and
therefore are not reported as assets in the Governmental Funds Balance
Sheet.
Capital assets used in governmental activities are not financial resources
and therefore are not reported as assets in Governmental Funds Balance
Sheet. The cost of the assets is $311,612,530 and the accumulated
depreciation is $89,524,744
Amounts reported for governmental activities in the District-wide Statement of Net Position are different because:
Total Fund Balances - Governmental Funds
WARREN COUNTY SCHOOL DISTRICT
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE
DISTRICT-WIDE STATEMENT OF NET POSITION
June 30, 2015
Continued
Expenditures
Instruction
Support Services
Student
Instructional Staff
District Administration
School Administration
Business
Plant Operations and Maintenance
Student Transportation
Community Services
Principal
Interest and Other Charges
Bond Issuance Cost
Total Revenues
Revenues
From Local Sources
Taxes
Property
Motor Vehicle
Utilities
Occupational License
Other
Tuition and Fees
Earnings on Investments
Other Local Revenues
Intermediate Sources
Intergovernmental - State
Intergovernmental - Federal
$
-17-
60,094
31,690
111,832
1,036,080
87,482
115,974
6,990,542
2,981,767
2,062,629
6,676,356
2,903,184
11,242,974
7,252,559
11,017,728
4,182,609
6,641,156
3,438
190,525
9,676,851
$
62,754,054
106,226,688
68,226,757
364,030
17,879,766
3,250,646
6,208,666
8,647,058
911,243
52,850
78,620
607,052
General
Fund
426,393
14,941,985
3,720,678
14,357
$ 11,206,950
Major Funds
Special
Capital
Revenue
Project
Fund
Funds
$
8,536,000
4,808,883
397,146
875,845
503,137
372,708
Debt
Service
Fund
$
24,174
4,632
34,066
255,670
747,658
737,996
9,662
Nonmajor Funds
Governmental
Funds
WARREN COUNTY SCHOOL DISTRICT
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For the Year Ended June 30, 2015
$
7,078,024
3,131,807
2,062,629
6,676,356
2,967,910
11,274,664
7,388,565
1,036,080
8,536,000
4,808,883
823,539
72,686,575
133,809,904
29,086,716
3,250,646
6,208,666
8,647,058
911,243
52,850
106,077
797,577
737,996
76,633,181
7,377,894
Total
Governmental
Funds
5,416,405
13,939,398
19,355,803
Net Change in Fund Balances
Fund Balances - July 1, 2014
Fund Balances - June 30, 2015
$
200,312
2,053,782
$
9,609,375
405,310
9,204,065
4,527,205
849,400
(14,835,004)
47,809
18,465,000
4,676,860
10,265,125
$
-18-
280,243
533,741
(253,498)
12,612,686
11,968,106
18,470,000
(11,940,000)
89,719
221,492
(6,196,631)
(12,866,184)
13,742,029
Debt
Service
Fund
See Accompanying Notes to Financial Statements
$ 1,083,491
985,454
98,037
309,535
(109,223)
(102,275)
11,120,003
12,932
211,778
2,371,509
(542,437)
3,362,623
102,864,065
Other Financing Sources (Uses)
Proceeds from Issuance of Bonds
Refunded School Building Revenue Bonds
Expenditure Reimbursement
Premium on Bonds Sold
Payments to Bond Escrow Agent
Proceeds from Sale of Equipment
Propriety Fund Transfers
Transfers In
Transfers Out
Total Other Financing Sources
(Uses)
Revenues in Excess of (Less Than)
Expenditures
Total Expenditures
Facilities Acquisition and Construction
General
Fund
Major Funds
Special
Capital
Revenue
Project
Fund
Funds
9,838,732
$
707,000
289,770
417,230
(11,886)
(11,886)
429,116
318,542
Nonmajor Funds
Governmental
Funds
WARREN COUNTY SCHOOL DISTRICT
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For the Year Ended June 30, 2015
$
31,035,912
16,153,673
14,882,239
19,382,099
36,935,000
(11,940,000)
89,719
269,301
(6,196,631)
12,932
211,778
15,498,550
(15,498,550)
(4,499,860)
138,309,764
Total
Governmental
Funds
9,838,732
3,189,632
9,965,860
Expenditures reported in the fund financial statements are recognized when the current financial
resource is used. However, expenses in the District-wide Statement of Activities are recognized
when they are incurred.
Total Change in District-wide Net Position of Governmental Activities
-19-
See Accompanying Notes to Financial Statements
(19,067,670)
8,536,000
Bond proceeds provide current financial resources to governmental funds, but issuing debt
increases long-term liabilities in the District-wide Statement of Net Position. Repayment of bond
principal in a refunding is an expenditure in the governmental funds, but the repayment reduces
long-term liabilities in the District-wide Statement of Net Position. This is the amount by which the
proceeds of current year debt issuances exceeded repayment of bond principal related to a bond
Repayment of bond principal is an expenditure in the governmental funds, but the repayment
reduces long-term liabilities in the District-wide Statement of Net Position.
297,983
Gains and losses are not presented in governmental funds because they do not provide or use
current financial resources. However, they are presented on the District-wide Statement of
Activities. The difference between the cost and accumulated depreciation of assets sold net to
this amount for the fiscal year.
14,882,239
2,127,676
$
$
Capital outlays are reported in governmental funds as expenditures. However, in the District-wide
Statement of Activities, the cost of those assets is allocated over their estimated useful lives as
depreciation expense. This is the amount by which capital outlays exceeds depreciation expense
in the fiscal year.
Amounts reported for governmental activities in the District-wide Statement of Activities are different because:
Total Net Change in Fund Balances - Governmental Funds
WARREN COUNTY SCHOOL DISTRICT
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
TO THE DISTRICT-WIDE STATEMENT OF ACTIVITIES
For the Year Ended June 30, 2015
PROPRIETARY FUNDS FINANCIAL STATEMENTS
WARREN COUNTY SCHOOL DISTRICT
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
June 30, 2015
Food Services
Assets
Current Assets
Cash and Cash Equivalents
Accounts and Grants Receivable
Due from Other Funds
Inventories for Consumption
Total Current Assets
$
3,070,523
88,494
Enterprise Funds
Day Care
$
14,515
208,502
147,988
3,307,005
Non-Current Assets
Capital Assets - Net of Accumulated
Depreciation
223,017
Total
$ 3,085,038
88,494
208,502
147,988
3,530,022
12,923,362
Deferred Outflows of Resources
Deferred pension contribution after
measurement date
12,923,362
394,427
Total Assets and Deferred Outflows of Resources
Liabilities and Net Position
Current Liabilities
Accounts Payable
Unearned Revenue
Net Pension Liability
Total Current Liabilities
$
16,624,794
$
19,238
70,062
2,996,840
3,086,140
Deferred Inflows of Resources
Differences between projected and actual earnings
on plan investments
$
409,360
237,950
$ 16,862,744
$
$
334,460
Net Position
Net Investment in Capital Assets
Unrestricted
Total Net Position
14,933
214,060
214,060
19,238
70,062
3,210,900
3,300,200
23,890
358,350
12,923,362
280,832
13,204,194
Total Liabilities and Net Position
$
16,624,794
12,923,362
280,832
13,204,194
$
See Accompanying Notes to Financial Statements
-20-
237,950
$ 16,862,744
WARREN COUNTY SCHOOL DISTRICT
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
For the Year Ended June 30, 2015
Food Services
Operating Revenues
Lunchroom Sales
Tuition and Fees
Other Operating Revenue
Total Operating Revenues
$
Enterprise Funds
Day Care
2,328,861
$
8,834
2,337,695
Operating Expenses
Salaries and Wages
Contract Services
Materials and Supplies
Other Operating Expenses
Depreciation Expense
Total Operating Expenses
Operating Loss
Non-Operating Revenues (Expenses)
Federal Grants
State Grants
Donated Commodities
Interest Revenue
Loss on Disposal of Assets
Governmental Funds Transfers
Total Non-Operating Revenues (Expenses)
Change in Net Position
Total Net Position - July 1, 2014, Restated
122,661
135,266
$
10,856
619
237
146,978
3,770,754
300,760
4,278,669
8,272
588,265
8,946,720
(6,462,047)
(24,317)
(6,486,364)
5,751,342
606,101
461,416
10,483
(8,985)
(420,280)
6,400,077
208,502
226,989
5,751,342
624,588
461,416
10,483
(8,985)
(211,778)
6,627,066
(61,970)
202,672
140,702
18,487
13,204,194
(202,672)
$
See Accompanying Notes to Financial Statements
-21-
$ 2,328,861
122,661
8,834
2,460,356
3,635,488
300,760
4,267,813
7,653
588,028
8,799,742
13,266,164
Total Net Position - June 30, 2015
122,661
Total
13,063,492
$ 13,204,194
WARREN COUNTY SCHOOL DISTRICT
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For the Year Ended June 30, 2015
Food Services
Cash Flows from Operating Activities
Cash Received from User Charges
Cash Received from Other Operating Revenues
Cash Payments to Employees for Services
Cash Payments for Contract Services
Cash Payments to Suppliers for Goods and Services
Cash Payments for Other Operating Expenses
Net Cash Used in Operating Activities
$
Cash Flows from Noncapital Financing Activities
Grants Received
2,412,095
8,834
(3,224,065)
(300,760)
(3,767,765)
(7,653)
(4,879,314)
Enterprise Funds
Day Care
$
122,661
Total
$
(107,379)
(10,856)
(209,121)
(204,695)
5,835,332
Cash Flows from Capital and Related Financing
Activities
Acquisition of Capital Assets
Transfers from Governmental Funds
Net Cash Provided by (Used in) Capital and
Related Financing Activities
Cash Flows from Investing Activities
Interest on Investments
5,835,332
(7,209)
(420,280)
208,502
(7,209)
(211,778)
(427,489)
208,502
(218,987)
10,483
Net Increase in Cash and Cash Equivalents
Cash and Cash Equivalents - July 1, 2014
Cash and Cash Equivalents - June 30, 2015
Reconciliation of Operating Loss to Net Cash
Provided by (Used in) Operating Activities
Operating Loss
Adjustments to Reconcile Operating Loss to Net Cash
Provided by (Used in) Operating Activities:
Depreciation
Commodities Used
On-Behalf Payments Received
Changes in Assets and Liabilities:
Receivables
Inventories
Deferred Outflow
Accounts Payable
Unearned Revenue
Net Pension Liability
Accrued benefits
Deferred Inflow
Net Cash Used In Operating Activities
10,483
539,012
3,807
542,819
2,531,511
10,708
2,542,219
$
3,070,523
$
14,515
$
(6,462,047)
$
(24,317)
588,028
461,416
522,111
$
2,534,756
8,834
(3,331,444)
(300,760)
(3,778,621)
(216,774)
(5,084,009)
74,892
29,588
(394,427)
9,044
8,342
6,203
(56,924)
334,460
(4,879,314)
237
18,487
(208,502)
(14,933)
443
$
23,890
(204,695)
$
3,085,038
$ (6,486,364)
588,265
461,416
540,598
(133,610)
29,588
(409,360)
9,044
8,342
6,646
(56,924)
358,350
$ (5,084,009)
Noncash Activities:
The Food Service Fund received $461,416 of donated commodities from the federal government.
The Proprietary Funds recognized revenues and expenses for on-behalf payments relating to fringe benefits in
the amount of $520,386 provided by state government.
See Accompanying Notes to Financial Statements
-22-
FIDUCIARY FUNDS FINANCIAL STATEMENTS
WARREN COUNTY SCHOOL DISTRICT
STATEMENT OF NET POSITION
FIDUCIARY FUNDS
June 30, 2015
Private
Purpose
Trust Fund
Assets
Cash and Cash Equivalents
Investments
Accounts Receivable
$
7,628
44,151
Agency
Funds
$
627,686
6,860
Total Assets
$
51,779
Liabilities
Accounts Payable
Due to Student Groups
$
634,546
$
15,860
618,686
Total Liabilities
634,546
Net Position
Held in Trust for Other Purposes
Total Liabilities and Net Position
$
51,779
$
51,779
See Accompanying Notes to Financial Statements
-23-
$
634,546
WARREN COUNTY SCHOOL DISTRICT
STATEMENT OF CHANGES IN NET POSITION
FIDUCIARY FUNDS
For the Year Ended June 30, 2015
Private
Purpose
Trust Funds
Additions
Earnings on Investments
$
41
Deductions
Account Maintenance Fee
117
Change in Net Position
(76)
Net Position, July 1, 2014
51,855
Net Position, June 30, 2015
$
See Accompanying Notes to Financial Statements
-24-
51,779
NOTES TO FINANCIAL STATEMENTS
WARREN COUNTY SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2015
NOTE A – REPORTING ENTITY
The Warren County Board of Education (the “Board”), a five-member group, is the level of government which has
oversight responsibilities over all activities related to public elementary and secondary school education within the
jurisdiction of the Warren County School District (the “District”). The District receives funding from local, state,
and federal government sources and must comply with the commitment requirements of these funding source
entities. However, the District is not included in any other governmental “reporting entity” as defined in Section
2100, Codification of Governmental Accounting and Financial Reporting Standards, as Board members are
elected by the public and have decision making authority, the power to designate management, the responsibility
to develop policies which may influence operations, and primary accountability for fiscal matters.
The District, for financial purposes, includes all of the funds and account groups relevant to the operation of the
Warren County School District. The financial statements presented herein do not include funds of groups and
organizations, which although associated with the school system, have not originated within the District itself such
as Athletic Boosters, Band Boosters, Parent-Teacher Associations, etc. The District is not involved in budgeting
or managing these organizations, is not responsible for any debt of the organizations, and has no influence over
the operation of these organizations.
The financial statements of the District include those of separately administered organizations that are controlled
by or dependent upon the District. Control or dependence is determined on the basis of budget adoption, funding
and appointment of the respective governing board.
Based on the foregoing criteria, the financial statements of the following organization are included in the
accompanying financial statements:
Warren County School District Finance Corporation – The Warren County, Kentucky, Board of Education has
established the Warren County School District Finance Corporation (the “Corporation”) (a non-profit, non-stock,
public corporation organized under the School Bond Act and KRS 273 and KRS 58.180) as an agency of the
District for financing the costs of school building facilities. The Board Members of the Warren County Board of
Education also comprise the Corporation’s Board of Directors.
NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 BASIS OF ACCOUNTING
The District’s financial statements are prepared in accordance with generally accepted accounting principles
(“GAAP”). The Governmental Accounting Standards Board (“GASB”) is responsible for establishing GAAP for state
and local governments through its pronouncements (Statements and Interpretations).
 BASIS OF PRESENTATION
District-Wide Financial Statements
The Statement of Net Position and Statement of Activities display information about the District as a whole. They
include all funds of the District except for the fiduciary funds. The statements distinguish between governmental
and business-type activities. Governmental activities generally are financed through taxes, intergovernmental
revenues, and other nonexchange revenues. Business-type activities are financed in whole or in part by fees
charged to external parties for goods or services.
-25-
WARREN COUNTY SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2015
The District-Wide Financial Statements are prepared using the economic measurement focus. This is the same
approach used in the preparation of the Proprietary Fund Financial Statements but differs from the manner in
which Governmental Fund Financial Statements are prepared. Governmental Fund Financial Statements
therefore include a reconciliation with brief explanations to better identify the relationship between the DistrictWide Financial Statements and the statements for governmental funds.
The District-Wide Financial Statement of Activities presents a comparison between direct expense and program
revenues for each segment of the business-type activities of the District and for each function or program of the
District’s governmental activities. Direct expenses are those that are specifically associated with a service,
program or department and therefore clearly identifiable to a particular function. Program revenues include grants
and contributions that are restricted to meeting the operational or capital requirements of a particular function or
program and charges paid by the recipient of the goods or services offered by the function or program. Revenues
not classified as program revenues are presented as general revenues of the District, with certain limited
exceptions. The comparison of direct expenses with program revenues identifies the extent to which each
business segment or governmental function or program is self-financing or draws from the general revenues of
the District. The District allocates certain indirect costs to be included in the function or program expenses
reported for individual governmental activities in the District-Wide Statement of Activities.
In the District-Wide Statement of Net Position and Statement of Activities, both governmental and business-like
activities are presented using the accrual basis of accounting. Under the accrual basis of accounting, revenues are
recognized when earned and expenses are recorded when the liability is incurred or economic asset is used.
Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-like transactions
are recognized when the exchange takes place.
Fund Financial Statements
The financial transactions of the District are reported in individual funds in the fund financial statements, each of
which is considered to be a separate set of self-balancing accounts which constitute its assets, liabilities, fund
equity, revenues and expenditures/expenses. Funds are organized into three major categories: governmental,
proprietary, and fiduciary. An emphasis is placed on major funds within the governmental and proprietary
categories. Each major fund is presented in a separate column. Nonmajor funds are aggregated and presented
in a single column. A fund is considered major if it is the primary operating fund of the District or meets the
following criteria:
a) Total assets, liabilities, revenues, or expenditures/expenses of that individual governmental fund or
enterprise fund are at least 10 percent of the corresponding total for all funds of that category or type, and
b) Total assets, liabilities, revenues, or expenditures/expenses of the individual governmental fund or
enterprise fund are at least 5 percent of the corresponding total for all governmental and enterprise funds
combined.
c) Funds may be reported as a major fund if the District considers them significant to the users of the
financial statements.
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All
governmental fund types are accounted for using a current financial resources measurement focus. The financial
statements for governmental funds are a Balance Sheet, which generally includes only current assets and current
liabilities, and a Statement of Revenues, Expenditures and Changes in Fund Balances, which reports on the
sources (i.e., revenues and other financing sources) and uses (i.e., expenditures and other financing uses) of
current financial resources.
Expenditures (including capital outlay) are recorded when the related fund liability is incurred, except for general
obligation bond principal and interest which are reported when due.
-26-
WARREN COUNTY SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2015
All proprietary fund types are accounted for on an economic resources measurement focus. With this
measurement focus, all assets and all liabilities associated with the operation of these funds are included on the
Statement of Net Position. The Statement of Revenues, Expenses and Changes in Fund Net Position presents
increases (i.e., revenues) and decreases (i.e., expenses) in total net position. The Statement of Cash Flows
provides information about how the District finances and meets the cash flow needs of its proprietary activities.
All proprietary funds utilize the accrual basis of accounting. Under the accrual basis of accounting, revenues are
recognized when earned and expenses are recorded when the liability is incurred or economic asset is used.
The fiduciary funds are reported using the economic resources measurement focus. Agency funds are not involved
in the measurement of results of operations; therefore, measurement focus is not applicable to them.
In the fund financial statements, governmental funds and agency funds are presented on the modified accrual basis
of accounting. Under this modified accrual basis of accounting, revenues are recognized when “measurable and
available.” Measurable means knowing or being able to reasonably estimate the amount. Available means
collectible within the current period or soon enough thereafter to pay current liabilities.
The funds of the financial reporting entity are described below:
I. Governmental Funds
Major Funds
A.
The General Fund is the primary operating fund of the District and is always classified as a major fund.
It is used to account for all activities except those legally or administratively required to be accounted for
in other funds. This is a budgeted fund and any unrestricted fund balances are considered to be
resources available for use. Reservations have been placed on the fund balance for outstanding
encumbrances, allocation to the schools’ site based decision making councils, and accrued sick leave.
B.
The Special Revenue Fund accounts for proceeds of specific revenue sources (other than expendable
trusts or major capital projects) that are legally restricted to disbursements for specified purposes. It
includes federal financial assistance programs where unused balances are returned to the grantor at the
close of specified project periods, as well as the state grant programs. Project accounting is employed
to maintain integrity for the various sources of funds. The separate projects of federally funded grant
programs are identified in the Schedule of Expenditures of Federal Awards included in this report. The
Kentucky Department of Education has deemed this fund always be classified as a major fund.
C.
Capital Project Fund is classified as a major fund and is used to account for financial resources
restricted for the acquisition or construction of major capital facilities and equipment (other than those
financed by Proprietary Funds). The District’s Capital Project Fund includes:
1.
The Support Education Excellence in Kentucky (“SEEK”) Capital Outlay Fund – This fund
receives those funds designated by the state as Capital Outlay Funds and is restricted for use
in financing projects identified in the District’s facility plan.
2.
The Facility Support Program of Kentucky (“FSPK”) Fund – This fund accounts for funds
generated by the building tax levy and also participates in the School Facilities Construction
Commission’s construction funding and state matching funds, where applicable. Funds may
be used for projects identified in the District’s facility plan.
3.
The Construction Fund – This fund accounts for proceeds from sales of bonds and other
revenues to be used for authorized construction.
-27-
WARREN COUNTY SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2015
Nonmajor Funds
A.
The Debt Service Fund accounts for the accumulation of financial resources for the payment of
principal, interest, and related costs on the general long-term debt of the District, including the payment
of interest on general obligation notes payable, as required by Kentucky law.
B.
The Permanent Fund accounts for assets held by the District pursuant to a trust agreement. The
principal portion of this fund must remain intact, but the earnings may be used to achieve the objectives
of the fund.
II. Proprietary Funds
Enterprise funds may be used to account for any activity for which a fee is charged to external users for goods
and services. The District’s enterprise funds are the School Food Service Fund and the Day Care Fund
operated out of Greenwood High School and are major funds. The School Food Service Fund is used to
account for the financial transactions related to the food service operations of the District.
III. Fiduciary Funds
Agency Funds
Agency funds account for assets held by the District in a purely custodial capacity. Since agency funds are
custodial in nature (i.e. assets equal liabilities), and they do not involve the measurement of results of
operations.
The School Activity Fund accounts for activities of student groups and other types of activities requiring
clearing accounts. These funds are accounted for in accordance with the Kentucky Department of Education
Publication Uniform Program of Accounting for School Activity Funds.
Private-Purpose Trust Funds
The Private-Purpose Trust Funds can only be used to purchase textbooks for needy students and for the
award of scholarships.
 CASH AND CASH EQUIVALENTS
The District considers demand deposits, money market funds, and other investments with an original maturity of 90
days or less, to be cash equivalents.
 ACCOUNTS RECEIVABLE
Receivables consist of all revenues earned at year-end and not yet received. Allowances for uncollectible accounts
are based upon historical trends and the periodic aging of accounts receivable. Major receivable balances for the
governmental activities include federal and state funding and taxes. Amounts on the District-Wide Statement of Net
Position and the Governmental Funds Balance Sheet are net of allowance for doubtful accounts.
 INVESTMENTS
Investments consist of non-brokered certificates of deposits recorded at fair value and are restricted at June 30,
2015.
-28-
WARREN COUNTY SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2015
 INVENTORIES
On the District-Wide Statement of Net Position inventories are stated at the lower of cost or market and are
expensed when used. The Food Service Fund inventories use the specific identification method and the General
Fund inventories use the first-in, first-out method. The Food Service Fund’s inventories consist of food and supplies
valued at cost, and U. S. Government commodities whose value is determined by the U. S. Department of
Agriculture.
In the Governmental Funds Balance Sheet, inventories in the General Fund are equally offset by a reserve which
indicates they do not constitute "available spendable resources” even though they are a component of total
assets.
 CAPITAL ASSETS
District-Wide Financial Statements
In the District-Wide Financial Statements, capital assets are valued at historical cost or estimated historical cost if
actual is unavailable, except for donated capital assets which are recorded at their estimated fair value at the date of
donation. The District maintains a capitalization threshold as follows, with the exception of land, computers and
technology equipment for which there is no threshold:
Land Improvements
Buildings
Portable Buildings
Building Improvements
School Buses
Other Vehicles
Rolling Stock
Food Service Equipment
Furniture and Fixtures
Audio-Visual Equipment
Other General Equipment
Musical Instruments
Software
$20,000
20,000
20,000
20,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
The cost of normal maintenance and repairs that do not add value or materially extend an asset’s life are expensed.
The District has elected not to capitalize interest on debt used to finance building construction/renovations.
Depreciation of all exhaustible capital assets is recorded as an allocated expense in the District-Wide Statement of
Activities, with accumulated depreciation reflected in the District-Wide Statement of Net Position. Depreciation is
provided over the assets’ estimated useful lives using the straight-line method of depreciation. The range of
estimated useful lives by type of asset is as follows:
50 years
25 years
5 years
10 years
5 years
12 years
15 years
10 years
Buildings
Building Improvements
Technology Improvements
School Buses
Vehicles
Food Service Equipment
Audio-Visual Equipment
Other General Equipment
-29-
WARREN COUNTY SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2015
Fund Financial Statements
In the fund financial statements, capital assets used in Governmental Fund operations are accounted for as
expenditures of the General Fund. Capital assets used in Proprietary Fund operations are accounted for the same
as in the District-Wide Financial Statements.
 LONG-TERM DEBT
District-Wide Financial Statements
All long-term debt to be repaid from governmental resources is reported as liabilities in the District-Wide Statement
of Net Position. The long-term debt consists primarily of bond obligations and compensated absences.
Fund Financial Statements
Long-term debt is not reported as liabilities in the Governmental Funds Balance Sheet. The debt proceeds are
reported as other financing sources and payment of principal and interest are reported as expenditures. There are
no long-term debt obligations recorded in the Proprietary Funds as these funds are not responsible for paying the
debt.
 COMPENSATED ABSENCE
The District’s policies regarding sick leave permit employees to accumulate earned but unused sick leave.
The entire compensated absence liability is reported on the District-Wide Statement of Net Position. The current
portion of this debt is estimated based on employees who have twenty-seven years of service or more as of June
30, 2015 and is calculated at thirty percent of their total accumulated sick leave.
In the Governmental Funds Balance Sheet, the current portion of unpaid compensated absences is the amount
expected to be paid using expendable available resources. The noncurrent portion of the liability is not reported. No
liability is accrued in the Proprietary Fund.
 EQUITY CLASSIFICATIONS
District-Wide Financial Statements
Equity is classified as net position and displayed in three components:
 Invested in Capital Assets, Net of Related Debt – Consists of capital assets net of accumulated
depreciation and reduced by the outstanding balances of any bonds, notes, or other borrowings that are
attributable to the acquisition, construction, or improvement of those assets.
 Restricted Net Position – Consists of net assets with constraints placed on the use either by 1) external
groups such as creditors, grantors, or laws or regulations, or 2) law through constitutional provisions or
enabling legislation.
 Unrestricted Net Position – All other net assets that do not meet the definition of “restricted” or “invested in
capital assets, net of related debt”.
Fund Financial Statements
Under the GASB Statement 54, fund balance is separated into five categories, as follows:
Nonspendable – Permanently nonspendable by decree of the donor, such as an endowment, or items which
may not be used for another purpose, such as amounts used to prepay future expenses or already-purchased
inventory on hand.
-30-
WARREN COUNTY SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2015
Restricted – Legally restricted under federal or state law, bond authority, or grantor contract.
Committed – Commitments passed by the Board.
Assigned – Funds assigned to management priority including issued encumbrances.
Unassigned – Funds available for future operations.
It is the District’s practice to liquidate funds when conditions have been met releasing these funds from legal,
contractual, Board, or managerial obligations, using restricted funds first, followed by committed funds, assigned
funds, then unassigned funds.
 ENCUMBRANCE ACCOUNTING
Encumbrances are not liabilities and, therefore, are not recorded as expenditures until receipt of material or service.
For budgetary purposes, appropriations lapse at fiscal year-end and outstanding encumbrances at year-end are
reappropriated in the next year. Accordingly, no differences exist between actual results and the applicable
budgetary data presented in the accompanying Required Supplementary Information. Encumbrances are
considered a managerial assignment of fund balance at June 30, 2015 in the Governmental Funds Balance Sheet.
 REVENUES – EXCHANGE AND NON-EXCHANGE TRANSACTIONS
Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is
recorded on the accrual basis when the exchange takes place. On a modified accrual basis, revenue is recorded in
the fiscal year in which the resources are measurable and become available. Available means that the resources
will be collected within the current fiscal year or are expected to be collected soon enough thereafter to be used to
pay liabilities of the current fiscal year. For the District, available means expected to be received within sixty days of
fiscal year-end.
Non-exchange transactions, in which the District receives value without directly giving equal value in return, include
property taxes, occupational taxes, grants, entitlements and donations.
In addition, the District levies an occupational license tax of 0.5% on salaries, wages, commissions, and other
compensation to residents of the Warren County School District for services performed or rendered within Warren
County and on the net profits of all resident businesses, professions, or occupations from activities conducted within
the Warren County School District. Occupational tax revenues are not susceptible to accrual because generally
they are not measurable until received in cash.
Revenue from grants, entitlements and donations is recognized in the fiscal year in which all eligibility requirements
have been satisfied. Eligibility requirements include timing requirements, which specify the year when the resources
are required to be used or the fiscal year when use is first permitted, matching requirements in which the District
must provide local resources to be used for a specified purpose, and expenditure requirements, in which the
resources are provided to the District on a reimbursement basis. On a modified accrual basis, revenue from nonexchange transactions must also be available before it can be recognized.
When both restricted and unrestricted resources are available, it is the District’s policy to use restricted resources
first then unrestricted resources, as they are needed.
 UNEARNED REVENUE
Unearned revenue arises when assets are recognized before a revenue recognition criterion has been satisfied.
Grants and entitlements received before the eligibility requirements are met are recorded as unearned grant
revenue.
-31-
WARREN COUNTY SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2015
In order to present the Special Revenue Fund on the accrual basis of accounting, and because the awards are not
yet available as assets, cash awards received in advance for the 2015-2016 school year have been classified as
unearned grant revenues. Likewise, all awards requested as a result of 2014-2015 expenditures have been
classified as receivables. Revenues of the Special Revenue Fund are considered earned when reimbursable
expenditures are made or obligations are incurred, and of an equal amount.
 OPERATING AND NONOPERATING REVENUES
Operating revenues are those revenues that are generated directly from the primary activity of the Proprietary
Funds. Those revenues are primarily charges for meals provided by the various schools and for childcare services
provided. Nonoperating revenues of the Proprietary Funds included grants, donations, and interest income.
 DONATED COMMODITIES
The fair value of donated commodities received during the year is reported in the Proprietary Fund Statement of
Revenues, Expenses, and Changes in Net Position as an expense and as donated commodities revenue
(nonoperating revenue).
 PROPERTY TAXES
Property taxes are levied each September on the assessed value listed as of the prior January 1, for all real and
personal property in Warren County. The tax rate is generally agreed to by the Board in the following September and
contingent upon state approval. The billings are considered due upon receipt by the taxpayer; however, the actual
due date is based on a period ending 30 days after the tax bill mailing. Property taxes are recorded as revenues in
the fiscal year for which they were levied. All taxes collected are initially deposited into the General Fund and then
transferred to the appropriate fund.
The property tax rates assessed for the year ended June 30, 2015 were $0.423 per $100 valuation for real property
and $0.423 per $100 valuation for business personal property. Motor vehicle tax was $0.545 for $100 valuation of
motor vehicles.
The following is the District’s property tax calendar:
Date Event
January 1, year of levy
October 1, year of levy
October 31, year of levy
December 31, year of levy
January 1, following year
February 1, following year
Assessment date
Taxes levied
2% discount allowed
Gross amount due
Delinquent date, 5% penalty added
21% penalty added
The District levies a 3.0% utility tax on all businesses and households within Warren County.
 ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect reported amounts of assets, liabilities, designated fund
balances, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported
amounts of revenues and expenses/expenditures during the reporting period. Actual results could differ from those
estimates.
-32-
WARREN COUNTY SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2015
 BUDGETARY PRINCIPLES
The District’s budgetary process accounts for certain transactions on a basis other than GAAP.
differences between the budgetary basis and the GAAP basis are:
The major
Revenues are recorded when received in cash (budgetary) as opposed to when susceptible to accrual (GAAP).
Expenditures are recorded when paid in cash (budgetary) as opposed to when the obligation is incurred (GAAP).
 INTERFUND RECEIVABLES AND PAYABLES
Each fund is a separate fiscal and accounting entity, and thus interfund transactions are recorded in each fund
affected by a transaction. Interfund receivables and payables for the District arise generally from two types of
transactions: 1) all funds are initially received into the General Fund, thus a payable and receivable are established
in the appropriate funds; and 2) payments are from the General Fund checking account, which may not have the
legal liability for the expenditure, thus a payable from the fund having the legal liability is established at such time.
Typically, interfund receivables and liabilities are resolved monthly, and all of these balances should be resolved
within a year. All interfund receivables and payables have been eliminated on the District-wide Statement of Net
Position.
 ACCRUED LIABILITIES AND LONG-TERM OBLIGATIONS
All payables, accrued liabilities and long-term obligations are reported in the District-wide Financial Statements, and
all payables, accrued liabilities and long-term obligations payable from proprietary funds are reported on the
proprietary fund financial statements.
Payables and accrued liabilities that will be paid from governmental funds are reported on the governmental fund
financial statements regardless of whether they will be liquidated with current resources. However, claims and
judgments, capital leases, compensated absences and special termination benefits that will be paid from
governmental funds are reported as a liability in the fund financial statements only to the extent that they will be paid
with current, expendable, available financial resources. In general, payments made within sixty days after year-end
are considered to have been made with current financial resources. School building revenue bonds and other longterm obligations that will be paid from governmental funds are not recognized as a liability in the fund financial
statements until due.
 PENSIONS
For the purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of
resources related to pensions, pension expense, information about the fiduciary net position of the Kentucky
Teachers Retirement System and County Employees Retirement System and additions to/deduction from these
pensions’ fiduciary net position have been determined on the same basis as they are reported by those pensions.
For this purpose, benefits payments (including refunds of employee contributions) are recognized when due and
payable in accordance with the benefit terms. Investments are reported at fair value.
NOTE C – CASH AND INVESTMENTS
The District’s funds are required to be deposited and invested under the terms of a depository contract pursuant to
Kentucky Revised Statutes (“KRS”) 160.570 and 702 Kentucky Administrative Regulations (“KAR”) 3:090. The
depository bank deposits for safekeeping with the District’s third party agent approved pledged securities in an
amount sufficient to protect District funds on a day-to-day basis during the period of the contract. The pledge of
approved securities is waived only to the extent of the dollar amount of Federal Deposit Insurance Corporation
(“FDIC”) insurance.
-33-
WARREN COUNTY SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2015
At June 30, 2015, the carrying amount of the District’s total cash and cash equivalents was $36,222,651. Of the
total cash balance, $250,000 was covered by Federal depository insurance, with the remainder covered by a
collateral agreement and collateral held by the pledging banks’ trust departments in the District’s name.
(Government Funds $32,545,174, Proprietary Funds $3,085,038, Private-Purpose Trust $7,628, and Agency Funds
$584,811)
KRS authorize the District to invest in direct obligations of the United States government; obligations backed by the
full faith and credit of the United States government; certificates of deposit or other interest bearing accounts issued
by any bank or savings and loan institution provided that such investment is insured by the FDIC or guaranteed by
the pledge of direct United States government obligations; bonds issued by the Commonwealth of Kentucky or one
of its agencies and instrumentalities; securities issued by any state or local government of the United States rated in
one of the three highest categories by a nationally recognized rating agency; certain mutual funds; commercial
paper rated in the highest category by a nationally recognized rating agency; or bankers’ acceptances for banks
rated in one of the three highest categories by a nationally recognized rating agency.
Due to the nature of the accounts and certain limitations imposed on the use of funds, each bank account within the
following funds is considered to be restricted: SEEK Capital Outlay Fund, FSPK Fund, Technology Fund
(accounted for within the Special Revenue Fund), Special Revenue Fund, Debt Service Fund, Bond Proceeds Fund,
School Construction Fund, School Food Service Fund, and School Activity Funds.
Generally Accepted Accounting Principles, require the District to address the following risks related to its
investments:
Credit Risk – Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the
investment. More specifically, custodial credit risk is the risk that, in the event of the failure of the counterparty,
the District will not be able to recover the value of its investments or collateral securities that are in the possession
of an outside party. The District does not have a policy for custodial credit risk. All investments held by the
District are insured or collateralized with securities held by the District or by the financial institution in the District’s
name.
Interest Rate Risk – Interest rate risk is the risk that changes in market interest rates will adversely affect the fair
value of an investment. The District manages its exposure to declines in fair value by purchasing a combination
of shorter and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is
maturing or approaching maturity evenly over time as necessary to provide the cash flow and liquidity needed for
operations.
Concentration of Credit Risk – The District’s investment policy places no limit on the amount the District may
invest in any one issuer.
-34-
WARREN COUNTY SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2015
NOTE D – RECEIVABLES
The District recognizes revenues as receivable when they are measurable and receipt is certain. Concentration of
credit risk with respect to the receivables from federal and state governments is limited due to the historical stability
of those institutions. While the District receives revenues from many different sources throughout the year, the
accounts and grants receivable may be grouped into the following categories:
Governmental
Activities/
Governmental
Funds
Accounts and Grants Receivable:
Other Receivables
Taxes Receivable
Grants Receivable
Gross Receivables
Less: Allowance for Doubtful Accounts
$
Net Receivables
$
Business-Type
Activities/
Proprietary
Funds
920,557
1,112,643
1,007,866
3,041,066
63,784
$
2,977,282
$
108,589
Total
$
1,029,146
1,112,643
1,007,866
3,149,655
83,879
$
3,065,776
108,589
20,095
88,494
Federal and state grants to be used or expended as specified by the grantor are recognized as revenue and
recorded as receivables when qualifying expenditures are incurred.
NOTE E – CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2015, was as follows:
Beginning
Balance
Additions
Retirements/
Reclassifications
Ending
Balance
Governmental Activities
Capital assets that are not depreciated:
Land
Construction in Progress
Total Nondepreciable Historical Cost
$
8,858,365
701,521
9,559,886
$
$
10,265,126
10,265,126
Capital assets that are depreciated:
Land Improvement
Buildings and Improvements
Technology Equipment
Vehicles
Other Machinery & Equipment
Total Depreciable Historical Cost
16,426,799
240,512,750
15,625,439
17,490,450
11,997,206
302,052,644
629,688
1,644,821
Less accumulated depreciation for:
Land improvements
Buildings and Improvements
Technology Equipment
Vehicles
Other Machinery & Equipment
Total Accumulated Depreciation
3,598,926
54,836,249
12,624,275
12,632,342
5,832,952
89,524,744
Total Depreciable Historical Cost, Net
212,527,900
Governmental Activities, Capital Assets, Net
$ 222,087,786
-35-
362,673
61,623
91,848
861,662
$
362,673
8,495,692
10,966,647
19,462,339
626,795
145,951
178,349
588,422
16,851,095
240,604,598
15,860,306
17,344,499
12,448,545
303,109,043
799,617
5,081,658
1,586,034
1,093,487
858,802
9,419,598
622,652
111,434
152,319
886,405
4,398,543
59,917,907
13,587,657
13,614,395
6,539,435
98,057,937
(7,774,777)
(297,983)
205,051,106
2,490,349
(362,673)
$
$
64,690
$ 224,513,445
WARREN COUNTY SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2015
Beginning
Balance
Retirements/
Reclassifications
Additions
Ending
Balance
Business-Type Activities:
Capital assets that are depreciated:
Buildings and Improvements
Technology Equipment
Other Machinery & Equipment
Total Depreciable Historical Cost
Less accumulated depreciation for:
Buildings and Improvements
Technology Equipment
Other Machinery & Equipment
Total Accumulated Depreciation
Total Depreciable Historical Cost, Net
Business-Type Activities, Capital Assets, Net
$ 15,127,597
156,023
4,508,480
19,792,100
7,209
2,031
123,494
125,525
$ 15,127,597
161,201
4,384,986
19,673,784
3,528,935
126,181
2,623,581
6,278,697
309,761
14,910
263,594
588,265
2,031
114,509
116,540
3,838,696
139,060
2,772,666
6,750,422
13,513,403
(581,056)
8,985
12,923,362
8,985
$ 12,923,362
$ 13,513,403
$
$
7,209
(581,056)
$
$
Depreciation expense was charged to functions/programs governmental activities as follows:
Instruction
Support Services:
Student
Instructional Staff
District Administration
School Administration
Business
Facilities Operations and Maintenance
Student Transportation
Community Service
$
Total Depreciation Expense
$
7,212,449
7,043
29,588
794
1,663
26,285
1,079,952
1,056,082
5,742
9,419,598
NOTE F – GENERAL LONG-TERM OBLIGATIONS
The amount shown in the accompanying District-Wide Financial Statements as bond obligations represents the
District’s future obligations to make lease payments relating to school building revenue bonds issued by the
Corporation on behalf of the District for purposes of school facility construction. These amounts are not reflected on
the governmental fund financial statements.
The General Fund, SEEK Capital Outlay Fund, and the FSPK Building Fund are obligated to make lease payments.
The lease agreements provide, among other things, for lease payments sufficient to satisfy debt service
requirements on bonds issued by the Corporation to construct school facilities. The District has the option to
purchase the property under lease at any time by retiring the bonds then outstanding. Upon completion of such
payments, the leased premises will become the property of the District. The District must generally make sinking
fund payments by the fifteenth day of the month prior to scheduled bond and interest payment dates. The District is
also obligated to maintain adequate property insurance on the school facilities, and the school facilities have been
pledged as security to the holders of the bonds.
In connection with the school building revenue bonds issued after May 1, 1996, the District entered into “participation
agreements” with the Kentucky School Facilities Construction Commission (the “Commission”). The Commission
was created by the Kentucky General Assembly for the purpose of assisting local school districts in meeting school
construction needs. The Commission will remit a stated amount of bond principal and interest payments annually,
subject to biennial approval by the Kentucky General Assembly. Should approval not be received in future periods,
-36-
WARREN COUNTY SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2015
the District remains obligated for the full amount of the bond principal and interest payments. Therefore, the liability
for the total bond amount remains with the District and, as such, the total principal outstanding has been recorded in
the District-Wide Financial Statements.
The District has issued one Build America Bond Series which requires the US Treasury to subsidize the District for
35% of the interest cost relating to the outstanding debt. The 2010 Series Build America Bonds have interest rates
that range from 0.80% to 5.63% and was fully refunded during the year ended June 30, 2015.
On April 1, 2015, the District issued $6,235,000 in School Building Revenue Bonds with interest rates that range
from 2% to 3% to refund $1,330,000 of outstanding 2006 Series Bonds with an average interest rate of 4%. The
refunding is scheduled for February 1, 2016. Until that time, the funds to refund the bonds are being held in escrow
and are considered defeased. The refunding reduced total debt service payments over the next 11 years by
$420,000, with a net present value savings of 6.25%. This results in an economic gain (the difference between the
present values of the old and the new debt service payments) of $360,000. The refunding of the Series 2006 Bonds
resulted in a deferred loss on refunding of $237,000, to be amortized over the life of the new bonds.
On April 1, 2015, the District issued $12,235,000 in School Building Revenue Bonds with interest rates that range
from 2% to 3.125% to refund $11,940,000 of outstanding 2010 Series Bonds with an average interest rate of 5.13%.
The refunding reduced total debt service payments over the next 16 years by $502,000, with a net present value
savings of 3.35%. This results in an economic gain (the difference between the present values of the old and the
new debt service payments) of $367,000. The refunding of the Series 2010 Bonds resulted in a deferred gain on
refunding of $15,000, to be amortized over the life of the new bonds.
Following is a schedule of obligations existing at June 30, 2015:
Issue Date
August 1, 2005
February 1, 2006
April 1, 2008
December 30, 2009
July 1, 2010
November 1, 2011
October 1, 2012
November 1, 2012
March 1, 2014
March 1, 2014
April 1, 2015
April 1, 2015
April 1, 2015
Series
XXXIV
XXXV
XXXVIII
MMIX
MMX
MMXII
MMXII
MMXIV
MMXIV
MMXIV
MMXV
MMXV
MMXV
Interest Rate
3.00%-4.00%
4.00%-4.25%
3.25%-4.375%
2.09%-2.09%
2.00%-3.125%
1.50%-2.625%
1.10%-2.50%
0.40%-1.75%
2.00%-3.00%
2.00%-4.00%
2.00%-3.50%
2.00%-3.00%
2.00%-3.125%
Amount
Outstanding
Maturity Date
December 1, 2019
February 1, 2026
April 1, 2028
December 15, 2025
February 1, 2019
April 1, 2022
October 1, 2032
June 1, 2023
December 1, 2024
June 1, 2029
April 1, 2035
February 1, 2026
August 1, 2030
$
6,170,000
1,330,000
42,420,000
4,484,000
2,195,000
3,920,000
4,175,000
4,125,000
5,825,000
25,520,000
18,465,000
6,235,000
12,235,000
137,099,000
1,465,918
Plus Unamortized Deferred Premiums and Discounts
Total School Building Revenue Bonds
-37-
$
138,564,918
WARREN COUNTY SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2015
Following are aggregate obligations existing at June 30, 2015:
Year
Ending
June 30,
2016
2017
2018
2019
2020
2021-2025
2026-2030
2031-2035
Interest
4,217,684
4,020,890
3,776,204
3,509,579
3,218,715
11,772,057
4,167,111
777,868
$ 13,640,684
13,281,890
13,280,204
13,291,579
13,264,715
58,421,057
37,681,111
9,697,868
$
503,326
476,921
476,922
476,921
444,564
1,869,433
1,452,430
122,738
$
$ 35,460,107
$ 172,559,107
$
5,823,255
$ 166,735,852
Principal
$
9,423,000
9,261,000
9,504,000
9,782,000
10,046,000
46,649,000
33,514,000
8,920,000
$ 137,099,000
Less:
Commission
Participation
Total
Repayments
$
Net
Repayments
13,137,358
12,804,969
12,803,282
12,814,658
12,820,151
56,551,624
36,228,681
9,575,130
Long term liability activity for the year ended June 30, 2015 was as follows:
Amounts
Balance
Governmental Activities
Balance
Due Within
July 1, 2014
Increases
Decreases
June 30, 2015
One Year
$ 126,600,000
$ 36,935,000
$ 26,436,000
$ 137,099,000
$ 9,423,000
1,317,830
269,301
121,213
1,465,918
127,917,830
37,204,301
26,557,213
138,564,918
9,423,000
5,272,342
516,469
268,320
5,520,491
557,261
Bonds Payable
General Obligation Debt
Plus Deferred Discounts and Premiums
Total Bonds Payable
Other Liabilities
Compensated Absences
Insurance
Total Other Liabilities
Total Long-Term Obligations
424,748
424,748
5,697,090
516,469
693,068
5,520,491
557,261
$ 133,614,920
$ 37,720,770
$ 27,250,281
$ 144,085,409
$ 9,980,261
NOTE G – ACCUMULATED UNPAID SICK LEAVE BENEFITS
Accrued sick leave, which has no maximum accumulation, is payable upon retirement at 30% of the value of
accumulated sick leave. In accordance with GAAP, the District has recorded approximately $5.5 million in accrued
sick leave as a liability in the District-Wide Statement of Net Position since the majority of these liabilities are not
expected to be liquidated with expendable available financial resources. Of the $5.5 million, $557,261 is reflected as
a current liability on the District Wide Statement of Net Position, as this amount is for those employees with twentyseven or more years of experience. Additionally, the Governmental Fund Balance Sheet reflects the current portion
of accrued sick leave of $34,550. This is the amount anticipated to be funded with current year’s economic financial
resources.
Sick leave benefits are accrued as a liability using the termination payment method. An accrual for earned sick
leave is made to the extent that it is probable that the benefits will result in termination payments. The liability is
based on the District’s past experience of making termination payments.
-38-
WARREN COUNTY SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2015
NOTE H – RETIREMENT PLANS
The District’s employees are provided with two pension plans, based on each position’s college degree requirement.
The County Employees Retirement System covers employees whose position does not require a college degree or
teaching certification. The Kentucky Teachers Retirement System covers positions requiring teaching certification or
otherwise requiring a college degree.
General information about the County Employees Retirement System Non-Hazardous (“CERS”)
Plan description
Employees whose positions do not require a degree beyond a high school diploma are covered by the CERS, a
cost-sharing multiple-employer defined benefit pension plan administered by the Kentucky Retirement System, an
agency of the Commonwealth of Kentucky. Under the provisions of the Kentucky Revised Statute Section (“KRS”)
61.645, the Board of Trustees of the Kentucky Retirement System administers CERS and has the authority to
establish and amend benefit provisions. The Kentucky Retirement System issues a publicly available financial report
that includes financial statements and required supplementary information for CERS. That report may be obtained
from http://kyret.ky.gov/.
Benefits provided
CERS provides retirement, health insurance, death and disability benefits to Plan members and beneficiaries.
Employees are vested in the plan after five years’ service. For retirement purposes, employees are grouped into
three tiers, based on hire date:
Amounts
Balance
Governmental Activities
Balance
Due Within
July 1, 2014
Increases
Decreases
June 30, 2015
One Year
$ 126,600,000
$ 36,935,000
$ 26,436,000
$ 137,099,000
$ 9,423,000
1,317,830
269,301
121,213
1,465,918
127,917,830
37,204,301
26,557,213
138,564,918
9,423,000
5,272,342
516,469
268,320
5,520,491
557,261
Bonds Payable
General Obligation Debt
Plus Deferred Discounts and Premiums
Total Bonds Payable
Other Liabilities
Compensated Absences
Insurance
Total Other Liabilities
Total Long-Term Obligations
424,748
424,748
5,697,090
516,469
693,068
5,520,491
557,261
$ 133,614,920
$ 37,720,770
$ 27,250,281
$ 144,085,409
$ 9,980,261
Cost of living adjustments are provided at the discretion of the State Legislature. Retirement is based on a factor of
the number of years’ service and hire date multiplied by the average of the highest five years’ earnings. Reduced
benefits are based on factors of both of these components. Participating employees become eligible to receive the
health insurance benefit after at least 180 months of service. Death benefits are provided for both death after
retirement and death prior to retirement. Death benefits after retirement are $5,000 in lump sum. Five years’ service
is required for death benefits prior to retirement and the employee must have suffered a duty-related death. The
decedent’s beneficiary will receive the higher of the normal death benefit and $10,000 plus 25% of the decedent’s
monthly final rate of pay and any dependent child will receive 10% of the decedent’s monthly final rate of pay up to
40% for all dependent children. Five years’ service is required for nonservice-related disability benefits.
-39-
WARREN COUNTY SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2015
Contributions
Required contributions to the employee are based on the tier:
Tier 1
Tier 2
Tier 3
Required Contribution
5%
5% + 1% for insurance
5% + 1% for insurance
General information about the Teachers’ Retirement System of the State of Kentucky (“KTRS”)
Plan description
Teaching-certified employees of the District and other employees whose positions require at least a college
degree are provided pensions through the Teachers’ Retirement System of the Commonwealth of Kentucky
(“KTRS”)—a cost-sharing multiple-employer defined benefit pension plan with a special funding situation
established to provide retirement annuity plan coverage for local school districts and other public educational
agencies in the Commonwealth. KTRS was created by the 1938 General Assembly and is governed by Chapter
161 Section 220 through Chapter 161 Section 990 of the KRS. KTRS is a blended component unit of the
Commonwealth of Kentucky and therefore is included in the Commonwealth’s financial statements. KTRS issues
a publicly available financial report that can be obtained at http://www.ktrs.ky.gov/05_publications/index.htm.
Benefits provided
For employees who have established an account in a retirement system administered by the Commonwealth prior
to July 1, 2008, employees become vested when they complete five (5) years of credited service. To qualify for
monthly retirement benefits, payable for life, employees must either:
1.) Attain age fifty-five (55) and complete five (5) years of Kentucky service, or
2.) Complete 27 years of Kentucky service.
Participants that retire before age 60 with less than 27 years of service receive reduced retirement benefits. Nonuniversity employees with an account established prior to July 1, 2002 receive monthly payments equal to two (2)
percent (service prior to July 1, 1983) and two and one-half (2.5) percent (service after July 1, 1983) of their final
average salaries for each year of credited service. New employees (including second retirement accounts) after
July 1, 2002 will receive monthly benefits equal to 2% of their final average salary for each year of service if, upon
retirement, their total service less than ten years. New employees after July 1, 2002 who retire with ten or more
years of total service will receive monthly benefits equal to 2.5% of their final average salary for each year of
service, including the first ten years. In addition, employees who retire July 1, 2004 and later with more than 30
years of service will have their multiplier increased for all years over 30 from 2.5% to 3.0% to be used in their
benefit calculation. Effective July 1, 2008, the System has been amended to change the benefit structure for
employees hired on or after that date.
Final average salary is defined as the employee’s five (5) highest annual salaries for those with less than 27 years
of service. Employees at least age 55 with 27 or more years of service may use their three (3) highest annual
salaries to compute the final average salary. KTRS also provides disability benefits for vested employees at the
rate of sixty (60) percent of the final average salary. A life insurance benefit, payable upon the death of an
employee, is $2,000 for active contributing employees and $5,000 for retired or disabled employees.
Cost of living increases are one and one-half (1.5) percent annually. Additional ad hoc increases and any other
benefit amendments must be authorized by the General Assembly.
-40-
WARREN COUNTY SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2015
Contributions
Contribution rates are established by KRS. Non-university employees are required to contribute 12.105% of their
salaries to the System.
The Commonwealth of Kentucky, as a non-employer contributing entity, pays matching contributions of the
amount 13.105% of salaries for local school district employees hired before July 1, 2008 and 14.105% for those
hired after July 1, 2008. For local school district employees whose salaries are federally funded, the employer
contributes 15.355% of salaries. If an employee leaves covered employment before accumulating five (5) years of
credited service, accumulated employee pension contributions plus interest are refunded to the employee upon
the employee’s request.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pensions
At June 30, 2015, the District reported a liability of for its proportionate share of the net pension liability for CERS.
KTRS did not report a liability for the District’s proportionate share of the net pension liability because the
Commonwealth of Kentucky provides the pension support directly to KTRS on behalf of the District. The amount
recognized by the District as its proportionate share of the net pension liability, the related Commonwealth
support, and the total portion of the net pension liability that was associated with the District were as follows:
District's proportionate share of the CERS net pension liability
$
21,406,000
Commonwealth's proportionate share of the KTRS net pension
liability associated with the District
344,848,397
$
366,254,397
The net pension liability for each plan was measured as of June 30, 2014, and the total pension liability used to
calculate the net pension liability was determined by an actuarial valuation as of that date.
The District’s proportion of the net pension liability for CERS was based on the actual liability of the employees
and former employees relative to the total liability of the System as determined by the actuary. At June 30, 2014,
the District’s proportion was 0.659788% percent.
For the year ended June 30, 2015, the District recognized pension expense of $2,433,305 related to CERS and
$16,898,273 related to KTRS, of which $8,126,457 was recognized on the fund financial statements as it
represented amounts paid on the District’s behalf during the year. The District also recognized revenue of
$16,898,273 for KTRS support provided by the State. At June 30, 2015, the District reported deferred outflows of
resources and deferred inflows of resources related to pensions from the following sources:
Deferred
Outflows of
Resources
Net difference between projected and actual
earnings on pension plan investments
District contributions subsequent to the
measurement date
$ 2,749,557
Total
$ 2,749,557
-41-
Deferred
Inflows of
Resources
$
2,389,000
$
2,389,000
WARREN COUNTY SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2015
$2,749,557 reported as deferred outflows of resources related to pensions resulting from District contributions
subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year
ended June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows related to
pensions will be recognized in pension expense as follows:
For the Year Ended June 30:
2016
2017
2018
2019
2020
$
549,911
549,911
549,911
549,911
549,911
Actuarial assumptions
The total pension liability in the June 30, 2014 actuarial valuation was determined using the following actuarial
assumptions, applied to all periods included in the measurement:
CERS
Inflation
Projected salary increases
Investment rate of return, net of investment expense
and inflation
KTRS
3.50%
4.50%
3.50%
4.0-8.2%
7.75%
7.50%
For CERS, Mortality rates for the period after service retirement are according to the 1983 Group Annuity
Mortality Table for all retired members and beneficiaries as of June 30, 2006 and the 1994 Group Annuity
Mortality Table for all other members. The Group Annuity Mortality Table set forward five years is used for the
period after disability retirement.
For KTRS, Mortality rates were based on the RP-2000 Combined Mortality Table for Males or Females, as
appropriate, with adjustments for mortality improvements based on a projection of Scale AA to 2020 with a
setback of 1 year for females. The last experience study was performed in 2011 and the next experience study is
scheduled to be conducted in 2016.
For CERS, the long-term expected return on plan assets is reviewed as part of the regular experience studies
prepared every five years. The most recent analysis, performed for the period covering fiscal years 2005 through
2008, is outlined in a report dated August 25, 2009. Several factors are considered in evaluating the long-term
rate of return assumption including long-term historical data, estimates inherent in current market data, and a lognormal distribution analysis in which best-estimate ranges of expected future real rates of return (expected return,
net of investment expense and inflation) were developed by the investment consultant for each major asset class.
These ranges were combined to produce the long-term expected rate of return by weighting the expected future
real rates of return by the target asset allocation percentage and then adding expected inflation. The capital
market assumptions developed by the investment consultant are intended for use over a 10-year horizon and may
not be useful in setting the long-term rate of return for funding pension plans which covers a longer timeframe.
The assumption is intended to be a long-term assumption and is not expected to changes absent a significant
change in the asset allocation, a change in the inflation assumption, or a fundamental change in the market that
alters expected returns in future years.
-42-
WARREN COUNTY SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2015
For KTRS, the long-term expected rate of return on pension plan investments was determined using a log-normal
distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of
pension plan investment expense and inflation) are developed for each major asset class. These ranges are
combined to produce the long-term expected rate of return by weighting the expected future real rates of return by
the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates
of arithmetic real rates of return for each major asset class, as provided by KTRS’s investment consultant, are
summarized in the following table:
Asset Class
U.S. Equity
Non U.S. Equity
Fixed Income
High Yield Bonds
Real Estate
Alternatives
Cash
Total
Target
Allocation
Long-Term Expected
Real Rate of Return
45.0%
17.0%
24.0%
4.0%
4.0%
4.0%
2.0%
100.0%
6.4%
6.5%
1.6%
3.1%
5.8%
6.8%
1.5%
Discount rate
For CERS, the discount rate used to measure the total pension liability was 7.75%. The projection of cash flows
used to determine the discount rate assumed that contributions from plan members and employers will be made
at statutory contribution rates. Projected inflows from investment earnings were calculated using the long-term
assumed investment return of 7.75%. The long-term investment rate of return was applied to all periods of
projected benefit payments to determine the total pension liability.
For KTRS, the discount rate used to measure the total pension liability was 5.23%. The projection of cash flows
used to determine the discount rate assumed that plan member contributions will be made at the current
contribution rates and the Employer contributions will be made at statutorily required rates. Based on those
assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future
benefit payments of current plan members until the 2036 plan year. Therefore, the long-term expected rate of
return on pension plan investments was applied to all periods of projected benefit payments through 2035 and a
municipal bond index rate of 4.35% was applied to all periods of projected benefit payments after 2035. The
Single Equivalent Interest Rate (SEIR) that discounts the entire projected benefit stream to the same amount as
the sum of the present values of the two separate benefit payments streams was used to determine the total
pension liability.
-43-
WARREN COUNTY SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2015
Sensitivity of CERS and KTRS proportionate share of net pension liability to changes in the discount rate
The following table presents the net pension liability of the District, calculated using the discount rates selected by
each pension system, as well as what the District’s net pension liability would be if it were calculated using a
discount rate that is 1-percentage-point lower or 1-percentage-point higher than the current rate:
1% Decrease
CERS
District's proportionate share
of net pension liability
Current
Discount Rate
6.75%
$ 18,643,935
KTRS
District's proportionate share
of net pension liability
4.23%
$0
7.75%
$
21,406,000
5.23%
1% Increase
8.75%
$24,168,065
6.23%
$0
Pension plan fiduciary net position
Detailed information about the pension plan’s fiduciary net position is available in the separately issued financial
reports of both CERS and KTRS.
Medical Insurance Plan
Plan description
In addition to the pension benefits described above, Kentucky Revised Statute 161.675 requires KTRS to provide
post-employment healthcare benefits to eligible members and dependents. The KTRS Medical Insurance benefit
is a cost-sharing multiple employer defined benefit plan. Changes made to the medical plan may be made by the
KTRS Board of Trustees, the Kentucky Department of Employee Insurance and the General Assembly.
To be eligible for medical benefits, the member must have retired either for service or disability. The KTRS
Medical Insurance Fund offers coverage to members under the age of 65 through the Kentucky Employees health
Plan administered by the Kentucky Department of Employee Insurance. Once retired members and eligible
spouses attain age 65 and are Medicare eligible, coverage is obtained through the KTRS Medicare Eligible Health
Plan.
Funding policy
In order to fund the post-retirement healthcare benefit, six percent 6% of the gross annual payroll of members
before July 1, 2008 is contributed. Three percent (3%) is paid by member contributions and three quarters percent
(.75%) from state appropriation and two and one quarter percent (2.25%) from the employer. Also, the premiums
collected from retirees as described in the plan description and investment interest help meet the medical
expenses of the plan.
-44-
WARREN COUNTY SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2015
NOTE I – ON-BEHALF PAYMENTS
The Commonwealth of Kentucky pays certain expenses on behalf of the District. In the financial statements, these
payments are recorded as an expense and other state revenue. These expenses include the following the year
ended June 30, 2015:
Health Insurance
KTRS Employer Match
Health Reimbursement Account
State Administration Fees
Life Insurance
Federal Reimbursement of Health Benefits
Technolgy
School Facilities Construction Commission Debt Service
$
13,626,177
8,126,457
733,078
168,707
24,532
(975,249)
135,650
503,137
$
22,342,489
NOTE J – POST-EMPLOYMENT HEALTH CARE BENEFITS
Retired District employees receive some health care benefits depending on their length of service. In accordance
with Kentucky Revised Statutes, these benefits are provided and advanced-funded on an actuarially determined
basis through the CERS and KTRS plans.
NOTE K – COMMITMENTS
On June 30, 2015, the District had outstanding commitments for construction of $22,726,788.
NOTE L – CONTINGENCIES
The District receives funding from federal, state, and local government agencies and private contributions. These
funds are to be used for designated purposes only. For government agency grants, if the grantor’s review indicates
that the funds have not been used for the intended purpose, the grantors may request a refund of monies advanced
or refuse to reimburse the District for its disbursements. The amount of such future refunds and unreimbursed
disbursements, if any, is not expected to be significant. Continuation of the District’s grant programs is predicated
upon the grantor’s satisfaction that the funds provided are being spent as intended and the grantors’ intent to
continue their programs.
In addition, the District operates in a heavily regulated environment. The operations of the District are subject to the
administrative directives, rules and regulations of federal and state regulatory agencies, including, but not limited to,
the U.S. Department of Education and the Kentucky Department of Education. Such administrative directives, rules
and regulations are subject to change by an act of Congress or the Kentucky Legislature or an administrative
change mandated by the Kentucky Department of Education. Such changes may occur with little or inadequate
funding to pay for the related cost, including the additional burden to comply with a change.
NOTE M – INSURANCE AND RISK MANAGEMENT
The District is exposed to various forms of loss of assets associated with the risks of fire, personal liability, theft,
vehicular accidents, errors and omissions, fiduciary responsibility, etc. Each of these risk areas is covered through
the purchase of commercial insurance. The District has purchased certain policies which are retrospectively rated
including workers’ compensation insurance. Premiums for these policies are based upon the District’s experience to
date.
The District is also exposed to various risks of loss related to torts, errors and omissions, injuries to employees, and
natural disasters. To obtain insurance for workers’ compensation, errors and omissions, and general liability
coverage, the District contracts with an insurance broker to obtain proper coverage.
-45-
WARREN COUNTY SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2015
The District purchases unemployment insurance through the Kentucky School Boards Insurance Trust
Unemployment Compensation Fund; however, risk has not been transferred to such fund.
In addition, the District continues to carry commercial insurance for all other risks of loss. Settled claims resulting
from these risks have not exceeded commercial insurance coverage in any of the past three fiscal years.
NOTE N – LITIGATION
The District is subject to various legal actions in various stages of litigation, the outcome of which is not determinable
at this time. Management of the District and its legal counsel do not anticipate that there will be any material effect
on the financial statements as a result of the litigation presently in progress.
NOTE O – RECONCILIATION OF FINANCIAL STATEMENTS TO ANNUAL FINANCIAL REPORT FILED WITH
THE KENTUCKY DEPARTMENT OF EDUCATION
In order for the District-Wide Statement of Net Position to conform to generally accepted accounting principles, the
Annual Financial Report (submitted to the Kentucky Department of Education) had to be adjusted. Below are
reconciliations of the total assets and liabilities of the District-Wide Statement of Net Position to the Annual Financial
Report.
Total Assets and Deferred Outflows of Resources per District-Wide Statement of Net
Position
$
280,455,936
Less: Transactions/Funds not Recorded on the
Annual Financial Report
(21,936)
Occupational Tax Office "Total Assets" from Governmental Funds Balance Sheet
Deferred Outflows of Resources not Recorded on the Governmental
Funds Balance Sheet
(3,184,902)
Other Governmental Funds "Total Assets" from
Governmental Funds Balance Sheet
(707,618)
Total Assets and Deferred Outflows of Resources per Annual Financial Report filed
with the Kentucky Department of Education
General Fund (1)
Special Revenue (2)
School Activity Fund (21)
Construction Fund (360)
Capital Outlay (310)
Food Service Fund (51)
Day Care (52)
Governmental Assets (8)
Food Service Assets (81)
Total Assets and Deferred Outflows of Resources Annual Financial Report filed with
the Kentucky Department of Education
-46-
$
276,541,480
$
21,341,407
1,977,155
280,243
11,471,545
94,941
3,701,432
237,950
224,513,445
12,923,362
$
276,541,480
WARREN COUNTY SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2015
Total Liabilities and Deferred Inflows of Resources per District-Wide Statement of Net
Position
$
173,713,707
Less: Transactions/Funds not Recorded on the
Annual Financial Report
Occupational Tax Office "Total Liabilities" from
Governmental Funds Balance Sheet
(7,514)
Bond Payable Discounts Less Amortization
(1,465,918)
Additional Current Portion of Compensated Absences
not Recorded on the Governmental Funds Balance Sheet
(522,710)
Deferred Inflow of Resources not Recorded on the Governmental
Funds Balance Sheet
(2,030,650)
Net Pension Liability not Recorded on the Governmental Funds Balance Sheet
(18,195,100)
Accrued Interest not Recorded on the Governmental
Funds Balance Sheet
Total Liabilities and Deferred Inflows of Resources per Annual Financial Report filed
with the Kentucky Department of Education
General Fund (1)
Special Revenue (2)
School Activity (21)
Construction Fund (360)
Food Service Fund (51)
Day Care Fund (52)
Long Term Debt Account Group (9)
Total Liabilities and Deferred Inflows of Resources per Annual Financial Report filed
with the Kentucky Department of Education
(919,615)
$
150,572,200
$
2,000,027
893,664
618
1,957,111
3,420,600
237,950
142,062,230
$
150,572,200
NOTE P – TRANSFER OF FUNDS
Although each fund is its own distinct reporting entity, periodically, funds have cause to transfer their revenues to
other funds. The most common reasons necessitating interfund transfers are for debt service payments and grant
matching funds. Debt service payments may be paid from revenues in the Capital Outlay Fund, Building Fund, or
Construction Fund, but the expenditures are recorded in the Debt Service Fund with transfers recorded to keep the
funds in balance.
At times, the Board receives grants which require an amount of matching funds. Usually, General Fund supplies this
match offset by operating transfers to the Special Revenue Fund.
-47-
WARREN COUNTY SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2015
Interfund transfers are eliminated in the governmental and business-type activities columns of the District-Wide
Statement of Net Position. As reflected on the governmental fund financial statements, the following transfers were
made during the year:
From Fund
To Fund
General Fund
General Fund
FSPK Fund
SEEK Fund
FSPK Fund
Food Service
General Fund
Special Revenue
General Fund
Special Revenue
Construction
General Fund
General Fund
Debt Service
General Fund
Construction
Debt Service
Day Care Fund
General Fund
Construction
Purpose
Technology Match
Capital Funds Request
Capital Funds Request
Capital Funds Request
Debt Service
Indirect Cost
Close Project
18C4 and 18CA Bond Pmts.
To cover debit fund balance
caused by pension liability
To cover negative cash balance
in Construction projects
Amount
$
309,535.00
825,000.00
972,348.64
1,178,772.36
11,968,106.16
420,279.63
4,527.79
109,223.00
208,501.60
19,872.50
$ 16,016,166.68
NOTE Q – COBRA
Under COBRA, employers are mandated to notify terminated employees of available continuing insurance
coverage. Failure to comply with this requirement may put the District at risk for a substantial loss contingency.
NOTE R – CHANGE IN ACCOUNTING PRINCIPLE AND RELATED CHANGES TO CERTAIN BEGINNING
BALANCES
Effective July 1, 2014, the District was required to adopt GASB Statement no. 68, Accounting and Financial
Reporting for Pensions. GASB 68 replaced the requirements of GASB 27, Accounting for Pensions by State and
Local Governmental Employers and GASB 50, Pension Disclosures, as they relate to governments that provide
pensions through pension plans administered as trusts or similar arrangements that meet certain criteria. GASB 68
requires governments providing defined benefit pensions to recognize their long-term obligation for pension benefits
as a liability to more comprehensively and comparably measure the annual costs of pension benefits. Cost-sharing
government employers, such as the District, are required to report a net pension liability, pension expense and
pension-related assets and liabilities based on their proportionate share of the collective amounts for all
governments in the plan.
GASB 68 required retrospective application. Since the District only presents one year of financial information, the
beginning net pension was adjusted to reflect the retrospective application. The adjustment resulted in a
$21,016,746 reduction in beginning for governmental activities net position on the District-wide Statement of
Activities and an increase of $2,389,000 of for governmental activities deferred outflows of resources – District
contributions subsequent to the measurement date. On the District-wide statement of activities and on the
statement of revenues, expenses and changes in net position – proprietary funds, the prior period adjustment
resulted in a reduction of $2,990,637 to the beginning net position for the School Food Service Fund and a reduction
of $213,617 to the beginning net position of the Day Care Fund.
-48-
WARREN COUNTY SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2015
NOTE S – FUTURE ACCOUNTING PRONOUNCEMENTS
In February 2015, the GASB issued Statement No. 72, Fair Value and Measurement and Application. The
requirements of this Statement are effective for financial statements for reporting periods beginning after June 15,
2015.
This statement establishes standards for valuation techniques to measure fair value. This statement establishes
a hierarchy of inputs to valuation techniques used to measure fair value. This statement requires disclosures to be
made about fair value measurements, the level of fair value hierarchy, and valuation techniques.
In June 2015, the GASB issued Statement No. 75, Accounting and Reporting for Postemployment Other Than
Pensions. The provisions of this statement are effective for fiscal years beginning after June 15, 2017.
This statement establishes new accounting and financial reporting requirements for OPEB plans. The scope of
this statement addresses accounting and financial reporting for OPEB that is provided to the employees of state
and local governmental employers. This statement establishes standards for recognizing and measuring liabilities,
deferred outflows of resources, deferred inflows of resources, and expense/expenditures. For defined benefit
OPEB, this statement identifies the methods and assumptions that are required to be used to project benefit
payments, discount projected benefit payments to their actuarial present value, and attribute that present value to
periods of employee service. Note disclosure and required supplementary information requirements about defined
benefit OPEB also are addressed.
The District is currently evaluating the impact that will result from adopting GASB No. 72 and GASB No. 75 and is
therefore unable to disclose the impact that adopting these standards will have on the District’s financial position
and the results of its operations when the statement is adopted.
NOTE T – SUBSEQUENT EVENTS
In preparing these financial statements, management of the District has evaluated events and transactions for
potential recognition or disclosure through November 7, 2015, the date the financial statements were available to
be issued.
-49-
REQUIRED SUPPLEMENTARY INFORMATION
WARREN COUNTY SCHOOL DISTRICT
BUDGETARY COMPARISON SCHEDULE FOR THE GENERAL FUND
For the Year Ended June 30, 2015
Budgeted Amounts
Original
Final
Revenues
Local and Intermediate Sources
State Programs
Federal Programs
Actual
$ 34,004,701
44,861,956
175,000
$ 35,877,047
64,978,713
200,000
$ 37,635,901
68,226,757
364,030
79,041,657
101,055,760
106,226,688
Total Revenues
VariancesFavorable
(Unfavorable)
Final
to Actual
$
1,758,854
3,248,044
164,030
5,170,928
Expenditures
Instruction
Support Services
Student
Instructional Staff
District Administration
School Administration
Business
Plant Operations and Maintenance
Student Transportation
Contingency
48,228,100
62,361,336
62,754,054
(392,718)
3,966,283
1,926,649
1,748,213
4,779,243
1,973,012
10,617,096
8,835,735
8,085,428
6,481,801
2,750,875
2,122,120
6,858,280
2,771,007
11,692,313
8,447,826
10,070,672
6,990,542
2,981,767
2,062,629
6,676,356
2,903,184
11,242,974
7,252,559
(508,741)
(230,892)
59,491
181,924
(132,177)
449,339
1,195,267
10,070,672
Total Expenditures
90,159,759
113,556,230
102,864,065
10,692,165
Revenues in Excess of (Less Than)
Expenditures
(11,118,102)
(12,500,470)
3,362,623
15,863,093
25,000
410,526
(212,518)
15,000
412,854
(204,000)
12,932
211,778
1,829,072
(2,068)
(201,076)
2,033,072
223,008
223,854
2,053,782
1,829,928
Other Financing Sources (Uses)
Proceeds from Sale of Fixed Assets
Transfers from Proprietary Funds
Operating Transfers
Total Other Financing
Sources (Uses)
Revenues and Other Financing
Sources in Excess of (Less Than)
Expenditures and Other Financing
Uses
(10,895,094)
(12,276,616)
5,416,405
17,693,021
10,895,094
12,276,616
13,939,398
1,662,782
$ 19,355,803
$ 19,355,803
Fund Balance-July 1, 2014
Fund Balance-June 30, 2015
$
$
See Independent Auditors’ Report
-50-
WARREN COUNTY SCHOOL DISTRICT
BUDGETARY COMPARISON SCHEDULE FOR THE SPECIAL REVENUE FUND
For the Year Ended June 30, 2015
Budgeted Amounts
Original
Final
Revenues
Local and Intermediate Sources
State Programs
Federal Programs
Total Revenues
$
Expenditures
Instruction
Support Services
Student
Instructional Staff
School Administration
Business
Plant Operations and Maintenance
Student Transportation
Community Service
Total Expenditures
130,098
3,372,354
6,839,761
10,342,213
$
Other Financing Sources
Operating transfers
Revenues and Other Financing
Sources in Excess of (Less Than)
Expenditures
$
109,747
94,978
(518,531)
(313,806)
9,676,851
55,411
46,264
130,764
87,482
115,974
(87,482)
14,790
20,000
105,437
991,972
11,491,805
60,094
31,690
111,832
1,036,080
11,120,003
(60,094)
(11,690)
(6,395)
(44,108)
371,802
566,781
(371,124)
(160,271)
(102,275)
57,996
224,658
160,271
200,312
40,041
98,037
98,037
985,454
985,454
(146,466)
$
193,963
4,182,609
6,641,156
11,017,728
10,243,632
Fund Balance-July 1, 2014
Fund Balance-June 30, 2015
$
9,435,500
(116)
184,024
992,254
10,713,337
Revenues Less Than Expenditures
84,216
4,087,631
7,159,687
11,331,534
Actual
VariancesFavorable
(Unfavorable)
Final
to Actual
(146,466)
$
See Independent Auditors’ Report
-51-
$ 1,083,491
$
1,083,491
WARREN COUNTY SCHOOL DISTRICT
SCHEDULE OF THE DISTRICT'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY -COUNTY EMPLOYEES RETIREMENT SYSTEM
For the Year Ended June 30, 2015
2014-15
District's portion of the net pension liability
0.6598%
District's proportionate share of the net
pension liability
$ 21,406,000
District's covered-employee payroll
$ 20,934,976
District's proportionate share of the net
pension liability as a percentage of its
covered-employee payroll
102.25%
Plan fiduciary net position as a
percentage of the total pension liability
5.4079%
**Schedule is intended to show information for ten years.
Additional years will be displayed as they become
available.
See Independent Auditors’ Report
-52-
WARREN COUNTY SCHOOL DISTRICT
SCHEDULE OF THE DISTRICT'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY -KENTUCKY TEACHERS RETIREMENT SYSTEM
For the Year Ended June 30, 2015
2014-15
District's portion of the net pension liability
0.0000%
District's proportionate share of the net
pension liability
0
Commonwealth's proportionate share of the net
pension liability associated with the
District
1.6782%
Commonwealth's proportionate share of the
net pension liability associated with the
District
$ 344,848,397
Total
$ 344,848,397
District's covered-employee payroll
$ 54,229,865
District's proportionate share of the net
pension liability
0
Commonwealth's proportionate share of the net
pension liability as a percentage of the
District's covered-employee payroll
635.90%
Plan fiduciary net position as a percentage of
the total pension liability
4.2776%
**Schedule is intended to show information for ten years.
Additional years will be displayed as they become
available.
See Independent Auditors’ Report
-53-
WARREN COUNTY SCHOOL DISTRICT
SCHEDULE OF THE DISTRICT CONTRIBUTIONS -COUNTY EMPLOYEES RETIREMENT SYSTEM
For the Year Ended June 30, 2015
2014-15
Contractually required contribution
$
Contributions in relation to the contractually
required contribution
2,859,305
(2,859,305)
$
District's covered-employee payroll
0
$ 20,934,976
Contributions as a percentage of coveredemployee payroll
13.6580%
**Schedule is intended to show information for ten years.
Additional years will be displayed as they become
available.
See Independent Auditors’ Report
-54-
WARREN COUNTY SCHOOL DISTRICT
SCHEDULE OF THE DISTRICT CONTRIBUTIONS -KENTUCKY TEACHERS RETIREMENT SYSTEM
For the Year Ended June 30, 2015
2014-15
Contractually required contribution
$
Contributions in relation to the contractually
required contribution
0
0
$
District's covered-employee payroll
0
$ 54,229,865
Contributions as a percentage of coveredemployee payroll
0.00%
**Schedule is intended to show information for ten years.
Additional years will be displayed as they become
available.
See Independent Auditors’ Report
-55-
OTHER SUPPLEMENTARY INFORMATION
COMBINING NONMAJOR FUND FINANCIAL STATEMENTS
WARREN COUNTY SCHOOL DISTRICT
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
June 30, 2015
Permanent
Fund
Assets
Cash and Cash Equivalents
Accounts Receivable
Total Assets
$
282,256
$
424,431
931
$
706,687
931
$
282,256
$
425,362
$
707,618
$
618
$
618
Liabilities and Fund Balances
Liabilities
Accounts Payable
Fund Balances
Nonspendable
Prepaids
Inventories
Permanent Fund Principal
Encumbrances
Unassigned
School
Activity Fund
Total
Nonmajor
Governmental
Funds
$
Total Fund Balances
282,256
282,256
Total Liabilities and Fund Balances
$
282,256
See Independent Auditors’ Report
-56-
$
15,189
409,555
282,256
15,189
409,555
424,744
707,000
425,362
$
707,618
WARREN COUNTY SCHOOL DISTRICT
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended June 30, 2015
Permanent
Fund
Revenues
Taxes
Earnings on Investments
Other
Total Revenues
$
9,004
Total Nonmajor
Governmental
Funds
$
$
9,004
Expenditures
Instruction
Support Services
Instructional Staff
Business
Student Transportation
Total Expenditures
4,632
Revenues in Excess of Expenditures
4,372
658
737,996
738,654
(11,886)
Net Changes in Fund Balances
(7,514)
Fund Balances July 1, 2014
255,670
34,066
24,174
313,910
34,066
4,632
24,174
318,542
424,744
429,116
(11,886)
424,744
289,770
$
282,256
See Independent Auditors’ Report
-57-
9,662
737,996
747,658
255,670
4,632
Other Financing Sources (Uses)
Transfers Out
Fund Balances June 30, 2015
School
Activity Fund
417,230
289,770
$
424,744
707,000
WARREN COUNTY SCHOOL DISTRICT
COMBINING BALANCE SHEET
GOVERNMENTAL FUND-CAPITAL PROJECT FUNDS
June 30, 2015
SEEK
Fund
Construction
Fund
Total
Capital
Project Funds
Assets
Cash and Cash Equivalents
$ 94,941
$ 11,471,545
$ 11,566,486
Total Assets
$ 94,941
$ 11,471,545
$ 11,566,486
$ 1,957,111
$
Liabilities and Fund Balances
Liabilities
Accounts Payable
Fund Balances
Restricted
Capital Projects and Purchase Obligations
Total Liabilities and Fund Balances
$ 94,941
9,514,434
9,609,375
$ 94,941
$ 11,471,545
$ 11,566,486
See Independent Auditors’ Report
-58-
1,957,111
WARREN COUNTY SCHOOL DISTRICT
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
GOVERNMENTAL FUND-CAPITAL PROJECT FUNDS
For the Year Ended June 30, 2015
FSPK
Fund
Revenues
From Local Sources
Taxes - Property
Earnings on Investments
Intergovernmental-State
SEEK
Fund
Construction
Fund
$ 11,206,950
14,357
$
11,206,950
14,357
3,720,678
14,357
14,941,985
426,393
9,838,732
426,393
9,838,732
10,265,125
10,265,125
(10,250,768)
4,676,860
18,465,000
47,809
849,400
18,465,000
47,809
849,400
(14,835,004)
19,362,209
4,527,205
92,624
9,111,441
9,204,065
2,317
402,993
405,310
$
Total Revenues
2,402,424
$ 1,318,254
13,609,374
1,318,254
Expenditures
Bond Issuance Cost
Facilities Acquisitions and Construction
Total Expenditures
Revenues in Excess of (Less Than)
Expenditures
13,609,374
Other Financing Sources (Uses)
Proceeds from Issuance of Bonds
Premium on Bonds Sold
Operating Transfers In
Operating Transfers Out
Total Other Financing Sources
(Uses)
1,318,254
(13,609,374)
(1,225,630)
(13,609,374)
(1,225,630)
Net Changes in Fund Balances
Fund Balances July 1, 2014
Fund Balances June 30, 2015
$
$
94,941
See Independent Auditors’ Report
-59-
Total
Capital
Project Funds
$
9,514,434
$
9,609,375
Total Liabilities and
Fund Balances
Fund Balances
Restricted
Capital Projects Purchase
Obligations
Liabilities and Fund Balances
Liabilities
Accounts Payable
Total Assets
Assets
Cash and Cash Equivalents
$
$
-
-
Greenwood
Athletic
Construction
$
$
$
$
57,760
37,760
20,000
57,760
57,760
Cumberland
Trace
Construction
$
$
$
$
943,612
910,433
33,179
943,612
943,612
Warren
East
Construction
$
$
-60-
-
-
Rockfield
Roof
Construction
See Independent Auditors’ Report
$ 9,936,914
8,032,982
$ 1,903,932
$ 9,936,914
$ 9,936,914
Warren
Central
Construction
$
$
$
$
266,202
266,202
266,202
266,202
Lost
River
Construction
WARREN COUNTY SCHOOL DISTRICT
COMBINING BALANCE SHEET
GOVERNMENTAL FUND-CAPITAL PROJECT FUNDS
CONSTRUCTION FUNDS
June 30, 2015
$
$
$
$
41,409
41,409
41,409
41,409
Middle
School
Construction
$
$
$
$
225,648
225,648
225,648
225,648
Briarwood
Addition
Construction
9,514,434
1,957,111
$ 11,471,545
$
$ 11,471,545
$ 11,471,545
Total
Construction
Funds
$
37,760
-
Fund Balances June 30, 2015
234
234
234
37,526
-
11,373
$
Cumberland
Trace
Construction
Fund Balances July 1, 2014
Net Changes in Fund Balances
Total Other Financing Sources
11,373
Other Financing Sources
Proceeds from Issuance of Bonds
Premium on Bonds Sold
Operating Transfers In
11,373
11,373
(11,373)
$
$
Revenues in Excess of (Less Than)
Expenditures
Total Expenditures
Expenditures
Facilities Acquisition & Construction
Bond Issuance Cost
Revenues
Earnings on Investments
Greenwood
Athletic
Construction
8,032,982
(391,791)
8,424,773
13,128,905
13,095,000
33,905
(4,704,132)
4,713,652
4,411,263
302,389
9,520
$
$
910,433
(36,802)
947,235
6,208,904
5,370,000
13,904
825,000
(5,261,669)
5,263,118
5,139,114
124,004
1,449
Warren
East
Construction
$
$
-61-
-
-
8,500
8,500
(8,500)
8,500
8,500
Rockfield
Roof
Construction
See Independent Auditors’ Report
$
$
$
Warren
Central
Construction
$
$
266,202
385,176
(118,974)
(118,974)
120,449
120,449
1,475
Lost
River
Construction
WARREN COUNTY SCHOOL DISTRICT
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUND-CAPITAL PROJECT FUNDS
CONSTRUCTION FUNDS
For the Year Ended June 30, 2015
$
$
41,409
41,241
168
168
168
Middle
School
Construction
$
$
225,648
367,643
(141,995)
4,528
4,528
(146,523)
148,034
148,034
1,511
Briarwood
Addition
Construction
$
$
9,514,434
402,993
9,111,441
19,362,210
18,465,000
47,809
849,401
(10,250,769)
10,265,126
9,838,733
426,393
14,357
Total
Construction
Fund
AGENCY FUND FINANCIAL INFORMATION
WARREN COUNTY SCHOOL DISTRICT
COMBINING STATEMENT OF RECEIPTS, DISBURSEMENTS AND DUE TO STUDENTS
SCHOOL ACTIVITY FUNDS (AGENCY FUNDS)
For the Year Ended June 30, 2015
Cash Balance
7/1/2014
High Schools
Greenwood
South Warren
Warren Central
Warren East
$
174,739
100,173
124,292
118,652
Total
Disbursements
Total
Receipts
$
338,046
383,416
184,125
275,643
$
398,065
399,610
218,363
295,696
Cash
Balance
6/30/2015
$
114,720
83,979
90,054
98,599
Middle Schools
Drakes Creek
Henry F. Moss
South Warren
Warren East
49,640
26,475
55,040
38,660
99,372
58,397
1,403
73,681
119,574
77,323
400
72,584
29,438
7,549
56,043
39,757
Elementary Schools
Alvaton
Briarwood
Bristow
Cumberland Trace
Jody Richards
Lost River
North Warren
Oakland
Plano
Rich Pond
Richardsville
Rockfield
Warren Elem.
William H. Natcher
17,495
27,668
20,240
14,086
11,888
24,299
18,652
9,912
15,441
12,626
55,463
15,131
17,150
23,539
361
17,706
328
15,757
17,004
21,353
2,209
8,774
29,356
28,087
37,922
16,869
9,165
24,937
38,442
21,374
34,476
11,417
33,070
84,605
31,314
50,524
33,857
150
27,668
20,568
487
805
7,730
3,992
9,521
15,441
4,493
9,300
5,191
1,102
1,099
971,261
$ 1,610,515
$ 1,954,090
Total
$
$
627,686
See Independent Auditors’ Report
-62-
Accounts
Receivable
6/30/2015
$
4,238
300
2,200
Due To
Students
& Others
6/30/2015
Accounts
Payable
6/30/2015
$
$
4,543
20
29,458
7,413
56,043
28,876
136
10,881
150
27,668
20,568
487
836
7,730
3,992
9,221
15,512
4,493
9,300
5,191
1,102
1,099
31
300
71
$
6,860
$
15,860
118,958
83,979
90,354
96,256
$
618,686
WARREN COUNTY SCHOOL DISTRICT
GREENWOOD HIGH SCHOOL ACTIVITY FUNDS
SCHEDULE OF RECEIPTS, DISBURSEMENTS AND DUE TO STUDENTS
For the Year Ended June 30, 2015
Cash Balance
7/1/2014
General Fund
Interest Income
Cash on Hand
AP Test
Co-op
Credit Recovery
Faculty Vending
Field Trips
Musical
Parking Tickets
PBIS
Prom
Student Council
Student Fees
Student Vending
Textbooks
Travel
Yearbooks
Anthology Club
Archery
Art Club
Band Club
BETA Club
Black History
Chess Club
Choir Club
Design Club
Drama Club
FBLA Club
FCA Club
FCCLA Club
FEA Club
FFA Club
Friends Club
GAPP Club
HOSA Club
International Club
Invisible Children Club
Jr. BETA Club
Literature Club
NHS Club
OAR Club
Orchestra
PEP Club
Philosophy Club
SADD Club
S.C.E.C. Club
$
1,574
7,641
415
1,983
216
7,479
6,620
1,002
63
5,052
997
382
641
1,122
3,078
10,372
987
377
1,250
5,358
123
92
3,221
33
1,827
878
228
984
1,134
6,389
277
867
238
485
334
4,290
4
314
824
369
400
156
158
Disbursements
Receipts
$
168
650
2,500
24,274
$
3,912
5,000
31,311
3,813
50
1,460
2,037
10,557
16,567
741
140
3,834
1,962
398
3,076
1,172
19,890
30,561
814
3,019
12,270
80
2,405
1,248
21,470
12,879
11,366
531
7,970
1,105
4,329
460
45,742
825
3,046
172
7,461
940
3,349
1,057
48,485
135
134
785
2,860
3,916
8,200
720
4,030
8,484
797
2,344
15,812
1,250
196
7,248
4,532
Cash
Balance
6/30/2015
Transfers
$
3,514
(603)
2,500
$
Accounts
Receivable
6/30/2015
1,344
47
Accounts
Payable
6/30/2015
Due To
Students
& Others
6/30/2015
$
604
415
1,344
47
604
415
(523)
523
$
1,991
2,514
3,078
(1,511)
522
5,865
5,865
641
8,466
3,567
641
8,466
3,567
16
1,378
(3,078)
340
(987)
120
200
4,290
(123)
445
(445)
1
(334)
(4,290)
(4)
(200)
400
2,247
3,625
41
41
854
1,191
2
448
854
1,191
2
448
92
4,734
33
2,186
1,832
393
1,519
537
3,646
142
733
278
672
92
4,734
33
2,186
1,832
393
1,519
537
3,646
142
733
278
672
940
292
940
292
487
308
487
308
(400)
(156)
1,932
200
1,445
50
Continued
-63-
WARREN COUNTY SCHOOL DISTRICT
GREENWOOD HIGH SCHOOL ACTIVITY FUNDS
SCHEDULE OF RECEIPTS, DISBURSEMENTS AND DUE TO STUDENTS
For the Year Ended June 30, 2015
Cash Balance
7/1/2014
Science Club
Spanish Club
STLP Club
TARS Club
YADS
YELP Club
Athletic Director
Athletic Special
Baseball
Tournament
Basketball -Boys
Basketball - Girls
Bowling - Boys
Bowling - Girls
Cheerleading
Cross Country - Boys
Cross Country - Girls
Football
Golf - Boys
Golf - Girls
Hall of Fame
Lacrosse
Rivals Bowl
Soccer - Boys
Soccer - Girls
Girls District Soccer
Softball
Swimming - Boys
Swimming - Girls
Tennis - Boys
Track - Boys
Track - Girls
Volleyball
Art Dept
English Dept
ESL
Family Consumer Science
Guidance Dept.
JROTC Dept
JROTC Spec Dept
Library Dept.
Math Dept
Newspaper Dept
Photography Dept
Science Dept
Social Studies Dept
Voc. Ag. Dept
Donations
Total
Disbursements
Receipts
359
313
207
1,644
124
273
585
1,923
1,334
100
883
11,530
1,391
1,517
22,300
Transfers
1,163
564
13,328
9,830
6,428
5,151
12,189
10,675
388
13,362
3,676
(11)
154
(124)
(585)
(2,310)
303
(388)
9,277
6,731
1,679
9,164
7,565
1,348
75
1,277
515
515
23,562
1,000
965
27,816
6,287
5,681
3,887
2,920
4,274
573
573
1,836
19
5,000
1
4,509
1,721
1,963
1,120
2,102
110
498
178
2,395
2,973
12,539
658
(5,423)
1,000
965
$
174,739
Accounts
Payable
6/30/2015
Due To
Students
& Others
6/30/2015
530
413
515
530
413
515
273
273
166
166
3,472
16,387
6,786
3,472
16,387
6,786
876
1,002
21,131
876
1,002
21,131
29
29
3,307
5,868
696
3,307
5,868
696
1,552
1,572
1,264
1,552
1,572
1,264
1
1
1,106
1,106
1
58
178
1
58
178
1,530
1,797
1,530
1,797
(120)
(3,042)
3,245
3,335
4,584
2,224
4,876
992
1,115
1,433
1,550
1,530
4,014
2,529
2,529
3,442
170
Accounts
Receivable
6/30/2015
1,348
75
1,277
29
120
961
6,565
Cash
Balance
6/30/2015
602
992
1,115
1,433
(189)
5,000
4,509
3,003
9,193
1,282
7,216
111
2,213
109
600
1,120
338,046
160
3,515
2,973
29,343
500
18,338
1,639
$
1,120
(1,120)
$
398,065
(4)
$
$
See Independent Auditors’ Report
-64-
114,720
$
4,238
$
$ 118,958
WARREN COUNTY SCHOOL DISTRICT
SOUTH WARREN HIGH SCHOOL ACTIVITY FUNDS
SCHEDULE OF RECEIPTS, DISBURSEMENTS AND DUE TO STUDENTS
For the Year Ended June 30, 2015
Cash Balance
7/1/2014
General Fund
Interest Income
AP Test
Aviation
Faculty Vending
Musical
PBIS
Prom
Science Trips
Student Council
Student Vending
Sunshine Fund
Textbooks
Yearbooks
Academic Team Club
Art Club
BETA Club
Choir Club
Club 14:23
Drama Club
Fashion Club
FBLA Club
FCA Club
FCCLA Club
FFA Club
History Club
Jr. BETA Club
KEY Club
Kentucky Youth Assembly
NHS Club
Orchestra
Quidditch Club
SCEC Club
Science Club
Spear-It
Speech Club
STLP Club
Athletic Special
Baseball
Basketball - Boys
Basketball - Girls
Bowling - Boys
Bowling - Girls
Cheerleading
Cross Country
Football
Fourth Region AD
Golf - Boys
Golf - Girls
$
9,186
1,791
150
553
15,996
48
2,971
80
3,084
4,440
311
2,559
8,730
296
1,182
1,612
1,622
10
270
1,179
319
79
209
3,243
113
771
6
41
112
30
142
1,013
289
1,317
59
441
4,733
677
4,627
334
250
499
2,250
968
714
1,200
1,200
Disbursements
Receipts
$
4,630
412
1,916
250
786
42,787
10,008
24,804
8,623
4,982
$
6,695
3,707
400
464
40,826
199
12,590
1,478
702
29,483
9,934
10,821
24,658
8,178
4,993
276
2,758
21,350
1,087
352
26,361
8,580
2,155
12,597
165
4,354
31,181
10,900
8,535
12,496
138
3,583
29,303
11,013
337
11,730
1,249
293
190
11,733
1,358
323
2,062
440
1,152
1,193
285
34,214
4,105
8,352
8,489
240
330
2,395
Cash
Balance
6/30/2015
Transfers
$
(5,750)
(412)
269
(250)
(63)
(1,035)
(2,882)
(35)
30
74
632
50
(270)
6,728
(365)
(858)
(1,095)
$
1,371
Accounts
Receivable
6/30/2015
Accounts
Payable
6/30/2015
Due To
Students
& Others
6/30/2015
$
1,371
875
18,226
48
1,908
163
2,494
1,547
875
18,226
48
1,908
163
2,494
1,547
761
1,532
5,366
3,026
10
761
1,532
5,366
3,026
10
1,527
55
106
122
4,026
1,527
55
106
122
4,026
153
38
3
153
38
3
680
812
1,408
180
319
2,639
1,047
1,947
6,841
579
684
680
812
1,408
180
319
2,639
1,047
1,947
6,841
579
684
2,250
3,169
1,129
1,200
1,210
2,250
3,169
1,129
1,200
1,210
(771)
(142)
20,550
1,200
400
315
1,013
407
27,550
7,967
8,037
7,375
247
246
504
1,734
18,221
860
1,605
1,185
Continued
-65-
83
(746)
(59)
(4,025)
176
955
1,100
252
350
5
1,734
(128)
75
1,205
1,195
WARREN COUNTY SCHOOL DISTRICT
SOUTH WARREN HIGH SCHOOL ACTIVITY FUNDS
SCHEDULE OF RECEIPTS, DISBURSEMENTS AND DUE TO STUDENTS
For the Year Ended June 30, 2015
Cash Balance
7/1/2014
Regionals
Soccer - Boys
Soccer - Girls
Softball
Swimming
Tennis - Boys
Tennis - Girls
Track
Volleyball
Family Consumer Science
GAT Dept
Guidance Dept.
Library Dept.
Math Dept.
Science Dept
The Spartan Spoon
Voc. Ag. Dept
Odysey of the Mind Team
District Sweep Acct.
Total
39,375
5,368
1,785
3,683
1,772
1,339
1,152
1,000
400
400
2,000
40
20
969
468
1,213
100,173
$
1,500
45
67
240
2,970
864
12,694
1,250
240
3,122
928
18,104
115
115
383,416
Transfers
39,375
4,409
1,745
2,680
1,430
408
380
1,450
2,238
3,153
152
779
6,758
5
$
Disbursements
Receipts
(256)
(6)
1,430
400
343
820
(60)
(20)
730
(50)
(30)
1,897
$
399,610
Cash
Balance
6/30/2015
(73)
250
(5)
500
$
$
See Independent Auditors’ Report
-66-
Accounts
Receivable
6/30/2015
Accounts
Payable
6/30/2015
Due To
Students
& Others
6/30/2015
2,475
1,373
2,155
1,000
392
363
1,370
895
2,475
1,373
2,155
1,000
392
363
1,370
895
1,302
463
1,302
463
642
1,598
642
1,598
500
500
83,979
$
$
$ 83,979
WARREN COUNTY SCHOOL DISTRICT
WARREN CENTRAL HIGH SCHOOL ACTIVITY FUNDS
SCHEDULE OF RECEIPTS, DISBURSEMENTS AND DUE TO STUDENTS
For the Year Ended June 30, 2015
Cash Balance
7/1/2014
General Fund
Interest Income
AP Test
Facility Rental
Faculty Vending
Field Trips
KYCID
Prom
Student Council
Student Vending
Sunshine Fund
Textbooks
Warren Central College Academy
Yearbooks
Afro American Club
Band Club
BETA Club
Biology Club
Bosnian Amer. Club
Chemistry Club
Chess Club
Computer Club
Drama Club
FBLA Club
FCA Club
FCCLA Club
FFA Club
KY Jr. Historical Club
Literary Club
Natl Sch. Sportsman
Physics Un-Club
Power Lifting Club
SCEC Club
Spanish Club
STLP Club
Writer's Ink Club
Young Democrats
Men of Distinction
Young Republicans
Athletics Hall of Fame
Athletic Special
Baseball
Basketball - Boys
Basketball - Girls
Bass Fishing
Bowling - Boys
Bowling - Girls
Cheerleading
$
892
3,046
3,400
3,216
4,259
587
9,879
379
446
596
2,230
512
1,056
219
420
2,525
161
1,030
1,271
25
1,830
2,517
157
1,552
320
7,915
18
684
361
1,694
255
195
1,424
769
441
20
496
1,447
1,389
2,585
13,010
5,259
212
532
394
396
Receipts
$
4,187
446
7,413
Disbursements
$
5,366
2,071
1,000
10,640
3,400
3,383
3,000
5,425
8,158
213
1,074
4,964
413
596
2,443
1,586
6,020
55
1,598
195
1,610
Transfers
$ 3,808
(446)
181
Cash
Balance
6/30/2015
$
Accounts
Receivable
6/30/2015
3,521
1,904
Accounts
Payable
6/30/2015
Due To
Students
& Others
6/30/2015
$
$
300
3,521
2,204
(2,259)
(587)
277
(33)
7,146
656
7,146
656
280
2,488
161
1,084
1,015
68
280
2,488
161
1,084
1,015
68
461
486
1,550
8,283
461
486
1,550
8,283
309
309
255
195
1,400
719
441
255
195
1,400
719
441
496
1,950
1,572
5,759
11,016
1,609
496
1,950
1,572
5,759
11,016
1,609
287
235
286
287
235
286
(219)
54
98
43
280
3,569
1,051
9,918
16,768
512
(25)
354
2,110
2,517
3,265
2,117
8,688
16,540
140
(512)
(18)
684
130
100
(182)
(1,794)
422
446
(50)
(20)
1,281
4,769
6,654
21,598
8,048
778
4,572
3,480
22,026
13,099
747
420
1,157
579
110
Continued
-67-
(14)
(1,566)
1,401
(212)
165
WARREN COUNTY SCHOOL DISTRICT
WARREN CENTRAL HIGH SCHOOL ACTIVITY FUNDS
SCHEDULE OF RECEIPTS, DISBURSEMENTS AND DUE TO STUDENTS - Continued
For the Year Ended June 30, 2015
Cash Balance
7/1/2014
Cross Country
Football
Golf
Rivals Bowl
Soccer - Boys
Soccer - Girls
Softball
Tennis - Boys
Tennis - Girls
Track
Volleyball
Art Dept.
Family Science Dept.
Freshman Acad Dept.
Global Learning Acad
JROTC Dept.
Library Dept.
Music Dept.
Voc. Ag. Dept
Habitat for Humanity Chapter
Renaissance
Target
Total
1,432
7,674
369
5,000
2,316
1,367
124,292
Transfers
424
22,110
384
8,506
2,839
2,424
1,250
598
659
2,640
9,467
26,358
9,792
3,185
2,921
2,205
879
878
2,608
10,728
25
2,324
209
305
427
1,103
810
556
15
321
1,514
4,367
1,291
11,098
173
404
1,520
$
Disbursements
Receipts
Cash
Balance
6/30/2015
8,066
15
(6,286)
(125)
Accounts
Receivable
6/30/2015
Accounts
Payable
6/30/2015
Due To
Students
& Others
6/30/2015
1,008
19,988
1,008
19,988
2,662
1,864
955
490
524
395
2,239
835
2,662
1,864
955
490
524
395
2,239
835
2,880
(15)
$
9,701
578
1,838
4,878
9,752
4,945
2,211
15,976
512
321
1,975
321
1,975
75
993
993
173
173
(277)
319
127
1,839
184,125
$
218,363
$
See Independent Auditors’ Report
-68-
$
90,054
$
300
$
$
90,354
WARREN COUNTY SCHOOL DISTRICT
WARREN EAST HIGH SCHOOL ACTIVITY FUNDS
SCHEDULE OF RECEIPTS, DISBURSEMENTS AND DUE TO STUDENTS
For the Year Ended June 30, 2015
Cash Balance
7/1/2014
General Fund
$
Due to Student Body
Interest Income
AP Test
Enrichment
Faculty Vending
Field Trips
Flower Fund
Musical
Smart Cards
Student Government
Student Rewards
Textbooks
WKU Graduation Video
Yearbooks
Academic Team Club
Afro American Club
Art Club
Archery Club
Band Club
BETA Club
CEC Club
Choir Club
FBLA Club
FCA Club
FCCLA Club
FEA Club
FFA Club
International Club
Jr. BETA Club
KEY Club
Kentucky Youth Assembly
Math Club
NHS Club
PEP Club
PRIDE Club
Science Club
TSA Club
Athletic Special
Baseball
Tournament
Basketball - Boys
Basketball - Girls
Bass Fishing
Bowling - Boys
11,244
377
10,033
825
1,872
662
54
3,572
84
1,624
825
265
15,676
2
162
262
350
746
26
171
1,945
316
356
2,079
1,656
3,963
429
10
3,592
618
242
566
1,327
1
3,125
125
3,870
5,680
114
556
Receipts
$
5,035
485
8,843
Disbursements
$
2,490
Transfers
$ 4,110
(378)
(485)
3,013
340
18,875
366
3,408
1,002
11,499
548
256
4,477
10
7,719
448
239
4,447
835
20,543
451
36,589
89
1,038
5,751
148
6,124
1,229
5,931
6,015
370
70
429
5,124
4,657
3,047
5,251
125
4,767
4,834
581
52,145
581
(776)
(459)
(205)
Cash
Balance
6/30/2015
Accounts
Receivable
6/30/2015
Accounts
Payable
6/30/2015
$ 17,899
(378)
377
1
1,272
Due To
Students
& Others
6/30/2015
$ 17,899
(378)
377
1
$
350
1,622
(54)
53,317
7,352
184
17
1,654
(265)
400
$
40
7,352
184
17
1,614
30
364
162
71
540
218
1,284
26
2,248
1,476
316
289
2,079
2,052
3,963
30
364
162
71
540
218
1,284
26
2,248
1,476
316
289
2,079
2,052
3,963
10
555
3,683
709
319
439
1,184
1
4,408
483
10
555
3,683
709
319
439
1,184
1
4,408
483
2,205
3,989
114
815
2,205
3,989
114
815
(429)
3,340
91
690
1,940
3,285
740
883
4,190
5,024
23,780
10,916
6,834
100
6,234
8,681
4,816
23,814
10,374
8,237
100
6,085
599
1,363
Continued
-69-
500
(500)
(127)
5,774
150
34
(2,207)
(288)
110
WARREN COUNTY SCHOOL DISTRICT
WARREN EAST HIGH SCHOOL ACTIVITY FUNDS
SCHEDULE OF RECEIPTS, DISBURSEMENTS AND DUE TO STUDENTS - Continued
For the Year Ended June 30, 2015
Cash Balance
7/1/2014
Cheerleading
Cross Country
Drill Team
Football
Football Playoffs
Soccer - Boys
Soccer - Girls
Softball
Softball - 4th Reg Tourn
Tennis
Track
Volleyball
Class Officers
Class of 2014
Class of 2015
Class of 2016
Business Dept.
Drama Dept.
Freshman Acad Dept.
GAT Dept.
Global Learning Acad.
Horticulture Dept.
JROTC Dept.
Language Arts Dept
Library Dept.
Science Dept.
Special Educ. Dept.
Speech Dept.
Renaissance-Donations
Total
Receipts
Disbursements
30
800
90
1,777
191
3,020
1,190
2,011
10
602
1,357
995
2,298
6,224
9
138
341
96
204
8,468
4,248
145
1,354
149
828
28
3,567
$
118,652
22,357
1,864
2,164
3,002
2,400
9,689
30
10
3,864
240
7,495
50
300
8,938
8,101
15
771
Transfers
Cash
Balance
6/30/2015
1,170
60
11,922
1,356
2,136
4,248
2,177
8,461
(3,490)
(508)
(90)
418
(478)
Accounts
Receivable
6/30/2015
Accounts
Payable
6/30/2015
Due To
Students
& Others
6/30/2015
2,147
2,147
191
9,965
191
9,965
1,128
765
651
750
632
1,128
765
(273)
750
632
1,790
2,714
(10)
3,115
2,106
995
103
1,503
4,455
9
(2,195)
(4,961)
4,500
2,106
995
7,540
348
7,192
3,674
210
3,464
1,231
1,231
(138)
(391)
396
1,697
2,321
17,315
8,675
160
894
149
828
1,725
1,402
$ 275,643
$ 295,696
(204)
(91)
(72)
$
4,414
60
$ 98,599
$ 2,200
See Independent Auditors’ Report
-70-
4,474
$ 4,543
$ 96,256
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
WARREN COUNTY SCHOOL DISTRICT
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
As of June 30, 2015
Federal Grantor/
Pass-Through Grantor/
Program Title
Federal
CFDA
Number
US Department of Agriculture:
Pass-through programs from:
KY Dept of Education:
Child Nutrition Cluster:
National School Lunch Program
School Breakfast Program
Summer Food Service Program for Children
Total Child Nutrition Cluster
Fresh Fruit and Vegetable Program
Pass-Through
Grantor's
Number
Federal
Expenditures
10.555
10.553
10.559
57505-02-Z, 57506-02-Z, 57506-08-Z
57605-05-Z, 57606-02-Z
57405-23-Z, 56905-24-Z
10.582
Grant #2154
Total Kentucky Department of Education
$
4,126,731
1,506,865
52,186
5,685,782
56,559
5,742,341
Pass-through programs from:
KY Dept of Agriculture:
Commodity Supplemental Food Program
Total US Department of Agriculture
10.565
Department of Education
Pass-through programs from:
KY Dept of Education:
Race To The Top - District Grants
84.413A
Adult Education - Basic Grants to States
Adult Education - Basic Grants to States
Total Adult Education - Basic Grants to States
Title I Grants to Local Educational Agencies (LEAs)
Title I Grants to Local Educational Agencies (LEAs)
Title I Grants to Local Educational Agencies (LEAs)
Title I-Delinquent Children in LEA Operated Institutes
Title I-Delinquent Children in LEA Operated Institutes
Title I-Part C Migrant
Total Title I Grants to Local Educational Agencies (LEAs)
336,881
6,079,222
Grant# 4521
16,035
Grant #371A
Grant# 3714
27,430
3,000
30,430
84.027A
84.027A
84.027A
84.173A
84.173A
58104-02-Z, 58105-02-Z, 58106-02-Z
58104-02-Z, 58105-02-Z, 58106-02-Z
58104-02-Z, 58105-02-Z, 58106-02-Z
58705-02-Z, 58706-02-Z
58705-02-Z, 58706-02-Z
608
325,309
1,964,993
10,579
60,884
2,362,373
84.010A
84.010A
84.010A
84.010A
84.010A
84.011A
35104-09-Z,35105-09-Z,35106-09-Z
35104-09-Z,35105-09-Z,35106-09-Z
35104-09-Z,35105-09-Z,35106-09-Z
Grant #3144
Grant #314A
Grant #311A
4,989
680,862
2,364,432
60,171
99,997
36,561
3,247,012
84.002
84.002
Special Education - Grants to States (IDEA, Part B)
Special Education - Grants to States (IDEA, Part B)
Special Education - Grants to States (IDEA, Part B)
Special Education - Preschool Grants (IDEA Preschool)
Special Education - Preschool Grants (IDEA Preschool)
Total Special Education (IDEA) Cluster
N/A
Title I-State Agency Program for Neglected and Delinquent Children and Youth
Title I-State Agency Program for Neglected and Delinquent Children and Youth
Total Title I-State Agency Program for Neglected and Delinquent Children and Youth
84.013
84.013
Grant #3134
Grant #3134
1,159
17,825
18,984
Career and Technical Education - Basic Grants to States (Perkins IV)
Career and Technical Education - Basic Grants to States (Perkins IV)
Career and Technical Education - Basic Grants to States (Perkins IV)
Career and Technical Education - Basic Grants to States (Perkins IV)
Total Career and Technical Education - Basic Grants to States (Perkins IV)
84.048
84.048
84.048
84.048
46206-10-Z, 46205-32-Z, 46206-32-Z
46206-10-Z, 46205-32-Z, 46206-32-Z
46206-10-Z, 46205-32-Z, 46206-32-Z
46206-10-Z, 46205-32-Z, 46206-32-Z
1,627
5,188
5,851
121,354
134,020
Title III - English Language Acquisition State Grants
Title III - English Language Acquisition State Grants - Immigrant
Total Title III - English Language Acquisition State Grants
84.365A
84.365A
52005-02-Z, 52006-02-Z
52005-02-Z, 52006-02-Z
67,259
178,058
245,317
Title II - Improving Teacher Quality State Grants
Title II - Improving Teacher Quality State Grants
Total Title II - Improving Teacher Quality State Grants
84.367A
84.367A
71005-02-Z, 71006-02-Z, 71004-03-Z
71005-02-Z, 71006-02-Z, 71004-03-Z
1,295
397,251
398,546
Continued
-71-
WARREN COUNTY SCHOOL DISTRICT
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS - Continued
As of June 30, 2015
Federal Grantor/
Pass-Through Grantor/
Program Title
Federal
CFDA
Number
Green River Regional Education Cooperative
Race To The Top - District Grants
Race To The Top - District Grants
Total Green River Regional Education Cooperative
Pass-Through
Grantor's
Number
84.416A
84.416A
Federal
Expenditures
Grant #4364
Grant #436A
628
4,450
5,078
Total Department of Education
6,457,795
Department of Health and Human Services
Pass-through programs from:
Catholic Charities of Louisville
Refugee and Entrant Assistance - Discretionary Grants
Refugee and Entrant Assistance - Discretionary Grants
Total Department of Health and Human Services
Corporation for National and Community Service:
US Department of Defense:
ROTC Language and Culture Training Grants
Total Corporation for National and Community Service
93.576
93.576
90ZE0175/01
90ZE0175/01
36,363
31,112
67,475
12.357
Grant# 504A
115,886
115,886
Total Expenditures of Federal Awards
$
See Notes to Schedule of Expenditures of Federal Awards
and the Independent Auditors’ Report
-72-
12,720,378
WARREN COUNTY SCHOOL DISTRICT
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Year Ended June 30, 2015
NOTE A – BASIS OF ACCOUNTING
The accompanying Schedule of Expenditures of Federal Awards (the “Schedule”) includes the federal grant activity
of the District and is presented on the accrual basis of accounting. The information in this Schedule is presented in
accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit
Organizations. Therefore, some amounts presented in this Schedule may differ from amounts presented in or used
in the preparation of the basic financial statements.
NOTE B – FOOD DISTRIBUTION
Nonmonetary assistance is reported in the Schedule at the fair value of the commodities received and disbursed.
During the fiscal year ended June 30, 2015, the District received $461,415 in donated food commodities. During
the year the District consumed $413,798 in donated food commodities, leaving a remaining amount of donated food
commodities in inventory, valued at $77,574.
-73-
REPORTS REQUIRED BY THE SINGLE AUDIT ACT
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
Strothman and Company
Cert ified Public Accolllltnllts mId Advisors
1600 Waterfront Plaza
325 West Ma in Street
Louisville, KY 40202
5025851600
Independent Auditors' Report on Internal Control
Over Financial Reporting and on Compliance and
Other Matters Based on an Audit of Financial
Statements Performed In Accordance with
Government Auditing Standards
~
~ Strothman+Co
Members of the Board
Warren County District
Bowling Green, Kentucky
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the business-type activities, each major fund, and the aggregate remaining fund information of the
Warren County School District (the "District") as of and for the year ended June 30, 2015, and the related
notes to financial statements, which collectively comprise the District's basic financial statements, and have
issued our report thereon dated November 7, 2015.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the District's internal
control over financial reporting (internal control) to determine the audit procedures that are appropriate in
the circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the District's internal control. Accordingly, we do
not express an opinion on the effectiveness of the District's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control, such that there is a reasonable possibility that a material
misstatement of the District's financial statements will not be prevented, or detected and corrected on a
timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control
that is less severe than a material weakness, yet important enough to merit attention by those charged
with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses may exist that have not been identified.
www.strothman.com
-74-
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District's financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on
the determination of financial statement amounts. However, providing an opinion on compliance with
those provisions was not an objective of our audit, and accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
In addition, the results of our tests disclosed no material instances of noncompliance with specific statutes
or regulations identified in the Kentucky Public School District's Audit Contract and Requirements
prescribed by the Kentucky State Committee for School District Audits.
We noted certain other matters that we reported to management of the District in a separate letter dated
November 7, 2015.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing-of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the District's internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the District's internal control and compliance. Accordingly,
this communication is not suitable for any other. purpose.
~Ke~y~~
/sc---
November 7, 2015
-75-
INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE
FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL
OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133
Strothman and Company
Certified Pllblic ACColllltallts nlld Advisors
1600 Wa terfront Plaza
325 West Main Street
Louisvill e, KY 40202
5025851600
Independent Auditors' Report on Compliance
for Each Major Program and on Internal Control
Over Compliance Required by OMB Circular A-133
~
~ Strothman+Co
Members of the Board
Warren County School District
Bowling Green, Kentucky
Report on Compliance for Each Major Federal Program
We have audited Warren County School District (the "District") compliance with the types of compliance
requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and
material effect on each of its major federal programs for the year ended June 30, 2015. The District's
major federal programs are identified in the Summary of Audit Results Section of the accompanying
Schedule of Findings and Questioned Costs.
Management's Responsibility
Management is responsible for compliance with the requirements of laws, regulations, contracts, and
grants applicable to its federal programs.
Auditor's Responsibility
Our responsibility is to express an opinion on compliance for each of the District's major federal programs
based on our audit of the types of compliance requirements referred to above. We conducted our audit of
compliance in accordance with auditing standards generally accepted in the United States of America; the
standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States, and OMB Circular A-133, Audits of States, Local Governments,
and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and
perform the audit to obtain reasonable assurance about whether noncompliance with the types of
compliance requirements referred to above that could have a direct and material effect on a major federal
program occurred. An audit includes examining, on a test basis, evidence about the District's compliance
with those requirements and performing such other procedures as we considered necessary in the
circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each major
federal program. However, our audit does not provide a legal determination of the District's compliance.
www.strothman.com
-76-
Opinion on Each Major Federal Program
In our opinion, the District complied, in all material respects, with the types of compliance requirements
referred to above that could have a direct and material effect on each of its major federal programs for the
year ended June 30, 2015.
Report on Internal Control Over Compliance
Management of the District is responsible for establishing and maintaining effective internal control over
compliance with the types of compliance requirements referred to above. In planning and performing our
audit of compliance, we considered the District's internal control over compliance with the types of
requirements that could have a direct and material effect on each major federal program to determine the
auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on
compliance for each major federal program and to test and report on internal control over compliance in
accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness
of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the
District's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance wHh a type of compliance requirement of a
federal program on a timely basis. A material weakness in internal control over compliance is a
deficiency, or combination of deficiencies, in internal control over compliance, such that there is a
reasonable possibility that material noncompliance with a type of compliance requirement of a federal
program will. not be prevented, or detected and corrected, on a timely basis. A significant deficiency in
internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over
compliance with a type of compliance requirement of a federal program that is less severe than a material
weakness in internal control over compliance, yet important enough to merit attention by those charged
with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not- designed to identify all deficiencies in internal control over
compliance that might be material weaknesses or significant deficiencies. We did not identify any
deficiencies in internal control over compliance that we consider t6 be material weaknesses. However,
material weaknesses may exist that have not been identified.
The purpose of this report on internal control over compliance is solely · to describe the scope of our
testing of internal control over compliance and the results of that testing based on the requirements of
OMB Circular A-133. Accordingly, this report is not suitable for any other purpose.
~~c1 (J,?O/SCNovember 7,2015
-77-
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Schedule of Findings and Questioned Costs
Warren County School District
Year Ended June 30, 2015
Section I – Summary of Audit Results
1. The Independent Auditors’ Report expresses an unmodified opinion on the financial statements of the
Warren County School District (the “District”).
2. No significant deficiencies relating to the audit of the financial statements were reported.
3. No instances of noncompliance material to the financial statements of the District were disclosed
during the audit.
4. No significant deficiencies in internal control relating to the audit of the major federal award programs
are reported.
5. The auditors’ report on compliance for the major federal programs of the District expresses an
unmodified opinion.
6. There were no audit findings that are required to be reported in accordance with Section 510(a) of
OMB Circular A-133.
7. The programs tested as major programs include:
Federal Grantor/Program Title
CFDA Number
US Department of Education:
Passed Through Kentucky Department of Education:
Title I Grants to Local Educational Agencies (LEAs)
Title I Grants to Local Educational Agencies (LEAs)
Title I Grants to Local Educational Agencies (LEAs)
Title I-Delinquent Children in LEA Operated Institutes
Title I-Delinquent Children in LEA Operated Institutes
Title II - Improving Teacher Quality State Grants
8. The threshold used for distinguishing Types A programs was $381,239.
9. The District qualified to be audited as a low-risk auditee.
Continued
-78-
84.010A
84.010A
84.010A
84.010A
84.010A
84.367A
Schedule of Findings and Questioned Costs--Continued
Warren County School District
Year Ended June 30, 2015
Section II--Findings – Financial Statement Audit
There are no findings related to the financial statements which are required to be reported in accordance
with Government Auditing Standards.
Section III--Findings and Questioned Costs – Major Federal Programs Audit
There are no findings or questioned costs related to the major federal programs which are required to be
reported in accordance with OMB Circular A-133.
-79-
SCHEDULE OF PRIOR AUDIT FINDINGS
Schedule of Prior Audit Findings
Warren County School District
Year Ended June 30, 2015
Section II--Findings – Financial Statement Audit
There were no findings related to the financial statements which were required to be reported in
accordance with Government Auditing Standards.
Section III--Findings and Questioned Costs – Major Federal Programs Audit
There were no findings or questioned costs related to the major federal programs which were required to
be reported in accordance with OMB Circular A-133.
-80-
APPENDIX C
Warren County School District Finance Corporation
School Building Revenue Bonds
Series of 2016
Continuing Disclosure Agreement
CONTINUING DISCLOSURE UNDERTAKING AGREEMENT
This Continuing Disclosure Undertaking Agreement ("Agreement") made and entered into as of the 1st
day of April, 2016 by and between the Board of Education of Warren County ("Board"); the Warren County School
District Finance Corporation, an agency and instrumentality of the Board ("Corporation") and the Registered and
Beneficial Owners of the Bonds hereinafter identified as third party beneficiaries to this Agreement. For the
purposes of this Agreement "Beneficial Owner" means the person or entity treated as the owner of the Bonds for
federal income tax purposes and "Registered Owner" means the person or entity named on the registration books
of the bond registrar.
W I T N E S S E T H:
WHEREAS, the Corporation has acted as issuing agency for the Board pursuant to the provisions of
Section 162.385 of the Kentucky Revised Statutes ("KRS") and the Corporation's Bond Resolution in connection
with the authorization, sale and delivery of $14,570,000 of the Corporation's School Building Revenue Bonds,
Series of 2016, dated April 1, 2016 ("Bonds"), which Bonds were offered for sale under the terms and conditions
of a Final Official Statement ("FOS") prepared Ross, Sinclaire & Associates, LLC, Lexington, Kentucky ("Financial
Advisor") and approved by the authorized representatives of the Board and the Corporation, and
WHEREAS, the Securities and Exchange Commission ("SEC"), pursuant to the Securities and Exchange
Act of 1934, has amended the provisions of SEC Rule 15c2-12 relating to financial disclosures by the issuers of
municipal securities under certain circumstances ("Rule"), and
WHEREAS, it is intended by the parties to this Agreement that all terms utilized herein shall have the same
meanings as defined by the Rule, and
WHEREAS, the Board is an "obligated person" as defined by the Rule and subject to the provisions of said
Rule, and
WHEREAS, failure by the Board and the Corporation to observe the requirements of the Rule will inhibit
the subsequent negotiation, transfer and exchange of the Bonds with a resulting diminution in the market value
thereof to the detriment of the Registered and Beneficial Owners of said Bonds and the Board;
NOW, THEREFORE, in order to comply with the provisions of the Rule and in consideration of the
purchase of the Bonds by the Registered and Beneficial Owners, the parties hereto agree as follows:
1. ANNUAL FINANCIAL INFORMATION
The Board agrees to provide the annual financial information contemplated by Rule 15c2-12(b)(5)(i)
relating to the Board for its fiscal years ending June 30 of each year to (a) the Municipal Securities Rulemaking
Board ("MSRB"), or any successor thereto for purposes of its Rule, through the continuing disclosure service portal
provided by the MSRB's Electronic Municipal Market Access ("EMMA") system as described in 1934 Act Release
No. 59062, or any similar system that is acceptable to the Securities and Exchange Commission and (b) the State
Information Depository ("SID"), if any (the Commonwealth of Kentucky has not established a SID as of the date
of this Agreement) within nine (9) months of the close of each fiscal year.
For the purposes of the Rule "annual financial information" means financial information and operating data
provided annually, of the type included in the FOS with respect to the Board in accordance with guidelines
established by the National Federation of Municipal Analysts, and shall include annual audited financial statements
for the Board in order that the recipients will be provided with ongoing information regarding revenues and
operating expenses of the Board and the information provided in the FOS under the headings "OUTSTANDING
BONDS", "BOND DEBT SERVICE", "DISTRICT STUDENT POPULATION", "LOCAL SUPPORT - Local Tax
Rates, Property Assessment and Revenue Collections and SEEK Allotment". If audited financial statements are
not available when the annual financial information is filed, unaudited financial statements shall be included, to be
followed by audited financial statements when available.
(C-1)
The audited financial statements shall be prepared in accordance with Generally Accepted Accounting
Principles, Generally Accepted Auditing Standards or in accordance with the appropriate sections of KRS or
Kentucky Administrative Regulations.
The parties hereto agree that this Agreement is entered into among them for the benefit of those who
become Registered and Beneficial Owners of the Bonds as third party beneficiaries to said Agreement.
2. MATERIAL EVENTS NOTICES
Under the Rule, Section 15c2-12(b)(5)(i)(C), the following fifteen (15) events must be disclosed within
ten (10) business days following the occurrence of said event to MSRB via EMMA and the SID, if any:
(1)
Principal/interest payment delinquency;
(2)
Nonpayment related default, if material;
(3)
Unscheduled draw on debt service reserve reflecting financial difficulties;
(4)
Unscheduled draw on credit enhancement reflecting financial difficulties;
(5)
Substitution of credit or liquidity provider, or its failure to perform;
(6)
Adverse tax opinions, the issuance by the IRS of proposed or final determinations of taxability,
Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with
respect to the tax status of the securities, or other material events affecting the tax status of the
security;
(7)
Modifications to rights of security holders, if material;
(8)
Bond call, if material;
(9)
Defeasance;
(10)
Tender offers;
(11)
Release, substitution or sale of property securing the repayment of the security, if material;
(12)
Rating change;
(13)
Merger, consolidation, acquisition or sale of all or substantially all assets of an obligated person,
other than in the ordinary course of business, and the entry into a definitive agreement to
undertake such action or the termination of a definitive agreement relating to such action, other
than pursuant to its terms, if material;
(14)
Bankruptcy, insolvency, receivership or similar event; and
(15)
Successor, additional or change in trustee, if material.
Notice of said material events shall be given to the entities identified in this Section by the Board on a
timely basis (within ten (10) business days of the occurrence). Notwithstanding the foregoing, the provisions of
the documents under which the Bonds are authorized and issued do not provide for a debt service reserve, credit
enhancements or credit or liquidity providers.
In accordance with Rule Section 15c2-12(b)(5)(i)(D), the Board agrees that in the event of a failure to
provide the Annual Financial Information required under Section 1 of this Agreement, it will notify MSRB via
EMMA of such failure in a timely manner as required above.
(C-2)
The Finance Officer of the Board shall be the responsible person for filing the annual financial information
and/or notices of the events set forth above within the time prescribed in this Agreement. The Board shall cause the
Finance Officer to institute an internal tickler system as a reminder of the obligations set forth herein. By December
1 of each fiscal year and each 30 days thereafter the Finance Officer will contact the auditor for the Board to
determine when the audited financial statements will be finalized. The Finance Officer will impress upon the auditor
the necessity of having such audited financial report on or before March 15. Within 5 days of receipt of such audited
financial report the finance officer will cause the annual financial information to be filed as required by this
Agreement.
3. SPECIAL REQUESTS FOR INFORMATION
Upon the request of any Registered or Beneficial Owner of the Bonds or the original purchaser of the
Bonds or any subsequent broker-dealer buying or selling said Bonds on the secondary market ("Underwriters"), the
Board shall cause financial information or operating data regarding the conduct of the affairs of the Board to be
made available on a timely basis following such request.
4. DISCLAIMER OF LIABILITY
The Board and the Corporation hereby disclaim any liability for monetary damages for any breach of the
commitments set forth in this Agreement and remedies for any breach of the Board's continuing disclosure
undertaking shall be limited to an action for specific performance or mandamus in a court of competent jurisdiction
in Kentucky following notice and an opportunity to cure such a breach.
5. FINAL OFFICIAL STATEMENT
That the Final Official Statement prepared by the Financial Advisor and approved by the authorized
representatives of the Board and the Corporation is hereby incorporated in this Agreement as fully as if copied
herein and the "annual financial information" required under Section 1 hereof shall in summary form update the
specific information set forth in said FOS.
6. DURATION OF THE AGREEMENT
This Agreement shall be in effect so long as any of the Bonds remain outstanding and unpaid; provided,
however, that the right is reserved in the Board to delegate its responsibilities under the Agreement to a competent
agent or trustee, or to adjust the format of the presentation of annual financial information so long as the intent and
purpose of the Rule to present adequate and accurate financial information regarding the Board is served.
7. AMENDMENT; WAIVER
Notwithstanding any other provision of this Agreement, the Board may amend this Agreement, and any
provision of this Agreement may be waived, provided that the following conditions are satisfied:
(a) If the amendment or waiver relates to the provisions of Section 1, it may only be made in connection
with a change in circumstances that arises from a change in legal requirements, change in law, or change in the
identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted;
(b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally
recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of
the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in
circumstances; and
(c) The amendment or waiver either (i) is approved by the holders of the Bonds in the same manner as
provided in the Bond Resolution for amendments to the Bond Resolution with the consent of holders, or (ii) does
not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Registered Owners
or Beneficial Owners of the Bonds.
In the event of any amendment or waiver of a provision of this Agreement, the Board shall describe such
amendment or waiver in the next Annual Report, and shall include, as applicable, a narrative explanation of the
(C-3)
reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles,
on the presentation) of financial information or operating data being presented by the Board. In addition, if the
amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such
change shall be given in the same manner as for a material event under Section 15c2-12(b)(5)(i)(C) of the Rule, and
(ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and
also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new
accounting principles and those prepared on the basis of the former accounting principles.
8. DEFAULT
In the event of a failure of the Board to comply with any provision of this Agreement, the Corporation may
and, at the request of any Underwriter or any Registered Owner or Beneficial Owner of Bonds, shall take such
actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order,
to cause the Board to comply with its obligations under this Agreement. A default under this Agreement shall not
be deemed an event of default under the Bond Resolution, and the sole remedy under this Agreement in the event
of any failure of the Board to comply with this Agreement shall be an action to compel performance.
In witness whereof the parties hereto have executed this Agreement as of the date first above written.
BOARD OF EDUCATION OF
WARREN COUNTY
Chairman
Attest:
Secretary
WARREN COUNTY (KENTUCKY) SCHOOL
DISTRICT FINANCE CORPORATION
President
Attest:
Secretary
(C-4)
APPENDIX D
Warren County School District Finance Corporation
School Building Revenue Bonds
Series of 2016
Official Terms and Conditions of Bond Sale
OFFICIAL
TERMS AND CONDITIONS OF BOND SALE
$14,570,000*
Warren County School District Finance Corporation
School Building Revenue Bonds, Series of 2016
Dated April 1, 2016
SALE: March 22, 2016 AT 11:00 A.M., E.D.S.T.
As advertised in The Courier Journal, published in Louisville, Kentucky, the Warren County (Kentucky) School
District Finance Corporation ("Corporation") will until March 22, 2016, at the hour of 11:00 A.M., E.D.S.T., in the office
of the Executive Director of the Kentucky School Facilities Construction Commission, 229 West Main Street, Suite 102,
Frankfort, Kentucky 40601-1879, receive competitive bids for the revenue bonds herein described. To be considered
bids must be submitted on an Official Bid Form and must be delivered to the Corporation at the address indicated on the
date of sale no later than the hour indicated submitted manually, by facsimile or electronically via PARITY. Bids will
be considered by the Corporation and may be accepted without further action by the Corporation's Board of Directors.
Subject to a Permitted Adjustment* increasing or decreasing the issue by up to $2,915,000.
WARREN COUNTY (KENTUCKY)
SCHOOL DISTRICT FINANCE CORPORATION
The Corporation has been formed in accordance with the provisions of Sections 162.120 through 162.300 and
Section 162.385 of the Kentucky Revised Statutes ("KRS"), and KRS Chapter 273 and KRS 58.180, as a non profit, non
stock corporation for the purpose of financing necessary school building facilities for and on behalf of the Board of
Education of the Warren County School District (the "Board"). Under the provisions of existing Kentucky law, the
Corporation is permitted to act as an agency and instrumentality of the Board for financing purposes and the legality of
the financing plan to be implemented by the Bonds herein referred to has been upheld by the Kentucky Court of Appeals
(Supreme Court) in the case of White v. City of Middlesboro, Ky. 414 S.W.2d 569.
STATUTORY AUTHORITY, PURPOSE OF ISSUE AND SECURITY
These Bonds are authorized pursuant to KRS 162.120 through 162.300, 162.385, and KRS 58.180 and are issued
in accordance with a Resolution of the Corporation's Board of Directors. Said Bonds are revenue bonds and constitute
a limited indebtedness of the Corporation payable from rental revenues derived by the Corporation from the Board under
the Lease identified below. Said Bonds are being issued to finance Phase II renovations at Warren East High School (the
"Project") and are secured by a lien upon and a pledge of the revenues from the rental of the school buildings to the Board
under the Lease on a year to year basis; the first rental period ending June 30, 2016. The lien securing the Bonds is
limited in its application to the Project constructed from the proceeds of the Bonds; provided, however, said lien and
pledge are inferior and subordinate to the liens and pledges securing School Building Revenue Bonds previously issued
to improve or refinance the Project (the "Prior Lien Bonds") but rank on the basis of parity with the Corporation's School
Building Revenue Bonds, Series of 2015, dated April 1, 2015 (the "Parity Bonds").
Should the Board default in its obligations under the Lease or fail to renew the Lease, the Registered Owners
of Bonds have the right to have a receiver appointed to administer the Project under KRS 162.220; foreclosure and sale
are not available as remedies.
The rental of the Project from the Corporation to the Board is to be effected under a certain Lease Agreement
by and between the Corporation and the Board (the "Lease"), whereunder the Project is leased to the Board for the initial
period ending June 30, 2016, with an option in the Board to renew the Lease each year at rentals sufficient to provide
for the principal and interest requirements on the Bonds as they become due, plus the costs of insurance, maintenance,
depreciation, and bond issuance and administration expenses; the Board being legally obligated only for the initial rental
period and for one year at a time thereafter each time the Lease is renewed.
Under the terms of the Lease, and any renewal thereof, the Board has agreed so long as the Bonds remain
outstanding, and in conformance with the intent and purpose of KRS 160.160(5), in the event of a failure by the Board
to pay the rentals due under the Lease, and unless sufficient funds have been transmitted to the Paying Agent, or will be
(D-1)
so transmitted, for paying said rentals when due, the Board has granted under the terms of the Lease to the Corporation
the right to notify and request the Kentucky Department of Education to withhold from the Board a sufficient portion of
any undisbursed funds then held, set aside, or allocated to the Board and to request said Department or Commissioner
of Education to transfer the required amount thereof to the Paying Agent for the payment of such rentals.
ADDITIONAL PARITY BONDS FOR COMPLETION OF PROJECT
The Corporation has reserved the right and privilege of issuing additional bonds from time to time payable from
the income and revenues of said school building Project and secured by the same lien and pledge of revenues, but only
if and to the extent the issuance of such additional parity bonds may be necessary to pay the costs, for which funds are
not otherwise available, of completing the construction of said school building Project in accordance with the plans and
specifications of the architect in charge of said Project, which plans have been completed, approved by the Board,
Commissioner of Education, and filed in the office of the Secretary of the Corporation.
BOND MATURITIES, PRIOR REDEMPTION PROVISIONS AND PAYING AGENT
All such Bonds shall be in denominations in multiples of $5,000 within the same maturity, bear interest from
April 1, 2016, payable on October 1, 2016, and semi annually thereafter and shall mature as to principal on April 1 in
each of the years as follows:
Year
Amount
Year
Amount
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
$ 360,000
360,000
365,000
370,000
595,000
605,000
620,000
635,000
655,000
675,000
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
$ 695,000
715,000
740,000
920,000
955,000
990,000
1,025,000
1,060,000
1,095,000
1,135,000
*Subject to a Permitted Adjustment of the amount of Bonds awarded of up to $2,915,000 which may be applied
in any or all maturities.
The Bonds maturing on or after April 1, 2027 are subject to redemption at the option of the Corporation prior
to their stated maturities on any date falling on or after April 1, 2026, in any order of maturities (less than all of a single
maturity to be selected by lot), in whole or in part, upon notice of such prior redemption being given by the Paying Agent
in accordance with DTC requirements not less than thirty (30) days prior to the date of redemption, upon terms of the
face amount, plus accrued interest, but without redemption premium.
Notwithstanding the foregoing, the Corporation reserves the right, upon thirty (30) days notice, to call the Bonds
in whole or in part on any date at par for redemption upon the total destruction by fire, lightning, windstorm or other
hazard of any building constituting the Project and apply casualty insurance proceeds to such purpose.
The Bonds are to be issued in fully registered form (both principal and interest). The Huntington National Bank,
Cincinnati, Ohio, has been designated as the Bond Registrar and Paying Agent, shall remit interest on each semiannual
due date to Cede & Co. Principal and interest will be payable through the Book-Entry-Only-System administered by The
Depository Trust Company: Please see "BOOK-ENTRY-ONLY-SYSTEM" below. Interest on the Bonds will be paid
at rates to be established upon the basis of competitive bidding as hereinafter set forth, such interest to be payable on June
1 and April 1 of each year, beginning June 1, 2016 (Record Date is 15th day of month preceding interest due date).
BIDDING CONDITIONS AND RESTRICTIONS
(A) Bids must be made on Official Bid Form, contained in Information for Bidders available from the
undersigned or Ross, Sinclaire & Associates, LLC, Lexington, Kentucky, by visiting www.rsamuni.com submitted
manually, by facsimile or electronically via PARITY®.
(D-2)
(B) Electronic bids for the Bonds must be submitted through PARITY® and no other provider of electronic
bidding services will be accepted. Subscription to the PARITY® Competitive Bidding System is required in order to
submit an electronic bid. The Corporation will neither confirm any subscription nor be responsible for the failure of any
prospective bidders to subscribe. For the purposes of the bidding process, the time as maintained by PARITY® shall
constitute the official time with respect to all bids whether in electronic or written form. To the extent any instructions
or directions set forth in PARITY® conflict with the terms of the Official Terms and Conditions of Bond Sale, this
Official Terms and Conditions of Sale of Bonds shall prevail. Electronic bids made through the facilities of PARITY®
shall be deemed an offer to purchase in response to the Notice of Bond Sale and shall be binding upon the bidders as if
made by signed, sealed written bids delivered to the Corporation. The Corporation shall not be responsible for any
malfunction or mistake made by or as a result of the use of the electronic bidding facilities provided and maintained by
PARITY®. The use of PARITY® facilities are at the sole risk of the prospective bidders. For further information
regarding PARITY®, potential bidders may contact PARITY®, telephone (212) 404-8102. Notwithstanding the
foregoing non-electronic bids may be submitted via facsimile or by hand delivery utilizing the Official Bid Form.
(C) The minimum bid shall be not less than $14,278,600 (98% of par) and shall not be greater than $15,298,500
(105% of par) plus accrued interest and a minimum price of not less than 96% of par is required for each maturity.
Interest rates shall be in multiples of 1/8 or 1/20 of 1% or both. Only one interest rate shall be permitted per Bond, and
all Bonds of the same maturity shall bear the same rate. There is no limit on the number of different interest rates which
may be specified by any bidder, however, no rate may exceed 5.0%.
(D) The maximum permissible net interest cost for the Bonds shall not exceed "The Bond Buyer's" Index of 20
Municipal Bonds as established on the Thursday immediately preceding the sale of said Bonds plus 1.50%.
(E) The determination of the best purchase bid for said Bonds shall be made on the basis of the lowest true
interest cost (TIC) according to the schedule of principal amounts listed in the Official Bid Form for exactly $14,570,000
principal amount of Bonds offered for sale under the terms and conditions herein specified; provided, however, the
Corporation reserves the right to increase or decrease the total principal amount of Bonds sold to such best bidder, in the
amount of not exceeding $2,915,000, with such increase or decrease to be made in any maturity, and the total amount
of Bonds awarded to such best bidder will be a minimum of $11,655,000 or a maximum of $17,485,000. In the event
of any such adjustment, no rebidding or recalculation of a submitted bid will be required or permitted, and the
Underwriter's Discount on the Bonds as submitted by the successful bidder shall be held constant. The Underwriter's
Discount shall be defined as the difference between the purchase price of the Bonds submitted by the bidder and the price
at which the Bonds will be issued to the public, calculated from information provided by the bidder, divided by the par
amount of the Bonds bid. The price at which such adjusted principal amount of Bonds will be sold will be at the same
price per $5,000 of Bonds as the price per $5,000 for the $14,570,000 of Bonds bid.
(F) The successful bidder may elect to notify the Financial Advisor within twenty-four (24) hours of the award
of the Bonds that certain serial maturities as awarded may be combined with immediately succeeding serial maturities
as one or more Term Bonds; provided, however, (a) bids must be submitted to permit only a single interest rate for each
term bond specified, and (b) Term Bonds will be subject to mandatory redemption by lot on April 1 in accordance with
the maturity schedule setting the actual size of the issue.
(G) CUSIP identification numbers will be printed on the Bonds at the expense of the Corporation. The
purchaser shall pay the CUSIP Service Bureau Charge. Improper imprintation or the failure to imprint CUSIP numbers
shall not constitute cause for a failure or refusal by the purchaser to accept delivery of and pay for said Bonds in
accordance with the terms of any accepted proposal for the purchase of said Bonds.
(H) The Corporation will provide to the successful purchaser a Final Official Statement in accordance with SEC
Rule 15c2-12. A Final Official Statement will be provided in Electronic Form to the successful bidder, in sufficient time
to meet the delivery requirements of the successful bidder under SEC and Municipal Securities Rulemaking Board
Delivery Requirements. The successful bidder will be required to pay for the printing of Final Official Statements.
(I) Bids need not be accompanied by a certified or bank cashier's good faith check, BUT the successful bidder
will be required to wire transfer an amount equal to 2% of the amount of the principal amount of Bonds awarded to the
order of the Corporation by the close of business on the day following the award. Said good faith amount which will be
forfeited as liquidated damages in the event of a failure of the successful bidder to take delivery of such Bonds when
ready. The good faith amount (without interest) will be applied to the purchase price upon delivery of the Bonds. The
(D-3)
successful bidder shall not be required to take up and pay for said Bonds unless delivery is made within 45 days from
the date the bid is accepted.
(J) Delivery will be made utilizing the DTC Book-Entry-Only-System.
(K) The Corporation reserves the right to reject any and all bids or to waive any informality in any bid. The
Bonds are offered for sale subject to the principal and interest not being subject to Federal or Kentucky income taxation
or Kentucky ad valorem taxation on the date of their delivery to the successful bidder, in accordance with the Final
Approving Legal Opinion of Steptoe & Johnson PLLC, Bond Counsel, Louisville, Kentucky, which Opinion will be
qualified in accordance with the section hereof on TAX EXEMPTION.
STATE SUPPORT OF EDUCATION
The 1990 Regular Session of the General Assembly of the Commonwealth enacted a comprehensive legislative
package known as the Kentucky Education Reform Act ("KERA") designed to comply with the mandate of the Kentucky
Supreme Court that the General Assembly provide for as efficient and equitable system of schools throughout the State.
KERA became fully effective on July 13, 1990. Elementary and Secondary Education in the Commonwealth
is supervised by the Commissioner of Education as the Chief Executive Officer of the State Department of Education
("DOE"), an appointee of the reconstituted State Board for Elementary and Secondary Education (the "State Board").
Some salient features of KERA are as follows:
KRS 157.330 establishes the fund to Support Education Excellence in Kentucky ("SEEK") funded from biennial
appropriations from the General Assembly for distribution to school districts. The base funding guaranteed to each
school district by SEEK for operating and capital expenditures is determined in each fiscal year by dividing the total
annual SEEK appropriation by the state-wide total of pupils in average daily attendance ("ADA") in the preceding fiscal
year; the ADA for each district is subject to adjustment to reflect the number of at risk students (approved for free lunch
programs under state and federal guidelines), number and types of exceptional children, and transportation costs.
KRS 157.420 establishes a formula which results in the allocation of funds for capital expenditures in school
districts at $100 per ADA pupil which is included in the SEEK allotment ($3,911) for the current biennium which is
required to be segregated into a Capital Outlay Allotment Fund which may be used only for (1) direct payment of
construction costs; (2) debt service on voted and funding bonds; (3) lease rental payments in support of bond issues; (4)
reduction of deficits resulting from over expenditures for emergency capital construction; and (5) a reserve for each of
the categories enumerated in 1 through 4 above.
KRS 160.470(12)(a) requires that effective for fiscal years beginning July 1, 1990 each school district shall levy
a minimum equivalent tax rate of $.30 for general school purposes. The equivalent tax rate is defined as the rate which
results when the income collected during the prior year from all taxes levied by the district (including utilities gross
receipts license and special voted) for school purposes is divided by the total assessed value of property, plus the
assessment for motor vehicles certified by the Revenue Cabinet of the Commonwealth. Any school district board of
education which fails to comply with the minimum equivalent tax rate levy shall be subject to removal from office.
KRS 160.470(12)(2) provides that for fiscal years beginning July 1, 1990 each school district may levy an
equivalent tax rate which will produce up to 15% of those revenues guaranteed by the SEEK program. Any increase
beyond the 4% annual limitation imposed by KRS 132.017 is not subject to the recall provisions of that Section. Revenue
generated by the 15% levy is to be equalized at 150% of the state-wide average per pupil equalized assessment.
KRS 157.440(2) permits school districts to levy up to 30% of the revenue guaranteed by the SEEK program, plus
the revenue produced by the 15% levy, but said additional tax will not be equalized with state funds and will be subject
to recall by a simple majority of those voting on the question.
KRS 157.620(1) also provides that in order to be eligible for participation from the Kentucky School Facilities
Construction Commission for debt service on bond issues the district must levy a tax which will produce revenues
equivalent to $.05 per $100 of the total assessed value of all property in the district (including tangible and intangible
property and motor vehicles) in addition to the minimum $.30 levy required by KRS 160.470(12). A district having a
special voted tax which is equal to or higher than the required $.05 tax, must commit and segregate for capital purposes
at least an amount equal to the required $.05 tax. Those districts which levy the additional $.05 tax are also eligible for
(D-4)
participation in the Kentucky Facilities Support ("KFS") program for which funds are appropriated separately from SEEK
funds and are distributed to districts in accordance with a formula taking into account outstanding debt and funds
available for payment from both local and state sources under KRS 157.440(1)(b).
KRS 160.460 provides that as of July 1, 1994 all real property located in the Commonwealth subject to local
taxation shall be assessed at 100% of fair cash value.
BIENNIAL BUDGET FOR PERIOD ENDING JUNE 30, 2016
The Kentucky General Assembly, during its Regular Session, adopted a budget for the biennium ending June
30, 2016 which was approved and signed by the Governor. Such budget was effective beginning July 1, 2014.
POTENTIAL LEGISLATION
No assurance can be given that any future legislation, including amendments to the Code, if enacted into law,
or changes in interpretation of the Code, will not cause interest on the Bonds to be subject, directly or indirectly, to
federal income taxation, or otherwise prevent owners of the Bonds from realizing the full current benefit of the tax
exemption of such interest. In addition, current and future legislative proposals, if enacted into law, may cause interest
on state or local government bonds (whether issued before, on the date of, or after enactment of such legislation) to be
subject, directly or indirectly, to federal income taxation by, for example, changing the current exclusion or deduction
rules to limit the amount of interest on such bonds that may currently be treated as tax exempt by certain individuals.
Prospective purchasers of the Bonds should consult their own tax advisers regarding any pending or proposed federal
tax legislation.
Further, no assurance can be given that the introduction or enactment of any such future legislation, or any action
of the IRS, including but not limited to regulation, ruling, or selection of the Bonds for audit examination, or the course
or result of any IRS examination of the Bonds or obligations which present similar tax issues, will not affect the market
price for the Bonds.
CONTINUING DISCLOSURE
As a result of the Board and issuing agencies acting on behalf of the Board having outstanding at the time the
Bonds referred to herein are offered for public sale municipal securities in excess of $1,000,000, the Corporation and
the Board will enter into a written agreement for the benefit of all parties who may become Registered or Beneficial
Owners of the Bonds whereunder said Corporation and Board will agree to comply with the provisions of the Municipal
Securities Disclosure Rules set forth in Securities and Exchange Commission Rule 15c2-12 by filing annual financial
statements and material events notices with the Electronic Municipal Market Access (EMMA) System maintained by
the Municipal Securities Rule Making Board.
Financial information regarding the Board may be obtained from Superintendent, Warren County School District
Board of Education, 303 Lovers Lane, PO Box 51810, Bowling Green, Kentucky 42103, Telephone 270-781-5150.
TAX EXEMPTION; NOT BANK QUALIFIED
Bond Counsel is of the opinion that the Bonds are NOT "qualified tax exempt obligations" within the meaning
of the Internal Revenue Code of 1986, as amended, and therefore advises as follows:
(A) The Bonds and the interest thereon are exempt from income and ad valorem taxation by the Commonwealth
of Kentucky and all of its political subdivisions.
(B) The interest income from the Bonds is excludable from the gross income of the recipient thereof for Federal
income tax purposes under existing law; provided, that the corporate entities noted below are advised of certain tax
consequences as follows:
(1) In the computation of the corporate minimum tax, earnings and profits may include otherwise tax
exempt interest on the Bonds; this provision applies to corporations only.
(D-5)
(2) Property and casualty insurance companies may be denied certain loss reserve deductions to the
extent of otherwise tax exempt interest on the Bonds.
(C) As a result of certifications by the Board and the Corporation, indicating the issuance of MORE than
$10,000,000 of qualified tax exempt obligations during the calendar year ending December 31, 2016, the Bonds may
NOT be treated by financial institutions as "qualified tax-exempt" obligations under Section 265(b)(3) of the Code.
(D) The interest income from the Bonds is excludable from the gross income of the recipient thereof for Federal
income tax purposes under existing law for individuals; however, said income must be included in the calculation of
"modified adjusted gross income" in the determination of whether and to what extent Social Security benefits are subject
to Federal income taxation.
BOOK-ENTRY-ONLY-SYSTEM
The Bonds shall utilize the Book-Entry-Only-System administered by The Depository Trust Company ("DTC").
DTC will act as securities depository for the Bonds. The Bonds initially will be issued as fully-registered
securities registered in the name of Cede & Co. (DTC's partnership nominee). One fully-registered Bond Certificate will
be issued, in the aggregate principal amount of the Bonds, and will be deposited with DTC.
DTC 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 securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such
as transfers and pledge, in deposited securities through electronic computerized book-entry changes in Participants'
accounts, thereby eliminating the need for physical movement of securities certificates. "Direct Participants" include
securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is
owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange,
Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such
as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with
a Direct Participant, either directly or indirectly ("Indirect Participants"). The Rules applicable to DTC and its
participants are on file with the Securities and Exchange Commission.
Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive
a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ("Beneficial
Owner") is in turn to be recorded on the Direct and Indirect Participant's records. Beneficial Owners will not receive
written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant
through which the beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds
("Beneficial Ownership Interest") are to be accomplished by entries made on the books of Participants acting on behalf
of Beneficial Owners. Beneficial Owners will not receive certificates representing their Beneficial Ownership interests
in Bonds, except in the event that use of the book-entry system for the Securities is discontinued. Transfers of ownership
interest in the Securities are to be accomplished by entries made on the books of 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 Bonds deposited by Participants with DTC are registered in the name of
DTC's partnership nominee, Cede & Co. The deposit of Bonds with DTC and their registration in the name of Cede &
Co., effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds;
DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may
or may not be the Beneficial Owners. The 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.
(D-6)
Redemption notices shall be sent to Cede & Co. If less than all of the Bonds are being redeemed, DTC's practice
is to determine by lot the amount of the interest of each Direct Participant in the Bonds to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to Bonds. Under its usual procedures, DTC mails
an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Principal and interest payments of the Bonds will be made to DTC. DTC's practice is to credit Direct
Participants' account on payable date in accordance with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payment on payable date. 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,
the Issuer, or the Trustee, subject to any statutory or regulatory requirements as may be in effect from time to time.
Payment of principal and interest to DTC is the responsibility of the Issuer or the Trustee, disbursements of such
payments to Direct Participants shall be the responsibility of DTC, and disbursements of such payment to the Beneficial
Owners shall be the responsibility of Direct and Indirect Participants.
A Beneficial Owner shall give notice to elect to have its Beneficial Ownership Interests purchased or tendered,
through its Participant, to the Trustee, and shall effect delivery of such Beneficial Ownership Interests by causing the
Direct Participant to transfer the Participant's interest in the Beneficial Ownership Interests, on DTC's records, to the
purchaser or the Trustee, as appropriate. The requirements for physical delivery of Bonds in connection with a demand
for purchase or a mandatory purchase will be deemed satisfied when the ownership rights in the Bonds are transferred
by Direct Participants on DTC's records.
DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by
giving reasonable notice to the Issuer or the Bond Registrar. Under such circumstances, in the event that a successor
securities depository is not obtained, Bond certificates are required to be printed and delivered by the Bond Registrar.
NEITHER THE ISSUER, THE BOARD NOR THE BOND REGISTRAR/PAYING AGENT WILL HAVE
ANY RESPONSIBILITY OR OBLIGATION TO ANY DIRECT PARTICIPANT, INDIRECT PARTICIPANT OR
ANY BENEFICIAL OWNER OR ANY OTHER PERSON NOT SHOWN ON THE REGISTRATION BOOKS OF
THE BOND REGISTRAR/PAYING AGENT AS BEING AN OWNER WITH RESPECT TO: (1) THE BONDS; (2)
THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT
PARTICIPANT; (3) THE PAYMENT BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT
OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PURCHASE PRICE OF
TENDERED BONDS OR THE PRINCIPAL OR REDEMPTION PRICE OF OR INTEREST ON THE BONDS; (4)
THE DELIVERY BY ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY NOTICE TO ANY
BENEFICIAL OWNER WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE BOND
RESOLUTION TO BE GIVEN TO HOLDERS; (5) THE SELECTION OF THE BENEFICIAL OWNERS TO
RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE BONDS; OR (6) ANY
CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS HOLDER.
WARREN COUNTY (KENTUCKY)
SCHOOL DISTRICT FINANCE CORPORATION
by s/ Rob Clayton
Secretary
(D-7)
APPENDIX E
Warren County School District Finance Corporation
School Building Revenue Bonds
Series of 2016
Official Bid Form
OFFICIAL BID FORM
(Bond Purchase Agreement)
The Warren County School District Finance Corporation ("Corporation" or "Issuer"), will until 11:00 A.M., E.D.S.T., on
March 22, 2016, receive in the office of the Executive Director of the Kentucky School Facilities Construction Commission,
Suite 102, 229 W. Main Street, Frankfort, Kentucky 40601, (telephone 502-564-5582; fax 888-979-6152) competitive bids for
its $14,570,000 School Building Revenue Bonds, Series of 2016, dated April 1, 2016; maturing April 1, 2017 through 2036
("Bonds").
We hereby bid for said $14,570,000* principal amount of Bonds, the total sum of $_______________ (not less than
$14,278,600 (98%) but not greater than $15,298,500 (105%)) plus accrued interest from April 1, 2016 payable October 1, 2016
and semiannually thereafter at the following annual rates, (rates not greater than 5.0% in multiples of 1/8 or 1/20 of 1%; number
of interest rates unlimited) and maturing as to principal on April 1 in the years as follows:
Year
Amount*
Rate
Year
Amount*
Rate
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
$ 360,000
360,000
365,000
370,000
595,000
605,000
620,000
635,000
655,000
675,000
_________%
_________%
_________%
_________%
_________%
_________%
_________%
_________%
_________%
_________%
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
$ 695,000
715,000
740,000
920,000
955,000
990,000
1,025,000
1,060,000
1,095,000
1,135,000
_________%
_________%
_________%
_________%
_________%
_________%
_________%
_________%
_________%
_________%
* Subject to Permitted Adjustment up to $2,915,000.
We understand that this bid may be accepted for as much as $17,485,000 of Bonds or as little as $11,655,000 of Bonds,
at the same price per $5,000 Bond, with the variation in such amount occurring in any maturity or all maturities, which will be
determined by the Secretary of the Corporation at the time of acceptance of the best bid.
Electronic bids for the Bonds must be submitted through PARITY® and no other provider of electronic bidding services
will be accepted. Subscription to the PARITY® Competitive Bidding System is required in order to submit an electronic bid.
The Corporation will neither confirm any subscription nor be responsible for the failure of any prospective bidders to subscribe.
For the purposes of the bidding process, the time as maintained by PARITY® shall constitute the official time with respect to
all bids whether in electronic or written form. To the extent any instructions or directions set forth in PARITY® conflict with
the terms of the Official Terms and Conditions of Sale of Bonds, this Official Terms and Conditions of Sale of Bonds shall
prevail. Electronic bids made through the facilities of PARITY® shall be deemed an offer to purchase in response to the Notice
of Bond Sale and shall be binding upon the bidders as if made by signed, sealed written bids delivered to the Corporation. The
Corporation shall not be responsible for any malfunction or mistake made by or as a result of the use of the electronic bidding
facilities provided and maintained by PARITY®. The use of PARITY® facilities are at the sole risk of the prospective bidders.
For further information regarding PARITY®, potential bidders may contact PARITY®, telephone (212) 404-8102.
Notwithstanding the foregoing, non-electronic bids may be submitted via facsimile or by hand delivery utilizing the Official
Bid Form.
The successful bidder may elect to notify the Financial Advisor within twenty-four (24) hours of the award of the Bonds
that certain serial maturities as awarded may be combined with immediately succeeding serial maturities as one or more Term
Bonds; provided, however, (a) bids must be submitted to permit only a single interest rate for each Term Bond specified, and
(b) Term Bonds will be subject to mandatory redemption on April 1 in accordance with the maturity schedule setting the actual
size of the issue.
The DTC Book-Entry-Only-System will be utilized on delivery of this issue.
It is understood that the Corporation will furnish the final approving Legal Opinion of Steptoe & Johnson PLLC Bond
Counsel, Louisville, Kentucky.
No certified or bank cashier's check will be required to accompany a bid, but the successful bidder shall be required to wire
transfer an amount equal to 2% of the principal amount of Bonds awarded by the close of business on the date following the
award. Said good faith amount will be applied (without interest) to the purchase price on delivery. Wire transfer procedures
should be arranged through The Huntington National Bank, Cincinnati, Ohio, Attn: Ms. Cheri Scott-Geraci (513-366-3073).
Bids must be submitted only on this form and must be fully executed.
If we are the successful bidder, we agree to accept and make payment for the Bonds in Federal Funds within forty-five (45)
days of the award and upon acceptance by the Issuer's Financial Advisor this Official Bid Form shall become the Bond Purchase
Agreement.
Respectfully submitted,
__________________________________
Bidder
By ________________________________
Authorized Officer
___________________________________
Address
(E-1)
Total interest cost from April 1, 2016 to final maturity
$_______________
Plus discount or less any premium
$_______________
Net interest cost (Total interest cost plus discount)
$_______________
True Interest Cost (i.e. TIC)
________________%
The above computation of net interest cost and of average interest rate or cost is submitted for information only and is not
a part of this Bid.
Accepted by Ross, Sinclaire & Associates, LLC, as Financial Advisor and Agent for the Warren County School District
Finance Corporation for $_________________ amount of Bonds at a price of $______________ as follows:
Year
Amount
Rate
Year
Amount
Rate
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
_______,000
_______,000
_______,000
_______,000
_______,000
_______,000
_______,000
_______,000
_______,000
_______,000
________%
________
________
________
________
________
________
________
________
________
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
_______,000
_______,000
_______,000
_______,000
_______,000
_______,000
_______,000
_______,000
_______,000
_______,000
________%
________
________
________
________
________
________
________
________
________
Dated: March 22, 2016
________________________________
ROSS, SINCLAIRE & ASSOCIATES, LLC,
as Agent for the Warren County
School District Finance Corporation
(E-2)