Butler County Area Vocational-Technical School Authority School Lease Revenue Bonds, Series of 2015 (Butler County Area Vocational-Technical School Project)
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NEW ISSUE—BOOK-ENTRY ONLY RATINGS: S&P: AA (Stable Outlook) (Insured) S&P: A (Stable Outlook) (Underlying) (See Ratings herein) In the opinion of Bond Counsel, based upon an analysis of existing laws, regulations, rulings and court decisions, interest on the Bonds (including, in the case of Bonds sold at an original issue discount, the difference between the initial offering price and par) is excluded from gross income for Federal income tax purposes. Bond Counsel is also of the opinion that interest on the Bonds is not a specific item of tax preference under §57 of the Internal Revenue Code of 1986, as amended (the “Code”) for purposes of Federal individual or corporate alternative minimum taxes. The Bonds, and the interest income therefrom, are free from taxation for purposes of personal income, corporate net income and personal property taxes within the Commonwealth of Pennsylvania. (See “TAX MATTERS” herein.) The Authority has designated the Bonds as “Qualified Tax-Exempt Obligations” pursuant to §265(b)(3) of the Code (relating to the deductibility of interest expense by certain financial institutions). $7,735,000 Butler County Area Vocational-Technical School Authority School Lease Revenue Bonds, Series of 2015 (Butler County Area Vocational-Technical School Project) INITIALLY DATED: December 29, 2015 INTEREST PAYABLE: March 1 and September 1 PRINCIPAL DUE: March 1, as shown herein FIRST INTEREST PAYMENT DATE: March 1, 2016 PAYMENT OF PRINCIPAL AND INTEREST: The School Lease Revenue Bonds, Series of 2015 (Butler County Area Vocational-Technical School Project), in the aggregate principal amount of $7,735,000 (the “Bonds”), will be registered in the name of Cede & Co. as the owner and nominee of The Depository Trust Company (“DTC”), New York, New York. Beneficial ownership of the Bonds can be acquired, in denominations of $5,000 or any integral multiple thereof, under the book-entry only system maintained by DTC through its brokers and dealers who are, or act through, DTC Participants. Purchasers of the Bonds will not receive physical delivery of Bond certificates, and must maintain an account with a broker or a dealer who is, or acts through, a DTC Participant to receive payment of principal of and interest on the Bonds. See “BOOK-ENTRY ONLY SYSTEM” herein. If, under the circumstances described herein, Bonds are ever issued in certificated form, the Bonds will be subject to registration of transfer, exchange and payment as described herein. Interest on the Bonds is payable initially on March 1, 2016 and thereafter semiannually on March 1 and September 1 of each year, until the principal sum thereof is paid. The Bonds are subject to redemption prior to stated maturity as described herein. SECURITY FOR THE BONDS: The principal of and interest on the Bonds will be paid by, or on behalf of, the Butler County Area Vocational-Technical School Authority (the “Authority”) to Wells Fargo Bank, N.A., Pittsburgh, Pennsylvania (the “Trustee”), acting as trustee and sinking fund depository for the Bonds, under the terms of a Trust Indenture, dated as of August 23, 2010, between the Authority and the Trustee as supplemented and amended by a First Supplemental Trust Indenture dated December 29, 2015 (the “First Supplemental Indenture” and, collectively the “Indenture”). For a further description of the amendments to the Indenture effectuated by the delivery of the First Supplemental Indenture, see “Security for the Bonds” herein. The Authority, as lessor, has entered into a Lease Agreement dated as of August 23, 2010 (the “Original Lease”), with the Butler County Area Vocational-Technical School Board (the “Joint Board”), which is the governing body of the Butler County Area Vocational-Technical School (“BCAVTS”), and Butler Area School District, Karns City Area School District, Mars Area School District, Moniteau School District, Seneca Valley School District, Slippery Rock Area School District, and South Butler County School District (the “School Districts”), as lessees as supplemented by a First Supplemental Lease Agreement dated December 29, 2015 (the “First Supplemental Lease” and with the Original Lease, the “Lease”). Under the Lease each of the School Districts (with the exception of Seneca Valley School District , the “Obligated School Districts”) is required to pay to the Joint Board for further credit to the Authority, semiannual lease rentals specified in the Lease, the sum of which shall always equal 100% of the debt service due on the Bonds. Seneca Valley School District had, independently of the Obligated School Districts, paid a onetime capital contribution for its share of the costs of the capital project in lieu of financing such costs under the Lease and having to make periodic lease payments thereunder. The Lease is assigned and pledged under the Indenture to the Trustee as security for the Bonds. The Bonds are special, limited revenue obligations of the Authority, payable solely from the lease rentals payable by the Joint Board and the Obligated School Districts under the Lease. The Obligated School Districts’ payment obligations under the Lease do not constitute debt of the Obligated School Districts. The Obligated School Districts have covenanted to budget and pay the amounts due under the Lease, but payments are subject to annual appropriation by each of the Obligated School Districts. The Obligated School Districts payment obligations under the Lease are, however, subject to enforcement by the Commonwealth of Pennsylvania under the state subsidy intercept provisions of Section 790 of the School Code (see, “Intercept of State Aid for Obligated School District’s Failure to Make Payments Under the Lease”, herein). The Authority and the BCAVTS/Joint Board have no taxing power. CREDIT ENHANCEMENT: The scheduled payment of principal of and interest on the Bonds when due will be guaranteed under a municipal bond insurance policy to be issued concurrently with the delivery of the Bonds by Assured Guaranty Municipal Corp. (“AGM”). CONTINUING DISCLOSURE UNDERTAKING: The Joint Board and the Obligated School Districts, as applicable, have agreed to provide, or cause to be provided, in a timely manner, certain information in accordance with the requirements of Rule 15c2-12, as promulgated under the Securities and Exchange Act of 1934, as amended and interpreted (the "Rule"). (See “CONTINUING DISCLOSURE UNDERTAKING” herein.) LEGAL APPROVALS: The Bonds are offered when, as and if issued by the Authority and received by the Underwriter, subject to prior sale and subject to the receipt of the approving legal opinion to be issued by Dinsmore & Shohl LLP, Pittsburgh, Pennsylvania, Bond Counsel. Certain additional matters, as requested by Bond Counsel, will be passed upon by Dillon, McCandless, King, Coulter and Graham, LLP, Butler, Pennsylvania, Solicitor to the Authority and to the BCAVTS. The Bonds are expected to be available for delivery on December 29, 2015 in New York, New York. REGISTRATION OF BONDS: Information concerning the Bonds has been furnished to The Depository Trust Company, New York, New York (“DTC”). It is expected that the Bonds will be book-entry only. Official Statement Dated: December 1, 2015 $7,735,000 Butler County Area Vocational-Technical School Authority School Lease Revenue Bonds, Series of 2015 (Butler County Area Vocational-Technical School Project) BOND MATURITY SCHEDULE Dated: December 29, 2015 Principal Due: March 1, as shown below Interest Due: March 1 and September 1 First Interest Payment: March 1, 2016 Principal Interest Initial Offering Mar. 1 Amounts Rates Yields Prices 2017 $195,000 2.000% 0.870% 101.314% 2018 245,000 2.000 1.230 101.644 2019 250,000 2.000 1.400 101.854 2020 255,000 2.000 1.630 101.485 2021 255,000 2.000 1.860 100.686 2022 265,000 2.000 2.140 99.193 2023 270,000 2.125 2.370 98.391 2024 275,000 2.375 2.540 98.787 2025 285,000 2.625 2.710 99.311 2026 285,000 2.750 2.900 98.684 2027 295,000 3.000 3.000 100.000 2028 305,000 3.000 3.070 99.290 2029 315,000 3.125 3.190 99.302 2030 320,000 3.125 3.270 98.363 2035* 1,785,000 3.500 3.600 98.620 2040* 2,135,000 3.625 3.830 96.783 *Term Bond Butler County Area Vocational-Technical School Authority MEMBERS OF THE AUTHORITY Name Position Member School District David H. Tack Chairperson Butler Area School District James Nickel Vice-Chairperson Seneca Valley School District Arthur Bernardi Treasurer Butler Area School District Roy Peffer Secretary Moniteau School District Michael Smith Assistant Secretary Karns City Area School District Gordon Marburger Member Mars Area School District Jacqueline Pfeiffer Member South Butler County School District Dennis Thompson Member Slippery Rock Area School District Butler County Area Vocational-Technical School JOINT OPERATING COMMITTEE MEMBERSHIP Name Position Member School District John Conrad Chairperson Butler Area School District James Nickel Vice-Chairperson Seneca Valley School District Roy Peffer Secretary Moniteau School District Gordon Marburger Treasurer Mars Area School District Carmen Bianco Member Butler Area School District Eric DiTullio Member Seneca Valley School District Bill Halle Member Butler Area School District James Keffalas Member Butler Area School District Jacqueline Pfeiffer Member South Butler County School District Josh Price Member Karns City Area School District Linda Rieck Member South Butler County School District Rev. Michael Scheer Member Slippery Rock Area School District ADMINISTRATION Mr. Kurt Speicher Executive Director Ms. Rebekah Davis Business Manager SOLICITOR Dillon, McCandless, King, Coulter and Graham, LLP Butler, Pennsylvania BOND COUNSEL Dinsmore & Shohl LLP Pittsburgh, Pennsylvania TRUSTEE Wells Fargo Bank National Association Pittsburgh, Pennsylvania FINANCIAL ADVISOR Public Financial Management Inc. Harrisburg, Pennsylvania UNDERWRITER Janney Montgomery Scott LLC Pittsburgh, Pennsylvania No dealer, broker or any other person has been authorized by the Authority, the BCAVTS/Joint Board or any of the School Districts, to give any information or make any representation, other than those contained in this Official Statement, and if given or made, such other information and representation must not be relied upon.