Town of Ellington, Connecticut

OFFICIAL STATEMENT DATED SEPTEMBER 17, 2013 NEW ISSUE MOODY’S RATING: Aa3 In the opinion of Bond Counsel, assuming the accuracy of and compliance by the Town with its representations and covenants relating to certain requirements contained in the Internal Revenue Code of 1986, as amended (the “Code”), under existing statutes, interest on the Bonds is excluded from gross income for Federal income tax purposes pursuant to Section 103 of the Code; the Bonds are not “private activity bonds” and interest on the Bonds is not treated as a preference item for purposes of calculating the Federal alternative minimum tax, but in the case of corporations a portion of such interest may be included in alternative minimum taxable income for purposes of computing any Federal alternative minimum tax; the Bonds are “qualified tax-exempt obligations”; interest on the Bonds is excluded from Connecticut taxable income for purposes of the Connecticut income tax on individuals, trusts and estates; and interest on the Bonds is excluded from amounts on which the net Connecticut minimum tax is based in the case of individuals, trusts and estates required to pay the Federal alternative minimum tax. (See Appendix B “Form of Opinion of Bond Counsel and Tax Exemption” herein.) TOWN OF ELLINGTON, CONNECTICUT $4,205,000 GENERAL OBLIGATION BONDS, ISSUE OF 2013 DATED DUE September 15, 2013 MATURITY SCHEDULE September 15, as shown below Due Principal Due Principal September 15 Amount Coupon Yield CUSIP1 September 15 Amount Coupon Yield CUSIP1 2014 $220,000 2.000% 0.300% 288515NL9 2024 $205,000 3.000% 2.850% 288515NW5 2015 220,000 3.000% 0.500% 288515NM7 2025 205,000 3.250% 3.050% 288515NX3 2016 220,000 3.000% 0.800% 288515NN5 2026 205,000 3.250% 3.200% 288515NY1 2017 220,000 3.000% 1.000% 288515NP0 2027 205,000 3.375% 3.350% 288515NZ8 2018 220,000 4.000% 1.450% 288515NQ8 2028 205,000 3.500% 3.500% 288515PA1 2019 220,000 4.000% 1.750% 288515NR6 2029 205,000 4.000% 3.650% 288515PB9 2020 215,000 4.000% 2.000% 288515NS4 2030 205,000 4.000% 3.750% 288515PC7 2021 215,000 4.000% 2.250% 288515NT2 2031 205,000 4.000% 3.850% 288515PD5 2022 210,000 3.000% 2.450% 288515NU9 2032 200,000 4.000% 3.950% 288515PE3 2023 205,000 3.000% 2.650% 288515NV7 2033 200,000 4.000% 4.000% 288515PF0 Underwriter JANNEY MONTGOMERY SCOTT LLC

Interest on the Bonds will be payable on March 15, 2014 and semiannually thereafter on September 15 and March 15 in each year until maturity.

The Bonds are subject to redemption prior to maturity as more fully described herein.

The Bonds will bear interest payable at maturity, will be issued by means of a book-entry-only system and registered in the name of Cede & Co., as nominee for The Depository Trust Company (“DTC”), New York, New York. DTC will act as securities depository for the Bonds. Principal of, redemption premium, if any, and interest on the Bonds will be payable by the Town or its agent to DTC or its nominee as registered owner of the Bonds. Purchases of the Bonds will be made in book- entry form, in denominations of $5,000 or integral multiples thereof. Purchasers of the Bonds will not receive certificates representing their ownership interest in the Bonds. So long as Cede & Co. is the Bond Owner, as nominee of DTC, reference herein to the Bond Owner or owners shall mean Cede & Co. as aforesaid, and shall not mean the Beneficial Owners (as described herein) of the Bonds. See “Book-Entry-Only Transfer System” herein.

The Bonds will be general obligations of the Town of Ellington, Connecticut (the “Town”), and the Town will pledge its full faith and credit to pay the principal of and interest on the Bonds when due. See “Security and Remedies” herein.

U.S. Bank National Association, Corporate Trust Services, 225 Asylum Street, 23rd Floor, Hartford, Connecticut will certify the Bonds and act as Registrar, Transfer Agent and Paying Agent for the Bonds.

The Bonds are offered for delivery when, as and if issued, subject to the approving opinion of Day Pitney LLP, Bond Counsel, of Hartford, Connecticut. It is expected that delivery of the Bonds in book-entry-only form will be made to the Depository Trust Company (‘DTC”) in New York, New York on or about September 25, 2013.

This cover page contains certain information for quick reference only. It is NOT a summary of this issue. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision.

______1 Copyright, American Bankers Association. CUSIP® is a registered trademark of the American Bankers Association. CUSIP numbers have been assigned by an independent company not affiliated with the Town and are included solely for the convenience of the holders of the Bonds. The Town is not responsible for the selection or use of these CUSIP numbers, does not undertake any responsibility for their accuracy, and makes no representation as to their correctness on the Bonds or as indicated above. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Bonds. The Financial Advisor to the Town has provided the following sentence for inclusion in this Official Statement. The Financial Advisor has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to the Town and, as applicable, to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Financial Advisor does not guarantee the accuracy or completeness of such information.

TABLE OF CONTENTS

Page Page

Bond Issue Summary I. Bond Information Introduction ...... 1 Comparative Assessed Valuations ...... 24 Description of the Bonds...... 1 Property Tax Levies and Collections ...... 24 Redemption ...... 2 Ten Largest Taxpayers ...... 24 Book-Entry-Only Transfer System ...... 2 Equalized Net Grand List ...... 25 DTC Practices ...... 4 V. Financial Information Security and Remedies ...... 4 Fiscal Year ...... 26 Qualification for Financial Institutions ...... 5 Accounting Policies...... 26 Availability of Continuing Disclosure ...... 5 Budgetary Procedures ...... 26 Authorization and Purpose ...... 5 Annual Audit ...... 27 Use of Bond Proceeds ...... 6 Pension Plans ...... 27 Rating ...... 6 Other Post Employment Benefits ...... 28 II. The Issuer Investment Policies and Practices ...... 28 Description of the Town ...... 7 General Fund Revenues and Expenditures ...... 29 Economic Development ...... 8 Analysis of General Fund Equity ...... 29 Form of Government ...... 9 VI. Debt Summary Principal Town Officials ...... 10 Principal Amount of Indebtedness...... 30 Summary of Municipal Services ...... 10 Annual Bonded Debt Maturity Schedule ...... 31 Town Employees ...... 14 Overlapping/Underlying Debt ...... 31 Municipal Employees Bargaining Units ...... 15 Debt Statement ...... 31 Education System ...... 15 Current Debt Ratios ...... 32 School Facilities ...... 16 Bond Authorization...... 32 School Enrollment ...... 16 Temporary Financing ...... 32 III. Economic and Demographic Information Limitation of Indebtedness ...... 33 Population Trends ...... 17 Statement of Statutory Debt Limitation ...... 33 Age Distribution of the Population ...... 17 Authorized But Unissued Debt ...... 34 Income Distribution ...... 17 Principal Amount of Outstanding Debt ...... 34 Income Levels ...... 18 Ratio of Direct Debt to Valuation, Educational Attainment ...... 18 Population, and Income ...... 34 Major Employers ...... 19 Ratio of Annual Debt Service Expenditures to Total Employment by Industry ...... 19 General Fund Expenditures ...... 34 Employment Data ...... 20 VII. Legal and Other Litigation Age Distribution of Housing ...... 20 Litigation ...... 35 Housing Inventory ...... 21 Transcript and Closing Documents ...... 35 Owner-Occupied Housing Values ...... 21 Concluding Statement ...... 35 Building Permits ...... 21 Land Use Summary ...... 22 Appendix A - Basic Financial Statements IV. Tax Base Data Appendix B - Opinion of Bond Counsel and Tax Exemption Assessments ...... 23 Appendix C - Form of Continuing Disclosure Agreement for Bonds Property Tax Collection Procedure ...... 23 Appendix D - Notice of Sale

No dealer, broker, salesman or other person has been authorized by the Town of Ellington, Connecticut (the “Town”) to give any information or to make any representations, other than those contained in this Official Statement; and if given or made, such other information or representation must not be relied upon as having been authorized by the Town. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale.

This Official Statement has been prepared only in connection with the initial offering and sale of the Bonds and may not be reproduced or used in whole or in part for any other purpose.

The information, estimates and expressions of opinion in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale of the Bonds shall, under any circumstances, create any implication that there has been no material change in the affairs of the Town since the date of this Official Statement. BOND ISSUE SUMMARY The information in this Bond Issue Summary and the front cover page is qualified in its entirety by the detailed information and financial statements appearing elsewhere in this Official Statement. This Official Statement speaks only as of its date and the information herein is subject to change.

Location of Sale: FirstSouthwest, 628 Hebron Avenue, Suite 306, Glastonbury, Connecticut 06033.

Date of Sale: Tuesday, September 17, 2013, 11:30 A.M. (EDT).

Issuer: Town of Ellington, Connecticut (the “Town”).

Issue: $4,205,000 General Obligation Bonds, Issue of 2013, Book-Entry-Only (the “Bonds”).

Dated Date: September 15, 2013.

Interest Due: March 15 and September 15, in each year until maturity, commencing March 15, 2014.

Principal Due: Serially, September 15, 2014 through 2033, as detailed in this Official Statement.

Purpose and Authority: The proceeds of the Bonds will be used to retire $410,000 in Bond Anticipation Notes maturing on September 25, 2013. These funds were used for the joint purchase, with the State of Connecticut, of development rights of a parcel of approximately 118 acres of agricultural land known as the DOJO property. The State’s contribution of the purchase price of $1.39 million is $900,000 and the Town’s contribution is $490,000 plus various associated costs. The additional funds will be used for various capital projects as authorized by the voters of the Town of Ellington. See “Authorization and Purpose” herein.

Redemption: The Bonds are subject to redemption prior to maturity as more fully described herein.

Security: The Bonds will be general obligations of the Town of Ellington, Connecticut and the Town will pledge its full faith and credit to the payment of principal of and interest on the Bonds when due.

Credit Rating: The Town has received a credit rating of “Aa3” from Moody’s Investors Service, Inc. (“Moody’s”) on the Bonds. See “Rating” herein.

Bond Insurance: The Town does not expect to direct purchase a credit enhancement facility.

Basis of Award: Lowest True Interest Cost (TIC), as of dated date.

Tax Exemption: Refer to “Opinion of Bond Counsel and Tax Exemption” herein.

Bank Qualification: The Bonds shall be designated by the Town as qualified tax-exempt obligations under the provisions of Section 265(b) of the Internal Revenue Code of 1986, as amended, for purposes of the deduction by financial institutions for interest expense allocable to the Bonds.

Continuing Disclosure: In accordance with the requirements of Rule 15c2-12 promulgated by the Securities and Exchange Commission, the Town will agree to provide, or cause to be provided, annual financial information and notices of certain events with respect to the Bonds within 10 business days of the occurrence of such events, pursuant to a Continuing Disclosure Agreement to be executed by the Town substantially in the form of Appendix C to this Official Statement. Registrar, Transfer Agent, Certifying Agent and Paying U.S. Bank National Association, Corporate Trust Services, 225 Asylum Street, 23rd Floor, Agent: Hartford, Connecticut.

Legal Opinion: Day Pitney LLP of Hartford, Connecticut will act as Bond Counsel.

Delivery and Payment: It is expected that delivery of the Bonds in book-entry-only form will be made to The Depository Trust Company on or about September 25, 2013 against payment in Federal Funds.

Issuer Official: Questions concerning the Official Statement should be addressed to Mr. Nicholas J. DiCorleto Jr., Finance Officer/Treasurer, Town of Ellington, Town Hall, 55 Main Street, Ellington, Connecticut 06029. Telephone: 860-870-3115.

Financial Advisor: FirstSouthwest, 628 Hebron Avenue, Suite 306, Glastonbury, Connecticut 06033, attention: Janette J. Marcoux, Senior Vice President, Telephone: 860-290-3003.

I. BOND INFORMATION

INTRODUCTION

This Official Statement, including the cover page and appendices, is provided for the purpose of presenting certain information relating to the Town of Ellington, Connecticut (the “Town”) in connection with the original issuance of $4,205,000 General Obligation Bonds, Issue of 2013 (the “Bonds”) of the Town.

The Bonds are being offered for sale at public bidding. A Notice of Sale dated September 9, 2013 has been furnished to prospective bidders. Reference is made to the Notice of Sale for the respective terms and conditions of the bidding on the Bonds.

This Official Statement is not to be construed as a contract or agreement between the Town and the purchasers or holders of any of the Bonds. Any statements made in this Official Statement involving matters of opinion or estimates are not intended to be representations of fact, and no representation is made that any such opinion or estimate will be realized. 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 Town since the date hereof. All quotations from and summaries and explanations of provisions of statutes, charters, or other laws and acts and proceedings of the Town contained herein do not purport to be complete and are qualified in their entirety by reference to the original official documents, and all references to the Bonds and the proceedings of the Town relating thereto are qualified in their entirety by reference to the definitive form of the Bonds and such proceedings.

The presentation of information is intended to show recent historical trends and is not intended to indicate future or continuing trends in the financial or other positions of the Town.

First Southwest Company is engaged as Financial Advisor to the Town in connection with the issuance of the Bonds. The Financial Advisor’s fee for services rendered with respect to the sale of the Bonds is contingent upon the issuance and delivery of the Bonds. First Southwest Company cannot submit a bid for the Bonds, either independently or as a member of a syndicate organized to submit a bid for the Bonds. First Southwest Company, in its capacity as Financial Advisor, does not assume any responsibility for the information, covenants and representations contained in any of the legal documents with respect to the federal and state income tax status of the Bonds, or the possible impact of any present, pending or future actions taken by any legislative or judicial bodies.

Set forth in Appendix A “Basic Financial Statements” hereto is a copy of the report of the independent auditors for the Town with respect to the financial statements of the Town included in that appendix. The report speaks only as of its date, and only to the matters expressly set forth therein. The auditors have not been engaged to review this Official Statement or to perform audit procedures regarding the post-audit period, nor have the auditors been requested to give their consent to the inclusion of their report in Appendix A. Except as stated in their report, the auditors have not been engaged to verify the financial information set out in Appendix A and are not passing upon and do not assume responsibility for the sufficiency, accuracy or completeness of the financial information presented in that appendix.

Bond Counsel are not passing upon and do not assume responsibility for the accuracy or completeness of the statements made in this Official Statement (other than matters expressly set forth as their opinion in Appendix B “Opinion of Bond Counsel and Tax Exemption” herein), and they make no representation that they have independently verified the same.

The Town considers this Official Statement to be “final” for purposes of Securities and Exchange Commission Rule 15c2-12(b)(1), but is subject to revision or amendment.

DESCRIPTION OF THE BONDS

The Bonds will be dated September 15, 2013 and will mature in annual installments on September 15 in each of the years and in the principal amounts set forth on the cover page hereof. The Bonds will be issued in denominations of $5,000 or any integral multiples thereof. Interest on the Bonds will be payable on March 15, 2014 and semiannually thereafter on March 15 and September 15 in each year until the date of maturity and will be payable to the registered owners of the Bonds as of the close of business on the last business day of February and August in each year. Interest will be calculated on the basis of a 360-day year, consisting of twelve 30-day months. A book- entry-only transfer system will be employed evidencing ownership of the Bonds with transfers of ownership on the

1 records of The Depository Trust Company, New York, New York (“DTC”), and its participants pursuant to rules and procedures established by DTC and its participants. See “Book-Entry-Only Transfer System” herein. The Certifying Agent, Paying Agent, Registrar and Transfer Agent will be U.S. Bank National Association, Corporate Trust Services, 225 Asylum Street, 23rd Floor, Hartford, Connecticut (email: [email protected]). The legal opinion on the Bonds will be rendered by Day Pitney LLP, in substantially the form set forth in Appendix B to this Official Statement.

The Bonds are subject to redemption prior to maturity as more fully described herein.

REDEMPTION

The Bonds maturing on or before September 15, 2021 are not subject to redemption prior to maturity. The Bonds maturing on September 15, 2022 and thereafter are subject to redemption prior to maturity, at the election of the Town, on and after September 15, 2021, at any time either in whole or in part, in such amounts and in such order of maturity (but by lot within a maturity) as the Town may determine, at the redemption prices (expressed as a percentage of the principal amount of the Bonds to be redeemed) set forth in the following table, plus accrued interest, to the redemption date:

Period During Which Redeemed Redemption Price September 15, 2021 and thereafter 100%

Notice of redemption shall be given by the Town or its agent by mailing a copy of the redemption notice by first- class mail not less than thirty (30) days prior to the redemption date to the registered owner of such Bonds at the address of such registered owner as the name shall last appear on the registration books for the Bonds kept for such purpose. Failure to give such notice by mailing to any registered owner, or any defect therein, shall not affect the validity of the redemption of any other Bonds. Upon the giving of such notice, if sufficient funds available solely for redemption are on deposit with the Paying Agent, the Bonds or portions thereof so called for redemption will cease to bear interest after the specified redemption date. So long as Cede & Co., as nominee of The Depository Trust Company (“DTC”), is the registered owner of the Bonds, notice of redemption will be sent only to DTC (or a successor securities depository) or its successor nominee.

If less than all the Bonds of any one maturity shall be called for redemption, the particular Bonds or portions of Bonds of such maturity to be redeemed shall be selected by lot in such manner as the Town in its discretion may determine, provided, however, that the portion of any Bonds to be redeemed shall be in the principal amount of $5,000 or integral multiples thereof and that, in selecting Bonds for redemption, each Bond shall be considered as representing that number of Bonds which is obtained by dividing the principal amount of such Bond by $5,000.

The Town, so long as a book-entry system is used for the Bonds, will send any notice of redemption only to DTC (or a successor securities depository) or its nominee. Any failure of DTC to advise any Direct Participant, or of any Direct Participant or Indirect Participant to notify any Indirect Participant or Beneficial Owner, of any such notice and its content or effect will not affect the validity of the redemption of such Bonds called for redemption. Redemption of a portion of the Bonds of any maturity by the Town will reduce the outstanding principal amount of Bonds of such maturity held by DTC. In such event it is the current practice of DTC to allocate by lot, through its book-entry system, among the interests held by Direct Participants in the Bonds to be redeemed, the interest to be reduced by such redemptions in accordance with its own rules or other agreements with Direct Participants. The Direct Participants and Indirect Participants may allocate reductions of the interest in the Bonds to be redeemed held by the Beneficial Owners. Any such allocation of interests in the Bonds to be redeemed will not be governed by the determination of the Town authorizing the issuance of the Bonds and will not be conducted by the Town or be the responsibility of, the Town, the Registrar or Paying Agent.

BOOK-ENTRY-ONLY TRANSFER SYSTEM

This section describes how ownership of the Bonds is to be transferred and how the principal of, premium, if any, and interest on the Bonds are to be paid to and accredited by DTC while the Bonds are registered in its nominee name. The information in this section concerning DTC and the Book-Entry-Only System has been provided by DTC for use in disclosure documents such as this Official Statement. The Town believes the source of such information to be reliable, but takes no responsibility for the accuracy or completeness thereof.

The Town cannot and does not give any assurance that (1) DTC will distribute payments of debt service on the Bonds, or redemption or other notices to DTC Participants, (2) DTC Participants or others will distribute debt service payments paid to DTC or its nominee (as the registered owner of the Bonds), or redemption or other notices, to the Beneficial Owners, or that they will do so on a timely basis, or (3) DTC will serve and act in the manner described in this Official Statement. The current rules applicable to DTC are on file with the Securities and Exchange Commission, and the current procedures of DTC to be followed in dealing with DTC Participants are on file with DTC.

The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered Bonds registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Bond certificate will be issued for each maturity of the Bonds in the aggregate principal amount of each maturity, and will be deposited with DTC.

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

Purchases of 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. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.

To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect 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 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 in an issue are being redeemed, DTC’s practice is to determine by lot, the amount of interest for 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 Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Town as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Principal and interest payments on, and redemption premium, if any, with respect to 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 Town or the Paying Agent/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, the Paying Agent/Registrar, or the Town, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest, and redemption premium, if any, to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Town or the Paying Agent/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 to the Town or the Paying Agent/Registrar. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered.

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

The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the Town believes to be reliable, but the Town takes no responsibility for the accuracy thereof.

DTC PRACTICES

The Town can make no assurances that DTC, Direct Participants, Indirect Participants or other nominees of the Beneficial Owners of the Bonds will act in a manner described in this Official Statement. DTC is required to act according to rules and procedures established by DTC and its participants which are on file with the Securities and Exchange Commission.

SECURITY AND REMEDIES

The Bonds will be general obligations of the Town of Ellington, Connecticut and the Town will pledge its full faith and credit to pay the principal of and interest on the Bonds when due.

Unless paid from other sources, the Bonds are payable from general property tax revenues. The Town has the power under Connecticut General Statutes to levy ad valorem taxes on all taxable property in the Town without limit as to rate or amount, except as to certain classified property such as certified forest land taxable at a limited rate and dwelling houses of qualified elderly persons of low income or of qualified disabled persons taxable at limited amounts. The Town may place a lien on the property for the amount of tax relief granted, plus interest, with respect to dwelling houses of qualified elderly persons of low income or qualified disabled persons. Under existing statutes, the State of Connecticut is obligated to pay the Town the amount of tax revenue that the Town would have received except for the limitation under certain of the statutes upon its power to tax such dwelling houses of qualified elderly persons of low income.

Payment of the Bonds is not limited to property tax revenues or any other revenue source, but certain revenues of the Town may be restricted as to use and therefore may not be available to pay debt service on the Bonds.

There are no statutory provisions for priorities in the payment of general obligations of the Town. There are no statutory provisions for a lien on any portion of the tax levy or other revenues to secure the Bonds, or judgments thereon, in priority to other claims.

The Town is subject to suit on its general obligation bonds and a court of competent jurisdiction has power in appropriate proceedings to render a judgment against the Town. Courts of competent jurisdiction also have the power in appropriate proceedings to order payment of a judgment on such Bonds from funds lawfully available therefor or, in the absence thereof, to order the Town to take all lawful action to obtain the same, including the raising of the required amount in the next annual tax levy. In exercising their discretion as to whether to enter such an order, the courts may take into account all relevant factors including the current operating needs of the Town and the availability and adequacy of other remedies.

Enforcement of a claim for payment of principal of or interest on the Bonds would also be subject to the applicable provisions of Federal bankruptcy laws as well as other bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights heretofore or hereafter enacted and to the exercise of judicial discretion. Section 7-566 of the Connecticut General Statutes, amended in 1993, provides that no Connecticut municipality shall file a petition in bankruptcy without the express prior written consent of the Governor. This prohibition applies to any town, city, borough, metropolitan district and any other political subdivision of the State having the power to levy taxes and issue bonds, notes or other obligations.

QUALIFICATION FOR FINANCIAL INSTITUTIONS

The Bonds will be designated by the Town as qualified tax-exempt obligations under the provisions of Section 265(b) of the Internal Revenue Code of 1986, as amended, for purposes of the deduction by financial institutions for interest expense incurred to carry the Bonds.

AVAILABILITY OF CONTINUING DISCLOSURE

The Town of Ellington prepares, in accordance with State law, annual audited financial statements and files such annual audits with the State Office of Policy and Management within six months of the end of its fiscal year. The Town provides, and will continue to provide, to the rating agency ongoing disclosure in the form of annual audited financial statements, adopted budgets and other materials relating to its management and financial condition as may be necessary or requested.

The Town will enter into a Continuing Disclosure Agreement with respect to the Bonds, substantially in the form attached as Appendix C to this Official Statement, to provide or cause to be provided, in accordance with the requirements of SEC Rule 15c2-12, annual financial information and timely notices of the occurrence of certain events with respect to the Bonds within 10 business days of the occurrence of such events.

The Town has previously undertaken in Continuing Disclosure Agreements entered into for the benefit of holders of certain of its general obligation bonds and notes to provide certain annual financial information and notices of certain events pursuant to Rule 15c2-12(b)(5). The Town has not defaulted in its obligation to provide annual information pursuant to Continuing Disclosure Agreements executed by the Town in connection with the sale of any bonds or notes, except for the filing by February 28, 2013 of the audited financial statements of the Town for Fiscal Year ended June 30, 2012. The loss of support staff in the Finance Office resulted in the delay in the completion of the annual financial statements of the Town. Draft copies of the Basic Financial Statements for Fiscal Year ending June 30, 2012, along with the required annual supplemental financial information and operating data, were filed as required by February 28, 2013; the final Audited Financial Statements were completed and submitted to EMMA on May 7, 2013.

AUTHORIZATION AND PURPOSE

The Bonds are issued pursuant to the General Statutes of Connecticut as amended and borrowing resolutions approved by the voters of the Town.

DOJO Farm Preservation: Pursuant to a resolution presented at Town Meeting on October 23, 2007 and approved at referendum held on November 6, 2007, an appropriation and bond authorization in the amount of $2,000,000 was approved for costs related to the acquisition by the Town of development rights.

59 South Road Property Acquisition: Pursuant to a resolution presented at Special Town Meeting on February 28, 2011, an appropriation and bond authorization in the amount of $355,000 was approved for costs related to the acquisition by the Town, for anticipated use for expansion of the Crystal Lake School site and other municipal purposes.

Hall Memorial Library HVAC System: Pursuant to a resolution presented at Special Town Meeting on February 28, 2011, an appropriation and bond authorization in the amount of $430,000 was approved for costs related to the rehabilitation of the HVAC system for the Hall Memorial Library at 93 Main Street in Ellington.

Windermere School Heating Control Replacement: Pursuant to a resolution presented at Annual Town Meeting on May 10, 2011, an appropriation and bond authorization in the amount of $345,000 was approved for costs related to the replacement of the heating controls at Windermere School at 2 Abbott Road in Ellington, contemplated to consist of removal of the existing pneumatic controls and replacement with digital computerized heating controls in all classrooms, and related work and improvements.

New Senior Center Project: Pursuant to resolutions presented at Special Town Meetings on January 31, 2012 and March 25, 2013 and approved at referenda held February 14, 2012 and April 2, 2013, respectively, an appropriation and bond authorization in the amount of $2,900,000 was approved for costs related to the design, construction, equipping and furnishing of a Senior Center to be located on property owned by the Town at 22 Maple Street in Ellington.

USE OF BOND PROCEEDS

Previously BANS Bonds Amount Bonded/ Maturing This Authorized/ Project Authorized Grants 9/25/2013 Issue But Unissued DOJO Farm Pres ervation…………………… $2,000,000 $100,000 $410,000 $440,000 $1,460,000 Property Acquisition - 59 South Road…… 355,000 163,000 0 190,000 2,000 Library HVAC Sys tem……………………… 430,000 0 0 430,000 0 Windermere School Heating Controls…… 345,000 0 0 345,000 0 Senior Center Construction……………… 2,900,000 0 0 2,800,000 100,000 Total $6,030,000 $263,000 $410,000 $4,205,000 $1,562,000

RATING

The Town received a credit rating of “Aa3” from Moody’s Investors Service, Inc. (“Moody’s”) on the Bonds.

The Town furnished to the rating agency certain information and materials, some of which may not have been included in this Official Statement. The rating reflects only the views of such rating agency and an explanation of the significance of the rating may be obtained from such rating agency at the following address: Moody’s Investors Service, Inc., 7 World Trade Center at 250 Greenwich Street, New York, New York 10007. Generally, a rating agency bases its rating on the information and materials furnished to it and on its investigations, studies and assumption of its own. There is no assurance that the rating will continue for any given period of time or that it will not be revised or withdrawn entirely if, in the judgment of the rating agency, circumstances so warrant. A revision or withdrawal of the rating may have an effect on the market price of the Town’s bonds and notes, including the Bonds.

II. THE ISSUER

DESCRIPTION OF THE TOWN

The Town of Ellington was first inhabited by Native American tribes. One of their ancient settlements was located on the eastern side of present day Crystal Lake. Originally part of Windsor, then East Windsor, Ellington was incorporated in 1786 on land that was once known as the Great Marsh. The Town is located in Tolland County about 17 miles northeast of Hartford. It is bordered on the north by the Towns of Enfield, Somers, and Stafford, on the southwest by the Town of South Windsor, on the east by the Town of Tolland and Willington, on the west by the Town of East Windsor and on the south by the Town of Vernon. It lies between the metropolitan areas of Boston and New York. Ellington has a population of 15,582 (Connecticut Department of Public Health, Estimate 2011) and covers an area of 34.8 square miles.

The State of Connecticut maintains approximately 24 miles of state roads which intersect the Town. These include Routes 140, 286, 83, 30, 32 and 74. The Town maintains approximately 98.26 miles of roads.

Ellington is a growing community with rural charm and suburban convenience. The Town is a blend of agriculture and industry, businesses and homes, nestled in the Connecticut River Valley and set against the backdrop of the Shenipsit State Forest. With over 3,000 acres under cultivation, Ellington remains one of the largest agricultural production towns in Connecticut. It is estimated the Town provides a work force of approximately 8,000 people. The top 5 commuting destinations for Ellington workers are Hartford, Vernon, Manchester, South Windsor, and East Hartford.

The number of housing units increased to 6,338 units in 2011 (Source: U.S. Census Bureau, 2007-2011 American Community Survey) from 5,417 in 2000. Approximately 768 subdivision lots have been approved by the Planning and Zoning Commission over the last 12 years, representing an annual rate of 64 approved buildings.

ECONOMIC DEVELOPMENT

Economic development is important to the Town of Ellington, not only in terms of providing a diversified tax base, jobs, and shopping opportunities, but from a community character standpoint as well. Through the combined efforts of the Board of Selectmen, Board of Finance, Economic Development Commission and the Planning and Zoning Commission, considerable progress has been made in developing an economic program for the Town. Several areas of commercial/industrial development contribute to the local economy:

Route 83 Corridor is the most significant economic development area in the Town. The corridor stretches over a distance of approximately 6 miles; public water and sewers are available for the majority of the area. It is estimated that approximately 340 acres of 550 available acres are developed.

In an effort to help achieve economic development goals and properly allocate additional sewer service capacity along the corridor, in the spring of 2013 the Town approved a special appropriation to conduct a study to evaluate land uses, zoning, future build-out and multi-family zoning and regulations. Additional funding was procured through the Capitol Region Council of Governments HUD Sustainable Communities Regional Planning Grant to allow the study to include a design development zone for commercial and mixed-use multifamily development with an affordable component. The study is scheduled for completion in 2014.

The Town Center Triangle is perceived as the town center. This area is served by public water, gas and sewers and has a wide variety of land uses, including the Town Hall, Public Works facility, High School, Center School, Elderly Housing Complex, library, retail, office, and other commercial uses. This area also contains many historic residential structures and in early 2013 construction commenced on an approximate 10,000 square foot new senior center facility targeted for completion in December 2013. Approximately 236 acres are zoned commercial within the area, of which 82 acres are under developed or undeveloped.

Five Corners Area is a relatively small area. It is nonetheless important because of its location and road configuration. The State of Connecticut Department of Motor Vehicles has redesigned the 5-legged intersection into a roundabout with construction completed in spring 2012.

Crystal Lake Area - Approximately 55 of the 103 acres zoned commercially are under developed or undeveloped. Public sewers are available for the majority of the area zoned commercial.

Route 140 West - Approximately 206 acres are zoned industrial over 10 distinct properties; however most of the area is in agricultural use. No public sewers or public water is available in this area.

Industrial Park/Windermere Area has good access and is served by public water, gas, and sewers. It contains approximately 106 properties zoned Industrial or Industrial Park. Approximately 175 of the 303 zoned acres are under developed or undeveloped. In 2009 Skip’s Septic constructed an 8,000 square foot building to serve as headquarters of their business operation. A Young Men’s Christian Association (YMCA) 40,000 square foot fitness facility was completed in 2010.

The Ellington Airport has 100 acres zoned industrial with water and gas. Public sewers were constructed in 2007 at a cost of $2.25 million. The costs were funded with the issuance of $1.75 million in general obligation bonds and a State of Connecticut Small Town Economic Assistance (STEAP) grant. A study was completed on the feasibility of the Town taking ownership of the airport in the interest of preserving the airport along with any other economic development potential. To date, there has been no further consideration.

Farming - Ellington is committed to agricultural preservation and “agro-business” operations. In November of 2007, voters overwhelmingly approved a $2 million bond authorization for the purchase of development rights of farmland. The first successful preservation effort was to purchase the development rights to 118 acres of active farmland known as “Silverherz Farm” , the second successful farmland preservation program was completed in 2012 preserving an additional 70 acres known as “Myers Farm” with three other proposals in the works, totaling an additional approximate 283 acres.

Industrial Park on Pinney Street – Almost all of the available land in the industrial park has been developed. Synmar Products has moved from its former location on Somers Road and constructed a relatively large (14,500 square foot) and modern facility to meet increasing demand on its services. A successful daycare was also relocated to this area and serves up to 100 children from the community.

The Town’s most recent Plan of Conservation and Development was prepared by Planimetrics LLC and adopted in 2007. The Plan:

Establishes land use policies to guide residential and commercial development in the Town of Ellington. Encourages economic development and reduces residential development. Protects natural, scenic, cultural resources, and promotes quality of life for residents. Enhances and preserves the rural character and small town aesthetics. Establishes zoning to promote development towards appropriate areas and away from sensitive areas. Creates more comprehensive and flexible land use regulations to effectively manage growth in a responsible manner.

A comprehensive residential rezoning initiative affecting up to approximately 80% of the town was approved by the Planning and Zoning Commission in February of 2012. This approval provides design flexibility while protecting sensitive resources and reducing the overall build-out population.

FORM OF GOVERNMENT

Pursuant to its home-rule charter, the Town of Ellington has a Town Meeting form of government with a seven- member Board of Selectmen and a Board of Finance consisting of six members. Elections are held biennially in November in every odd-numbered year. The inhabitants also have the powers and privileges conferred and granted to Towns and Cities under the Constitution and the General Statutes of the State of Connecticut.

The First Selectman is the full-time Chief Executive and Administrative Officer of the Town and oversees the execution of all laws and ordinances governing the Town. He presides over the Board of Selectmen and has full voting privileges on the Board. The First Selectman, with the approval of the Board of Selectmen, appoints members to various commissions and boards.

The Board of Finance is responsible for proposing annual budgets and special appropriations at Town Meetings and works closely with the Finance Officer to establish and enforce fiscal policy and implement the recommendations of the Town auditors. The Board directs fiscal policy such as the establishment of Reserve Funds and the allocation of funds among sectors such as departmental budgets, capital expenditures and debt service.

The Town of Ellington’s full-time professional staff includes a Finance Officer. The Finance Officer is responsible for the coordination of the activities of the accounting staff and treasury management functions of the Town. In addition, the Finance Officer is responsible for assisting the Board of Finance in the preparation of the annual budget; the day-to-day administration of the adopted budget; the maintenance of the general ledgers of the various funds and account groups of the Town; financial planning and cost accounting; data processing; financial report preparation; and supervision of the annual independent audit. The Finance Officer is also responsible for the investment of all Town Funds and serves as the Town’s Purchasing Agent. Additional duties include the authority over and the responsibility for the tax collector, assessor and their operations.

PRINCIPAL TOWN OFFICIALS

Principal Manner of Term of Employement Office Name Selection Office Last Five Years Firs t Selectman……………………… Maurice W. Blanchette Elected 12/11-12/13 Former President Trans-Tek Deputy Firs t Selectman…………… Ronald F. Stomberg Elected 12/11-12/13 Stromberg RF Plumbing & Heating Finance Officer……………………… Nicholas J. DiCorleto, Jr. Appointed Indefinite Finance Officer Chairman, Board of Finance………… Robert J. Clements Elected 12/11-12/15 Financial Planner/Professional Chairman, Board of Education……… Daniel C. Keune Elected 12/09-12/13 Realtor Town Clerk…………………………… Diane H. McKeegan Appointed Indefinite Town Clerk Tax Collector………………………… Ann Marie Conti Appointed Indefinite Tax Collector Superintendent of Schools1………… Stephen C. Cullinan Appointed Indefinite Superintendent of Schools ______1 Previously served as Assistant/Acting/ and Superintendent in Vernon, CT. Sources: Town Officials

SUMMARY OF MUNICIPAL SERVICES

Police: A team, consisting of five resident State Troopers made up of one administrative resident trooper sergeant and four State troopers, twelve part-time Ellington officers, and troopers of the State Police Barracks (Troop “C”) in Tolland provide the Town with protection. Two troopers conduct the DARE (Drug Abuse Resistance Education) program which is aimed at teaching positive self esteem and other tools for children to aid in their resistance to negative peer pressure.

The team is backed up by the entire State Police Department and its specialists which include: Major Crime Squad, Detective Division, Forensic Laboratory, Fire Marshals Division, Emergency Services Division, Narcotics Divisions, Canine Corps, Bomb Squad, Traffic and Truck Squads.

Fire: The Town has two volunteer fire departments, the Ellington Fire Department organized in 1928 and the Crystal Lake Fire Department organized in 1934.

The Ellington Volunteer Fire Department's 56 members attend regular drills and training sessions. They have five pieces of apparatus located in two facilities providing protection to the western majority of the Town. The services they deliver include fire suppression, technical rescue, hazardous material response, confined space and water/ice rescue and emergency medical response to supplement the local ambulance service. Members are also active with the regional dive, search and rescue and hazardous materials response teams.

The Crystal Lake Fire Department has 40 members who also attend regular drill and training sessions. The Department has five pieces of equipment; each rescue truck is equipped with a defibrillator.

Emergency Medical Assistance: Ellington has two ambulances with certified Emergency Medical Technicians (“EMT”) and Emergency Medical Responders (“EMR”) that provide coverage 24 hours a day, seven days a week. Monday through Friday day time crews are staffed with full-time, part-time and Rescue Post Members. Additional medical services are available through the Tolland County Mutual Aid System, Hartford Hospital's Life Star and Paramedics from several agencies. The ambulance transports patients to local hospitals and additionally those in the greater Hartford area. The Town is three miles from Rockville General Hospital and 20 minutes from Manchester Memorial Hospital.

Solid Waste: The Town provides for town-wide pickup of solid waste collected by a private company. The Town has executed a Service Contract (the “Service Contract”) with the Connecticut Resource Recovery Authority (the “Authority”) for the disposal of solid waste through the Mid-Connecticut System (the “System”) located in the City of Hartford. The Service Contract became effective upon execution and will remain in effect so long as any bonds issued by the Authority remain outstanding, provided the last installment of principal on any bond shall become due no later than 30 years from the effective date of the Service Contract. The System began commercial operation on October 26, 1988. Barring any interim extensions, the Town’s contract with the Authority runs through 2015.

Each of the 44 municipalities that have signed a Service Contract, including the Town, has agreed to cause to be delivered to the Mid-Connecticut System all of the solid waste under the legal control of the municipality. The 10

Authority is required to impose service payments at a uniform rate per ton for all municipalities. The tipping fees are $61.00 per ton for solid waste for the current Fiscal Year 2013-14. If the municipality delivers less than its minimum commitment as defined in the Service Contract, such rates shall be applied to its minimum commitment amount. Pursuant to the Service Contracts, the participating municipalities are responsible for delivering to the Mid-Connecticut System an aggregate 411,158 tons per year of acceptable solid waste generated by the municipalities. The Town’s minimum commitment is 5,834 tons per year.

The Authority is required to accept and dispose of solid waste in accordance with the Service Contract and with acceptable business standards. Each municipality retains the responsibility for the collection, disposal and treatment of solid waste which does not meet the requirements of or which the Authority refuses or is unable to accept under the Service Contract.

The Authority is required to calculate and impose Service Payments for all solid waste accepted at the System, such that the aggregate of all such Service Payments received by the Authority shall be sufficient to pay for the net cost of operation of the System as defined in the Service Contract. Service Payments shall be at a uniform rate per ton for all municipalities. If a municipality delivers less than its Minimum Commitment (as defined in the Service Contract) such rate shall be applied to its Minimum Commitment amount. The Authority is required to submit bills to the participating municipalities on or before the fifteenth day following the end of a billing period. Municipalities are required to pay Service Payments within 30 days of the date of invoice.

Not less than 120 days prior to the commencement of each Contract Year (as defined in the Service Contract) the Authority will estimate (i) the Service Payments to be paid by each Municipality for such Contract Year and (ii) the Annual Budget for the Facility and will submit such information to each municipality. Each municipality is then required to make all provisions necessary so that it will be able to pay Service Payments on a timely basis. The Service Payments remain in effect for the Contract Year with differences between the aggregate of all such Service Payments and the net cost of operation for each Contract Year being settled in the following Contract Year. A municipality is obligated to make Service Payments only if the Authority accepts solid waste delivered by the municipality.

All municipalities, including the Town, pledge their full faith and credit for the payment of all Service Payments and any delayed-payment charges and costs and expenses of the Authority and its representatives in collecting overdue Service Payments. Each municipality agrees that its obligation to make any such Service Payments and other such payments, in the amounts and at the times specified in the Service Contract, whether to the Authority or the trustee, shall be absolute and unconditional, shall not be subject to any setoff, counterclaim, recoupment, defense (other than payment itself) or other right which the municipality may have against the Authority, the trustee or any other person for any reason whatsoever, shall not be affected by any defect in title, compliance with the plans and specifications, condition, design, fitness for use of, or damage to or loss or destruction of, the System or any part thereof and, so long as the Authority shall accept solid waste delivered by the municipality pursuant to the Service Contract, shall not be affected by any interruption or cessation in the possession, use or operation of the System of any part thereof by the Authority or the operator of the System for any reason whatever.

To the extent that a municipality does not make provisions or appropriations necessary to provide for and authorize the payment by such municipality to the Authority of the payments required to be made by it under the Service Contract, the remaining municipalities, including the Town, must levy and collect such general or special taxes or cost sharing or other assessments as may be necessary to make such payments in full when due thereunder.

In the event of any dispute as to any portion of any bill, the disputing municipality will nevertheless pay the full amount of the disputed charges when due and will, within 30 days from the date of the disputed bill, give written notice of the dispute to the Authority. The dispute will then be resolved under the dispute resolution provisions of the Service Contract.

Water: The Town is serviced by one water company which has the capacity of accommodating approximately sixty percent of the populated area of the Town. Seventy percent of the commercial and industrial zoned land is serviced by the water company. Shenipsit Lake is the largest local water source which spans the borders of two adjoining towns. Crystal Lake is located in Ellington and stretches over an area of 175 acres. The Hockanum River runs north-south and is located in the southern part of Town. Some individuals have private wells.

Sewers: Approximately 50% of the Town's population is serviced by public sewers. Approximately 90% of the commercially zoned land has direct access and 50% of the industrial land has direct or reasonable access to the sewer system. Private on-site septic systems are used by the remainder of residents.

The Town’s Water Pollution Control Authority (“WPCA”) is comprised of five volunteer members who are responsible for the administration and maintenance of the Hockanum Sewer System, the Crystal Lake Sewer System and the guidance of the future of the sewer service area. The Hockanum Sewer System is connected with the Town of Vernon’s wastewater treatment facility and the Crystal Lake Sewer System is connected with the Town of Stafford’s wastewater treatment facility. The Town’s Public Works Department oversees the operation and maintenance of the Town’s sewage collection system.

The Town of Vernon upgraded and expanded its existing wastewater treatment facility in 1996. The treatment facility accepts sanitary wastes from Vernon, as well as portions of the surrounding towns of Ellington, Tolland, Manchester and South Windsor in accordance with the provisions of inter-municipal sewer agreements between each of those towns and Vernon.

The project cost of approximately $32,540,000 was funded through the Clean Water Fund (the “CWF”). The CWF provided Vernon as the sole bond obligor with approximately $27,635,000 in permanent financing at a 2% interest rate with the balance of project costs paid from CWF grants. Debt service payments commenced on December 31, 1997.

In settlement of a dispute between Vernon and the Town of Ellington regarding various payments due under the original 1979 inter-municipal agreement, the two towns have entered into a new inter-municipal agreement effective July 1, 2003, and amended July 1, 2013. Under the amended July 1, 2013 agreement, Ellington received an additional 380,000 gallons of sewage capacity bringing the maximum flow rate to 1,400,000 gallons per day. Ellington must seek Vernon’s permission before exceeding the maximum flow rate and pay any additional cost for the flow increase. Vernon may, on a retroactive basis for the period such flow rates were exceeded, reallocate capital costs in accordance with actual flow rates. Pursuant to the 2013 agreement, Ellington has paid its pro rata share of the capital cost of the sewer treatment plant upgrade based upon its reserved flow capacity since the inception of the CWF loan to Vernon, and is obligated to pay the sum of $202,852 annually for the balance of the CWF loan term, which ends in July 2016. The calculation of user charges by Vernon to Ellington is also set forth in the 2013 agreement. All Vernon user charges to Ellington are included in semi-annual user fees charged by Ellington to sewer system users. All payments due from Ellington to Vernon in accordance with the 2013 agreement are current.

The Town is current with respect to all charges from Stafford for waste processing at its wastewater treatment plant for the Crystal Lake Sewer System.

Since March 1992, the Town’s sewer user policy has provided that actual water usage will be used in calculating the sewer user rate. The Connecticut Water Company has provided the Town with the actual water consumption which is utilized to calculate the sewer user bills for property owners connected to the water company in the Hockanum Sewer System. This provides financial fairness to households that produce lower than average wastewater. As properties connected to the Crystal Lake Sewer System have water supplied by private wells, the WPCA has determined to calculate the sewer use charge for that system based on an average use method. Hockanum Sewer System property owners currently pay an average of $220 and Crystal Lake Sewer System property owners currently pay an average of $260 in sewer user charges every six months.

Parks & Recreation: The Town provides beach facilities at Crystal Lake during the summer months. The State of Connecticut maintains a public boat launch at Crystal Lake. In addition, the Town maintains sport facilities at each school, Brookside Park and the High School Athletic Field, providing manicured playing fields. In 1996, a new playscape was constructed for elementary children at both Center School and Crystal Lake School. An exercise course for seniors has been constructed in the new, centrally located Bicentennial Arbor Park on Main Street. Brookside Park Pavilion, completed in 1991, is equipped with restrooms and a concession stand and is available to local groups by obtaining a permit from the Parks and Recreation Office. Ellington High School Pavilion, completed in 2004 is equipped with restrooms, concession stands and storage space for Parks and Recreation and the High School, which services the Athletic complex at the High School.

The Town was awarded a State of Connecticut Small Town Economic Assistance Program (“STEAP”) grant in the amount of $170,000 for the construction of tennis courts adjacent to the High School.

Library: The Hall Memorial Library provides the citizens of the Town of Ellington with materials and opportunities for education and entertainment in a beautiful, state-of-the-art 23,000 square foot building. The collection consists of in excess of 65,000 in several formats, including books, periodicals, audiotapes, videotapes, DVDs, compact disks, and equipment. Also available are computers for word processing, access to computerized reference and periodical resources, and access to the internet. In addition to the materials available, the library provides a variety of programs for patrons of all ages, including book discussion groups, concerts, informational speakers, story hours and summer reading programs. For those patrons who are not able to come to the library, outreach and home delivery services are provided, as well as remote access to reference sources, reference assistance and collection information via the webpage.

Human Services: Human Services provides heat assistance to Ellington residents who are not eligible for the State Fuel Program through Operation Fuel and Human Services Discretionary Funds. During the summer months, services are provided to help low-income residents to pay for cooling costs. Human Services also serves as a site for the AARP Tax Preparation Program and the Renters Rebate Program for the elderly and disabled. The department works closely with Soldiers, Sailors and Marine Fund and the Veterans Services to provide social services to Ellington veterans.

In August 2013 the State awarded the Town a $250,000 small Town Economic Assistance Program (STEAP) Grant for the construction of an addition to the Human Services building. The grant will be used to create an additional 1,000 square foot extension to the existing building. This will be a 6-room addition that includes three offices, a storage area, bathroom, and a conference room. This addition will allow for youth services to increase counseling services, provide more small group sessions, and provide more space for youth services staff including part-time and volunteer aides.

Youth Services: Full and partial camperships are available to children through Human Services. Youth Services offers self-esteem, and character building programs within the school setting and team building programs are offered after school. Youth Services has received two consecutive State grants from the Department of Mental Health and Addiction Services to continue its work in the schools to reduce underage drinking and raise community awareness. In addition to a monthly parent newsletter and program presentations by national motivational speakers, Youth Services has organized a high school youth group called Rise Above that is working with Middle School Students to help encourage them to make positive life choices. Rise Above sponsors recreational sport activities, social dinners and mentoring.

Youth Services received two additional grants in 2013. The first was a Department of Mental Health and Addiction Services (DMHAS) for $29,411. This Partnership for Success Grant will allow staff to continue to provide programs and services to reduce underage drinking and raise public awareness of this issue. These funds will be added to the $75,000 received from DMHAS for a total of $104,411. Our very active staff is recognized by the State for their work in the area of preventing underage drinking. The second grant is a $10,000 from the Office of Policy and Management. It is a partnership with the State Police/Ellington Resident Troopers to actively engage at risk youth in social and recreational activities that promote and encourage positive youth development and view the police as a friend.

Senior Center/Elderly Services: The senior center has been awarded a grant from the State Department of Transportation for a new senior bus. The senior center also had a 2009 four-door sedan donated to provide rides for its medical emergency transportation program which covers areas not served by the Dial-A-Ride Program. The senior center also participates in the My Senior Center Computer Program which keeps track of program participants, and informs the center of the most current trends and services being offered at senior centers nationwide.

In anticipation of the new senior center opening February 2014 and the projected increase in program participation, the senior center hired an activity coordinator. This 30 hour a week position has already increased attendance at the senior center and introduced new programs and activities into the monthly scheduling. Another addition to the senior center staff is a part-time van driver. This brings the total of drivers to three part-time employees.

Health Services: Ellington is a member of the North Central District Health Department (NCDHD) which provides Ellington with full-time health department coverage and is on call seven days a week, twenty-four hours a day in case of emergencies. Each member town contributes financially to the operation of the District based on its respective population. Numerous services are provided under Community Health including Home Health, Mental Health, Home Maintenance Management and the Meals on Wheels Program. Within these programs, special services are also available including Hospice, Mental Health After Care, Alzheimer’s, Private Duty Nursing, Maternal Child Health, Senior Citizen Health and the Substance Abuse Program.

Airport: The Town has a privately owned airport, centrally located, to provide air carrier services to both New York and Boston. The airport can accommodate both fixed-wing aircraft and helicopters. There is an 1,800-foot runway used by small planes.

Utilities: Electricity for the Town is provided by the Connecticut Light & Power Company, a subsidiary of Northeast Utilities.

TOWN EMPLOYEES

The following table illustrates the permanent full and part-time Town employees:

Fiscal Year 2013 2012 2011 2010 2009 General Government…… 65 65 63 63 63 Board of Education……… 369 366 355 338 342 Total…………………… 434 431 418 401 405 ______Source: Town of Ellington.

The following table reflects the present breakdown of employees:

General Government Paid Pos itions Ambulance……………………………… 2 Library………………………………...… 7 Highway…………………...…………… 19 Town Hall and Human Services……… 33 Police Pers onnel………………………… 1 Parks and Recreation…………………… 3 Board of Education…………………… 369 Total…………………………………. 434 ______Source: Town of Ellington.

MUNICIPAL EMPLOYEES’ BARGAINING UNITS

Positions Current Contract Bargaining Groups Covered 1 Expiration Date

General Government Public Works - Ellington Public Works and Custodians, Local #1303 of Council #4, AFSME, AFL-CIO……………………...……………………………… 19 June 30, 2016 Ellington Supervis or Employes s , CSEA/SEIU, Local 2001………………………… 5 June 30, 2016 Ellington White Collar Employees , CSEA/SEIU, Local 2001……………..………... 22 June 30, 2016 Police - Ellington Poice Union, Local #2693 of Council #15, AFSCME, AFL-CIO…………………………………………………………………… 10 June 30, 2016 Ellington EMS Professional & Volunteer Ambulance Corps IAEP Local RI-512.. 6 June 30, 2016 Total………………. 62

Board of Education Adminis trators - Ellington Adminis trative As s ociation…………………………… 11 June 30, 2014 Teachers - Ellington Education As s ociation………………………………………… 216 June 30, 2016 Clerical/Aides - Ellington Educational Support Staff……...…….………………… 67 June 30, 2014 Custodian/Cafeteria Employees - AFSCME, Local #1303-242 of Council #4……… 45 June 30, 2018 Van Drivers - AFSCME, Local #1303-268 of Council #4…………………………… 5 June 30, 2017

Total………………. 344 ______1 Positions covered are given in the full-time equivalent. Source: Town of Ellington.

Connecticut General Statutes Sections 7-473c, 7-474, and 10-153a to 10-153n provide for a procedure for binding arbitration of collective bargaining agreements between municipal employers and organizations representing municipal employees, including certified teachers and certain other employees. The legislative body of a municipality may reject an arbitration panel's decision by a two-thirds majority vote. The State of Connecticut and the employee organization must be advised in writing of the reasons for rejection. The State then appoints a new panel of either one or three arbitrators to review the decisions on each of the rejected issues. The panel must accept the last best offer of either party. In reaching its determination, the arbitration panel gives priority to the public interest and the financial capability of the municipal employer, including consideration of other demands on the financial capability of the municipal employer. Effective October 1, 1997, for binding arbitration of teachers’ contracts, in assessing the financial capability of a municipal entity, there is an irrefutable presumption that a budget reserve of 5% or less is not available for payment of the cost of any item subject to arbitration. In light of the employer's financial capability, the panel considers prior negotiations between the parties, the interests and welfare of the employee group, changes in the cost of living, existing employment conditions, and wages, salaries, fringe benefits, and other conditions of employment prevailing in the labor market, including developments in private sector wages and benefits.

EDUCATION SYSTEM

The Town's school system services grades pre-kindergarten through twelve and is governed by the local Board of Education. Ellington has a ten-member Board of Education elected to four-year staggered terms. The primary function of the Board is to establish policy. Some of the areas for which such policies are set include curriculum, budget requests submission, ensuring funds for education as appropriated by the Town are properly expended, implementation of both State and Federal laws, and planning for facilities needed by the system, including construction and renovation.

The Town has five schools for grades pre-kindergarten through twelve. Enrollment in grades pre-kindergarten through twelve as of October 1, 2012 is 2,714. The rated capacity of the system facilities is 2,763.

SCHOOL FACILITIES Date of Construction/ Number of 10/1/2012 Rated School Grades Remodeling Classrooms Enrollment Capacity Center………………………… PK-4 1949, 1963, 2003 28 432 459 Crys tal Lake……….………… K-4 1956, 1977 11 210 204 W indermere………………… K-6 1966, 1977, 1995, 2002 47 855 800 Ellington Middle School1… 7-8 1953, 1977, 1989, 1996 28 428 500 High School ………………… 9-12 1960, 1972, 1973, 1978, 2004 58 789 800 Total………………………… 2,714 2,763 ______1 Formerly Longview Middle School. Source: Superintendent of Schools, Town of Ellington.

SCHOOL ENROLLMENT

School Elementary Middle School High School Special Year Pre-K K-6 7-8 9-12 Education Total Historical 2008-2009 46 1,420 390 777 0 2,633 2009-2010 43 1,442 405 777 0 2,667 2010-2011 48 1,476 410 791 0 2,725 2011-2012 63 1,463 421 797 0 2,744 2012-2013 52 1,445 428 787 0 2,712

Projected 2013-2014 53 1,489 409 808 0 2,759 2014-2015 54 1,461 424 808 0 2,747 2015-2016 55 1,464 435 799 0 2,753 2016-2017 56 1,458 441 831 0 2,786 2017-2018 57 1,454 446 825 0 2,782

______Source: Superintendent of Schools, Town of Ellington.

III. ECONOMIC AND DEMOGRAPHIC INFORMATION

POPULATION TRENDS

Year Population 1 % Incre ase De nsi ty 2 2011 15,582 (0.1) 448 2010 15,602 20.7 448 2000 12,921 15.4 371 1990 11,197 15.3 322 1980 9,711 26.0 279 1970 7,707 38.1 221 ______1 U.S. Department of Commerce, Bureau of Census, 1970 – 2010; Connecticut Department of Public Health, Estimate 2011. 2 Per square mile: 34.8 square miles.

AGE DISTRIBUTION OF THE POPULATION

Town of Ellington State of Connecticut Number Percent Number Percent Under 5……..……. 1,006 6.5% 203,168 5.7% 5 - 19……………..… 3,206 20.8% 717,785 20.2% 20 - 44 ………..….. 5,391 35.0% 1,136,836 32.0% 45 - 64……..……… 4,292 27.9% 1,000,909 28.1% 65 - 84………..…… 1,248 8.1% 415,578 11.7% 85 and over……… 251 1.6% 83,896 2.4% Totals ………….… 15,394 100.0% 3,558,172 100.0%

Median Age (years) 38.3 39.8 ______Source: U.S. Census Bureau, 2007-2011 American Community Survey.

INCOME DISTRIBUTION

Town of Ellington State of Connecticut Families Percent Families Percent $ 0 - $ 9,999………. 36 0.8% 28,077 3.1% 10,000 - 14,999……. 19 0.4% 18,909 2.1% 15,000 - 24,999……. 128 3.0% 46,077 5.1% 25,000 - 34,999……. 191 4.5% 56,404 6.2% 35,000 - 49,999……. 282 6.6% 89,046 9.8% 50,000 - 74,999……. 776 18.2% 149,535 16.5% 75,000 - 99,999……. 846 19.8% 138,055 15.2% 100,000 - 149,999…. 1,088 25.5% 190,736 21.0% 150,000 - 199,999…. 544 12.8% 87,410 9.6% 200,000 and over….. 352 8.3% 104,575 11.5% Totals 4,262 100.0% 100.0% 908,824 ______Source: U.S. Census Bureau, 2007-2011 American Community Survey.

INCOME LEVELS

Town of State of Ellington Connecticut Per Capita Income, 2011……….. $38,554 $37,627 Per Capita Income, 1999……….. $27,766 $28,776 Per Capita Income, 1989 ………. $19,710 $20,189

Median Family Income, 2011….. $96,152 $86,395 Median Family Income, 1999….. $77,813 $65,521 Median Family Income, 1989….. $51,425 $49,199

Families Below Poverty Level 2011 2.3% 6.5%

______Source: U.S. Department of Commerce, Bureau of Census, 2000, 1990; U.S. Census Bureau, 2007-2011 American Community Survey, 2011.

EDUCATIONAL ATTAINMENT Years of School Completed Age 25 and Over

Town of Ellington State of Connecticut Number Percent Number Percent Les s than 9th grade…………….. 230 2.3% 111,783 4.6% 9th to 12th grade………………. 329 3.2% 164,150 6.8% High School graduate………….. 2,542 24.9% 678,997 28.1% Some college, no degree……….. 1,887 18.5% 420,489 17.4% As s ociate's degree ……………... 1,260 12.4% 176,481 7.3% Bachelor's degree………………. 2,302 22.6% 486,109 20.1% Graduate or professional degree. 1,649 16.2% 375,913 15.6% Totals 10,199 100.0% 2,413,922 100.0%

Total high school graduate or higher (%) 94.5% 88.6% Total bachelor's degree or higher (%) 38.7% 35.7% ______Source: U.S. Census Bureau, 2007-2011 American Community Survey.

MAJOR EMPLOYERS As of August 2013 Estimated Number Employer Product of Employees Town of Ellington…………………………………………… Municipality 434 Big Y………………………………………………..………… Supermarket 125 Country Pure Foods …………………………..…………… Dairy Products/Fruit Juices 107 Ellington Ridge Country Club…………...…...…………… Country Club 80 Kloter Farms Country Store………………………………… Retail Country Store 68 Rice/Action Packaging………………………..………...… Packaging Manufacturer 62 Bolles Motors , Inc.……………………....………………… Auto Sales, Parts & Service 43 Lee's Auto Center, Inc.…………………………..………… Auto Sales, Parts & Service 34 Merill Indus tries , Inc……………………………………...… Packaging Plant 30 Bergs on Tire…………………..……………..…………….. Commercial Retread Manufacturer 27 TSI Harley……………….………………………………….. Motorcycle Sales, Parts & Service 24 Trans -Tek, Inc..…………………………..………………… Transducers Manufacturer 22 Syn Mar Products Inc..…………………………..………… Cast Polymer Manufacturer 22 St. Francis Medical Care Center..………………………… Medical Facility 5 ______Source: Telephone Survey of Employers.

EMPLOYMENT BY INDUSTRY

Town of Ellington State of Connecticut Sector Families Percent Families Percent Agriculture, forestry, fishing and hunting, and mining……………………………………………. 31 0.4% 6,490 0.4% Cons truction……………………….……………….…… 552 6.4% 107,614 6.1% Manufacturing………………..…………...……………… 1,309 15.1% 201,999 11.4% W holes ale Trade……………….……..………………… 332 3.8% 45,358 2.6% Retail Trade………………………..………………..…… 909 10.5% 193,940 11.0% Transportation and warehousing, and utilities……… 336 3.9% 67,041 3.8% Information ………………….…………………….……… 134 1.5% 44,581 2.5% Finance, insurance, real estate, and rental and leas ing…………………………………………… 997 11.5% 166,839 9.5% Professional, scientific, management, administrative, and was te management s ervices ………………… 811 9.4% 190,314 10.8% Educational, health and s ocial s ervices ………………… 2,057 23.7% 451,766 25.6% Arts, entertainment, recreation, accomodation and food s ervices …………………………………………. 549 6.3% 142,250 8.1% Other services (except public administration)………… 165 1.9% 79,787 4.5% Public Adminis tration…………………………………… 491 5.7% 66,776 3.8% Total Labor Force, Employed…………………….…… 8,673 100.0% 1,764,755 100.0% ______Source: U.S. Census Bureau, 2007-2011 American Community Survey.

EMPLOYMENT DATA

Town of Ellington Percentage Unemployed Town of Hartford State of Period 1 Employed Unemployed Ellington Labor Market Connecticut July 2013…………… 8,792 567 6.1% 8.4% 8.3% June 2013…………… 8,704 565 6.1 8.2 8.1 May 2013…………… 8,671 595 6.4 8.1 8.1 March 2013………… 8,643 662 7.1 8.2 8.2 January 2013……… 8,604 661 7.1 8.7 8.7

Annual Average 2012………………. 8,732 596 6.4% 8.4% 8.4% 2011………………… 8,911 646 6.8 8.8 8.8 2010………………. 8,838 699 7.3 9.4 9.3 2009………………. 8,508 620 6.8 8.3 8.3 2008………………. 8,509 411 4.6 5.7 5.6 2007………………. 8,386 333 3.8 4.7 4.6 2006………………. 8,256 324 3.8 4.6 4.4 2005………………. 8,045 333 4.0 5.1 4.9 2004………………. 7,950 331 4.0 5.2 4.9 2003………………. 7,804 330 4.1 5.7 5.5 ______1 Not seasonally adjusted. Source: Department of Labor, State of Connecticut.

AGE DISTRIBUTION OF HOUSING

Town of Ellington State of Connecticut Year Built Units Percent Units Percent 1939 or earlier……………...…… 710 11.2% 346,215 23.3% 1940 to 1969…………………… 1,676 26.4% 535,273 36.1% 1970 to 1979…………………… 920 14.5% 202,757 13.7% 1980 to 1989…………………... 962 15.2% 191,545 12.9% 1990 to March, 2000…………… 835 13.2% 109,329 7.4% Later than 2000………………… 1,235 19.5% 97,679 6.6% Total housing units, 2011 6,338 100.0% 1,482,798 100.0%

Percent Owner Occupied, 2011 69.6% 68.9% ______Source: U.S. Census Bureau, 2007-2011 American Community Survey.

HOUSING INVENTORY

Town of Ellington State of Connecticut Type Units Percent Units Percent 1 unit detached………… 4,023 63.5% 879,393 59.3% 1 unit attached……...….. 179 2.8% 77,315 5.2% 2 to 4 units ……………… 668 10.5% 251,147 16.9% 5 to 9 units ……………… 815 12.9% 80,575 5.4% 10 or more units ………… 653 10.3% 181,314 12.2% Mobile home, trailer, other 0 0.0% 13,054 0.9% Total Inventory……… 6,338 100.0% 1,482,798 100.0% ______Source: U.S. Census Bureau, 2007-2011 American Community Survey.

OWNER-OCCUPIED HOUSING VALUES

Town of Ellington State of Connecticut Specified Owner-Occupied Units Number Percent Number Percent Less than $50,000………..………… 14 0.3% 15,295 1.6% $50,000 to $99,999…………….…… 87 2.1% 19,347 2.1% $100,000 to $149,999…………..…… 199 4.8% 56,379 6.0% $150,000 to $199,999………….…… 494 12.0% 123,823 13.2% $200,000 to $299,999………….…… 1,668 40.6% 271,204 28.9% $300,000 to $499,999………...……… 1,187 28.9% 275,823 29.4% $500,000 to $999,999………...……… 422 10.3% 129,633 13.8% $1,000,000 or more…………….…… 34 0.8% 45,835 4.9% Totals ………………………...……… 4,105 100.0% 937,339 100.0%

Median Sales Price1 $158,000 $166,900 Median Sales Price $275,600 $293,100 ______1 Median Sales Price, U.S. Department of Commerce, Bureau of Census, 2000. Source: U.S. Census Bureau, 2007-2011 American Community Survey.

BUILDING PERMITS

Fiscal Year Residential Commercial/Industrial Other1 Total Ending 6/30 Number Value Number Value Number Value Number Value 2013 40 $7,784,760 0 $0 1,022 $4,737,352 1,062 $12,522,112 2012 35 7,551,880 0 0 1,116 10,283,574 1,151 17,835,454 2011 21 4,764,366 0 0 898 2,950,721 919 7,715,087 2010 40 9,219,101 0 0 963 7,090,765 1,003 16,309,866 2009 30 7,552,558 4 6,292,998 1,042 8,187,515 1,076 22,033,071 2008 67 15,990,929 2 462,375 1,192 10,616,445 1,261 27,069,749 2007 68 17,303,328 6 3,051,720 1,283 8,243,127 1,357 28,598,175 2006 98 24,174,759 6 4,753,910 1,456 16,531,957 1,560 45,460,626 2005 87 19,660,513 3 722,357 1,284 8,332,342 1,374 28,715,212 2004 79 16,559,871 3 455,000 1,268 9,436,916 1,350 26,451,787 ______1 Included in “Other” are multi-family homes. 2 Includes permits totaling $21,214,725 for school facilities. Source: Building Department, Town of Ellington

LAND USE SUMMARY

Total Area Developed Undeveloped Classification Acreage % Acreage % Acreage % Residential………………… 17,590 79.57% 5,042 22.81% 12,548 56.76% Commercial…………………… 700 3.17% 498 2.25% 202 0.92% Industrial……………………… 1,041 4.71% 483 2.19% 558 2.52% Open Space…………………… 1,654 7.48% 0 0.00% 1,654 7.48% Road Rights of Way………… 782 3.54% 0 0.00% 782 3.54% Lakes………………………… 339 1.53% 0 0.00% 339 1.53% Total Area…………………… 22,106 100.00% 6,023 27.25% 16,083 72.75% ______Source: GIS System, Town of Ellington.

IV. TAX BASE DATA

ASSESSMENTS

The Town of Ellington had a general property revaluation effective October 1, 2010. Under Section 12-62 of the Connecticut General Statutes, the Town must do a revaluation every five years based on generally accepted mass appraisal methods and a revaluation by physical inspection no later than ten years from the preceding physical inspection. A 2006 statute permits a municipality, upon approval of its legislative body, to phase-in a real property assessment increase resulting from a revaluation over a period of up to five years. Various State Statutes provide for or authorize exemptions, abatement and other adjustments to assessments. Section 12-62 also imposes a penalty on municipalities that fail to effect revaluations as required, with certain exceptions. Municipalities may choose to phase-in real property assessment increases resulting from a revaluation, but such phase-in must be implemented in less than five assessment years. The maintenance of an equitable tax base, and the location and appraisal of all real and personal property within the Town of Ellington for inclusion onto the Grand List are the responsibilities of the Town’s Assessor’s Office. The Grand List represents the total of assessed values for all taxable and non-taxable real and personal property and motor vehicles located within the Town on October 1. A Board of Assessment Appeals determines whether adjustments to the Assessor’s list on assessments under appeal are warranted. Assessments for real property are computed at 70 percent of the estimated market value at the time of the last general revaluation, while assessments for personal property and motor vehicles are computed at 70 percent of the annual appraisal value.

When a new structure, or modification to an existing structure is undertaken, the Assessor’s Office receives a copy of the permit issued by the Building Inspector. A physical appraisal is then completed and the structure is classified and priced from a schedule developed at the time of the last revaluation. Property depreciation and obsolescence factors are also considered when arriving at an equitable value.

All personal property (furniture, fixtures, equipment, and machinery) is revalued annually. An assessor’s check and audit is completed periodically.

Motor vehicle lists are furnished to the Town by the State of Connecticut and appraisals of motor vehicles are accomplished in accordance with an automobile price schedule as recommended by the State of Connecticut Office of Policy and Management and the Assessor of the Town of Ellington. Section 12-71b of the Connecticut General Statutes provides that motor vehicles which are registered with the Commissioner of Motor Vehicles after the October 1 assessment date but before the next August 1 are subject to a property tax as if the motor vehicle has been included on the October Grand List. The tax is prorated, and the proration is based on the number of months of ownership between October 1 and the following July 31. Motor vehicles purchased in August and September are not taxed until the next October 1 Grand List. If the motor vehicle replaces a motor vehicle that was taxed on the October Grand List, the taxpayer is entitled to certain credits.

PROPERTY TAX COLLECTION PROCEDURE

Property taxes are levied on all assessed property on the Grand List of October 1 prior to the beginning of the fiscal year. Real estate tax bills are payable in two installments on July 1 and January 1. Real estate and personal property taxes of less than $600 are due in full in July. Motor vehicle taxes are payable in full, regardless of amount, on July 1. A margin against delinquencies, legal reductions, and Grand List adjustments, such as Assessor errors, is provided by adjusting the Grand List downward when computing anticipated property tax revenue from the current levy. An estimate for delinquent taxes and outstanding interest and lien fees anticipated to be collected during the fiscal year is normally included as a revenue item in the budget. Delinquent taxes are billed monthly, with interest charged at the rate of one and one-half percent per month with a minimum charge of $2. In accordance with State law, the oldest outstanding tax is collected first. Outstanding real estate tax accounts are automatically liened each year prior to June 30 with legal demands and alias tax warrants used in the collection of personal property and motor vehicle tax bills. Delinquent motor vehicle, personal property, and real estate accounts are transferred to a suspense account after two years at which time they cease to be carried as receivables.

A 2006 statute permits a municipality, upon approval of its legislative body, to freeze the real property taxes due for certain low income elderly residents. Any municipality providing tax relief may place a lien upon such property in the amount of the total tax relief granted plus interest.

COMPARATIVE ASSESSED VALUATIONS Net Grand Residential Commercial/ Gross Taxable List Real Industrial All Personal Motor Taxable Less Grand % of 10/1 Property Real Property Land Property Vehicle Grand List Exe mpti ons 1 List Growth 2012 75.0% 11.9% 0.7% 3.2% 9.2% $1,293,232,813 $21,775,940 $1,271,456,873 1.2% 2011 75.2 11.7 0.7 3.1 9.3 1,278,497,562 22,336,339 1,256,161,223 1.1% 2 2010 75.6 11.7 0.8 3.1 8.8 1,264,884,536 21,922,820 1,242,961,716 -1.7% 2009 76.0 11.0 0.6 4.3 8.1 1,286,204,831 22,177,397 1,264,027,434 1.6% 2008 76.4 11.0 0.6 4.1 7.9 1,265,943,379 21,605,760 1,244,337,619 1.6% 2007 76.3 10.8 0.6 3.8 8.5 1,243,086,483 18,415,416 1,224,671,067 3.4% 2006 76.5 11.1 0.5 3.7 8.2 1,200,428,549 16,478,458 1,183,950,091 4.6% 2 2005 77.2 10.6 0.5 3.4 8.3 1,147,867,109 15,790,565 1,132,076,544 49.0% 2004 69.3 11.6 2.8 4.6 11.7 771,784,030 11,860,249 759,923,781 4.4% 2003 69.9 11.9 2.7 4.5 11.0 738,462,190 10,864,040 727,598,150 2.7% ______1 Connecticut General Statutes Section 12-81 (72) exempts new manufacturing equipment from property taxation by municipalities. 2 Revaluation Years. Source: Assessor’s Office, Town of Ellington.

PROPERTY TAX LEVIES AND COLLECTIONS

Percent Percent Percent Grand Fiscal Year Net Annual Levy Annual Levy Annual Levy List of Year Taxable Mill Tax Collected End of Uncollected Uncollected Oct. 1 Ending 6/30 Grand List Rate Levy Fiscal Year End of Fiscal Year 6/30/2012 2012 2014 $1,271,456,873 28.40 $35,541,022 - Collections 7/13 & 1/14 - 2011 2013 1,256,161,223 27.90 34,542,764 - Collections 7/12 & 1/13 - 2010 2012 1,242,961,716 27.50 34,331,008 98.7% 1.3% 1.3% 2009 2011 1,264,027,434 25.30 32,222,929 98.7% 1.3% 0.7% 2008 2010 1,244,337,619 25.00 31,270,709 98.8% 1.2% 0.4% 2007 2009 1,224,671,067 24.40 30,171,558 98.4% 1.6% 0.3% 2006 2008 1,183,950,091 24.50 29,301,643 98.9% 1.1% 0.2% 2005 2007 1,132,076,544 24.30 27,840,465 98.9% 1.1% 0.1% 2004 2006 759,923,781 33.60 25,889,404 98.9% 1.1% 0.1% 2003 2005 727,598,150 32.70 24,090,933 98.8% 1.2% 0.1% ______Source: Assessor’s Office, Town of Ellington. TEN LARGEST TAXPAYERS1 Percent of Assessed Net Taxable Name of Taxpayer Nature of Business Valuation Grand List Autumn Chas e LLC……………………………… Apartments $22,395,410 1.76% Deer Valley LLC………………………………… Apartments 21,855,270 1.72% Corners tone Ellington LLC……………………… Real Estate 10,504,600 0.83% Connecticut Light & Power Company………… Utility 8,903,150 0.70% Connecticut W ater Company…………………… Utility 8,426,890 0.66% Cornfield As s oc. Limited……………………… Apartments 6,711,890 0.53% Johnny Apples eed LLC………………………… Apartments 4,575,510 0.36% GPT-High Meadow LLC.………………………… Apartments 4,402,500 0.35% Meadowbrook Apartments LLC……………… Real Es tate 4,268,730 0.34% Yankee Gas Services Company………………… Utility 3,919,420 0.31% Total…………………………………………… $ 95,963,370 7.56% ______1 Based on a 10/1/12 Net Taxable Grand List of $1,271,456,873. Source: Assessor’s Office, Town of Ellington.

EQUALIZED NET GRAND LIST

Grand List Equalized Net % of 10/1 Grand Lis t Growth 2010 $1,775,579,566 -5.07% 2009 1,870,347,137 0.97% 2008 1,852,462,871 -0.29% 2007 1,857,807,278 -0.07% 2006 1,859,058,264 14.16% 2005 1,628,457,220 -0.89% 2004 1,643,041,583 11.91% 2003 1,468,173,216 14.50% 2002 1,282,220,212 16.43% 2001 1,101,318,381 17.98% ______Source: State of Connecticut, Office of Policy and Management.

V. FINANCIAL INFORMATION

FISCAL YEAR

The Town’s fiscal year begins July 1 and ends June 30.

BASIS OF ACCOUNTING

Accounting Policies

The financial statements of the Town of Ellington, Connecticut have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The Town has changed its financial reporting to comply with GASB Statement No. 34 beginning with its financial report for Fiscal Year ended June 30, 2003. Please refer to Appendix A “Basic Financial Statements” herein for compliance and implementation details.

The reporting model includes the following segments:

Management’s Discussion and Analysis (“MD&A”) – provides introductory information on basic financial statements and an analytical overview of the Town’s financial activities.

Government-wide financial statements – consist of a statement of net assets and a statement of activities, which are prepared on the accrual basis of accounting. These statements distinguish between governmental activities and business-type activities and exclude fiduciary (employee retirement system and agency funds). Capital assets, including infrastructure and long-term obligations are included along with current assets and liabilities.

Fund financial statements – provide information about the Town’s governmental, proprietary and fiduciary funds. These statements emphasize major fund activity and, depending on the fund type, utilize different basis of accounting.

Required supplementary information – in addition to the MD&A, budgetary comparison schedules are presented for the General Fund.

Please refer to Appendix A “Basic Financial Statements” herein for measurement focus and basis of accounting of the government-wide financial statements as well as the fiduciary fund financial statements of the Town of Ellington.

BUDGETARY PROCEDURES

The General Fund is the only fund for which an annual budget is legally adopted. The Town adheres to the following procedures in establishing the budgetary data included in the General Fund financial statements.

The Board of Finance submits a proposed operating budget for the fiscal year commencing July 1 to a public budget hearing, at which taxpayer comments are obtained. The Board of Finance then prepares the recommended Town budget, which it presents at the annual Town meeting held on the second Tuesday in May. The operating budget includes proposed expenditures and the means of financing them.

Expenditures are budgeted by function, department and object. Management may not exceed appropriations at the department level and must seek approval from the Board of Finance to reassign resources within a department, except for the Board of Education. The Board of Education may reassign resources within its department without seeking Board of Finance approval. The legal level of budgetary control (the level at which expenditures may not exceed appropriations) is the department level for the Board of Education and the object level for all other departments. Because the legal level of control is more detailed than the accompanying budgetary comparison schedule presented herein, a separately issued budgetary report demonstrating legal compliance with the adopted budget is

available from the Town. The Board of Finance is authorized to transfer budgeted amounts within and between departments and objects. Additional appropriations of less than $40,000 must be approved by the Board of Finance. Appropriations in excess of $40,000 must be approved at a Town meeting. During the Fiscal Year 2012, the Board of Finance and, where required, Town meetings, approved additional appropriations from fund balance of $778,310.

ANNUAL AUDIT

Pursuant to the Municipal Auditing Act (Chapter 111 of the Connecticut General Statutes), the Town is obligated to undergo an annual examination by an independent certified public accountant. The audit must be conducted under the guidelines issued by the State of Connecticut, Office of Policy and Management, and a copy of said audit report must be filed with the Office of Policy and Management. The Town of Ellington is in full compliance with said provisions. For the fiscal year ended June 30, 2012, the financial statements of the Town were audited by the firm of Grant Thornton LLP, Independent Certified Public Accountants of Glastonbury, Connecticut.

PENSION PLANS

Money Purchase Plan

The Town provides retirement benefits for all full-time and part-time employees of the Town through a non- contributory money purchase plan. Employees are eligible to participate from the date of employment. The Town’s contributions for each employee (and interest allocated to the employee’s account) are fully vested from the date of employment. The Town is required to contribute 7.1% of the payroll of the active employees.

Connecticut Municipal Employees’ Retirement Fund

The Town participates in the Connecticut Municipal Employees’ Retirement Fund B (MERF) a cost-sharing multiple employer public employee retirement system (PERS) established by the State of Connecticut and administered by the State Retirement Commission to provide pension benefits for the employees of participating municipalities. MERF covers all full-time employees of the Town, except for Board of Education employees who participate in the Connecticut State Teachers’ Retirement System.

Plan members are required by State Statute to contribute 2-1/4% of earnings upon which Social Security tax is paid plus 5% of earnings on which no Social Security tax is paid. Each participating municipality is required to contribute at an actuarially determined rate. The current rate is 9.0% of annual covered payroll. The contribution requirements of the Town are established and may be amended by the State Retirement Commission. The Town’s contributions to the MERF for the years ended June 30, 2012, 2011 and 2010 were $452,874, $449,486 and $351,795, respectively, and were equal to the required contributions for each year.

State Teachers’ Retirement System

The faculty and professional personnel of the Board of Education participate in a contributory defined benefit plan, established under Chapter 167a of the Connecticut General Statutes, which is administered by the Connecticut State Teachers’ Retirement Board.

Certain part-time and all full-time certified teachers are eligible to participate in the plan and are required to contribute 7.25% of their annual earnings to the plan. The Town does not and is not legally responsible to contribute to the plan. Prior to completing five years of service, teachers are fully vested in their contributions up to 5% of their earnings. After five years of service, teachers are fully vested in the monthly pension benefit which is payable at the age of sixty. The State of Connecticut contributes based on actuarially determined amounts. The funding level is determined based on actuarial information for the plan as a whole, which does not provide actuarial information on an individual Town basis.

Please refer to the Town of Ellington’s “Notes to the Financial Statements”, Note 10, in “Appendix A” herein for further information on the Town’s Pension Plans.

OTHER POST EMPLOYMENT BENEFITS

The Town of Ellington administers the Town of Ellington Retirement Healthcare Plan (the “Plan”), which is a single-employer defined benefit healthcare plan. The Plan provides lifetime healthcare insurance benefits for eligible retirees and their spouses through the Town’s group health insurance plan, which covers both active and retired members. Benefit provisions are established through negotiations between the Town and the union representing Town employees and are renegotiated each three-year bargaining period.

Contribution requirements of the plan members and the Town are established in the Plan document and may be amended through negotiations between the Town and the respective labor union. Currently, Board of Education employees age 55 with 5 or more consecutive years of service or any age with 25 years of service in the Ellington School System are eligible to receive benefits. Also, Town employees with 25 or more years of service and age plus service greater than or equal to 75 years are eligible to receive benefits. Retirees contribute 100% towards dental and medical premiums. For Non-Union employees, the Town contributes 100% of the premium cost for retiree’s health and dental insurance coverage. For Supervisors and White Collar employees, the Town contributes 90% towards pre age 65 retiree medical and dental premiums and 100% of the premium cost for Medicare and dental coverage for retirees age 65 and older. Employees hired on or after December 4, 2008 are not eligible for any post employment town contributions. For Public Works Department employees, the Town contributes 88% towards pre age 65 retiree medical and dental premiums and 100% of the premium cost for Medicare and dental coverage for retirees age 65 and older. Employees hired on or after March 25, 2008 are not eligible for any post employment town contributions.

The following reflects the results of an actuarial valuation of Post Employment Benefits as of July 1, 2010:

Town/Board of Education GASB 45 Valuation Employees Actuarial Accrued Liability (AAL)……… $3,675,039

ARC for Fiscal Year 2012………………… 309,122 Es timated Benefit Payouts ……………… 150,975 Increase in Net OPEB Obligation……… $158,147

Net OPEB Obligation, Beginning of Year… $399,615 Net OPEB Obligation, End of Year………… $557,762

In addition, the Town of Ellington appropriated $100,000 in each of the Fiscal Years 2011, 2012 and 2013 to be transferred into a Reserve Fund designated for Other Post-Employment Benefits Liabilities. The estimated balance designated at June 30, 2013 is $783,000; a contribution of $100,000 is being made in the current 2013-14 Fiscal Year.

Please refer to the Town of Ellington’s “Notes to the Financial Statements”, Note 11, in “Appendix A” herein for further information on the Town’s Pension Plans.

INVESTMENT POLICIES AND PRACTICES

Sections 7-400 and 7-402 of the Connecticut General Statutes govern the investments the Town is permitted to acquire. Generally, the Town may invest in certificates of deposit, municipal notes and bonds, obligations of the United States of America, including joint and several obligations of the Federal Home Loan Mortgage Association, the Federal Savings and Loan Insurance Corporation, obligations of the United States Postal Service, all the Federal Home Loan Banks, all Federal Land Banks, the Tennessee Valley Authority, or any other agency of the United States government and money market mutual funds.

The Town’s investment practices are in compliance with the Connecticut General Statutes.

GENERAL FUND REVENUES AND EXPENDITURES Summary of Audited Revenues and Expenditures (GAAP Basis)

Budget Budget Actual Actual Actual Actual Actual 2013-141 2012-131 2011-12 2010-11 2009-10 2008-09 2007-084 REVENUES: P ro p ert y T ax es………………………………… $35,631,022 $34,632,764 $34,334,410 $31,933,571 $31,414,992 $29,966,770 $29,168,625 I nt erest and Lien Fees………………………… 110,000 110,000 306,798 179,503 304,125 216,701 168,852 I nt ergo ver nm ent al……………………………… 10,699,085 10,356,326 14,663,268 13,593,091 13,520,745 13,582,654 21,870,263 Ch arges fo r ser vices…………………………… 709,820 666,769 780,248 800,860 1,024,249 947,100 1,148,548 I nt erest and Dividen ds………………………… 15,000 15,000 6 5,228 15,654 92,921 389,893 Cap it al Leases…………………………………… 250,000 260,000 1,067,669 640,000 268,796 Ot h er I nco me……...…………………………… 370,930 373,474 387,107 438,851 498,046 457,917 512,813 T ran sfers in ……………………………………… 2,394,980 2 1,719,321 2 8,922,904 5 141,395 357,284 144,771 90,253 To t a l Re ve n u e s and Transfers In……………………………… $50,180,837 $48,133,654 $59,394,741 $48,160,168 $47,775,095 $45,408,834 $53,618,043

EXP EN DITUR ES : Gen eral Go v ern men t …………………………… $1,437,048 $1,398,486 $1,351,347 $1,285,116 $1,282,264 $1,411,037 $1,302,458 Bo ards and Agen cies…………………………… 108,049 107,900 87,726 89,777 89,984 104,997 111,727 P ublic saf et y …………………………...………… 2,358,273 2,215,120 2,165,477 2,139,380 2,113,422 2,148,188 1,983,998 P ublic wo rk s…………………………………..… 3,700,637 3,595,620 3,550,914 3,323,949 3,305,384 3,453,848 3,110,276 Recreat io n…………………………..…………… 438,326 444,896 387,352 393,835 414,874 361,365 355,641 Libr ary …………………………………………… 688,724 662,084 629,923 605,323 573,492 604,682 527,374 Human Serv ices………………………………… 617,931 594,794 576,304 535,975 495,315 477,079 433,577 T o wn P ro p ert ies………………………………… 487,772 484,397 478,335 429,823 468,553 466,744 376,100 Educat ion ………………………………………… 32,915,950 31,518,437 33,773,953 32,365,108 31,017,970 30,967,610 37,596,600 Miscellan eous……………………..……………… 690,390 685,755 2,991,321 2,475,711 2,425,792 2,255,764 2,105,469 Debt Ser vice……………………………..……… 2,695,811 2,606,759 2,395,730 2,626,416 2,567,476 2,569,334 2,863,300 Fixed Ch arges…………………………………… 2,622,090 2,506,541 1,628,087 Cap it al Out lay s………………………………… 1,419,836 1,312,865 455,800 2,134,627 122,236 966,649 1,542,332 T ran sfers Out …………………………………… 8,816,643 6 192,363 248,500 141,532

Total Expenditures and Transfers Out…………………………… $50,180,837 $48,133,654 $57,660,825 $48,597,403 $46,504,849 $46,035,797 $52,450,384

Results from Operations…………………… 3 $1,733,916 ($437,235) $1,270,246 ($626,963) $1,167,659

Fund Balance, July 1………………………… $6,848,833 $7,286,068 $5,967,622 $6,594,585 $5,426,926

Fund Balance, June 30……………………… $8,582,749 $6,848,833 $7,237,868 $5,967,622 $6,594,585 ______1 Budgetary Basis. 2 Represents appropriations from “Fund Balance”. 3 Town Officials anticipate that revenues and transfers in will exceed expenditures and transfers out by approximately $1,053,022. 4 Under the GAAP basis of accounting, total revenues and expenditures for Fiscal Year 2007-08 include State of Connecticut’s on-behalf contribution of $10,435,667 to the Connecticut State Teachers’ Retirement Fund. 5 Includes $8,240,000 in refunding bonds issued and $606,812 in premium on the refunding bonds issued. 6 Includes $8,721,720 of payment to refunded bonds escrow agent.

ANALYSIS OF GENERAL FUND EQUITY (GAAP BASIS)

Budget Budget Actual Actual Actual Actual Actual 2013-14 2012-13 2011-12 2010-11 2009-10 2008-09 2007-08 Co mmit t ed……………………………………… N/A N/A $4,274,790 $3,676,115 Assign ed…………………………………………… N/A N/A 970,382 834,881 Reserv ed Fund Balan ce………………………… $131,935 $28,300 $24,975 Unassign ed……………………………………… N/A N/A 3,337,577 2,337,837 Unreserved - Additional Reserves…………… 3,165,708 2,328,160 3,537,416 Unreserved, Post Employment Benefits…… 483,774 383,774 283,774 Unreserved, Cap it al Reserv es………………… 3,176,956 2,871,379 2,547,684 Unreserved Capital & Nonrecurring………… 279,495 356,009 200,736 Total Fund Balance……………………… N/A N/A $8,582,749 $6,848,833 $7,237,868 $5,967,622 $6,594,585 ______

Source: Audited Financial Statements 2008-2012; Budgets 2013 and 2014, Town of Ellington.

VI. DEBT SUMMARY

PRINCIPAL AMOUNT OF INDEBTEDNESS As of September 25, 2013 (Pro Forma)

Long-Term Debt: Bonds Debt Date of Original Outstanding Fiscal Year Date Purpose Rate % Issue As of 9/25/13 Maturity General Purpos e 04/06/10 General Purpose Refunding……………… 2.00-5.00 690,000 455,000 2019 08/29/11 General Purpose Refunding………………… 2.00-4.00 700,000 560,000 2023 09/15/13 General Purpos e ……………………...…… This Issue 3,860,000 3,860,000 2033 Total $5,250,000 $4,875,000

Schools 04/06/10 School Refunding…………………………… 2.00-5.00 2,890,000 1,670,000 2019 08/29/11 School Refunding…………………………… 2.00-4.00 7,540,000 6,390,000 2024 09/15/13 School Improvements ……………………… This Issue 345,000 345,000 2033 Total $10,775,000 $8,405,000

Sewers 06/15/07 Sewers ……………………………………… 4.00-5.50 $1,750,000 $1,300,000 2027 04/06/10 Sewer Refunding…………………………… 2.00-5.00 740,000 175,000 2014 Total $2,490,000 $1,475,000

Total Long Term Debt……………………… $18,515,000 $14,755,000

Short-Term Debt:

None

Other Long-Term Commitment:

The Towns of Ellington and Vernon entered into an inter-municipal agreement in 1979 and amended such agreement effective July 1, 2003 for Ellington’s share of Vernon’s wastewater plant upgrade. The Town of Vernon obtained permanent financing at a rate of 1.5% through the State of Connecticut Clean Water Fund Program. The Town of Ellington is obligated to pay the sum of $202,852 annually until July 2016.

ANNUAL BONDED DEBT MATURITY SCHEDULE As of September 25, 2013 (Pro Forma) GENERAL GOVERNMENT Cumulative Fiscal Year Bonds Percent Ending 6/30 Principal 1 Interest Total This Issue Retired 2014 $1,535,000 $363,100 $1,898,100 $220,000 11.28 2015 1,200,000 323,600 1,523,600 220,000 20.40 2016 1,180,000 290,850 1,470,850 220,000 29.40 2017 1,160,000 253,125 1,413,125 220,000 38.27 2018 1,165,000 215,900 1,380,900 220,000 47.17 2019 1,150,000 181,050 1,331,050 220,000 55.98 2020 825,000 145,600 970,600 215,000 62.66 2021 815,000 112,675 927,675 215,000 69.28 2022 810,000 80,050 890,050 210,000 75.84 2023 805,000 47,625 852,625 205,000 82.33 2024 410,000 23,200 433,200 205,000 86.28 2025 100,000 12,750 112,750 205,000 88.24 2026 100,000 8,500 108,500 205,000 90.20 2027 100,000 4,250 104,250 205,000 92.16 2028 205,000 93.48 2029 205,000 94.79 2030 205,000 96.11 2031 205,000 97.43 2032 200,000 98.71 2033 200,000 100.00 Totals $11,355,000 $2,062,275 $13,417,275 $4,205,000 ______1 Includes principal payments of $805,000 made in the current fiscal year 2013-14.

OVERLAPPING/UNDERLYING DEBT

The Town of Ellington does not have any overlapping or underlying debt.

DEBT STATEMENT As of September 25, 2013 (Pro Forma) LONG TERM DEBT Bonds: Including This Issue General Purpose……………………………… $4,875,000 Schools………………………………………… 8,405,000 Sewer…………………………………………… 1,475,000 TOTAL LONG TERM DEBT: $14,755,000

SHORT TERM DEBT: $0 TOTAL DIRECT DEBT: $14,755,000 Less: School Construction Grants1 88,314 Sewer Assessments2 118,089 TOTAL DIRECT NET DEBT $14,548,597 OVERLAPPING/UNDERLYING DEBT 0 TOTAL OVERALL NET DEBT $14,548,597 ______

1 Represents State of Connecticut School Construction Grants payable to the Town over the life of certain school bond issues. 2 As of 6/30/12.

CURRENT DEBT RATIOS September 25, 2013 (Pro Forma)

Population1 15,582 Net Taxable Grand List - 10/1/12 @ 70% of full value $1,271,456,873 Estimated Full Value $1,816,366,961 Equalized Net Taxable Grand List - 20102 $1,775,579,566 Money Income per Capita - 20113 $38,554

Total Total Net Total Overall Direct Debt Direct Debt Net Debt $14,755,000 $14,548,597 $14,548,597 Per Capita $946.93 $933.68 $933.68 Ratio to Net Taxable Grand List 1.16% 1.14% 1.14% Ratio to Estimated Full Value 0.81% 0.80% 0.80% Ratio to Equalized Grand List 0.83% 0.82% 0.82% Debt per Capita to Money Income per Capita 2.46% 2.42% 2.42% ______1 Connecticut Department of Public Health, 2011 Estimate. 2 Office of Policy and Management, State of Connecticut. 3 U.S. Census Bureau, 2007-2011 American Community Survey.

BOND AUTHORIZATION

The Town of Ellington has the power to incur indebtedness by issuing its bonds or notes as authorized by the General Statutes of the State of Connecticut subject to statutory debt limitations and the procedural requirements of the Town Charter. The issuance of Bonds and Notes is authorized by the Town Meeting, at which all electors and certain non-resident property owners can vote upon the recommendations of the Board of Finance.

TEMPORARY FINANCING

When general obligation bonds have been authorized, bond anticipation notes may be issued maturing in not more than two years (CGS Sec. 7-378). Temporary notes may be renewed up to ten years from their original date of issue if the legislative body schedules principal reductions no later than the end of the third year and for each subsequent year during which such temporary notes remain outstanding. The term of the bond issue is reduced by the amount of time temporary financing exceeds two years, or, for sewer projects, by the amount of time temporary financing has been outstanding.

Temporary notes must be permanently funded no later than ten years from the initial borrowing date except for sewer notes issued in anticipation of State and/or Federal grants. If a written commitment exists, the municipality may renew the notes from time to time in terms not to exceed six months until such time that the final grant payments are received (CGS Sec. 7-378b).

Temporary notes may also be issued for up to fifteen years for certain capital projects associated with the operation of a waterworks system (CGS Sec. 7-244a) or a sewage system (CGS Sec. 7-264a). In the first year following the completion of the project(s), or in the sixth year (whichever is sooner), and in each year thereafter, the notes must be reduced by at least 1/15 of the total amount of the notes issued by funds derived from certain sources of payment.

Temporary notes may be issued in one year maturities for up to fifteen years in anticipation of sewer assessments receivable, such notes to be reduced annually by the amount of assessments received during the preceding year (CGS Sec. 7-269a).

LIMITATION OF INDEBTEDNESS

Municipalities shall not incur indebtedness through the issuance of bonds, which will cause aggregate indebtedness by class to exceed the following:

General Purposes: 2.25 times annual receipts from taxation School Purposes: 4.50 times annual receipts from taxation Sewer Purposes: 3.75 times annual receipts from taxation Urban Renewal Purposes: 3.25 times annual receipts from taxation Pension Obligation Purposes: 3.00 times annual receipts from taxation

In no case however, shall total indebtedness exceed seven times the base. “Annual receipts from taxation,” (the “base,”) are defined as total tax collections (including interest, and late payment of taxes) and state payments for revenue loss under CGS Sections 12-129d and 7-528.

The statutes also provide for exclusion from the debt limit calculation debt issued in anticipation of taxes; for the supply of water, gas, electricity; for the construction of subways for cables, wires and pipes; for the construction of underground conduits for cables, wires and pipes; and for two or more of such purposes. There are additional exclusions for indebtedness issued in anticipation of the receipt of proceeds from assessments levied upon property benefited by any public improvement and for indebtedness issued in anticipation of the receipt of proceeds from State or Federal grants evidenced by a written commitment or contract but only to the extent such indebtedness can be paid from such proceeds. The statutes also provide for exclusion from the debt limitation any debt to be paid from a funded sinking fund. STATEMENT OF STATUTORY DEBT LIMITATION As of September 25, 2013 (Pro Forma)

TOTAL TAX COLLECTIONS (including interest and lien fees)1 received by the Treasurer for the year ended June 30, 2012……………… $34,586,649 REIMBURSEMENT FOR REVENUE LOSS ON: Tax Relief for Elderly…………………………………………………………… 71,062 BASE………………………………………………………………………………… $34,657,711

General Urban Pension DEBT LIMITATION: Purposes Schools Sewers Renewal Obligation 2¼ times bas e……………………………… $77,979,850 4½ times bas e……………………………… $155,959,700 3¾ times bas e……………………………… $129,966,416 3¼ times base……………………………. $112,637,561 3 times bas e……………………………… $103,973,133 Total debt limitation……………………… $77,979,850 $155,959,700 $129,966,416 $112,637,561 $103,973,133

INDEBTEDNESS:1 Bonds Payable…………………………… $4,875,000 $8,405,000 $1,475,000 $0 $0 Notes Payable……………………………… 00000 Authorized but Unissued Debt…………… 1,562,000 21,040,000 2 000 TOTAL DIRECT INDEBTEDNESS:…… $6,437,000 $29,445,000 $1,475,000 $0 $0 Les s : School Construction Grants… $88,314 3 Sewer Assessments…………… $118,089 4 TOTAL NET INDEBTEDNESS………… $6,437,000 $29,356,686 $1,356,911 $0 $0 DEBT LIMITATION IN EXCESS OF OUTSTANDING AND AUTHORIZED DEBT……………… $71,542,850 $126,603,014 $128,609,505 $112,637,561 $103,973,133 ______1 Does not include collection or debt of Crystal Lake Fire District, a coterminous municipality of the Town. 2 The Town anticipates State of Connecticut School Construction Grants of $10.38 million, leaving a Town net share of $10.66 million to be bonded. 3 Represents State of Connecticut School Construction Grants payable to the Town over the life of certain school bond issues. 4 Represents sewer assessments receivable as of 6/30/12. Note: In no case shall total indebtedness exceed seven times annual receipts from taxation or $242,603,977.

AUTHORIZED BUT UNISSUED DEBT As of September 25, 2013 (Pro Forma) Debt Authorized but Unissued Previously Bonded/ These General Project Authorized Grants/Paydown Bonds Purpose Schools Sewer Total Farm Preservation………………………. 2,000,000 100,000 440,000 1,460,000 0 0 1,460,000 Property Acquisition - 59 South Rd.…… 355,000 163,000 190,000 2,000 0 0 2,000 Crystal Lake School/Windermere School… 21,040,000 0 0 0 21,040,000 0 21,040,000 1 Senior Center Project…………………… 2,900,000 0 2,800,000 100,000 0 0 100,000 Total $26,295,000 $263,000 $3,430,000 $1,562,000 $21,040,000 $0 $22,602,000 ______1 These projects qualify for State of Connecticut School Construction Grants on eligible costs. The Town’s net share is estimated at $10.66 million.

PRINCIPAL AMOUNT OF OUTSTANDING DEBT

Long-Term Debt 2013 Est. 2012 2011 2010 2009 2008 Bonds $11,355,000 $12,910,000 $14,520,000 $16,180,000 $19,349,025 $21,309,222 Short-Term Debt Bond Anticipation Notes 410,000 410,000 410,000 510,000 0 0 Totals $11,765,000 $13,320,000 $14,930,000 $16,690,000 $19,349,025 $21,309,222

RATIO OF DIRECT DEBT TO VALUATION, POPULATION AND INCOME1

Ratio of Ratio of Direct Ratio of Direct Debt Fiscal Net Debt to Direct Debt Direct per Capita to Year Assessed Estimated Direct Assessed to Estimated Debt per Per Capita Ended 6/30 Value Full Value Debt1 Value (%) Full Value (%) Population2 Capita Income (%)3 2013 Est. $1,256,161,223 $1,794,516,033 $11,765,000 0.94% 0.66% 15,582 $755.04 1.96% 2012 1,242,961,716 1,775,659,594 13,320,000 1.07% 0.75% 15,582 854.83 2.22% 2011 1,264,027,434 1,805,753,477 14,930,000 1.18% 0.83% 15,582 958.16 2.49% 2010 1,244,337,619 1,777,625,170 16,690,000 1.34% 0.94% 15,602 1,069.73 2.77% 2009 1,224,671,067 1,749,530,096 19,349,025 1.58% 1.11% 14,829 1,304.81 3.38% 2008 1,183,950,091 1,691,357,273 21,309,222 1.80% 1.26% 14,568 1,462.74 3.79% ______1 Does not reflect State of Connecticut School Construction and interest subsidy grants applied to the retirement of the outstanding debt. 2 FY 2008-13 Population: State of Connecticut, Department of Health Services Estimates. 3 Income per Capita: $38,554 - U.S. Census Bureau, 2007-2011 American Community Survey.

RATIO OF ANNUAL DEBT SERVICE EXPENDITURES TO TOTAL GENERAL FUND EXPENDITURES Ratio of General Total Fund Debt Service Fiscal Year General Fund to Total General Ended 6/30 Principal Interest Total Expenditures Fund Expenditures % 2013 Est. $1,988,307 $618,452 $2,606,759 $48,133,654 5.42% 2012 2,195,013 435,548 2,630,561 57,660,825 4.56% 2011 2,017,090 609,326 2,626,416 48,597,403 5.40% 2010 1,813,541 677,756 2,491,297 46,504,849 5.36% 2009 1,805,423 763,911 2,569,334 46,035,797 5.58% 2008 2,035,883 827,417 2,863,300 52,450,384 5.46%

THE TOWN OF ELLINGTON HAS NEVER DEFAULTED IN THE PAYMENT OF PRINCIPAL OR INTEREST ON ITS BONDS OR NOTES.

VII. LEGAL AND OTHER LITIGATION

LITIGATION

The Town of Ellington, its officers, employees, boards and commissions, are defendants in a number of lawsuits. Following consultation with the Town Officials, it is the opinion of the Town Attorney that pending litigation will not be finally determined so as to result individually or in the aggregate in a final judgment against the Town which would have a materially adverse affect upon its financial position.

TRANSCRIPT AND CLOSING DOCUMENTS

Upon the delivery of the Bonds, the Original Purchaser will be furnished with the following:

1. A Signature and No Litigation Certificate stating that at the time of delivery of the Bonds no litigation is pending or threatened affecting the validity of the Bonds or the levy or collection of taxes to pay them.

2. A Certificate on behalf of the Town signed by the First Selectman and the Finance Officer/Treasurer which will be dated the date of delivery and attached to a signed copy of the Official Statement, and which will certify, to the best of said officials' knowledge and belief, that at the time the bids on the Bonds were accepted, the descriptions and statements in the Official Statement relating to the Town of Ellington and its finances were true and correct in all material respects and did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and that there has been no material adverse change in the financial condition of the Town from that set forth in or contemplated by the Official Statement.

3. A receipt for the purchase price of the Bonds.

4. The approving opinion of Day Pitney LLP, Bond Counsel, of Hartford, Connecticut substantially in the form set out in Appendix B attached hereto.

5. An Executed Continuing Disclosure Agreement for the Bonds substantially in the form of Appendix C attached hereto.

6. The Town of Ellington, Connecticut has prepared an Official Statement for the Bonds which is dated September 17, 2013. The Town deems such Official Statement final as of its date for purposes of SEC Rule 15c2-12(b)(i), but it is subject to revision or amendment. The Town will make available to each winning purchaser of the Bonds 100 copies of the Official Statement at the Town’s expense within seven business days of the bid opening. Additional copies may be obtained by the Purchaser(s) at their own expense by arrangement with the printer.

A transcript of the proceedings taken by the Town in authorizing the Bonds will be kept on file at the offices of U.S. Bank National Association, Corporate Trust Services, 225 Asylum Street, 23rd Floor, Hartford, Connecticut and will be available for examination upon reasonable request.

CONCLUDING STATEMENT

This Official Statement is not to be construed as a contract or agreement between the Town and the purchaser or holders of any of the Bonds. Any statements made in this Official Statement involving matters of opinion or estimates are not intended to be representations of fact, and no representation is made that any of such opinion or estimate will be realized.

No representation is made that past experience, as might be shown by financial or other information herein, will necessarily continue or be repeated in the future. 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 Town since the date hereof. References to statutes, charters, or other laws herein may not be complete and such provisions of law are subject to repeal or amendment.

This Official Statement has been duly prepared and delivered by the Town, and executed for and on behalf of the Town of Ellington by the following officials:

TOWN OF ELLINGTON, CONNECTICUT

/s/ Maurice W. Blanchette Maurice W. Blanchette, First Selectman

/s/ Nicholas J. DiCorleto Jr. Nicholas J. DiCorleto Jr., Finance Officer/Treasurer

September 17, 2013

36 APPENDIX A - BASIC FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 Page Independent Auditors’ Report 1 Management’s Discussion and Analysis 3

Basic Financial Statements Government-Wide Financial Statements:

Statement of Net Assets ...... 17

Statement of Activities ...... 18

Fund Financial Statements: Governmental Fund Financial Statement

Balance Sheet ...... 19

Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets ...... 20

Statement of Revenues, Expenditures and Changes in Fund Balances ...... 21

Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities ...... 22

Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual – Budgetary Basis - General Fund ...... 24

Proprietary Fund Financial Statements

Statement of Net Assets ...... 25

Statement of Revenues, Expenses, and Changes in Fund Net Assets (Deficit) ...... 26

Statement of Cash Flows ...... 27

Fiduciary Fund Financial Statements

Statement of Fiduciary Net Assets ...... 28

Statement of Changes in Fiduciary Net Assets ...... 29

Notes to the Financial Statements ...... 30

Required Supplementary Information Schedule of Funding Progress ...... 57

Appendix A - Basic Financial Statements - is taken from the Annual Report of the Town of Ellington for the Fiscal Year ended June 30, 2012 as presented by the Auditors and does not include all of the schedules or management letter made in such report. A copy of the complete report is available upon request to the Finance Officer/Treasurer, Town of Ellington, Connecticut.

APPENDIX B - OPINION OF BOND COUNSEL AND TAX EXEMPTION

The following information has been prepared by Bond Counsel in connection with this bond issue. Bond Counsel are not passing upon and do not assume responsibility for the accuracy or completeness of the statements made in the Official Statement (other than matters in this Appendix), and they make no representation that they have independently verified the same.

BOND COUNSEL OPINION

The legal opinion of the firm of Day Pitney LLP of Hartford, Connecticut, Bond Counsel, will be furnished to the successful bidder when the Bonds are delivered, and a copy of the legal opinion will be included in the record of proceedings of the Town authorizing the Bonds. The opinion will be dated and given on and will speak only as of the date of original delivery of the Bonds to the successful bidder.

The opinion of Day Pitney LLP with respect to the Bonds will be substantially in the following form:

[FORM OF BOND COUNSEL OPINION]

(date of closing)

Town of Ellington Ellington, Connecticut

We have represented the Town of Ellington, Connecticut as Bond Counsel in connection with the issuance by the Town of $4,205,000 General Obligation Bonds, Issue of 2013, dated as of September 15, 2013.

We have examined a record of proceedings authorizing the Bonds, and based on our examination, we are of the opinion that the Town of Ellington is authorized to issue the Bonds; the Town is duly and legally organized; all proper proceedings for the issuance and delivery of the Bonds have been taken; no limitation of indebtedness under the laws of the State of Connecticut has been exceeded in the issuance of the Bonds; the Bonds will be valid and binding general obligations of the Town when certified as provided thereon by a duly authorized official of U.S. Bank National Association; and the Town has the power to levy ad valorem taxes to pay the Bonds against all the taxable property in the Town without limit as to rate or amount except certified forest land taxable at a limited rate and dwelling houses of qualified elderly people of low income or of qualified disabled persons taxable at limited amounts.

It is to be understood that the rights of the holders of the Bonds and the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights heretofore or hereafter enacted and to the exercise of judicial discretion.

The Internal Revenue Code of 1986, as amended (the “Code”), establishes certain requirements that must be met in order that interest on the Bonds is excluded from gross income for Federal income tax purposes. The Town officials authorized to issue the Bonds have executed written representations and agreements on behalf of the Town relating to compliance with such provisions of the Code to ensure that the interest on the Bonds will be excluded from gross income for Federal income tax purposes. The representations and agreements also provide that the Bonds are designated or deemed designated as “qualified tax-exempt obligations” for purposes of the deduction for Federal income tax purposes by financial institutions of a portion of interest expense allocable to tax-exempt obligations.

Based on such representations and agreements and on the record of proceedings authorizing the Bonds, and assuming the accuracy of such representations and compliance with such agreements, it is our opinion that, under existing statutes: (1) interest on the Bonds is excluded from gross income for Federal income tax purposes pursuant to Section 103 of the Code; (2) the Bonds are not “private activity bonds” and interest on the Bonds is not treated as -2- a preference item for purposes of calculating the Federal alternative minimum tax, but in the case of corporations a portion of such interest may be included in alternative minimum taxable income for purposes of computing any Federal alternative minimum tax; and (3) the Bonds are “qualified tax-exempt obligations” for purposes of the deduction for Federal income tax purposes by financial institutions of a portion of interest expense allocable to tax- exempt obligations.

Based on the record of proceedings authorizing the Bonds, it is our opinion that, under existing statutes: (1) interest on the Bonds is excluded from Connecticut taxable income for purposes of the Connecticut income tax on individuals, trusts and estates; and (2) interest on the Bonds is excluded from amounts on which the net Connecticut minimum tax is based in the case of individuals, trusts and estates required to pay the Federal alternative minimum tax. Very truly yours,

Day Pitney LLP

FEDERAL INCOME TAX.

Interest Excluded From Gross Income. The Internal Revenue Code of 1986, as amended (the "Code") establishes certain requirements that must be met in order that interest on the Bonds is excluded from the gross income of the owners thereof for Federal income tax purposes. Some of these requirements must be continuously met subsequent to delivery of the Bonds. Failure to comply with any of these requirements may cause the interest on the Bonds to be includable in gross income for Federal income tax purposes retroactively to the date of their issuance irrespective of the date on which such noncompliance occurs.

The Town officials authorized to issue the Bonds will enter into a Tax Compliance Agreement in connection with the delivery of the Bonds, which will contain certain representations and covenants on behalf of the Town relating to compliance with such requirements of the Code to ensure that the interest on the Bonds will be excluded from the gross income of the owners thereof for Federal income tax purposes.

Alternative Minimum Tax. The Code imposes an alternative minimum tax on individuals and an alternative minimum tax on corporations. The alternative minimum tax is imposed on alternative minimum taxable income, which includes preference items. The interest on certain tax-exempt “private activity bonds” is treated as a preference item. The Town's Tax Compliance Agreement will contain certain representations and covenants to ensure that the Bonds are not “private activity bonds” so that interest on the Bonds will not be treated as a preference item for individuals or corporations in calculating alternative minimum taxable income.

The Code provides, however, that for most corporations a portion of the excess of adjusted current earnings (which includes certain tax-exempt interest) over other alternative minimum taxable income will be included in alternative minimum taxable income for purposes of calculating the corporation's alternative minimum tax.

Financial Institutions. The Code provides that commercial banks, thrift institutions and certain other financial institutions may not deduct the portion of their interest expense allocable to tax-exempt obligations acquired after August 7, 1986, other than "qualified tax-exempt obligations". The Town’s Tax Compliance Agreement will contain certain representations and covenants to ensure that the Bonds will be "qualified tax-exempt obligations" for purposes of the deduction for Federal income tax purposes by financial institutions of a portion of interest expense allocable to tax-exempt obligations.

Additional Federal Income Tax Matters. In addition to the matters addressed above, prospective purchasers of the Bonds should be aware that the ownership of tax-exempt obligations, such as the Bonds, may result in collateral Federal income tax consequences to certain taxpayers, including without limitation, taxpayers otherwise eligible for the earned income credit, recipients of Social Security and certain Railroad Retirement benefits, taxpayers that may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations, financial institutions, certain insurance companies, certain S corporations and foreign corporations -3- subject to the branch profits tax. Prospective purchasers of the Bonds may also wish to consult with their tax advisors with respect to the need to furnish certain taxpayer information in order to avoid backup withholding.

STATE OF CONNECTICUT TAX ON INTEREST.

The opinion of Bond Counsel will state in substance that, based on the record of proceedings authorizing the Bonds, under existing statutes: (1) interest on the Bonds is excluded from Connecticut taxable income for purposes of the Connecticut income tax on individuals, trusts and estates; and (2) interest on the Bonds is excluded from amounts on which the net Connecticut minimum tax is based in the case of individuals, trusts and estates required to pay the Federal alternative minimum tax.

Interest on the Bonds is included in gross income for purposes of the Connecticut corporation business tax.

Owners of the Bonds should consult their tax advisors with respect to other applicable state and local tax consequences of ownership of the Bonds and the disposition thereof, including the extent to which gains and losses from the sale or exchange of the Bonds held as capital assets reduce and increase, respectively, amounts taken into account in computing the Connecticut income tax on individuals, trusts and estates and may affect the net Connecticut minimum tax on such taxpayers who are also required to pay the Federal alternative minimum tax.

ORIGINAL ISSUE DISCOUNT.

The initial public offering price of certain of the Bonds may be less than the amount payable on the Bonds at maturity. The excess of the amount payable at maturity over the initial public offering price at which a substantial amount of such Bonds are sold constitutes original issue discount. Any prices set forth on the cover page of the Official Statement may or may not reflect the prices at which a substantial amount of the Bonds were ultimately sold to the public.

The discussion in this paragraph applies to those Bonds having original issue discount. Under Section 1288 of the Code, the amount of original issue discount treated as having accrued with respect to any such bond during each day it is owned by a taxpayer is added to the cost basis of such owner for purposes of determining gain or loss upon the sale or other disposition of such bond by such owner. Accrued original issue discount on a bond is excluded from gross income of the owners thereof for Federal income tax purposes. Accrued original issue discount on a bond is also excluded from Connecticut taxable income for purposes of the Connecticut income tax on individuals, trusts and estates and is excluded from amounts on which the net Connecticut minimum tax is based in the case of individuals, trusts and estates required to pay the Federal alternative minimum tax. Original issue discount on any bond is treated as accruing on the basis of economic accrual for such purposes, computed by a constant semiannual compounding method using the yield to maturity on such bond. The original issue discount attributable to any bond for any particular semiannual period is equal to the excess of the product of (i) one-half of the yield to maturity of such bond and (ii) the amount which would be the adjusted basis of the bond at the beginning of such semiannual period if held by the original owner and purchased by such owner at the initial public offering price, over the interest payable on such bond during such period. The amount so treated as accruing during each semiannual period is apportioned in equal amounts among the days in that period to determine the amount of original issue discount accruing for such purposes during each such day. Owners of Bonds having original issue discount, and especially any owner who is not an original owner of a bond who bought the bond at its initial public offering price, should consult their tax advisors with respect to the Federal and state income tax consequences of the disposition of such Bonds.

ORIGINAL ISSUE PREMIUM.

The initial public offering price of certain of the Bonds may be greater than the amount payable on the Bonds at maturity. The excess of the initial public offering price at which a substantial amount of such the Bonds are sold over the amount payable thereon at maturity constitutes original issue premium. Any prices set forth on the cover page of the Official Statement may or may not reflect the prices at which a substantial amount of the Bonds were ultimately sold to the public. -4-

The discussion in this paragraph applies to those the Bonds having original issue premium. Under Sections 1016 and 171 of the Code, the amount of original issue premium treated as having amortized with respect to any bond during each day it is owned by a taxpayer is subtracted from the cost basis of such owner for purposes of determining gain or loss upon the sale or other disposition of such bond by such owner. Original issue premium on any bond is treated as amortizing on the basis of the taxpayer's yield to maturity on such bond using the taxpayer's cost basis and a constant semiannual compounding method. As a consequence of the resulting cost basis reduction, under certain circumstances an owner of a bond acquired with original issue premium may realize a taxable gain upon disposition thereof even though it is sold or redeemed for an amount equal to or less than such owner's original cost of acquiring the bond. Amortized original issue premium on a bond is not allowed as a deduction from gross income for Federal income tax purposes. Amortized original issue premium on a bond also does not reduce Connecticut taxable income for purposes of the Connecticut income tax on individuals, trusts and estates and does not reduce amounts on which the net Connecticut minimum tax is based in the case of individuals, trusts and estates required to pay the Federal alternative minimum tax. Owners of the Bonds having original issue premium, and especially any owner who is not an original owner of a bond who bought the bond at its initial public offering price, should consult their tax advisors with respect to the Federal and state income tax consequences of the disposition of such the Bonds.

GENERAL.

Bond Counsel has not undertaken to advise in the future whether any events after the date of issuance of the Bonds may affect the tax status of interest on the Bonds. Legislation affecting municipal bonds is regularly under consideration by the United States Congress. For example, on September 13, 2011, S.B. 1549, the "American Jobs Act of 2011" (the “Jobs Act”), was introduced into the United States Senate, which legislation, if enacted as introduced, would have subjected to federal income taxation a portion of the interest on all tax-exempt bonds (including the Bonds) received for taxable years beginning on or after January 1, 2013 by certain individuals with incomes above specified limits. The Jobs Act was not enacted; however, on February 13, 2012, President Obama released his fiscal 2013 Federal budget request, which includes a proposal to cap at 28% the value of tax preferences, including tax-exempt interest for municipal bonds. No assurance can be given that Federal legislation enacted or proposed after the date of issuance of the Bonds will not have an adverse effect on the tax-exempt status or market price of the Bonds or will not change the effect of other Federal tax law consequences discussed above of owning and disposing of the Bonds and Bond Counsel expresses no opinion thereon. No assurance can be given that future legislation, or amendments to the income tax law of the State of Connecticut, if enacted into law, will not contain provisions that could, directly or indirectly, reduce the benefit of the exclusion of the interest on the Bonds or any gain made on the sale or exchange thereof from Connecticut taxable income for purposes of the Connecticut income tax on individuals, trusts and estates, and Bond Counsel expresses no opinion thereon. Prospective owners of the Bonds are advised to consult their tax advisors regarding the potential tax consequences of proposed Federal or State of Connecticut tax legislation affecting municipal bonds.

The information above does not purport to deal with all aspects of Federal or State of Connecticut taxation that may be relevant to a particular owner of the Bonds. Prospective owners of the Bonds, particularly those who may be subject to special rules, are advised to consult their tax advisors regarding the Federal, state and local tax consequences of owning and disposing of the Bonds, including any tax consequences arising under the laws of any other state or other taxing jurisdiction. APPENDIX C - FORM OF CONTINUING DISCLOSURE AGREEMENT FOR BONDS

In accordance with the requirements of Rule 15c2-12 promulgated by the Securities and Exchange Commission, the Town will agree, pursuant to a Continuing Disclosure Agreement for Bonds to be executed by the Town substantially in the following form, to provide, or cause to be provided, (i) annual financial information and operating data, (ii) in a timely manner not in excess of ten business days after the occurrence of the event, notice of the occurrence of certain events with respect to the Bonds and (iii) timely notice of a failure by the Town to provide the required annual financial information on or before the date specified in the Continuing Disclosure Agreement for Bonds.

Continuing Disclosure Agreement for Bonds

This Continuing Disclosure Agreement for Bonds ("Agreement") is made as of September 25, 2013 by the Town of Ellington, Connecticut (the "Issuer") acting by its undersigned officers, duly authorized, in connection with the issuance of $4,205,000 General Obligation Bonds, Issue of 2013, dated as of September 15, 2013 (the "Bonds"), for the benefit of the beneficial owners from time to time of the Bonds.

Section 1. Definitions. For purposes of this Agreement, the following capitalized terms shall have the following meanings:

"Final Official Statement" means the official statement of the Issuer dated September 17, 2013 prepared in connection with the Bonds.

"MSRB" means the Municipal Securities Rulemaking Board established under the Securities Exchange Act of 1934, as amended, or any successor thereto.

"Repository" means the MSRB or any other information repository established pursuant to the Rule as amended from time to time.

"Rule" means Rule 15c2-12 under the Securities Exchange Act of 1934, as of the date of this Agreement.

"SEC" means the Securities and Exchange Commission of the United States, or any successor thereto.

Section 2. Annual Financial Information.

(a) The Issuer agrees to provide or cause to be provided to each Repository, in accordance with the provisions of the Rule and of this Agreement, annual financial information and operating data (commencing with information and data for the fiscal year ending June 30, 2013) as follows:

(i) Financial statements of the Issuer's general fund and, any special revenue, capital projects, permanent enterprise and trust or agency funds, for the prior fiscal year which statements shall be prepared in accordance with generally accepted accounting principles or mandated state statutory principles as in effect from time to time. As of the date of this Agreement, the Issuer prepares its financial statements in accordance with generally accepted accounting principles. The financial statements will be audited.

(ii) The following financial information and operating data to the extent not included in the financial statements described in (i) above:

(A) amounts of the gross and the net taxable grand list applicable to the fiscal year,

(B) listing of the ten largest taxpayers on the applicable grand list, together with each such taxpayer's taxable valuation thereon, -2-

(D) schedule of annual debt service on outstanding long-term bonded indebtedness as of the close of the fiscal year,

(E) calculation of total direct debt, total net direct debt, and total overall net debt (reflecting overlapping and underlying debt), as of the close of the fiscal year,

(F) total direct debt, total net direct debt and total overall net debt of the Issuer per capita,

(G) ratios of the total direct debt, total net direct debt and total overall net debt of the Issuer to the Issuer's applicable net taxable grand list,

(H) statement of statutory debt limitation as of the close of the fiscal year, and

(I) funding status of the pension benefit obligation.

(b) The financial information and operating data described above will be provided on or before the date eight months after the close of the fiscal year for which such information is being provided. The Issuer's fiscal year currently ends on June 30.

(c) Annual financial information and operating data may be provided in whole or in part by cross- reference to other documents available to the public on the MSRB’s Internet Web site referenced in the Rule as amended from time to time or filed with the SEC. All or a portion of the financial information and operating data may be provided in the form of a comprehensive annual financial report.

(d) The Issuer reserves the right (i) to provide financial statements which are not audited if no longer required by law, (ii) to modify from time to time the format of the presentation of such information or data, and (iii) to modify the accounting principles it follows to the extent required by law, by changes in generally accepted accounting principles, or by changes in accounting principles adopted by the Issuer; provided that the Issuer agrees that any such modification will be done in a manner consistent with the Rule.

Section 3. Notice of Certain Events.

The Issuer agrees to provide or cause to be provided, in a timely manner not in excess of ten business days after the occurrence of the event, to each Repository notice of the occurrence of any of the following events with respect to the Bonds:

(a) principal and interest payment delinquencies;

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

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

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

(f) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the bonds, or other material events affecting the tax status of the Bonds; -3-

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

(h) Bond calls, if material, and tender offers;

(i) Bond defeasances;

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

(k) rating changes;

(l) bankruptcy, insolvency, receivership or similar event of the Issuer;

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

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

Section 4. Notice of Failure to Provide Annual Financial Information.

The Issuer agrees to provide or cause to be provided, in a timely manner, to each Repository notice of any failure by the Issuer to provide annual financial information as set forth in Section 2(a) hereof on or before the date set forth in Section 2(b) hereof.

Section 5. Use of Agents.

Annual financial information and operating data and notices to be provided pursuant to this Agreement may be provided by the Issuer or by any agents which may be employed by the Issuer for such purpose from time to time.

Section 6. Termination.

The obligations of the Issuer under this Agreement shall terminate upon the earlier of (i) payment or legal defeasance, at maturity or otherwise, of all of the Bonds, or (ii) such time as the Issuer ceases to be an obligated person with respect to the Bonds within the meaning of the Rule.

Section 7. Enforcement.

The Issuer acknowledges that the undertakings set forth in this Agreement are intended to be for the benefit of, and enforceable by, the beneficial owners from time to time of the Bonds. In the event the Issuer shall fail to perform its duties hereunder, the Issuer shall have the option to cure such failure within a reasonable time (but not exceeding 30 days with respect to the undertakings set forth in Section 2 of this Agreement or five business days with respect to the undertakings set forth in Sections 3 and 4 of this Agreement) from the time the Issuer's Finance Officer, or a successor, receives written notice from any beneficial owner of the Bonds of such failure. The present address of the Finance Officer is Town Hall, 55 Main Street, P.O. Box 187, Ellington, Connecticut 06029.

In the event the Issuer does not cure such failure within the time specified above, the beneficial owner of any Bonds shall be entitled only to the remedy of specific performance. The parties expressly acknowledge and agree that no monetary damages shall arise or be payable hereunder nor shall any failure to comply with this Agreement constitute an event of default with respect to the Bonds. -4-

Section 8. Miscellaneous.

(a) All documents provided by the Issuer to a Repository pursuant to the Issuer’s undertakings set forth in Sections 2, 3 and 4 of this Agreement shall be in an electronic format as prescribed by the MSRB from time to time and shall be accompanied by identifying information as prescribed by the MSRB from time to time.

(b) The Issuer shall have no obligation to provide any information, data or notices other than as set forth in this Agreement; provided, however, nothing in this Agreement shall be construed as prohibiting the Issuer from providing such additional information, data or notices from time to time as it deems appropriate in connection with the Bonds. If the Issuer elects to provide any such additional information, data or notices, the Issuer shall have no obligation under this Agreement to update or continue to provide further additional information, data or notices of the type so provided.

(d) Notwithstanding any other provision of this Agreement, the Issuer may amend this Agreement, and any provision of this Agreement may be waived, if such amendment or waiver is made in connection with a change of circumstances that arises from a change in legal requirements, a change in law, or a change in the identity, nature or status of the Issuer, and is supported by an opinion of counsel expert in federal securities laws, to the effect that (i) such amendment or waiver would not materially adversely affect the beneficial owners of the Bonds, and (ii) the provisions of the Agreement as so amended or waived would have complied with the requirements of the Rule, taking into account any amendments or interpretations of the Rule as well as any changes in circumstances, in each case as of the date of such amendment to the Agreement or waiver. A copy of any such amendment or waiver will be filed in a timely manner with each Repository. The annual financial information provided on the first date following adoption of any such amendment will explain, in narrative form, the reasons for the amendment and the impact of the change in the type of operating or financial information provided.

(e) This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but such counterparts shall together constitute but one and the same instrument.

TOWN OF ELLINGTON

By ______Maurice W. Blanchette First Selectman

By ______Nicholas J. DiCorleto, Jr. Finance Officer APPENDIX D – NOTICE OF SALE

NOTICE OF SALE $4,205,000 Town of Ellington, Connecticut General Obligation Bonds (BOOK-ENTRY)

SEALED PROPOSALS and ELECTRONIC BIDS via PARITY® will be received by the Town of Ellington, Connecticut at First Southwest Company, 628 Hebron Avenue, Suite 306, Glastonbury, Connecticut, until 11:30 A.M. (Eastern Daylight Time) on TUESDAY,

SEPTEMBER 17, 2013 for the purchase, when issued, at not less than par and accrued interest from the date of the Bonds to the date of delivery, of the whole of

$4,205,000 General Obligation Bonds, Issue of 2013 Payable annually on September 15 as follows:

$220,000 in 2014 through 2019 $215,000 in 2020 through 2021 $210,000 in 2022 $205,000 in 2023 through 2031 $200,000 in 2032 through 2033

The Bonds will be dated September 15, 2013, with interest payable on March 15, 2014 and thereafter semiannually on each September 15th and March 15th.

The Bonds will be general obligations of the Town payable from ad valorem taxes levied on all taxable property in the Town without limitation as to rate or amount except classified property such as certified forest land taxable at a limited rate and dwelling houses of qualified elderly persons of low income or of qualified disabled persons taxable at limited amounts.

DTC Book Entry. The Bonds will be issued by means of a book-entry system with no physical distribution of bond certificates made to the public. The Bonds will be issued in registered form and one bond certificate for each maturity will be issued to The Depository Trust Company ("DTC"), New York, New York, registered in the name of its nominee, Cede & Co., and immobilized in its custody. A book-entry system will be employed, evidencing ownership of the Bonds in principal amounts of $5,000 or any integral multiple thereof, with transfers of ownership effected on the records of DTC and its Participants pursuant to rules and procedures adopted by DTC and its Participants. The purchaser, as a condition to delivery of the Bonds, will be required to deposit the bond certificates with DTC, registered in the name of Cede & Co. Principal of, redemption premium, if any, and interest on the Bonds will be payable by the Town or its agent to DTC or its nominee as registered owner of the Bonds. Principal, redemption premium, if any, and interest payments by DTC to Participants of DTC will be the responsibility of DTC; principal, redemption premium, if any, and interest payments to Beneficial Owners by Participants of DTC will be the responsibility of such Participants and other nominees of Beneficial Owners. The Town will not be responsible or liable for payments by DTC to its Participants or by DTC Participants or Indirect Participants to Beneficial Owners or for maintaining, supervising or reviewing the records maintained by DTC, its Participants or persons acting through such Participants.

In the event that (a) DTC determines not to continue to act as securities depository for the Bonds and the Town fails to identify another qualified securities depository to replace DTC, or (b) the Town determines to discontinue the book-entry system of evidence and transfer of ownership of the Bonds, the Town will authenticate and deliver replacement Bonds in the form of fully registered certificates. Any such replacement Bonds will provide that interest will be payable by check mailed by the Paying Agent to the registered owner whose name appears on the -2- registration books of the Town as of the close of business on the record date preceding each interest payment date. The record dates will be the last business day of February and August.

Redemption. Bonds maturing after September 15, 2021 are subject to redemption prior to maturity, at the option of the Town, on or after September 15, 2021, [at any time,] either in whole [at any time ]or in part, [on any interest payment date] in such amounts and in such order of maturity (but by lot within a maturity) as the Town may determine, following notice mailed by first class mail at least 30 days prior to the redemption date to the registered owners of the Bonds to be redeemed, at the following redemption price, expressed as a percentage of the principal amount, plus accrued interest to the date set for redemption:

Period During Which Redeemed Redemption Price September 15, 2021 and thereafter 100%

Proposals. Each proposal must specify the amount bid for the Bonds (which shall be the aggregate par value of the Bonds, and, at the option of the bidder, a premium), and must specify in a multiple of one-twentieth or one eighth of one percent the rate or rates of interest per annum which the Bonds are to bear, but shall not specify (a) more than one interest rate for any Bonds having a like maturity, or (b) any interest rate for any Bonds which exceeds the interest rate specified in such proposal for any other Bonds by more than two (2%) percentage points. In addition to the amount bid for the Bonds, the purchaser must pay an amount equal to the interest on the Bonds accrued to the date of delivery. For the purpose of the bidding process, the time as maintained on PARITY® shall constitute the official time. For information purposes only, bidders are requested to state in their bids the true interest cost to the Town, as described under "Basis of Award" below, represented by the rate or rates of interest and the bid price specified in their respective bids.

Sealed Proposals Bidding Procedure. All proposals for the purchase of Bonds shall be submitted on forms furnished by the Town and submitted at the time and place indicated above. All proposals must be enclosed in sealed envelopes marked on the outside, in substance, "Proposal for Ellington Bonds." All proposals should be addressed to Mr. Nicholas J. DiCorleto, Jr., Finance Officer, Town of Ellington, c/o First Southwest Company, 628 Hebron Avenue, Suite 306, Glastonbury, Connecticut 06033.

Electronic Proposals Bidding Procedure. Electronic bids for the purchase of the Bonds must be submitted through the facilities of PARITY®. Any prospective bidder must be a subscriber of I-Deal’s Bidcomp competitive bidding system. Further information about PARITY®, including any fee charged, may be obtained from PARITY®, 1359 Broadway, 2nd Floor, New York, New York 10018, Attention: Customer Service Department (telephone: (212) 849-5021 - email notice: [email protected]). The Town neither will confirm any subscription nor be responsible for any failure of a prospective bidder to subscribe.

Once an electronic bid made through the facilities of PARITY® is communicated to the Town, it shall constitute an irrevocable offer, in response to this Notice, and shall be binding upon the bidder as if made by a signed, sealed bid delivered to the Town. By submitting a bid for the Bonds via PARITY®, the bidder represents and warrants to the Town that such bidder’s bid for the purchase of the Bonds is submitted for and on behalf of such prospective bidder by an officer or agent who is duly authorized to bind the prospective bidder by an irrevocable offer and that acceptance of such bid by the Town will bind the bidder by a legal, valid and enforceable contract, for the purchase of the Bonds on the terms described in this Notice. The Town shall not be responsible for any malfunction or mistake made by, or as a result of the use of the facilities of PARITY®, the use of such facilities being the sole risk of the prospective bidder.

Disclaimer - Each PARITY® prospective electronic bidder shall be solely responsible to make necessary arrangements to access PARITY® for the purposes of submitting its bid in a timely manner and in compliance with the requirements of this Notice of Sale. Neither the Town nor PARITY® shall have any duty or obligation to undertake such arrangements to bid for any prospective bidder or to provide or assure such access to any prospective bidder, and neither the Town nor PARITY® shall be responsible for a bidder's failure to make a bid or for proper operation of, or have any liability for any delays or interruptions of, or any damages caused by, PARITY®. The Town is using PARITY® as a communication mechanism, and not as the Town's agent, to conduct the electronic bidding for the Bonds. The Town is not bound by any advice and determination of PARITY® to the effect that any particular bid complies with the terms of this Notice of Sale and in particular the bid requirements herein set forth. -3-

All costs and expenses incurred by prospective bidders in connection with their subscription to, arrangements with and submission of bids via PARITY® are the sole responsibility of the bidders; and the Town is not responsible, directly or indirectly, for any such costs or expenses. If a prospective bidder encounters any difficulty in arranging to bid or submitting, modifying or withdrawing a bid for the Bonds, the prospective bidder should telephone PARITY® at (212) 849-5021. If any provision of this Notice shall conflict with information provided by PARITY®, this Notice of Sale shall control.

All electronic bids shall be deemed to incorporate the provisions of this Notice and the form of Proposal for Bonds.

Basis of Award. As between proposals which comply with this Notice, the Bonds will be sold to the responsible bidder offering to purchase the Bonds at the lowest true interest cost to the Town. For the purpose of determining the successful bidder, the true interest cost to the Town will be the annual interest rate, compounded semiannually, which, when used to discount all payments of principal and interest payable on the Bonds to September 15, 2013, the date of the Bonds, results in an amount equal to the purchase price for the Bonds, excluding interest accrued to the date of delivery. If there is more than one responsible bidder making said offer at the same lowest true interest cost, the Bonds will be sold to the responsible bidder whose proposal is selected by the Town by lot from among all such proposals. It is requested that each proposal be accompanied by a statement of the percentage of true interest cost completed to four decimal places. Such statement shall not be considered as part of the proposal.

The right is reserved to reject any and all proposals and to reject any proposal not complying with this Notice of Sale and to waive any irregularity or informality with respect to any proposal.

The Town further reserves the right to postpone the sale to another time and date in its sole discretion for any reason, including internet difficulties. the Town will use its best efforts to notify prospective bidders in a timely manner of any need for a postponement. If the sale is postponed, an alternative bid date will be published on Bloomberg at least 48 hours prior to such alternative bid date. Upon the establishment of an alternative bid date, any bidder may submit proposals for the purchase of the Bonds in accordance with the provisions of this Notice of Sale.

Certifying and Paying Agent. The Bonds will be authenticated by U.S. Bank National Association, Hartford, Connecticut. U.S. Bank National Association will act as Registrar and Paying Agent.

Delivery. At or prior to the delivery of the Bonds the successful bidder shall be furnished, without cost, with (a) the approving opinion of Day Pitney LLP of Hartford, Connecticut, Bond Counsel, substantially in the form set out in Appendix B to the Official Statement; (b) a signature and no litigation certificate, in form satisfactory to said firm, dated as of the date of delivery of the Bonds, and stating that there is no litigation pending, or to the knowledge of the signer or signers thereof threatened, affecting the validity of the Bonds or the power of the Town to levy and collect taxes to pay them; (c) a signed copy of the Official Statement prepared for this bond issue; (d) a certificate of Town Officials relating to the accuracy and completeness of the Official Statement; (e) a Continuing Disclosure Agreement; and (f) a receipt of payment for the Bonds. U.S. Bank National Association will keep the original opinion and certificates and copies of the supporting documents, which may be examined at its principal office in Hartford, Connecticut, upon reasonable notice.

Bond Counsel Opinion. The opinion of Bond Counsel will cover the following matters: (1) that the Bonds will be valid general obligations of the Town when duly certified; (2) that, assuming the accuracy of and compliance by the Town with its representations and covenants relating to certain requirements contained in the Internal Revenue Code of 1986, as amended, under existing statutes, interest on the Bonds is excluded from gross income for Federal income tax purposes pursuant to Section 103 of the Code; and the Bonds are not “private activity bonds” and interest on the Bonds is not treated as a preference item for purposes of calculating the Federal alternative minimum tax, but in the case of corporations a portion of such interest may be included in alternative minimum taxable income for purposes of computing any Federal alternative minimum tax; and the Bonds are "qualified tax-exempt obligations"; and (3) that, under existing statutes, interest on the Bonds is excluded from Connecticut taxable income for purposes of the Connecticut income tax on individuals, trusts and estates; and interest on the Bonds is excluded from amounts on which the net Connecticut minimum tax is based in the case of individuals, trusts and estates required to pay the Federal alternative minimum tax. -4-

Official Statement. The Town of Ellington has prepared a preliminary Official Statement for the Bond issue which is dated September 9, 2013. The Town deems such preliminary Official Statement final as of its date for purposes of SEC Rule 15c2-12(b)(1), but it is subject to revision or amendment. The Town will make available to the winning purchaser 100 copies of the Official Statement as prepared by the Town at the Town's expense. The copies of the Official Statement will be made available to the winning purchaser at the office of the Town's financial advisor, First Southwest Company, Glastonbury, Connecticut, by the delivery of the Bonds or by the seventh business day after the day bids on the Bonds are received if earlier. If the Town's financial advisor is provided with the necessary information from the winning purchaser by noon of the day following the day bids on the Bonds are received, the copies of the Official Statement will include an additional cover page and other pages indicating the interest rates, ratings, yields or reoffering prices, the name of the managing underwriter, the name of the insurer, if any, on the Bonds and any corrections. The purchaser shall arrange with the financial advisor the method of delivery of the copies of the Official Statement to the purchaser. Additional copies of the Official Statement may be obtained by the purchaser at its own expense by arrangement with the printer.

Continuing Disclosure Agreement. The Town will enter into a Continuing Disclosure Agreement with respect to the Bonds, substantially in the form attached as Appendix C to the Official Statement (the "Continuing Disclosure Agreement for Bonds"), to provide or cause to be provided, in accordance with the requirements of SEC Rule 15c2 12, (i) annual financial information and operating data, (ii) timely notice of the occurrence of certain material events with respect to the Bonds, and (iii) timely notice of a failure by the Town to provide the required annual financial information on or before the date specified in the Continuing Disclosure Agreement for Bonds. The winning bidder's obligation to purchase the Bonds shall be conditioned upon its receiving, at or prior to the delivery of the Bonds, an executed copy of the Continuing Disclosure Agreement for Bonds.

CUSIP Numbers. The deposit of the Bonds with DTC under a book-entry system requires the assignment of CUSIP numbers prior to delivery. It shall be the responsibility of the purchaser to apply for CUSIP numbers for the Bonds prior to delivery. Neither the failure to print such CUSIP number on any bond, nor any error with respect thereto, shall constitute cause for a failure or refusal by the purchaser thereof to accept delivery of and pay for the Bonds. All expenses in relation to the printing of CUSIP numbers on the Bonds shall be paid for by the Town; provided, however, that the Town assumes no responsibility for any CUSIP Service Bureau charge or other charge that may be imposed for the assignment of such numbers, which charges shall be the responsibility of and shall be paid for by the purchaser.

Reoffering Prices. IT SHALL BE THE RESPONSIBILITY OF THE PURCHASER TO FURNISH TO THE TOWN IN WRITING BEFORE THE DELIVERY OF THE BONDS THE REOFFERING PRICES AT WHICH A SUBSTANTIAL PORTION OF EACH MATURITY OF THE BONDS WERE SOLD.

Delivery Date and Payment. It is expected that the closing on the Bonds will occur on or about September 25, 2013 through the facilities of the Depository Trust Company, New York, New York, against payment in immediately available Federal funds.

More Information. For more information regarding this issue and the Town reference is made to the Official Statement. Proposal forms and copies of the Official Statement may be obtained from Ms. Janette J. Marcoux, Senior Vice President, First Southwest Company, 628 Hebron Avenue, Suite 306, Glastonbury, Connecticut 06033 (telephone: (860) 290-3003) or from Mr. Nicholas J. DiCorleto, Jr., Finance Officer, Town of Ellington, Town Hall, 55 Main Street, Ellington, Connecticut 06029 (telephone: (860) 870-3115).

MAURICE W. BLANCHETTE, NICHOLAS J. DICORLETO,JR., First Selectman Finance Officer

September 9, 2013 PROPOSAL FOR BONDS

September 17, 2013

Mr. Nicholas J. DiCorleto, Jr. Finance Officer Town of Ellington c/o First Southwest Company 628 Hebron Avenue, Suite 306 Glastonbury, Connecticut 06033

Subject to the provisions and in accordance with the terms of the annexed Notice of Sale dated September 9, 2013 which is hereby made a part of this proposal, we hereby offer to purchase all of the aggregate principal amount of $4,205,000 General Obligation Bonds, Issue of 2013, of the Town of Ellington described in said Notice of Sale, and to pay therefor the price of par plus a premium of $______plus interest accrued on said Bonds to the date of their delivery, provided that the Bonds maturing in the several years set forth below shall bear interest from their date until maturity at the respective rates per annum stated in the following table:

Year of Interest Year of Interest Maturity Amount Rate Maturity Amount Rate 2014 $220,000 _____% 2024 $205,000 _____% 2015 $220,000 _____% 2025 $205,000 _____% 2016 $220,000 _____% 2026 $205,000 _____% 2017 $220,000 _____% 2027 $205,000 _____% 2018 $220,000 _____% 2028 $205,000 _____% 2019 $220,000 _____% 2029 $205,000 _____% 2020 $215,000 _____% 2030 $205,000 _____% 2021 $215,000 _____% 2031 $205,000 _____% 2022 $210,000 _____% 2032 $200,000 _____% 2023 $205,000 _____% 2033 $200,000 _____%

We acknowledge receipt of the Official Statement referred to in the Notice of Sale.

Name of Bidder:

Address of Bidder:

Signature of Officer or Authorized Agent of Bidder:

Telephone Number:

The following is our computation of the percentage of true interest cost, made as provided in the above mentioned Notice of Sale, and certain other information, which is not part of the foregoing proposal.

Percent of True Interest Cost % (four decimals)

Gross Interest $ Accrued Interest from September 15, 2013 to September 25, 2013 $

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