Township of Lakewood in the County of Ocean, New Jersey

This is a Preliminary Official Statement and the information contained herein is subject to completion, amendment or other change without notice. The securities described herein may not be sold nor may offers to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the applicable securities laws of any such jurisdiction. * Preliminary, subjecttochange. Dated:______, 2012 form, willbeavailablefordeliveryon orabout August 22,2012. passed upon by the Township by the Township Attorney, Lawrence E. Bathgate, II, Esquire, Lakewood, New Jersey. It is expected that the Bonds, in definitive GluckWalrathby legality of approval to LLP, Trenton,Jersey,New be will matters legal Certain herein. described conditions other certain and Counsel, Bond INFORMED INVESTMENT DECISION. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN or amount,forsuchpurposes. power of the Township is available, and all the taxable real property within the Township is subject to the levy of (the “Taxable Bonds Record Dates” for the payment of interest on the Taxable Bonds). The Bonds are not subject to redemption prior to their stated maturities. Interest on the Taxable Bonds will be credited to the participants of DTC as listed on the records of DTC as of each next preceding March 15 and September 15 records of DTC as of each next preceding January 1 and July 1 (the “Tax-Exempt Bonds Record Dates” for the payment of interest on the Tax-Exempt Bonds). made by the Township directly to DTC or its nominee, Cede & Co. Interest on the Tax-Exempt Bonds will be credited to the participants of DTC as year listed until on maturity.the As long as DTC or its nominee, Cede & Co., each in is 1 and the April 1 registered October owner on of thereafter the semiannually and Bonds, 2012 payment 1, of October the on principal payable Taxablethe is and on Bonds interest below.Interest on forth set the years Bonds the will of be each in 1 on April payable Taxableis the Bonds of Principal maturity. until year each in 15 January and 15 July on thereafter semiannually and 2013 15, January receive certificatesrepresentingtheirbeneficialownershipinterestsintheBonds. any integral multiple thereof through book-entries made on the books and the records of DTC and its participants. Individual purchasers of the Bonds will not or $5,000 of amount principal the in made be may series each or Bonds the of purchases Individual herein). System” Only Entry Book – BONDS “THE (see made directly to Cede & Co., which is to remit such payments to DTC participants, which in turn is to remit such payments be to to are series be such of beneficialBonds the ownerson interest ofand of theprincipal the Bonds of payments Bonds, the of owner registered the is Co., & Cede nominee its or DTC, as long Depository of TrustThe New (“DTC”), Company York, New York, So DTC. Depository. with Securities deposit as on act be will will which certificates The certificate for the aggregate principal amount ofone eachof maturityform ofthe eachin seriesseries ofeach of Bondsof andBonds when“Bonds”) registered issuedfully willas the beissued registeredbe “Township”) inwill Bonds, (the theTax-Exempt Jersey nameNew of the Ocean, Cedeof &County Co.,with the asin nominee Lakewood, together Townshipthe of and Bonds” “Taxable (the 2012 Series Taxable Bonds, Refunding Pension $940,000* and Bonds”) Dated: DateofDelivery on theBonds. Income Tax Act. See“TAX MATTERS” herein foradescriptionofcertainotherprovisions oftheCodethatmayaffectfederaltaxtreatment ofinterest date oforiginaldeliverytheBonds,interest ontheBondsandanygainfrom thesalethereof isexcludablefrom gross incomeundertheNewJerseyGross retroactively ifcertainrequirements undertheCodeare notcompliedwith.UnderthelawsofStateNewJersey, asenactedandconstruedonthe the purposesofcomputingalternativeminimumtaxonsuchcorporations.However, interest ontheTax-Exempt Bondsmaybecometaxable 57 oftheCodeforindividualsorcorporations.Interest ontheTax-Exempt Bondsisincludedintheadjustedcurrent earningsofcertaincorporationsfor Bonds willbeexcludablefrom gross incomeforfederaltaxpurposesandwillnotbetreated asataxpreference itemforpurposesunderSection regulations, rulingsandjudicialdecisionsexistingonthedateoforiginaldeliveryTax-Exempt Bonds,interest received byholdersoftheTax-Exempt as amended(the“Code”),applicabletotheTax-Exempt Bondsandsubjecttocertainprovisions oftheCodewhichare describedherein, underlaws, BOOK-ENTRY ONLY NEW ISSUE The Bonds are offered when, as and if received by the Underwriter and subject to prior sale, withdrawal or modification of the offer without notice, and notice, without offer the of modification or withdrawal sale, prior to subject and Underwriter the by received if and as when, offered are Bonds The THIS COVERPAGE CONTAINS CERTAININFORMATION ONLY. FORQUICKREFERENCE IT ISNOT A SUMMARY OF THIS ISSUE. taxing and credit faith, full the which on interest and of principal the of payment the Townshipthe for of obligations general constitute will Bonds The on payable is Bonds Tax-Exempt the on Interest below. forth set years the of each in 15 January on payable is Bonds Tax-Exempt the of Principal The $8,595,000* General Obligation Refunding Bonds, consisting of $7,655,000* General Improvement Refunding Bonds, Series 2012 (the “Tax-Exempt In the opinion of GluckWalrath LLP, Bond Counsel assuming continuing compliance with the provisions of the Internal Revenue Code of 1986, $7,655,000* GENERAL IMPROVEMENT REFUNDINGBONDS,SERIES2012 $940,000* PENSIONREFUNDINGBONDS, TAXABLE SERIES2012 $8,595,000* GENERAL OBLIGATION REFUNDINGBONDS PRELIMINARY OFFICIAL STATEMENT DATED JULY 25,2012 IN THE COUNTY OF OCEAN,NEW JERSEY TOWNSHIP OF LAKEWOOD (Book Entry-Only)(Non-Callable) NOT BANKQUALIFIED consisting of AND ad valorem Due: Shownontheinsidefrom cover taxes, without limitation as to rate (See“RATING” herein) RATING: S&P A+

AMOUNTS, MATURITIES, INTEREST RATES AND PRICES OR YIELDS

TAX-EXEMPT BONDS

(01/15) Interest Year Amount* Rate Price/Yield 2013 $ 800,000 2014 790,000 2015 1,515,000 2016 1,570,000 2017 695,000 2018 725,000 2019 760,000 2020 800,000

TAXABLE BONDS

(04/01) Interest Year Amount* Rate Price/Yield 2013 $20,000 2014 90,000 2015 100,000 2016 110,000 2017 125,000 2018 135,000 2019 150,000 2020 160,000 2021 50,000

______* Preliminary, subject to change.

TOWNSHIP OF LAKEWOOD IN THE COUNTY OF OCEAN, NEW JERSEY

MAYOR

Menashe Miller

COMMITTEE MEMBERS

Steven Langert Raymond G. Coles Meir Lichtenstein Albert Ackerman

MANAGER

Michael Muscillo

CHIEF FINANCIAL OFFICER

William C. Rieker

CLERK

Mary Ann Del Mastro

TOWNSHIP ATTORNEY

Lawrence E. Bathgate, II, Esquire

INDEPENDENT ACCOUNTANTS

Holman & Frenia, P.C. Medford, New Jersey

BOND COUNSEL

GluckWalrath LLP Trenton, New Jersey No dealer, broker, salesperson or other person has been authorized by the Township to give any information or to make any representations with respect to the Bonds other than those contained in this Official Statement and, if given or made, such information or representations must not be relied upon as having been authorized by the foregoing. The information contained herein has been derived from the Township and other sources deemed reliable; however, no representation or warranty is made as to its accuracy or completeness and it is not to be construed as a representation as to information from sources other than itself, by the Township. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Township since the date hereof.

References in this Official Statement to laws, rules, regulations, resolutions, agreements, reports and other documents do not purport to be comprehensive or definitive. All references to such documents are qualified in their entirety by references to the particular document, the full text of which may contain qualifications of and exceptions to statements made herein, and copies of which may be obtained from the Township during normal business hours.

Upon issuance, the Bonds will not be registered under the Securities Act of 1933 as amended, will not be listed on any stock or other securities exchange and neither the Securities and Exchange Commission nor any other federal, state, municipal or other governmental entity, other than the Township, will have passed upon the accuracy or adequacy of the Official Statement.

The order and placement of materials in the Official Statement, including the Appendices, are not to be deemed to be a determination of relevance, materiality or importance and the Official Statement, including the Appendices, must be considered in its entirety.

The Underwriter has reviewed the information in this Official Statement pursuant to its responsibilities to investors under the federal securities laws, but the Underwriter does not guarantee the accuracy or completeness of such information.

TABLE OF CONTENTS

Page

INTRODUCTION ...... 1

THE BONDS ...... 1 General Description ...... 1 Denominations and Place of Payment ...... 1 Book-Entry-Only System...... 2 Redemption...... 4

AUTHORIZATION AND USE OF PROCEEDS...... 4

ESTIMATED SOURCES AND USES ...... 5

SECURITY FOR THE BONDS...... 6

PROVISIONS FOR THE PROTECTION OF GENERAL OBLIGATION DEBT...... 6 Local Bond Law (N.J.S.A. 40A:2-1 et seq.)...... 6 Debt Limits ...... 6 Exceptions to Debt Limits - Extensions of Credit ...... 6 Short Term Financing ...... 7 Tax Anticipation Notes (N.J.S.A. 40A:4-64 et seq.) ...... 7 School Debt Subject to Voter Approval ...... 7 Property Tax Reform ...... 7

BUDGET AND ANNUAL AUDIT REQUIREMENTS AND INFORMATION...... 7 The Local Budget Law (N.J.S.A. 40A:4-1 et seq.)...... 7 Tax Levy Cap (N.J.S.A. 40A:4-45.44, et seq.)...... 8 Appropriation "CAP"...... 9 Miscellaneous Revenues...... 9 Reserve for Uncollected Taxes ...... 10 Deferral of Current Expenses...... 10 Budget Transfers...... 10 Operation of Utilities ...... 10 Capital Budget ...... 11 Annual Financial Statement...... 11 Annual Audit Requirement...... 11

TAX MATTERS...... 11 Tax-Exempt Bonds ...... 11 Taxable Bonds ...... 13 Interest Income ...... 13 Backup Withholding...... 13 State Taxation ...... 14

LEGALITY FOR INVESTMENT ...... 14

CONTINUING DISCLOSURE...... 14

LITIGATION...... 14

MUNICIPAL BANKRUPTCY ...... 15

CERTAIN REFERENCES ...... 15

CERTIFICATION OF OFFICIAL STATEMENT ...... 16

RATING ...... 16

UNDERWRITING ...... 16

VERIFICATION...... 17

APPROVAL OF LEGAL PROCEEDINGS...... 17

ADDITIONAL INFORMATION...... 17

MISCELLANEOUS ...... 17

APPENDIX A – GENERAL INFORMATION REGARDING THE TOWNSHIP APPENDIX B – INDEPENDENT AUDITOR’S REPORT APPENDIX C – FORM OF CONTINUING DISCLOSURE CERTIFICATE APPENDIX D – FORMS OF BOND COUNSEL’S OPINIONS

OFFICIAL STATEMENT of the TOWNSHIP OF LAKEWOOD, County of Ocean, New Jersey Relating to $8,595,000 * GENERAL OBLIGATION REFUNDING BONDS consisting of $7,655,000* GENERAL IMPROVEMENT REFUNDING BONDS, SERIES 2012 AND $940,000* PENSION REFUNDING BONDS, TAXABLE SERIES 2012

INTRODUCTION

This Official Statement, which includes the cover page and the appendices attached hereto, has been prepared by the Township of Lakewood (the "Township"), in the County of Ocean (the "County"), New Jersey (the "State") in connection with the sale and issuance of $8,595,000* General Obligation Refunding Bonds, consisting of $7,655,000 * General Improvement Refunding Bonds, Series 2012 (the "Tax-Exempt Bonds") and $940,000* Pension Refunding Bonds, Taxable Series 2012 (the "Taxable Bonds" and together with the Tax-Exempt Bonds, the "Bonds"). THE BONDS General Description

The Bonds will be dated their date of delivery and will mature serially as shown on the cover hereof. Principal of the Tax-Exempt Bonds is payable on January 15 in each of the years set forth below. Interest on the Tax-Exempt Bonds is payable on January 15, 2013 and semiannually thereafter on July 15 and January 15 in each year until maturity. Principal of the Taxable Bonds is payable on April 1 in each of the years set forth below. Interest on the Taxable Bonds is payable on October 1, 2012 and semiannually thereafter on October 1 and April 1 in each year until maturity.

The Bonds are general obligations of the Township and are secured by a pledge of the full faith and credit of the Township for the payment of the principal thereof and interest thereon. The Township is obligated to levy ad valorem taxes upon all of the taxable property within the Township for the payment of principal of and interest on the Bonds without limitation as to rate or amount. Denominations and Place of Payment

The Bonds will be initially issued in book-entry form only in the form of one certificate for the aggregate principal amount of the Bonds of each series maturing in each year and, when issued, will be registered in the name of and held by Cede & Co., as registered owner and nominee for the Depository Trust Company, New York, New York (“DTC”), which has been appointed to act as securities depository for the Bonds. As long as DTC or its nominee, Cede & Co., is the registered owner of the Bonds, payment of the principal and interest on the Bonds will be made by the Township directly to DTC or its nominee, Cede & Co. Interest on the Tax-Exempt Bonds will be credited to the participants of DTC as listed on the records of DTC as of each next preceding January 1 and July 1 (the "Tax-Exempt Bonds Record Dates" for the payment of interest on the Tax-Exempt Bonds). Interest on the Taxable Bonds will be credited to the participants of DTC as listed on the records of DTC as of each next preceding March 15 and September

*Preliminary, subject to change.

15 (the "Taxable Bonds Record Dates" for the payment of interest on the Taxable Bonds). See “Book- Entry-Only System” herein. Book-Entry-Only System

DTC will act as securities depository for the Bonds. One fully registered bond certificate will be issued in the aggregate principal amount of the Bonds of each series. The Bonds of each series will be registered in the name of Cede & Co. (DTC’s partnership nominee) 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 Direct and Indirect Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com .

Purchases of the 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 Note (“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, however, Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of the 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 only 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 nominee 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. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The 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 the 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 the Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners, or 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 within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds. Under its usual procedures, DTC mails an omnibus proxy (the “Omnibus Proxy”) to the Township 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, redemption premium, if any, and interest payments on the Bonds will be made to DTC. DTC's practice is to credit Direct Participants' accounts on the payment date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on the payment date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name”, and will be the responsibility of such Participant and not of DTC, the Paying Agent, or the Township, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, redemption premium, if any, and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Township or the Paying Agent, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payment to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the Township and discharging its responsibilities with respect thereto under applicable law, or the Township may terminate its participation in the system of book-entry transfer through DTC at any time by giving notice to DTC. In either event, the Township may retain another securities depository for the Bonds or deliver Note certificates in accordance with instructions from DTC or its successors.

The Township will recognize DTC or its nominee as the Bondholder for all purposes, including notices and voting, and so long as a book-entry-only system is used, will send any notice of redemption or other notices to Bondholders only to DTC. Any failure of DTC to advise any DTC Participants or of any DTC Participant to notify the Beneficial Owner, of any such notice and its content or effect will not affect the validity of the redemption of the Bonds called for redemption or of any other action premised on such notice.

The Township cannot and does not give any assurance that DTC will distribute payments of debt service to DTC Participants or that the DTC Participants or others will distribute payments of debt service on the Bonds paid to DTC or its nominee, as the registered owner thereof, or any redemption or other

notices, to the Beneficial Owners, or that they will do so on a timely basis or that DTC will serve and act in a manner described in this Official Statement.

The information in this section concerning DTC and DTC’s book-entry-only system is based upon information obtained from DTC. The Township believes the information to be reliable but assumes no responsibility as to accuracy, sufficiency, or completeness thereof.

UNLESS OTHERWISE NOTED, THE INFORMATION CONTAINED IN THE PRECEDING PARAGRAPHS OF THIS SUBSECTION "BOOK-ENTRY-ONLY SYSTEM" HAS BEEN OBTAINED FROM SOURCES THE TOWNSHIP BELIEVES TO BE RELIABLE, BUT THE TOWNSHIP TAKES NO RESPONSIBILITY FOR THE ACCURACY THEREOF. THE TOWNSHIP MAKES NO REPRESENTATIONS AS TO THE COMPLETENESS OR THE ACCURACY OF SUCH INFORMATION, NOR AS TO THE ABSENCE OF ADVERSE CHANGES IN SUCH INFORMATION SUBSEQUENT TO THE DATE HEREOF. THE TOWNSHIP WILL NOT HAVE ANY RESPONSIBILITY OR OBLIGATION TO DTC PARTICIPANTS OR TO ANY BENEFICIAL OWNER WITH RESPECT TO (I) THE ACCURACY OF ANY RECORDS MAINTAINED BY ANY DTC PARTICIPANT; (II) ANY NOTICE (INCLUDING ANY NOTICE OF REDEMPTION) THAT IS PERMITTED OR REQUIRED TO BE GIVEN TO BOND OWNERS; (III) THE PAYMENT BY DTC OR ANY DTC PARTICIPANT OF ANY AMOUNT WITH RESPECT TO THE PRINCIPAL, PREMIUM (IF ANY) OR INTEREST DUE ON THE BONDS; (IV) THE SELECTION BY DTC OR DTC PARTICIPANTS OF ANY PERSON TO RECEIVE A PAYMENT IN THE EVENT OF A PARTIAL REDEMPTION OF THE BONDS; OR (V) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY CEDE & CO., AS NOMINEE OF DTC, AND THE REGISTERED OWNER OF THE BONDS. THE RULES APPLICABLE TO DTC ARE ON FILE WITH THE SECURITIES AND EXCHANGE COMMISSION AND THE PROCEDURES OF DTC TO BE FOLLOWED IN DEALING WITH DTC PARTICIPANTS ARE ON FILE WITH DTC. Redemption

The Bonds are not subject to redemption prior to their stated maturities.

AUTHORIZATION AND USE OF PROCEEDS

The Bonds have been authorized and are being issued pursuant to N.J.S.A. 40A:2-51 et seq. of the Local Bond Law, Chapter 169 of the Laws of 1960 of the State of New Jersey, as amended and supplemented (the "Local Bond Law"). The Bonds are authorized by a refunding bond ordinance adopted by the Township Committee on February 2, 2012 (the "Refunding Bond Ordinance") and by a resolution adopted by the Township Committee on March 29, 2012 (the "Resolution"). The issuance of the Bonds has received approval from the Local Finance Board, Division of Local Government Services in the Department of Community Affairs (the “Local Finance Board”), by resolutions adopted February 8, 2012.

The Refunding Bond Ordinance providing for the sale of the Bonds was published on February 6, 2012, after adoption along with the statement as required by the Local Bond Law that the twenty-day period of limitation within which a suit, action or proceeding questioning the validity of the authorizing refunding bond ordinance can be commenced, began to run from the date of the first publication of such estoppel statement. The Local Bond Law provides that, after issuance, all obligations shall be conclusively presumed to be fully authorized and issued by all laws of the State, and any person shall be estopped from questioning the sale, execution or delivery of the Bonds by the Township.

The Bonds are issued to (i) effectuate the refunding of the Township's (a) General Improvement Bonds, Series 2002, dated October 1, 2002 currently outstanding in the total principal amount of $3,395,000, maturing on October 1 in the years 2013 through and including 2016 (the "2002 Bonds"); (b)

Pension Obligation Refunding Bonds, Series 2003 (Federally Taxable), dated April 1, 2003 currently outstanding in the total principal amount of $875,000, maturing on April 1 in the years 2014 through and including 2021 (the "2003 Bonds"); and (c) General Improvement Bonds, Series 2005, dated May 1, 2005 currently outstanding in the total principal amount of $4,535,000, maturing on January 1 in the years 2015 through and including 2020 (the "2005 Bonds", and together with the 2002 Bonds and the 2003 Bonds, the "Refunded Bonds" on the dates fixed for redemption (October 1, 2012 with respect to the 2002 Bonds, the "2002 Bonds Redemption Date", April 1, 2013 with respect to the 2003 Bonds, the "2003 Bonds Redemption Date" and January 15, 2014 with respect to the 2005 Bonds, the "2005 Bonds Redemption Date", collectively, the "Redemption Dates") at the option of the Township at a redemption price of 100% of the principal amount of the Refunded Bonds to be redeemed, plus interest accrued to the Redemption Dates; and (ii) pay certain costs incurred in connection with the issuance of the Bonds.

Pursuant to an Escrow Deposit Agreement (the "Escrow Deposit Agreement") dated the date of issuance of the Bonds, between the Township and TD Bank, National Association, Cherry Hill, New Jersey (the "Escrow Agent"), the Township will irrevocably deposit direct non-callable obligations of, or obligations, the principal of and interest on which are unconditionally guaranteed by the United States of America ("Government Obligations") with the Escrow Agent, which Government Obligations will bear interest at such rates and will mature at such times and in such amounts so that, when paid in accordance with their terms, sufficient moneys will be available to make full and timely payments of the principal of or redemption price of and interest on the Refunded Bonds .

The mathematical calculations of adequacy of the deposit to provide for payment of the Refunded Bonds will be verified by Holman & Frenia, P.C., Medford, New Jersey, at the time of delivery of the Bonds. All moneys and Government Obligations deposited for the payment of the Refunded Bonds, including interest thereon, are pledged solely and irrevocably for the benefit of the holders of the Refunded Bonds.

ESTIMATED SOURCES AND USES Tax-Exempt Bonds Taxable Bonds

Sources of Funds Bond Proceeds: Par Amount $ $ Net Original Issue Premium/Discount

Total Sources of Funds $ $

Uses of Funds Deposit to Escrow Fund $ $ Delivery Date Expenses: Costs of Issuance (1) Underwriter's Discount

Total Uses of Funds $ $

(1) Includes, inter alia, underwriter’s discount, credit rating, municipal bond insurance, if any, legal, financial, accounting, printing and fiduciary fees and other expenses incurred in connection with the issuance of the Bonds.

SECURITY FOR THE BONDS

The Bonds are general obligations of the Township, and the Township has pledged its full faith and credit for the payment of the principal, redemption premium, if any, and the interest on the Bonds. The Township is required by law to levy ad valorem taxes on all taxable real property in the Township for the payment of the principal, redemption premium, if any, of and the interest on the Bonds, without limitation as to rate or amount.

The Township may pledge only its own credit and taxing power in respect of the Bonds, and has no power to pledge the credit or taxing power of the State of New Jersey (the "State") or any other political subdivision thereof, nor shall the Bonds be deemed to be obligations of said state or any other political subdivision thereof, nor shall said state or any other political subdivision thereof be liable for the payment of principal of or interest on the Bonds. PROVISIONS FOR THE PROTECTION OF GENERAL OBLIGATION DEBT Local Bond Law (N.J.S.A. 40A:2-1 et seq.)

The Local Bond Law governs the issuance of bonds and notes to finance certain general municipal and utility capital expenditures. Among its provisions are requirements that Bonds must mature within the statutory period of usefulness of the projects bonded and that Bonds be retired in serial installments, with no annual principal payment greater than 100% of the smallest amount of any prior year’s principal amount. A 5% cash down payment is generally required toward the financing of expenditures for municipal purposes. All bonds and notes issued by the Township are general full faith and credit obligations. Debt Limits

The authorized bonded indebtedness of the Township is limited by statute, subject to the exceptions noted below, to an amount equal to 3 ½% of its average equalized valuation basis. The equalized valuation basis of a municipality is set by statute as the average for the last three preceding years of the equalized value of all taxable real property and improvements and certain Class 11 railroad property within its boundaries, as determined annually by the State Director of Taxation. Certain categories of debt, which include the portion of school debt within a Township’s debt limitation and the self-liquidating portion of a utility’s debt, are permitted by statute to be deducted for purposes of computing the statutory debt limit. Exceptions to Debt Limits - Extensions of Credit

The Township may exceed its debt limit with the approval of the Local Finance Board, a State regulatory agency, and as permitted by other statutory exceptions. If all or any part of a proposed debt authorization would exceed its debt limit, the Township may apply to the Local Finance Board for an extension of credit. If the Local Finance Board determines that a proposed debt authorization would not materially impair the credit of the Township or substantially reduce the ability of the Township to meet its obligations or to provide essential public improvements and services, or makes certain other statutory determinations, approval is granted. In addition, debt in excess of the statutory limit may be issued by the Township, without approval of the Local Finance Board, to fund certain notes, to provide for self- liquidating purposes, and, in each fiscal year, to provide for purposes in an amount not exceeding 2/3 of the amount budgeted in such fiscal year for the retirement of outstanding obligations (exclusive of utility and assessment obligations).

Short Term Financing

The Township may sell short-term “bond anticipation notes” to temporarily finance a capital improvement or project in anticipation of the issuance of Bonds, if the bond ordinance or subsequent resolution so provides. Bond anticipation notes for capital improvements may be issued in an aggregate amount not exceeding the amount specified in the ordinance, as may be amended and supplemented, creating such capital expenditure. A local unit’s bond anticipation notes may be issued for one year periods, with the last date of issuance not to exceed ten years and four months from the original issuance date. Beginning in the third year, the amount of notes that may be issued is decreased by the minimum amount required for the first year’s principal payment for a bond. Tax Anticipation Notes (N.J.S.A. 40A:4-64 et seq.)

The issuance of tax anticipation notes is limited in amount by law to, collectively, 30% of the tax levy plus 30% of realized miscellaneous revenues of the next preceding fiscal year, and must be paid in full within 120 days after the close of the fiscal year which they were issued. School Debt Subject to Voter Approval

State law permits local school districts, upon approval of the voters in a Type II school district, to authorize school district debt, including debt in excess of its independent debt limitation by using the available borrowing capacity of the Township. If such debt is in excess of the school district’s debt limit and the remaining borrowing capacity of the Township, the State Commissioner of Education and the Local Finance Board must approve the proposed debt authorization before it is submitted to the voters for approval. Property Tax Reform

In recent years, the New Jersey Legislature has considered various proposals to lessen the dependence of local governments on property taxes and to find alternative means to fund vital governmental services.

In November, 2006, the voters approved a constitutional amendment which dedicated the annual revenue derived from ½% of the 7% State sales tax for the purpose of property tax reform. In 2006, the Legislature also created four joint legislative committees to review and formulate proposals that address (i) public school funding reform, (ii) government consolidation and shared services, (iii) public employee benefits reform and (iv) property tax reform (including through amendments to the State Constitution), and Governor Corzine also introduced a Blueprint for Property Tax Relief and Reform, calling for legislative consideration of a number of proposals, including a 4% cap in the annual increase in property tax bills.

Any legislation or constitutional amendments which alter the existing system of real property taxation in New Jersey may adversely affect the security and/or market value of bonds, notes and other obligations of counties and municipalities (such as the Township). BUDGET AND ANNUAL AUDIT REQUIREMENTS AND INFORMATION The Local Budget Law (N.J.S.A. 40A:4-1 et seq.)

The foundation of the New Jersey local finance system is the annual cash basis budget. Every local unit must adopt an operating budget in the form required by the Division of Local Government Services, Department of Community Affairs, State of New Jersey. No Municipal Budget may be adopted

without approval of the Director of the Division of Local Government Services (the “Director”). The Director approves the budget once he has determined that the budget meets all the requirements of the Local Budget Law, and all the regulations of the Local Finance Board.

Tax anticipation notes are limited in amount by law and must be paid off in full by a municipality within 120 days of the close of the fiscal year. The Director has no authority over individual operating appropriations, unless a specific amount is required by law, but the review functions focusing on anticipated revenues serve to protect the solvency of all local units.

The Local Budget Law imposes various restrictions on the formulation of the Municipal Budget, the more important of which pertain to anticipation of revenues and review of adequacy of appropriation. Among other restrictions, the Local Budget Law requires that the budget be balanced and that the Director examine the budget with reference to all estimates of revenue and the following appropriations: a) payment of interest and debt redemption charges; b) deferred charges and statutory expenditures; c) cash deficit of preceding year; d) reserve for uncollected taxes; e) other reserves and non-disbursement items. In establishing the total tax levy the ratio of anticipated tax revenues to the total levy may not exceed the same proportion as actual cash collections bore to the total levy in the previous year and a reserve amount must be factored into the budget to insulate against a shortfall in actual collections. Anticipated non-tax revenues are limited to the amount actually realized in cash the previous year unless the Director certifies a higher figure. Tax Levy Cap (N.J.S.A. 40A:4-45.44, et seq.)

Chapter 62 of P.L. 2008 imposes limitations on increases in the tax levies of municipalities, counties, and fire districts subject to various exclusions. Beginning with the preparation of Fiscal 2008 budgets the amount to be raised by taxation by a local unit shall not exceed the sum of new ratables, the adjusted tax levy, and the total of waivers approved by the Local Finance Board pursuant to section 11 of P.L. 2008, c.62 (C.40A:4-45.46). “New Ratables” means the product of the taxable value of any new construction or improvements times the tax rate of the local unit for its previous tax year. “Adjusted tax levy” means an amount not greater than the amount to be raised by taxation of the previous fiscal year, less any waivers from a prior fiscal year multiplied by 1.04, to which the sum of exclusions defined in subsection b. of section 10 of P.L. 2008, c.62 (C:40A:4-45.45) shall be added. Exclusions pursuant to this section are: (1) increases in amounts required to be raised for (a) all debt service and (b) lease payments with county improvement authorities in effect at the time of the passing of the legislation; (2) increases in amounts required to be raised to replace State formula aid due to a reduction in State formula aid from the previous local budget year; (3) increases in amounts for certain pension contributions set forth in section 5 of P.L. 2003, c.108 (C.40A:4-45.43) for the years set forth in that section; (4) any increase greater than four percent in the reserve for uncollected taxes that is required by law; (5) increases in health care costs equal to that portion of the actual increase in total health care costs for the budget year that is in excess of four percent of the total health care costs in the prior year, but is not in excess of the product of the total health care costs in the prior year and the average percentage increase of the State Health Benefits Program as annually determined by the Division of Pensions and Benefits in the Department of the Treasury: (6) Notwithstanding the above provisions, when the appropriation for all debt service is less than the amount appropriated for all debt service in the prior fiscal year, the amount of the difference shall be deducted from the sum of the exclusions listed above as (1) through (5) . If there are no exclusions, then the amount of the difference shall reduce the adjusted tax levy by that amount. Any cancelled or unexpended appropriations for any exclusion pursuant to this subsection or waiver , also shall be deducted from the sum of the exclusions listed above as (1) through (5) or directly reduce the adjusted tax levy if there are no exclusions. The Tax Levy Cap does not limit the obligations of the Township to levy ad valorem taxes upon all taxable real property within the Township to pay debt service on the Bonds.

Appropriation "CAP" A provision of law known as the New Jersey "Cap Law" (N.J.S.A. 40A:4-45.1 et seq.) imposes limitations on increases in municipal appropriations subject to various exceptions. The payment of debt service is an exception from this limitation. The Cap formula is somewhat complex, but basically, it permits a municipality to increase its overall appropriations by the lesser of 2.5% or the “Index Rate” if the index rate is greater than 2.5%. The “Index Rate” is the rate of annual percentage increase, rounded to the nearest one-half percent, in the Implicit Price Deflator for State and Local Government purchases of goods and services computed by the U.S. Department of Commerce. Exceptions to the limitations imposed by the Cap Law also exist for other things including capital expenditures; extraordinary expenses approved by the Local Finance Board for implementation of an interlocal services agreement; expenditures mandated as a result of certain emergencies; and certain expenditures for services mandated by law. Counties are also prohibited from increasing their tax levies by more than the lesser of 2.5% or the Index Rate subject to certain exceptions. Municipalities by ordinance approved by a majority of the full membership of the governing body may increase appropriations up to 3.5% over the prior year’s appropriation and counties by resolution approved by a majority of the full membership of the governing body may increase the tax levy up to 3.5% over the prior years’ tax levy in years when the Index Rate is 2.4% or less.

Additionally, new legislation constituting P.L. 2010, c. 44, effective July 13, 2010, imposes a two percent (2%) cap on the tax levy of a municipality, county, fire district or solid waste collection district, with certain exceptions and subject to a number of adjustments. The exclusions from the limit include increases required to be raised for capital expenditures, including debt service, increases in pension contributions in excess of 2%, certain increases in health care over 2%, and extraordinary costs incurred by a local unit directly related to a declared emergency. The governing body of a local unit may request approval, through a public question submitted to the legal voters residing in its territory, to increase the amount to be raised by taxation, and voters may approve increases above 2% not otherwise permitted under the law by an affirmative vote of 50%.

The Division has advised that counties and municipalities must comply with both budget "CAP" and the tax levy limitation. Neither the tax levy limitation nor the "CAP" law, however, limits the obligation of the Township to levy ad valorem taxes upon all taxable property within the boundaries of the Township to pay debt service on bonds and notes.

In accordance with the Local Budget Law, each local unit must adopt and may from time to time amend rules and regulations for capital budgets, which rules and regulations must require a statement of capital undertakings underway or projected for a period not greater than over the next ensuing six years as a general improvement program. The capital budget, when adopted, does not constitute the approval or appropriation of funds, but sets forth a plan of the possible capital expenditures which the local unit may contemplate over the next six years. Expenditures for capital purposes may be made either by ordinances adopted by the governing body setting forth the items and the method of financing or from the annual operating budget if the terms were detailed. Miscellaneous Revenues

N.J.S.A. 40A:4-26 provides that no miscellaneous revenues from any source shall be included as an anticipated revenue in the budget in an amount in excess of the amount actually realized in cash from the same source during the next preceding fiscal year, unless the Director shall determine upon application by the governing body that the facts clearly warrant the expectation that such excess amount will actually be realized in cash during the fiscal year and shall certify such determination, in writing, to the local unit.

No budget or amendment thereof shall be adopted unless the Director shall have previously certified his approval thereof with the exception of inclusion of categorical grants-in-aid contracts for their face amount with an offsetting appropriation. The fiscal years for such grants rarely coincide with the municipality’s calendar fiscal year. Reserve for Uncollected Taxes

The same general principle that revenue cannot be anticipated in a budget in excess of that realized in the preceding year applies to delinquent property taxes. N.J.S.A. 40A:4-29 delineates anticipation of delinquent tax collections. The maximum which may be anticipated is the sum produced by the multiplication of the amount of delinquent taxes unpaid and owing to the local unit on the first day of the current fiscal year by the percentage of collection of delinquent taxes for the year immediately preceding the current fiscal year.

N.J.S.A. 40A:4-41 provides with regard to current taxes that receipts from the collection of taxes levied or to be levied in the municipality, or in the case of a county for general county purposes and payable in the fiscal year shall be anticipated in an amount which is not in excess of the percentage of taxes levied and payable during the next preceding fiscal year which was received in cash by the last day of the preceding fiscal year. The law requires that an additional amount (the “reserve for uncollected taxes”) be added to the tax levy required to balance the budget so that when the percentage of the prior year’s tax collection is applied to the combined total, the product will at least be equal to the tax levy required to balance the budget. The reserve requirement is calculated as follows: Levy Required to Balance Budget Prior Year’s Percentage of Current (=) Total Taxes to be Levied Tax Collection (or lesser %) Deferral of Current Expenses

Emergency appropriations, those made after the adoption of the budget and determination of the tax rate, may be authorized by the governing body of the municipality. With minor exceptions, however, such appropriations must be included in full in the following year’s budget. When such appropriations exceed 3% of the adopted operating budget, consent of the Director of Local Government Services must be obtained.

The exceptions are certain enumerated quasi-capital projects such as ice, snow and flood damage to street, roads, bridges, which may be amortized over three years, and tax map preparation, revision of ordinances, and master plan preparations, which may be amortized over five years. Budget Transfers

Transfers provide a degree of flexibility and afford a control mechanism. Transfers between line item appropriation accounts are prohibited until the last two months of the year and, although subaccounts within an appropriation are not subject to the same year-end transfer restriction, they are subject to internal review and approval. Operation of Utilities

Municipal public utilities are supported, in addition to the general taxing power upon real property, by the revenues generated by the respective operations of the utilities.

For each utility, there is established a separate budget. The anticipated revenues and appropriations for each utility are set forth in the separate budget. The budget is required to be balanced

and to fully provide for debt service. The regulations regarding anticipation of revenue and deferral of charges apply to the budgets of the utilities.

Deficits or anticipated deficits in utility operations which cannot be provided for from utility surplus, if any, are required to be raised in the “Current Fund” or operating budget. Capital Budget

In accordance with the Local Budget Law each local unit must adopt and annually revise a six- year capital program budget. The capital budget, when adopted, does not constitute the approval or appropriation of funds, but sets forth a plan of the possible capital expenditures which the local unit may contemplate over the next six years. Annual Financial Statement

An Annual Financial Statement for the fiscal year must be filed with the Division of Local Government Services, State of New Jersey, on or before February 10, of the succeeding year. This Financial Statement reflects the results of operations for the year, for all Funds. If there is a cash deficit in any fund it must be raised in the succeeding year’s budget. While the Annual Financial Statement is not audited, certain agreed-upon procedures are applied by the auditor. The Township has filed the Annual Financial Statement and has supplied it to the NRMSIRs. Annual Audit Requirement

The Local Fiscal Affairs Law (N.J.S.A. 40A:5-1 et seq.) regulates the non-budgetary financial activities of local governments. An annual, independent audit of the local unit’s accounts for the previous year must be performed by a licensed Registered Municipal Accountant. The audit, conforming to the Division of Local Government Services “Requirements of Audit”, includes recommendations for improvement of the local unit’s financial procedures and must be filed with the Director prior to June 30 of each year. A synopsis of the audit report, together with all recommendations made, must be published in a local newspaper within 30 days of its completion. The entire annual audit report is filed with the Municipal Clerk and is available for review during business hours. The annual audit report for Fiscal Year 2011 has not yet been completed. TAX MATTERS Tax-Exempt Bonds

In the opinion of Bond Counsel, assuming continuing compliance with the provisions of the Internal Revenue Code of 1986, as amended (the "Code") applicable to the Tax-Exempt Bonds and subject to certain provisions of the Code which are described below, under laws, regulations, rulings and judicial decisions existing on the date of the original delivery of the Tax-Exempt Bonds, interest received by a holder of the Tax-Exempt Bonds will be excludable from gross income for federal income tax purposes, and will not be treated as a tax preference item for purposes under Section 57 of the Code for individuals or corporations. Interest on the Tax-Exempt Bonds is included in the adjusted current earnings of certain corporations for the purposes of computing the alternative minimum alternative tax on such corporations . However, interest on the Tax-Exempt Bonds may become taxable retroactively if certain requirements under the Code are not complied with.

The Code contains a number of provisions that apply to the Tax-Exempt Bonds, including restrictions relating to the use or investment of the proceeds of the Tax-Exempt Bonds (or facilities financed by such proceeds) and the payment of certain arbitrage earnings in excess of the "yield" on the Tax-Exempt Bonds to the Treasury of the United States. Non-compliance with such provisions may

result in interest on the Tax-Exempt Bonds not being excludable from gross income for federal income tax purposes retroactive to the date of issuance of the Tax-Exempt Bonds. The Issuer has covenanted to comply with these requirements.

Section 55 of the Code provides that an alternative minimum tax is imposed on corporations. For the purposes of the corporate alternative minimum tax, the Code includes an increase adjustment for computation of the alternative minimum tax consisting generally of 75% of the amount by which “adjusted current earnings” exceeds alternative minimum taxable income (computed without regard to this adjustment and the alternative tax net operating loss deduction). Thus, to the extent that interest on the Tax-Exempt Bonds is a component of a corporate holder’s “adjusted current earnings”, such interest may be subject to an alternative minimum tax.

Section 265(b) of the Code generally denies to financial institutions any deduction for that portion of interest expense incurred to purchase or carry certain tax-exempt obligations. An exception is provided certain small issuers who designate the obligations as "qualified tax-exempt obligations" under Section 265(b)(3) of the Code and, provided certain conditions are met, for obligations the proceeds of which refund obligations which were designated as qualified tax-exempt obligations. Such obligations will be subject to a reduced disallowance rule. The Tax-Exempt Bonds will NOT be designated by the Township as qualified tax exempt obligations under Section 265(b) of the Code.

Ownership of tax-exempt obligations may also result in collateral federal income tax consequences to certain taxpayers including, without limitation, certain foreign corporations doing business in the United States, certain S corporations with excess passive income, property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry tax- exempt obligations.

From time to time, there are legislative proposals in Congress that, if enacted, could alter or amend the federal tax matters referred to above or adversely affect the market value of the Tax-Exempt Bonds. President Obama recently submitted to Congress various legislative proposals, which if enacted, would limit for certain individual taxpayers the value of certain deductions and exclusions, including the exclusion for tax-exempt interest. If enacted into law, such proposals may cause interest on the Tax- Exempt Bonds to be subject, directly or indirectly, to federal income taxation or otherwise prevent owners of the Tax-Exempt Bonds from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such legislative proposals may also affect the market price for, or marketability of, the Tax-Exempt Bonds. No prediction is made whether these provisions will be enacted as proposed or concerning other future legislation which if passed might have the effect on the tax treatment of interest on the Tax-Exempt Bonds. Bond Counsel expresses no opinion regarding any pending or proposed federal tax legislation. Bond Counsel will render its opinion as of the issue date, and will assume no obligation to update its opinions after the issue date to reflect any future facts or circumstances, or any future changes in law or interpretation, or otherwise. Moreover, the opinions of Bond Counsel are only opinions and not a warranty or guaranty of the matters discussed. Bond Counsel has no obligation to provide updated information concerning pending or future legislation. Each purchaser of the Tax-Exempt Bonds should consult his or her own tax advisor regarding any pending or proposed federal tax legislation.

In addition, the Internal Revenue Service ("IRS") has established an expanded audit program for tax-exempt bonds. There can be no assurance that an audit initiated or concluded by the IRS after the issue date of the Bonds involving either the Bonds or other tax-exempt Bonds will not have an adverse effect on the tax-exempt status or market price of the Bonds.

In addition, prospective purchasers of the Tax-Exempt Bonds should be aware that on May 17, 2006, President Bush signed into law the Tax Increase Prevention and Reconciliation Act of 2005 ("TIPRA"). TIPRA amended Section 6049 of the Code to provide that interest paid on tax-exempt obligations will be subject to information reporting in a manner similar to interest paid on taxable obligations. The provision is effective for interest paid on tax-exempt obligations after December 31, 2005, regardless of when the tax exempt obligations were issued. Pursuant to Notice 2006-93, backup withholding will be required if the bondholder fails to provide a tax identification number. The reporting requirement does not in and of itself affect or alter the excludability of such interest from gross income for federal tax purposes or any other federal tax consequence of purchasing, holding or selling tax-exempt obligations.

ALL POTENTIAL PURCHASERS OF THE BONDS SHOULD CONSULT WITH THEIR TAX ADVISORS IN ORDER TO UNDERSTAND THE IMPLICATION OF THE TAX CONSEQUENCES UNDER THE CODE . Taxable Bonds

The following is a general discussion of certain of the anticipated federal tax consequences of the purchase, ownership and disposition of the Taxable Bonds by the original purchasers of the Taxable Bonds. Investors should consult their own tax advisors in determining the federal, state, local or other tax consequences to them of purchase, ownership and disposition of the Taxable Bonds. This discussion is based upon the Code, regulations, rulings and decisions now in effect, all of which are subject to change at any time, possibly with retroactive effect, and does not purport to deal with federal income tax consequences applicable to all categories of investors, some of which will be subject to special rules. This discussion assumes that the Taxable Bonds will be held as "capital assets" under the Code and that the Taxable Bonds are owned by U.S. Holders (as defined below). Investors should consult their own tax advisors in determining the federal, state, local or other tax consequences to them of purchase, ownership and disposition of the Taxable Bonds.

As used herein, the term “U.S. Holder” means a beneficial owner of a Bond that is for United States federal income tax purposes (i) a citizen or resident of the United States, (ii) a corporation, partnership or other entity created or organized in or under the laws of the United States or any State or any political subdivision thereof, (iii) an estate the income of which is subject to United States federal income taxation regardless of its source or (iv) a trust whose administration is subject to the primary jurisdiction of a court within the United States and which has one or more United States fiduciaries who have the authority to control all substantial decisions of the trust. Interest Income

INTEREST ON THE TAXABLE BONDS IS NOT EXCLUDED FROM GROSS INCOME FOR FEDERAL INCOME TAX PURPOSES. The Township will report annually (or more frequently if required) to owners of record and to the Internal Revenue Service in respect of interest paid on the Taxable Bonds. Backup Withholding

Under the Code, payments on the Taxable Bonds may under certain circumstances, be subject to "backup withholding" at a rate equal to the fourth lowest rate of tax applicable under Section 1(c) of the Code. This withholding generally applies if the owner (i) fails to furnish such owner’s social security number or other taxpayer identification number ("TIN"), (ii) furnishes an incorrect TIN, (iii) fails to properly report interest, dividends or other "reportable payments" as defined in the Code, or (iv) under certain circumstances, fails to provide such owner’s securities broker with a certified statement, signed

under penalties of perjury, that the TIN is correct and that such Bondholder is not subject to backup withholding. Owners of the Taxable Bonds should consult their own tax advisors as to their qualification for exemption for backup withholding and the procedures for obtaining the exemption.

IRS CIRCULAR 230 DISCLAIMER REGARDING THE TAXABLE BONDS: TO ENSURE COMPLIANCE WITH REQUIREMENTS IMPOSED BY THE INTERNAL REVENUE SERVICE, ANY TAX OPINIONS CONTAINED HEREIN WITH RESPECT TO THE TAXABLE BONDS ARE NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING TAX-RELATED PENALTIES UNDER THE INTERNAL REVENUE CODE. State Taxation

Bond Counsel is of the opinion, based upon existing statutes and judicial decisions, that interest on the Bonds and net gains from the sale of the Bonds are not included as gross income under the New Jersey Gross Income Tax Act. Potential purchasers of the Bonds should consult with their tax advisors in order to understand the tax consequences of ownership of the Bonds under the laws of other states.

THE FOREGOING IS NOT INTENDED AS AN EXHAUSTIVE RECITAL OF THE POTENTIAL TAX CONSEQUENCES OF HOLDING THE BONDS. PROSPECTIVE PURCHASERS OF THE BONDS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE FEDERAL, STATE AND LOCAL TAX CONSEQUENCES OF OWNERSHIP OF THE BONDS.

LEGALITY FOR INVESTMENT

The State and all public officers, municipalities, counties, political subdivisions and public bodies, and agencies thereof, all banks, bankers, trust companies, savings and loan associations, savings banks and institutional building and loan associations, investment companies, and other persons carrying on banking business, all insurance companies, and all executors, administrators, guardians, trustees, and other fiduciaries may legally invest any sinking funds, moneys or other funds belonging to them or within their control in any Bonds of the Township including the Bonds, and such Bonds are authorized security for any and all public deposits. CONTINUING DISCLOSURE

Pursuant to the requirements of Rule 15c2-12 (the "Rule") adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, the Township will deliver concurrently with the delivery of the Bonds a Continuing Disclosure Certificate in substantially the form annexed hereto as Appendix D (the "Continuing Disclosure Certificate"). The Township has covenanted for the benefit of the Bondholders, in accordance with the provisions of the Continuing Disclosure Certificate, to provide or cause to be provided, in accordance with the requirements of the Rule, certain financial information and operating data to Municipal Securities Rulemaking Board through the EMMA data port, or to any other designated nationally recognized municipal securities information repository (the "National Repository") and to the appropriate State information depository if any (as defined in the Continuing Disclosure Certificate). The Township has also covenanted in the Continuing Disclosure Certificate to provide notices of the occurrence of certain enumerated events, if material.

The Township has never failed to comply in all material respects with any previous undertakings with regard to said Rule to provide annual reports or notices of material events. LITIGATION

Upon delivery of the Bonds, the Township shall furnish a certificate of the Township Attorney, Steven Secare, dated the date of delivery of the Bonds, to the effect that there is no litigation of any nature

pending or, to his knowledge, threatened to restrain or enjoin the issuance, sale, execution or delivery of the Bonds, or in any way contesting or affecting the validity of the Bonds or any of the proceedings taken with respect to the issuance and sale thereof or the application of moneys to the payment of the Bonds. In addition, such certificate shall state that there is no litigation of any nature now pending or threatened by or against the Township wherein an adverse judgment or ruling could have a material adverse impact on the financial condition of the Township or adversely affect the power of the Township to levy, collect and enforce the collection of taxes or other revenues for the payment of its bonds, which has not been disclosed in this Official Statement. MUNICIPAL BANKRUPTCY

The undertakings of the Township should be considered with reference to Chapter IX of the Bankruptcy Act, 11 U.S.C. Section 401, et seq. , as amended by Public Law 95-598, approved November 6, 1978, and as further amended on November 3, 1988, by an Act to Amend the Bankruptcy Law to Provide for Special Revenue Bonds, and for Other Purposes, and on October 22, 1994, by the Bankruptcy Reform Act of 1994, and by other bankruptcy laws affecting creditors’ rights and municipalities in general. Chapter IX permits a state or any political subdivision, public agency or instrumentality that is insolvent or unable to meet its debts to file a petition in a bankruptcy court for the ultimate purpose of effecting a plan to adjust its debts. Chapter IX directs such a petitioner to file with the Bankruptcy Court a list of the petitioner’s creditors; provides that a petition filed under this chapter shall operate as a stay of the commencement or continuation of any judicial or other proceeding against the petitioner, with the exception that such petition does not operate as a stay of application of pledged special revenues to the payment of indebtedness secured by such revenues; grants priority to administrative and operational expenses and to debts owed for services or material, up to $4,000 per individual or corporation, actually provided within ninety (90) days of the filing of the petition; directs a petitioner to file a plan for the adjustment of its debts; provides that any securities issued under a reorganization plan will be exempt from the securities laws and, therefore, exempt from registration requirements; permits the petitioner, during bankruptcy proceedings, to continue to pay pre-petition debt without prior court approval; and provides that the plan must be accepted by a class of creditors, in writing, by or on behalf of creditors holding at least two-thirds in amount and more than one-half in number of the allowed claims of such class held by creditors. A plan shall not be approved by the Bankruptcy Court unless it is in the best interests of creditors and is feasible.

Reference should also be made to N.J.S.A. 52:27-40 through 52:27-45.11, which provides that any county, municipality, or other political subdivision of this State has the power to file a petition with any Bankruptcy Court, provided the approval of the municipal finance commission has been obtained, and such petition has been authorized by ordinance of the governing body of the political subdivision. The powers of the municipal finance commission have been vested in the Local Finance Board. The Bankruptcy Act specifically provides that Chapter IX does not limit or impair the power of a state to control, by legislation or otherwise, the procedures that a municipality must follow in order to take advantage of the provisions of the Bankruptcy Act. However, the Bankruptcy Act does provide that a municipality must obtain any regulatory or electoral approval necessary under constitutional, statutory, or charter provisions, for actions taken under the reorganization plan.

CERTAIN REFERENCES

The foregoing statements and descriptions of provisions of the New Jersey Constitution, the Local Bond Law and other laws of the State of New Jersey, the Federal Bankruptcy Code, the Ordinances and the Resolution of the Township and the Bonds and all references to other material not purported to be quoted in full are only brief, generalized descriptions thereof, do not purport to be complete, and are in all respects subject to and qualified in their entireties by express reference to the complete provisions thereof. Copies of the Ordinances and the Resolution will be furnished by the Township on request.

All estimates and assumptions herein are believed to be reasonable, but no warranty, guaranty or other representation is made that such estimates or assumptions will be realized or are correct. So far as any statements herein involve matters of opinion, whether or not expressly so stated, they are intended merely as such and not as representations of fact. CERTIFICATION OF OFFICIAL STATEMENT

The Township hereby states that the descriptions and statements herein relating to the Township are true and correct in all material respects and, upon request, it will confirm to the purchasers of the Bonds, by certificates signed by the Township Chief Financial Officer, that to his knowledge such descriptions and statements, as of the date hereof, and as of Closing, are true and correct in all material respects and do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements herein, in light of the circumstances under which they were made, not misleading.

All other information has been obtained from sources which the Township considers to be reliable and it makes no warranty, guaranty or other representation which respect to the accuracy and completeness of such information.

GluckWalrath LLP ("Bond Counsel") has not participated in the preparation of the financial or statistical information contained in this Official Statement, nor has it verified the accuracy, completeness or fairness thereof and, accordingly, expresses no opinion with respect thereto. Except to the extent necessary to issue its approving opinion as to the validity of the Bonds and tax matters relating to the Bonds, Bond Counsel has not been retained to examine or review, and has not examined or reviewed such financial or statistical information. RATING

Standard & Poor’ s ("S&P") has assigned a rating of "A+" to the Bonds. The rating reflects only the views of S&P and an explanation of the significance of such rating may only be obtained from S&P. The Township furnished to S&P certain information and materials concerning the Bonds and the Township. There can be no assurance that the rating will be maintained for any given period of time or that it may not be raised, lowered or withdrawn entirely if, in S&P judgment, circumstances so warrant. Any downward change in or withdrawal of such rating may have an adverse effect on the marketability or market price of the Bonds.

An explanation of the significance of such rating may be obtained from S&P at 55 Water Street, New York, New York 10041. The rating is not a recommendation to buy, sell or hold the Bonds and there is no assurance that such rating will continue for any given period of time or that the rating will not be revised downward or withdrawn entirely by S&P if, in its judgment, circumstances so warrant. Any such downward revision or withdrawal of such rating by S&P may have an adverse effect on the market price of the Bonds.

UNDERWRITING

RBC Capital Markets, LLC, Florham Park, New Jersey (the "Underwriter") has agreed to purchase the Bonds, pursuant to the terms of a contract of purchase, by and between the Township and the Underwriter at an aggregate purchase of $______. The purchase price of the Bonds reflects an Underwriter's discount of $______and an original issue premium of $______. The Underwriter is obligated to purchase all of the Bonds if any Bonds are purchased. The Underwriter intends to offer the Bonds to the public initially at the offering prices set forth on the cover page of this Official Statement, which may subsequently change without any requirement of prior notice. The

Underwriter reserves the right to join with dealers and other underwriters in offering the Bonds to the public. The Underwriter may offer and sell Bonds to certain dealers (including dealers depositing bonds into investment trusts) at prices lower than the public offering prices set forth on the cover page, and such public offering prices may be changed, from time to time, by the Underwriter without prior notice.

VERIFICATION

The accuracy of: (i) the arithmetic computations supporting the conclusion that the principal amounts of, and interest earned on, the Government Obligations to be acquired with a portion of the proceeds of the Bonds, are sufficient to pay the redemption price of and interest on the Refunded Bonds on their redemption date and the principal of and redemption premium, if any, on the Refunded Bonds due on the redemption date; and (ii) the mathematical computations supporting the conclusions that the Bonds will not be "arbitrage bonds" under the Code, will be independently verified by Holman & Frenia, P.C., Medford, New Jersey (the "Verification Agent"). APPROVAL OF LEGAL PROCEEDINGS

All legal matters incident to the authorization, the issuance, the sale and the delivery of the Bonds are subject to the approval of GluckWalrath LLP Trenton, New Jersey, Bond Counsel to the Township, whose approving legal opinions will be delivered with the Bonds substantially in the forms set forth as Appendix D. Certain legal matters will be passed on for the Township by the Township Attorney, Lawrence E. Bathgate, II, Esquire. ADDITIONAL INFORMATION

Inquiries regarding this Official Statement, including any information additional to that contained herein, may be directed to William C. Rieker, Chief Financial Officer, Township of Lakewood, 231 Third Street, Lakewood, New Jersey (732) 364-2500.

MISCELLANEOUS

This Official Statement is not to be construed as a contract or agreement between the Township and the purchasers or holders of any of the Bonds. Any statements made in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended merely as opinions and not as representations of fact. The information and expressions of opinion contained herein are subject to change without notice and neither the delivery of this Official Statement nor any sale of Bonds made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Township since the date hereof.

This Official Statement has been duly executed and delivered by the Township. TOWNSHIP OF LAKEWOOD, IN THE COUNTY OF OCEAN, NEW JERSEY

By: William C. Rieker, Chief Financial Officer

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APPENDIX A

GENERAL INFORMATION REGARDING THE TOWNSHIP

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THE TOWNSHIP OF LAKEWOOD

Description of Areas and Governmental Structure

The Township of Lakewood is a community of approximately 26 square miles located at the northern edge of Ocean County, New Jersey, about 60 miles from the New York-New Jersey metropolitan region, and from the New Jersey-Philadelphia metropolitan region. It is bounded by Brick Township on the east, Dover Township on the south, Jackson Township on the west, and Howell Township (Monmouth County) on the north. The Township Committee form of government provides for a five-member committee elected at general elections conducted on the first Tuesday following the first Monday in November. The Township presently employs a Municipal Manager, whose duties are specified by local ordinance, and who generally carries out the policies adopted by the Township Committee. Therefore, the Township has full-time professional management to assist in the conduct of its affairs.

Township Industry

Industrial development in the Township has been centered around two large industrial parks. One is located around a municipally owned airport in the southeast section of the Township, and the second has the advantage of railroad access in the southwestern portion of the Township.

Transportation

The Township of Lakewood's existing road system is a composite of Federal, State, County and Local Jurisdiction. Route 9 traverses the Township from north to south and provides easy access to the northern metropolitan New Jersey and New York metropolitan areas, and easy access to the southern resort area of New Jersey. Route 70 traverses the Township from east to west and provides highway traffic to Camden and the Philadelphia metropolitan region.

The Garden State Parkway provides access to both the northern and southern areas of New Jersey with easy access from the Parkway to the New Jersey Turnpike for commuting to New York, New England, and points south and west. Further east-west traffic is provided by Routes 72, 37 and 88. Route 88 connects Lakewood with Point Pleasant where rail facilities are available for commuting to the northern New Jersey-New York area.

The Township is served by the Central Railroad of New Jersey for freight services, which traverses the northwest portion of the Township and connects the Township with major rail centers.

The Township is served by the Lakewood airport located within its city limits for fast, easy access to passenger points of destination in the Newark, Philadelphia and New York airports.

The Township is provided with bus service for easy transportation to New York or Philadelphia metropolitan areas, Atlantic City and Asbury Park.

School Facilities

The Lakewood Township school system began operation in 1869 with the opening of the first public school. Today, the Lakewood School District operates four K through 6 elementary schools, a grade 7 and 8 middle school and a High School and an alternative High School for grades 9 through 12, serving a student population of approximately 5,200 students. A significant number of children also attend various private and religious schools in the district. The Board of Education is a Type II school district without a Board of Estimate. A-1

Public enrollments for the Lakewood School District from Fiscal Year 2006 through Fiscal Year 2011 are summarized in the table below:

Fiscal Year Student Enrollment 2010-11 5,269 2009-10 5,183 2008-09 5,086 2007-08 5,458 2006-07 5,452 2005-06 5,358

Utilities

The Township of Lakewood is serviced by Verizon, which provides telephone service. Jersey Central Power & Light Company provides electrical service. The Lakewood Township Municipal Utilities Authority (the “LTMUA”) operates the former franchise area of the South Lakewood Water Company, which provides water service to approximately 4,500 users in the southern section of the Township. There is a private water utility known as the New Jersey Water Company, servicing the remaining portion of the Township, with both sewer and water. The South Lakewood Sewerage Company, providing service to approximately 4,500 units in the southern portion of the Municipality, is a private utility and is presently connected to the facilities of the Ocean County Utilities Authority for treatment and disposal of effluent. The LTMUA has no future plans to acquire or operate a sewerage system, although authorized to do so under the Municipal Utilities Authority Act. The LTMUA is operating on a self-liquidating basis from water revenues received from its users.

In 1975, the Township and the LTMUA entered into a Service Contract providing for certain annual service charges payable by the Township in respect of operating deficits of the LTMUA (including, if necessary, amounts in respect of debt service on obligations of the LTMUA). Through such Service Contract the Township provides additional security for, and is contingently liable in respect of, certain bonds and notes issued from time to time by the LTMUA. At present, such indebtedness consists of (i) the LTMUA’s $5,675,000 principal amount of Water and Sewer Revenue Refunding Bonds (Series J), dated October 15, 1993, of which $1,070,000 is currently outstanding, (ii) the LTMUA’s $3,420,000 principal amount of Revenue Bonds, Series 2002A, dated October 15, 2002, and (iii) the LTMUA’s $3,041,230 principal amount of Revenue Bonds, Series 2002B, dated October 15, 2002. The LTMUA may issue additional indebtedness from time to time, which when issued may be entitled to the benefits of the Service Contract.

Municipal Services

The Township of Lakewood provides for a variety of municipal services including the operation of a municipal building and complex, along with excellent recreation facilities through a system of Township-Owned parks and playgrounds.

Police protection is provided by a 130-member full-time police department, which includes officers, 14 dispatchers, 10 administrative staff, and 24 crossing guards, providing 24-hour police protection. The ratio is approximately one to every 538 persons of population.

A-2

A three-man, full-time, paid fire department, together with 125 volunteer firemen, 25 fire police, provide fire protection for the Township. Five separate fire headquarters are stationed at strategic points throughout the municipality.

One of the fire stations is manned by volunteers located in the general industrial area in close proximity to the Leisure Village Senior Citizens Community.

The Public Works Department provides residential garbage and refuse disposal, the cost of which is paid by the Township taxpayers from the general property tax.

The large industrial users provide for disposal through private contracts. Leisure Village, under its condominium plan, has its own disposal system.

There is a 9 person full-time, paid emergency medical service with approximately 20 volunteer first aid squad members who operate from one main station together with a civil defense volunteer group of 12 men who operate trucks, lights, evacuation units, and other disaster vehicles.

The municipality operates a Municipal Building and complex, constructed in 1969, with an addition completed in 1979.

A-3

TOWNSHIP OF LAKEWOOD COUNTY OF OCEAN, NEW JERSEY

CONSTRUCTION PERMITS

2011 2010 2009 2008 2007 Residential: New 200 275 262 206 181 Additions/Alterations 1,546 1,591 1,484 1,193 1,139 Multi-Dwelling 44 8 7 10 132

Commercial: New* 10 7 14 23 29 Additions/Alterations 150 203 169 664 795

Industrial: New 0 0 0 0 1 Additions/Alterations 32 21 15 6 12

Office Building:* New Additions/Alterations Other

Total 1,982 2,105 1,951 2,102 2,289

______

*Note: Commercial and Office Buildings are calculated under New Commercial.

Source: The Township.

A-4

TOWNSHIP OF LAKEWOOD COUNTY OF OCEAN, NEW JERSEY

POPULATION TRENDS

Year Lakewood Ocean County

2010* 92,843 576,567 2009 71,359 573,678 2008 70,959 569,662 2007 69,876 565,525 2006 69,427 561,748

______

Source: *U.S. Census Bureau Ocean County Department of Planning

TREND OF EMPLOYMENT AND UNEMPLOYMENT

Year Labor Force Employment Unemployment Rate

2010 Township 25,229 22,926 9.1% County 263,270 236,690 10.1% State 4,502,458 4,076,708 9.5%

2009 Township 25,325 23,107 8.8% County 263,739 238,563 9.5% State 4,526,508 4,116,383 9.1%

2008 Township 25,379 23,906 5.8% County 261,610 246,059 5.9% State 4,496,700 4,251,200 5.5%

2007 Township 24,866 23,721 4.6% County 257,600 245,900 4.5% State 4,462,300 4,271,700 4.3%

2006 Township 24,704 23,496 4.9% County 257,236 244,473 5.0% State 4,477,500 4,269,600 4.6%

______

Source: New Jersey Department of Labor and Workforce Development Statistics

A-5

TOWNSHIP OF LAKEWOOD COUNTY OF OCEAN, NEW JERSEY

LARGEST TAXPAYERS

Taxpayer 2011 Assessed Value

Harrogate Inc. $42,872,600 New Hampshire Ave Investments LLC 29,000,000 Lakewood Plaza 9 Associates LP 28,513,900 1900 Route 70 Associates LLC 26,939,600 Leisure Park Venture Limited Partnership 26,931,900 Lakewood Industrial Holdings 26,341,300 Lakewood Cogeneration, LP 20,921,000 Woodlake Village LLC 19,775,000 Lighthouse Washington Square 18,999,800 Southgate at Lakewood LLC 16,828,900

______Source: The Township.

A-6

TOWNSHIP OF LAKEWOOD COUNTY OF OCEAN, NEW JERSEY

LIST OF MAJOR EMPLOYERS

Employer Number of Employees

Kimball Medical Center, Inc. 1,522

Lakewood Township Board of Education 837 DPT Corporation 487 Georgian Court College 484 Lakewood Township 387 Home Depot 341 Church & Dwight 268 J. Knipper and Company 230 SS White Burs, Inc. 222 Blinds-To-Go, Inc. 205 Gaming Laboratories International, LLC 202

______Source: The Township

A-7

TOWNSHIP OF LAKEWOOD COUNTY OF OCEAN, NEW JERSEY

APPORTIONMENT OF TAX RATE (Per $100 of Assessed Valuation)

2011 2010* 2009 2008 2007

Municipal $0.686 $0.686 $0..554 $0.504 $0.455 Local School 1.114 1.157 0.925 0.871 0.837 County 0.420 0.408 0.319 0.316 0..311 Fire District 0.049 0.057 0.046 0..048 0.048 $2.269 $2.308 $1.844 $1.739 $1.651

* Reassessment

______Source: The Township.

A-8

TOWNSHIP OF LAKEWOOD COUNTY OF OCEAN, NEW JERSEY

COMPARISON OF TAX LEVIES AND COLLECTIONS

Current Year's Tax Levy Collected

Year Tax Levy Amount Percentage 2011* $147,102,706 $141,165,249 95.96% 2010 148,469,166 141,528,084 95.32% 2009 146,719,608 139,700,461 95.22% 2008 138,134,632 131,705,399 95.35% 2007 129,653,733 124,600,942 96.10%

TAX TITLE LIENS AND DELINQUENT TAXES

Amount of Tax Amount of Dec. 31 Title Liens Delinquent Taxes Total Delinquent Percentage of Tax Levy

2011* $850,400 $4,278,071 $5,125,471 3.48% 2010 726,220 6,074,597 6,800,817 4.64% 2009 541,432 5,149,752 5,691,184 3.88% 2008 315,836 4,681,163 4,996,999 3.62% 2007 199,287 4,833,514 5,032,801 3.88%

______

Source: The Township * Unaudited

A-9

TOWNSHIP OF LAKEWOOD COUNTY OF OCEAN, NEW JERSEY

COMPARATIVE SCHEDULE OF FUND BALANCES

Utilized in Balance Succeeding Year December 31 Year’s Budget

2011 $9,862,487* Not Yet Determined 2010 7,035,270 5,973,250 2009 7,560,991 5,650,000 2008 6,705,087 5,500,000 2007 10,299,838 7,570,000

______

Source: The Township's Audited Financial Statements. *12/31/11 Fund Balance Unaudited

A-10

TOWNSHIP OF LAKEWOOD COUNTY OF OCEAN, NEW JERSEY

ASSESSED VALUATIONS OF PROPERTY BY CLASS

2010** 2009 2008 2007 2006* Property Classification Vacant Land $306,386,400 $443,346,300 $468,468,400 $516,913,990 $484,032,600 Residential 4,510,548,500 5,697,250,600 5,633,818,300 5,488,354,800 5,351,184,600 Farm 4,069,100 4,933,100 4,932,900 5,711,600 6,428,400 Commercial 674,025,700 753,075,100 762,189,400 729,287,500 732,269,400 Industrial 508,339,000 602,732,400 602,901,700 602,049,000 599,638,000 Apartments 334,258,700 356,218,000 374,283,300 377,306,100 347,259,300 6,337,627,400 7,857,555,500 7,846,594,000 7,719,622,990 7,520,812,300 Exempt Property 1,143,907,000 1,263,965,900 1,201,530,700 1,159,337,500 1,126,198,400 $7,481,534,400 $9,121,521,400 $9,048,124,700 $8,878,960,490 $8,647,010,700

**Reassessment * Revaluation

______Source: The Township.

A-11

TOWNSHIP OF LAKEWOOD COUNTY OF OCEAN, NEW JERSEY

PROPERTY VALUATIONS

2010** 2009 2008 2007 2006*

Assessed Valuation: Land and Improvements $6,337,627,400 $7,857,555,500 $7,846,594,000 $7,719,622,990 $7,520,812,300 Personal Tangible Property 17,183,651 16,378,436 15,623,200 15,994,464 15,570,739

Total Assessed Valuation $6,354,811,051 $7,873,933,936 $7,862,217,200 $7,735,617,454 $7,536,383,039

County Equalized Valuation $8,160,825,064 $8,317,482,696 $8,125,220,315 $7,791318,523 $6,767,257,076

County Equalized Ratio 78.42% 95.30% 97.28% 99.73% 111.97%

** Reassessment * Revaluation ______Source: County of Ocean Abstract of Ratables.

A-12

TOWNSHIP OF LAKEWOOD COUNTY OF OCEAN, NEW JERSEY

STATUTORY DEBT AS OF DECEMBER 31, 2010

Deductible Gross Debt __Debt __ Net Debt

School Purpose: Bonds Issued $2,347,000.00 $2,347,000.00 $0.00

Municipal Purpose: Bonds and Loans Issued 45,982,500.00 Notes Issued 9,368,000.00 Authorized but Unissued 9,987,825.00 1,875,118.00 63,463,207.00

Total Gross Statutory Debt $67,685,325.00

Total Deductible Statutory Debt $4,222,118.00

Total Net Statutory Debt $63,463,207.00

______Source: The Township's 2010 Annual Debt Statement.

A-13

TOWNSHIP OF LAKEWOOD COUNTY OF OCEAN, NEW JERSEY

STATUTORY BORROWING POWER AS OF DECEMBER 31, 2010

Three-Year Average of the Equalized Valuation (1) $8,123,817,269.00

Statutory Borrowing Power (2) 284,333,604.42

Statutory Net Debt 63,463,207.00

Remaining Statutory Borrowing Power 220,870,397.42

Ratios: Statutory Net Debt to State Equalized Valuation 0.78%

______

(1) Average for the years 2008, 2009 and 2010 as prepared by the State of New Jersey.

(2) 3.50% of the three-year average of the equalized valuation as prepared by the State of New Jersey.

A-14

TOWNSHIP OF LAKEWOOD COUNTY OF OCEAN

UNDERLYING DEBT DECEMBER 31, 2010

County of Ocean* Bonds Issued and Outstanding $ 404,409,137.43 Bonds and Notes Authorized but Not Issued 32,793,056.02

Gross Debt December 31, 2010** $ 437,202,193.45

Apportionment to Township of Lakewood $ 33,319,553.32

Basis of Debt Apportionment: Ratio of Equalized Valuation Basis Township of Lakewood - 2010 $8,123,817,269.00

Ocean County - 2010 Equalized Valuation Basis $106,596,588,958.00

Ratio - Township of Lakewood 7.6211%

______

*County of Ocean 2010 Annual Debt Statement

**Includes Bonds Issued and Bonds Authorized but Not Issued for Capital Projects of County Colleges and County Vocational Schools

A-15

TOWNSHIP OF LAKEWOOD COUNTY OF OCEAN, NEW JERSEY

GROSS DEBT COMPARED WITH TRUE VALUE

Municipal Debt Including Apportioned Municipal Debt Underlying Debt

Gross Debt as of December 31, 2010 $67,685,325.00 $101,004,878.32

Aggregate Fair Value for 2010 - All Taxable Property: Assessed Value $6,354,811,051.00

Amount Added for Equalization: Real Property Assessed 78.42% of True Value 1,806,014,013.00

Total - Property at True Value (2010) $8,160,825,064.00

Gross Debt as a Percentage of True Value 0.829% 1.238%

A-16 APPENDIX B

INDEPENDENT AUDITOR’S REPORT

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TOWNSIllP OF LAKEWOOD

AUDIT REPORT FOR THE YEAR ENDED DECEMBER 31, 2010 TOWNSHIP OF LAKEWOOD COUNTY OF OCEAN

CONTENTS

PART!

PAGE

Independent Anditor's RepOli Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an andit of Financial Statements Performed in Accordance with Governmental Auditing Standards 3

Financial Statements - Regulatory Basis: EXHIBITS Current Fund: Comparative Statements of Assets, Liabilities, Reserves & Fund Balance - Regulatory Basis A 5 Comparative Statement of Operations and Changes in Fund Balance - Regulatory Basis A-I 7 Statement of Revenues - Regulatory Basis A-2 8 Statement of Expenditures - Regnlatory Basis A-3 11

Trust Fund: Comparative Statements of Assets, Liabilities, Reserves & Fnnd Balance - RegulatOlY Basis B 18

General Capital Flmd: Comparative Statements of Assets, Liabilities, Reserves & Fund Balance - Regulatory Basis C 19

Payroll Fund: Comparative Statements of Assets, Liabilities, Reserves & Fund Balance - Regulatory Basis D 20

General Fixed Assets Account Group: Comparative Statements of Assets, Liabilities, Reserves & Fund Balance - Regulatory Basis E 21

Notes to Financial Statements 22

Supplemental Schedules: Current Fund Schedule of Cash & Cash Equivalents - Treasurer A-4 37 Schedule of Current Cash - Collector A-5 38 Schedule of Taxes Receivable & Analysis of Property Tax Levy A-6 39 Schedule of Tax Title Liens A-7 40 Schedule of Change Funds A-8 40 Schedule of Property Acquired for Taxes A-9 41 (Continued) EXUllBITS PAGE Current Fund (continued): Schedule of Due From State of New Jersey A-IO 41 Schedule of Demolition Charges Receivable A-ll 41 Schedule of Revenue Accounts Receivable A-12 42 Schedule of Deferred Charges A-13 43 Schedule of 2009 Appropriation Reserves A-14 44 Schedule of Accounts Payable A-IS 48 Schedule of Prepaid Taxes A-16 48 Schedule of Tax Overpayments A-I7 48 Schedule of County Taxes Payable A-I8 49 Schedule of Local District School Taxes Payable A-I9 49 Schedule of Fire District Taxes Payable A-20 49 Schedule of Various Reserves A-21 50 Schedule of Due to State of New Jersey A-22 50 Schedule of Reserve for State Board of Taxation Appeals A-23 51 Schedule of Deposits on Sale of Property A-24 51 Schedule of Due to Lakewood Housing A-25 51 Schedule of Interfunds - Other Funds A-26 52 Schedule of Special Emergency Notes A-27 53 Schedule of Due to Current Fund A-28 54 Federal and State Grant Fund: Schedule of Grants Receivable A-29 55 Schedule of Appropriated Reserves A-3D 57 Schedule of Unappropriated Reserves A-3I 61

Trust Fund: Schedule of Cash and Cash Equivalents B-1 62 Schedule of Investments B-2 63 Schedule of Reserve for Animal Control Expenditures B-3 63 Animal Control Trust Fund: Schedule of hlterfund - Current Fund B-4 64 Schedule of Due from State of New Jersey B-5 64 Schedule of Reserve for Revolving Loan Grant B-6 65 Schedule of hlterfund - Current Fund B-7 65 Schedule of Various Reserves B-8 66

General Capital Fund: Schedule of Fund Balance - Regulatory Basis C-I 67 Schedule of Cash, Cash Equivalents & hlVestments C-2 67 Analysis of General Capital Cash, Cash Equivalents & InvestmentsC-3 68 Schedule of Deferred Charges to Futm-e Taxation - Funded C-4 69 Schedule of Deferred Charges to Future Taxation - Unfunded C-5 70 Schedule of Prospective Assessments Raised by Taxation C-6 72 Schedule of Dne fi-om American Baseball Company, LLC C-7 72 Schedule ofImprovement Authorizations C-8 73 Schedule of General Serial Bonds C-9 79 Schedule of Bond Anticipation Notes C- I 0 82 Schedule of Capitallnlprovement Fund C-Il 84 Schedule ofNJ Economic Development Authority Loan C-12 85 Schedule of Reserve for Payment of Notes C-13 86 Schedule of Reserve for Payment of Bonds C-14 86 (Continued) EXlffiBITS PAGE General Capital Fund (continued): Schedulc of Reserve for hnprovements C-15 86 Schedule of Reserve for Renewal & Replacement C-16 87 Schcdule of Reserve for Debt Service C-17 87 Schedule of Bonds & Notes Authorized but not Issued C-18 88

General Fixed Assets: Schedule ofInvestments in General Fixed Assets D-l 89

Single Audit Section: Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control Over Compliance in Accordance with OMB Circular A-133 and New Jersey OMB Circular 04-04 90 Schedule of Expenditure of Federal Awards 92 Schedule of Expenditure of State Financial Assistance 93 Notes to Schedule of State Financial Assistance 94 Schedule of Findings & Questioned Costs 95 Summary Schedule of Prior Audit Findings 102

Supplementmy Data: Summary of StatutOlY Debt 103 Comparative Statement of Operations & Change in Fund Balance - Current Fund 104 Comparison of Tax Levies and Collection Currently 105 Property Acquired By Tax Title Lien Liquidation 106

Officials in Office 107

PART II

Comments and RecOlmnendatiDns: Scope of Audit 108 Contracts and Agreements Required to be Advertised 108 Contracts and Agreements Requiring Solicitation of Quotations 109 Collection of Interest Dn Delinquent Taxes 109 Delinquent Taxes and Tax Title Liens 110 EXaIllination DfBills 110 Payroll Fund 110 Municipal Court III Tax CDllector's Annual Report 111 Tax CDllector III Follow-Up of Prior Yem" Findings 112 Acknowledgment 112 (Concluded)

****************** TOWNSHIP OF LAKEWOOD COUNTY OF OCEAN

PART I

INDEPENDENT AUDITOR'S REPORTS FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA FOR THE YEAR ENDED DECEMBER 31, 2010

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.c.

Certified Public Accountants & Consultants

INDEPENDENT AUDITOR'S REPORT

The Honorable Mayor and Members of the Township Committee Township of Lakewood County of Ocean Lakewood, New Jersey 08701

We have audited the accompanying comparative statements of assets, liabilities, reserves and fund balance--regulatory basis of the various fimds of the Township of Lakewood, State of New Jersey as of December 31, 2010 and 2009, and the related comparative statements of operations and chariges in fund balance--regulatory basis for the years then ended, and the related comparative statement of revenues- regulatory basis, comparative statement of expenditures--regulatory basis and general fixed assets group comparative statement of assets and fund balance--regulatory basis as of December 31, 2010 and 2009. These financial statements are the responsibility of the Township of Lakewood's management. Our responsibility is to express an opinion on these financial statements based on our audit.

Except as discussed in the following pamgraph, we conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and in compliance with audit requirements prescribed by the Division of Local Government Services, Department of Commnnity Affairs, State of New Jersey. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amOlmts and disclosures in the fmancial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for onr opinion.

As described in Note 1, the financial statements previously referred to have been prepared in conformity with accounting practices prescribed by the Division of Local Govennnent Services, Department of Community Affairs, State of New Jersey, which differ from accounting principles generally accepted in the United States of America. The effects on the financial statements of the variances between these regulatory accounting practices and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material.

In our opinion, because of the effects of the matters, as discussed in the preceding paragraph, the fmancial statements referred to above do not present fairly, in conformity with accounting principles generally accepted in the United States of America, the financial position of the Township of Lakewood, State of New Jersey, as of December 31 2010, the changes in its financial position, or where applicable, its cash flows for the yeaI' then ended. Fmther, the Township of Lakewood, State of New Jersey has not presented a management's discussion and analysis that accounting principles generally accepted in the United States has determined is necessary to supplement, although not required to be part of, the basic financial statements.

Futthennore, in our opinion, the fmancial statements referred to above present fairly, in all material respects, the assets, liabilities, reserves and fund balance--regulatory basis of the various funds of the

MEDFORD OFFICE TOMS RIVER OFFICE 618 Stokes Road. Medford, NJ 08055 10 Allen St., Suite 2B. Toms River, NJ 08753 Tel: 609.953.0612 • Fax: 609.953.8443 Tel: 732.797.1333· Fax: 732.797.1022 holmanfrenia.com 1 holmanfrenia.com Township of Lakewood, State of New Jersey, as of December 31, 2010, and the results of its operations and changes in fund balance of such funds--regulatory basis for the years then ended, and the revenues- regulatory basis, expenditures--regulatory basis of the various funds and general fixed assets, for the year ended December 31, 2010 in confonnity with acconnting principles and practices prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey as described in Note 1.

In accordance with Government Auditing Standards, we have also issued our report dated June 17, 2011, on our consideration of the Township of Lakewood, State of New Jersey's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of intemal control over financial repOliing and compliance and the results of that testing, and not to provide an opinion on the internal control over financial repOliing or on compliance. That report is an integral pmi of an andit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.

Our audit was conducted for the purpose of forming opinions onlhe finmlcial statements of the Township of Lakewood's basic financial statements. The supplemental financial statements presented for the various funds are presented for purposes of additional analysis as required by the Division of Local Govemment Services, Department of Community Affairs, State of New Jersey. Such information has been subjected to the aUditing procedures applied in the audit of the financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the financial statements of each of the respective individual funds and account group taken as a whole. The accompanying schedules of expenditures of federal awards and state financial assistance are presented for purposes of additional analysis as required by U.S. Office of management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations and New Jersey OMB's Circulm' 04-04, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid respectively, mld m'e not a required part of the financial statements. The schedules of expenditures of federal awards and state financial assistance are the responsibility of management and were derived from mld relate directIy to tI,e underlying accounting and other records used to prepare the financial statements. The infonnation has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to tI,e financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in tI,e United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.

Respectful y submitted,

evin P. Frenia Certified Public Account Registered Municipal Accountant CR435 Medford, New Jersey June 17,2011

2 .c. Certified Public Accountants & Consultants

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

The Honorable Mayor and Members ofthe Township Committee Township of Lakewood Connty of Ocean Lakewood, New Jersey 08701

We have audited the fmancial statements of the Township of Lakewood, County of Ocean, State of New Jersey, as of and for the fiscal year ended December 31, 2010, and have issued our report thereon dated June 17, 2011. Our repmt disclosed that, as described in Note 1 to the financial statements, the Township prepares its financial statements on a basis of accounting prescribed by the Division of Local Government Service, Deprutrnent of Community Affairs, State of New Jersey, that demonstrates compliance with a modified accrual basis and the budget laws of the State of New Jersey, which is a comprehensive basis of acconnting other than accounting principles generally accepted in the United States of America. We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to finrulCial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and audit requirements as prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey.

Internal Control Over Financial Reporting

In plarming ruld performing our audit, we considered the Township of Lakewood's internal control over financial repmting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Township's internal control over finrulcial reporting. Accordingly, we do not express an opinion on the effectiveness of the Township's internal control over financial repmting.

A deficiency in internal controls exists when the design or operation of a control does not allow management or employees, in the nOflllal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Township's financial statements will not be prevented, or detected and corrected on a timely basis.

Onr consideration of the internal control over finrulcial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial repmting that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. However, we identified certain deficiencies in internal control over financial repmting, described in the accompanying General Comments section as Finding No.'s: 2010- 01, 2010-03, 2010-05 and 2010-06 that we consider to be a significant deficiency in internal

MEDFORD OFFICE TOMS RIVER OFFICE 618 Stokes Road· Medford, NJ 08055 10 Allen St., Suite 28. Toms River, NJ 08753 Tel: 609.953.0612 • Fax: 609.953.8443 Tel: 732.797.1333. Fax: 732.797.1022 holmanfrenia.com 3 holmanfrenia.com control over financial repOliing. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Township of Lakewood's financial statements are free of material misstatement, we peI'fonned tests of its compliance with cmiain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amonnts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The resnlts of our tests disclosed six instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and audit requirements as prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey, which are described in the accompanying Comment and Recommendation Section as Finding No's: 2010-01,2010-02,2010-03,2010-04,2010-05 and 2010-06.

This report is intended solely for the information and use of the Township of Lakewood's management, and Committee members, others within the organization, the Division of Local Government Services, and federal and state awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified p81iies.

Respectfully submitted,

HOLMAN &FRENlA,P. C.

Registered Mr11licipal Acconntant CR435

Medford, New Jersey June 17,2011

4 FINANCIAL STATEMENTS 1 ~ ____J EXHIBIT A (Page 1 of2) TOWNSHIP OF LAKEWOOD CURRENT FUND COMPARATIVE STATEMENT OF ASSETS, LIABILITIES, RESERVES AND FUND BALANCE - REGULATORY BASIS DECEMBER 31,2010 AND 2009

ASSETS REFERENCE 2010 2009

Regular Fund: Cash & Cash Equivalents A-4 $19,478,413 24,336,749 Cash - Change Fund A-8 950 950 Due from State of New Jersey A-I0 92,174 79,565

Total Regular Fund 19,571,537 24,417,264

Receivables & Other Assets With Fun Reserves: Delinquent Property Taxes Receivable A-6 6,074,597 5,149,752 Tax Title Liens Receivable A-7 726,220 541,432 Demolition Charges Receivable A-II 26,224 28,306 Property Acquired for Taxes A-9 5,953,392 5,959,192 Revenue Accounts Receivable A-12 232,875 220,898 Local District School Tax Advances A-19 Interfunds Receivable A-26 310,517 276,228

Total Receivable & Other Assets With Full Reserves 13,323,825 12,175,808

Defen-ed Charges: Special Emergency Authorizations A-13 560,000 3,580,872

Total Deferred Charges 560,000 3,580,872

Total 33,455,362 40,173,944

Federal & State Grants: Federal & State Grants Receivable A-29 13,666,301 8,098,385

Total Federal & State Grants 13,666,301 8,098,385

Total Assets $47,121,663 48,272,329

The accompanying Notes to the Financial Statements are an integral part of this Statement.

5 EXHIBIT A (Page 2 of2) TOWNSHIP OF LAKEWOOD CURRENT FUND COMPARATIVE STATEMENT OF ASSETS, LIABILITIES, RESERVES AND FUND BALANCE - REGULATORY BASIS DECEMBER 31, 2010 AND 2009

LIABILITIES, RESERVES & FUND BALANCE REFERENCE 2010 2009

Regular Fund: Liabilities: Appropriation Reserves A-3 $1,861,878 2,732,321 Reserve for Encumbrances A-3 661,262 1,783,353 Accounts Payable A-15 131,364 92,727 Prepaid Taxes A-16 1,447,032 2,181,025 Tax Overpayments A-17 4,030,008 2, I 96,257 County Taxes Payable A-18 301,847 246,415 Local District School Tax Payable A-19 952,342 597,113 Due to State of New Jersey A-22 38,404 30,130 Reserve for State Board of Taxation Appeals A-23 1,307,134 2,892,746 Reserve for Reassessment 49,332 517,232 Reserve for Repayment of Tax Appeal Notes 202,740 Interfunds Payable A-26 1,539,501 2,042,000 Deposits on Sale of Property A-24 89,252 92,852 Due to Lakewood Housing A-25 90,471 1,160,984 Special Emergency Notes A-27 560,000 3,580,872 Various Reserves A-21 36,440 88,379

Total Liabilities 13,096,267 20,437,146

Reserves for Receivables & Other Assets A 13,323,825 12,175,808 Fund Balance A-I 7,035,270 7,560,991

Total Regular Fund 33,455,362 40,173,945

State & Federal Grants: Due to Cunent Fund A-28 310,517 276,228 Reserve for State & Federal Grants: Encumbered A-30 1,367,367 1,319,646 Reserved A-30 11,853,689 6,351,171 Unappropriated Reserves A-31 134,728 151,339

Total State & Federal Grants 13,666,301 8,098,384

Total Liabilities, Reserves & Fund Balance $47,121,663 48,272,329

The accompanying Notes to the Financial Statements are an integral part of this Statement.

6 EXHIBIT 1\-1 TOWNSHIP OF LAKEWOOD CURRENT FUND COMPARATIVE STATEMENT OF OPERATIONS AND CHANGES IN FUND BALANCE - REGULATORY BASIS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009

REFERENCE 2010 2009 Revenue & Other Income Realized: Fund Balance Utilized $5,650,000 5,500,000 Miscellaneous Revenue Anticipated 22,583,445 20,234,287 Receipts from Delinquent Taxes 2,577,269 4,252,885 Receipts from CWTent Taxes 141,528,084 139,700,461 Nonbudget Revenues 3,385,356 2,636,002 Other Credits to Income: Unexpended Balance of Appropriation Reserves 1,589,705 1,575,900 Reserve for Revaluation Cancelled 100,000 Interfunds Returned 278,483 574,311

Total 177,692,342 174,473,846

Expenditures: Budget & Emergency Appropriations: Appropriations Within 1'CAPS 1' : Operations: Salaries & Wages 24,706,328 24,425,016 Other Expenses 22,109,135 24,220,884 Deferred Charges & StatutOlY Expenditures 2,995,733 2,917,843 Appropriations Excluded from "CAPS": Operations: Other Expenses 10,824,601 9,812,252 Capital Improvements 2,025,058 967,345 Municipal Debt Service 6,164,533 7,429,954 Defened Charges 140,000 50,000 Local School District Taxes 73,546,157 72,835,700 County Taxes Payable 26,184,458 25,377,249 Fire District Taxes Payable 3,575,321 3,597,043 Refund of Prior Year Revenue 65,530 Interfund Advances 296,739

Total 172,568,063 171,698,816

Excess in Revenue 5,124,279 2,775,030 Expenditures Included Above which are by Statute Defened Charges to Budgets of Succeeding Years 3,580,872

Statutory Excess to Flll1d Balance 5,124,279 6,355,902 Fund Balance January 1, 7,560,991 6,705,089

Total 12,685,270 13,060,991

Less: AmOlll1t of Fund Balance Utilized as Revenue 5,650,000 5,500,000

Fund Balance December 31, 2010 $7,035,270 7,560,991

The accompanying Notes to the Financial Statements are an integral part of this Statement.

7 EXHIBIT A-2 (Page Ion) TOWNSHIP OF LAKEWOOD CURRENT FUND STATEMENT OF REVENUES - REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31,2010

ANTICIPATED ADOPTED SPECIAL EXCESS BUDGET N.J,S.40A:4-87 REALIZED (DEFICIT)

Fund Balance Anticipated $5,650,000 5,650,000

Miscellaneous Revenues Anticipated: Local Revenues: Licenses: Alcoholic Beverages 76,000 80,100 4,100 Other 104,000 128,542 24,542 Fees & PelTI1its: Uniform Construction Code 1,175,000 1,329,355 154,355 Other 372,000 468,782 96,782 Fines & Costs - Municipal Court 820,000 843,992 23,992 Interest & Costs on Taxes 780,000 976,969 196,969 Police Identification Fees 38,000 44,590 6,590 Payment in Lien of Taxes: Sons ofIsrael 65,000 179,872 114,872 Lakewood Plaza II 95,000 96,996 1,996 Consolidated Municipal Property Tax Relief 883,340 880,849 (2,491) Energy Receipts Tax 4,274,267 4,274,267 Garden State TllJst Fund 221 221 Tax Abatement Progranl Revenues 736,727 968,764 232,037 Emergency Medical Services 792,512 810,461 17,949 Recycling Revenues from County 90,000 131,257 41,257 Baseball StadiUlll Rent 25,000 25,000 Baseball Stadium - Debt Service on Notes 28,960 28,960 Shared Services Agreement - Schools TrashfRecycling 102,795 88,083 (14,712) Police Off-Duty Funds 86,000 101,941 15,941 Cell Tower Lease 45,632 58,584 12,952 Reserve for Repayment of Debt Service 700,000 700,000 Cable TV Franchise Fees 138,082 141,912 3,830 Health Premium Reimbursement 52,000 51,560 (440)

Subtotal Local Revenues 11,480,536 12,411,057 930,521

Federal & State Grants: NJ Forest Service 2009 Business Stimulus Fund 7,000 7,000 Ocean County Censns Grant 50,000 50,000 Energy Efficiency/Conservation Block Grant 678,200 678,200 Recycling Tonnage Grant 124,148 124,148 Clean COlmnunities Program 97,095 97,095 Alcohol Education & Rehabilitation Fund 4,455 4,455 Municipal Alliance on Alcoholism & Drug Abnse 48,000 48,000 Safe & Secure Communities Progranl 60,000 60,000 Byrne Justice Assistance Grant 124,014 124,014 ConmlUnity Development Block Grant- Title I 850,299 850,299 New Jersey Emergency Assistance Grant 5,000 5,000 Urban Enterprise Zone: Monmonth Avenue Revitalization 334,880 334,880 Municipal Services 690,575 690,575

8 EXHIBIT A-2 (page 2 00) TOWNSHIP OF LAKEWOOD CURRENT FUND STATEMENT OF REVENUES - REGULA TORY BASIS FOR THE YEAR ENDED DECEMBER 31, 2010

ANTICIPATED ADOPTED SPECIAL EXCESS BUDGET N.J.SAOA:4-87 REALIZED (DEFICIT) Federal & State Grants (cantin ued): Parking Development Phase II 249,337 249,337 Land Development Phase I Enviromnental Assistance 66,000 66,000 Administration Grant 770,000 770,000 Administration Amendment 14,910 14,910 Administration 2009120 10 48,010 48,010 Job Link Bus 105,000 105,000 Business Attraction Initiative 62,000 62,000 Redevelopment Database-Pilot Prnject 20,000 20,000 Emergent Stadium Repair 1,275,000 1,275,000 FY II 966 Reimbursement Plan 1,449 1,449 Franklin Street Redevelopment Area Acquisition 981,000 981,000 Job Links XIV 69,960 69,960 Co-op Advertising Program-Pilot Pr(jject 250,000 250,000 Small Business Development 155,000 155,000 Supplemental Parking 832,000 832,000 Financial Assistance Program 950,000 950,000 Lakewnnd Stimulus Grant 135,000 135,000 Airport Upgrades: Video. Surveillance 133,425 133,425 Runaway End Identifier Lights 125,400 125,400 HeJipad 52,250 52,250 Self Service Fuel Tank 47,500 47,500 Seal CnatinglWinsnck 269,211 269,211 Envirnmnental Study Phase III 52,447 52,447 Fence Enviromnental 103,391 103,391 Perimeter Fence Phase II - Federal 296,057 296,057 Perimeter Fence Phase II - State 7,807 7,807 Wetlands Mitigation - Federal 25,887 25,887 Wetlands Mitigatinn - State 681 681

Tntal Miscellaneous Revenue 15,244,216 6,408,708 22,583,445 930,521

Receipts From Delinquent taxes 4,650,000 2,577,269 (2,072,731)

Amount to be Raised by Taxes 43,588,489 44,797,641 1,209,152 N nnbudget Revenues 3,385,356 3,385,356

Tntal $69,132,705 6408,708 78,993,711 3,452,298

ANALYSIS OF REALIZED REVENUE

Allocation of Current Tax Collections: Revenue From Collection $141,528,084

Net Revenue frnm Collectinns 141,528,084 Allncated to School, Cnunty & Fire District Taxes 103,305,936

Balance for Suppnrt of Municipal Budget Appropriations 38,222,148 Add: Reserve fnr Uncollected Taxes 6,575,493

Amnunt for Suppnrt nfMunicipal Budget Appropriations $44,797,641

The accnmpanying Notes to the Financial Statements are an integral part nfthis Statement. 9 EXHIBIT A-2 (Page 3 of3) TOWNSHIP OF LAKEWOOD CURRENT FUND STATEMENT OF REVENUES - REGULA TORY BASIS FOR THE YEAR ENDED DECEMBER 31,2010

ANALYSIS OF NONBUDGET REVENUE

Miscellaneous Revenue Not Anticipated: Interest on Investments & Deposits $20,560 State Administration Fee - Senior Citizens' & Veterans! 16,038 Cable Television Franchise Fee 6,402 Recycling 45,616 Health Benefits Refunds 590,832 Macedonia/Senior Housing ~ PILOT 32,946 Miscellaneous Other 132,477 Ocean County Health Insurance Fund 622,457 Cancel Outstanding Checks 5,207 Scibal 62,461 Rent 11,000 American Baseball Utility Reimbursement 27,118 2009 Snow Stonn Removal 108,946 Co-Gen Host Community Fees 282,519 Lakewood Board of Education - Fuel Usage Retmbursement 53,674 Lakewood Board of Education - Asphalt Repairs 46,526 Police Vehicle Fee 40,000 Lifting of Deed Restrictions on Pine Road 850,000 Copies 3,494 Sale of Municipal Property 386,600 Lease of Property 40,483

Total $3,385,356

The accompanying Notes to the Financial Statements are an integral part ofthis Statement.

10 EXHIBIT A-3 (Page Ion) TOWNSHIP OF LAKEWOOD CURRENT FUND STATEMENT OF EXPENDITURES - REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31, 2010

APPROPRlA TIONS EXPENDED UNEXPENDED BUDGET AFTER PAID OR BALANCE OPERATIONS WITHIN CAPS BUDGET MODIFICATION CHARGED RESERVED CANCELLED

GENERAL GOVERNMENT FUNCTIONS: Administrative & Executive: Office ofthe Manager Salaries and Wages $287,456 279,456 278,940 516 Other Expenses 10,698 10,698 8,106 2,592 Governing Body: Salaries and Wages 108,915 108,915 108,915 Other Expenses 96,385 96,385 . 51,212 45,173 Office of the Cleric: Salaries and Wages 204,411 204,411 204,411 Other Expenses 39,380 50,380 40,527 9,853 Purchasing Department: Salaries and Wages 124,154 107,154 105,961 1,193 Other Expenses 202,500 197,500 182,589 14,911 Financial Administration Salaries and Wages 297,619 297,619 290,515 7,104 Other Expenses 17,480 17,480 9,204 8,276 Audit Services: Other Expenses 50,000 50,000 50,000 Computer Center: Salaries and Wages 69,980 69,980 69,980 Other Expenses 55,525 55,525 51,796 3,729 Collection of Taxes: Salaries and Wages 296,493 292,493 289,660 2,833 Other Expenses 45,010 45,010 35,158 9,852 Assessment of Taxes: Salaries and Wages 402,279 387,279 384,084 3,195 Other Expenses 298,982 212,982 113,331 99,651 Liquidation of Tax Liens & Foreclosed Property: Other Expenses 20,500 20,500 20,500 Legal Services & Costs: Other Expenses 650,000 685,000 636,189 48,811 Engineering Services & Costs: Other Expenses 631,750 621,750 578,780 42,970 Civil Rights Commission (N.J.S. 18:25-10): Other Expenses 1,250 1,250 1,250 Advisory Board on Disability: Other Expenses 1,500 1,500 1,500 Tourism Advisory COlmnittee: Other Expenses 3,500 3,500 3,500 Veterans Advisory COlmnittee: Other Expenses 2,500 2,500 2,500

11 EXHIBIT A-3 (Page 2 of7) TOWNSHIP OJ!' LAKEWOOD CURRENT FUND STATEMENT OF EXPENDITURES - REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31,2010

APPROPRIATIONS ~~~E~X~P~EN~D~E=D~ ___ UNEXPENDED ". BUDGET AFTER PAID OR BALANCE OPERATIONS WITHIN CAPS BUDGET MODIFICATION CHARGED RESERVED CANCELLED

LAND USE ADMINISTRATION: Planning Board: Other Expenses 40,305 37,305 26,050 11,255 Zoning Board: Other Expenses 47,150 39,150 22,256 16,894 PUBLIC SAFETY FUNCTIONS: Police: Salaries and Wages 14,292,358 14,643,358 14,557,634 85,724 Other Expenses 516,072 506,072 496,153 9,919 Emergency Management Services: Salaries and Wages 73,141 73,341 73,201 140 Other Expenses 15,251 15,251 15,037 214 Emergency Medical TecImicians: Salaries and Wages 890,418 917,418 908,324 9,094 Other Expenses 33,175 35,175 33,169 2,006 Municipal Prosecutor: Other Expenses . 75,000 75,000 69,150 5,850 PUBLIC WORKS FUNCTION: Road Repairs & Maintenance: Salaries and Wages 971,094 961,094 932,465 28,629 Other Expenses 412,000 417,000 384,095 32,905 Street Cleaning: Salaries and Wages 129,718 129,718 129,718 Other Expenses 14,500 14,500 14,454 46 Department of Public Works: Salaries and Wages 566,297 608,467 604,029 4,438 Other Expenses 53,580 53,580 44,720 8,860 Shade Tree Commission: Salaries and Wages 158,703 149,933 138,973 10,960 Other Expenses 9,450 9,450 3,832 5,618 Cross Street Landfill Maintenance: Other Expenses 10,000 10,000 3,916 6,084 Garbage & Trash Removal: Salaries and Wages 986,869 1,035,869 997,713 38,156 Other Expenses 201,500 201,500 196,724 4,776 Recycling: Salaries and Wages 727,396 792,896 769,841 23,055 Other Expenses 62,150 62,150 56,645 5,505 Public Buildings & Grounds: Salaries and Wages 216,508 216,508 215,420 1,088 Other Expenses 149,100 167,600 148,883 18,717 Apartment Trash Reimbursements: Other Expenses 500,000 500,000 404,194 95,806 Automotive Mechanics: Salaries and Wages 499,415 496,415 492,642 3,773

12 EXHIBIT A-3 (Page 3 of7) TOWNSHIP OF LAKEWOOD CURRENT FUND STATEMENT OF EXPENDITURES - REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31, 2010

APPROPRIATIONS ~~~E~X~P~E_N_D_E_oD______UNEXPENDED BUDGET AFTER PAID OR BALANCE OPERATIONS WITHIN CAPS BUDGET MODIFICATION CHARGED RESERVED CANCELLED

PUBLIC WORKS FUNCTION (continued): Municipal Garage: Salaries and Wages 113,847 104,847 97,598 .7,249 Other Expenses 99,000 99,000 93, 1I5 5,885 Community Services Act: Other Expenses 1,300,000 1,257,000 861,605 395,395 MUNICIPAL COURT FUNCTIONS: Municipal Court: Salaries and Wages 542,338 542,338 534,410 7,928 Other Expenses 22,800 27,800 21,901 5,899 Public Defender: Other Expenses 30,000 30,000 30,000 HEALTH & HUMAN SERVICES FUNCTIONS: Board of Health: Salaries and Wages 83,637 86,037 85,475 562 Other Expenses 2,420 2,420 1,779 641 Environmental Conunission (N.J.S. 40:56-A-l, et seq.): Other Expenses 2,500 2,500 1,254 1,246 Anhnal Control Salaries and Wages 55,566 55,566 55,336 230 Other Expenses 78,200 78,200 64,679 13,521 Relocation Assistance Program Other Expenses 7,500 7,500 7,500 Senior & Soda1 Services: Other Expenses 180,000 180,000 180,000 Lakewood Community Services Corporation (NJ.S.A.40:23-8.17) 30,000 30,000 30,000 PARKS & RECREATION FUNCTIONS: Recreation: Salaries and Wages 175,000 175,000 162,932 12,068 Other Expenses 96,650 96,650 82,927 13,723 Conununity Center: Salaries and Wages 163,793 164,793 164,322 471 Other Expenses 33,018 33,018 29,352 3,666

13 EXHIBIT A-3 (Page 4 on) TOWNSHIP OF LAKEWOOD CURRENT FUND STATEMENT OF EXPENDITURES - REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31, 2010

APPROPRIATIONS ~~~E~X~P_EN_D_E_D_____ UNEXPENDED BUDGET AFTER HAID OR BALANCE OPERATIONS WITHIN CAPS BUDGET MODIFICATION CHARGED RESERVED CANCELLED

PARKS & RECREATION FUNCTIONS (continued): Parks & Playgrounds: Salaries and Wages 761,719 771,419 767,319 4,100 Other Expenses 141,000 141,000 137,143 3,857 OTHER COMMON OPERATING FUNCTIONS: Accumulated Leave Compensation 418,000 418,000 418,000 Celebration of Public Events: Other Expenses 10,000 10,000 10,000 Transfer to Lakewood Airport Authority 50,000 50,000 49,381 619 CODE ENFORCEMENT & ADMINISTRATION: State Uniform Construction Code Officials: Salaries and Wages 955,267 930,267 913,683 16,584 Other Expenses 154,650 132,650 102,925 29,725 Property Maintenance Code: Salaries and Wages 98,137 103,737 103,725 12 INSURANCE: Liability Insurance 664,734 664,734 663,714 1,020 Workers Compensation Insurance 947,859 947,859 934,266 13,593 Group Insurance Plan for Employees 9,299,881 9,025,881 9,022,022 3,859 UTILITY EXPENSES & BULK PURCHASES: Electricity 475,775 475,775 475,772 3 Street Lighting 915,000 915,000 837,586 77,414 Telephone 87,000 87,000 77,296 9,704 Water 38,500 45,200 38,340 6,860 Natural Gas 105,000 105,000 102,599 2,401 Gasoline 728,000 712,000 685,701 26,299 Stadiwn Utilities 32,550 32,550 28,806 3,744 LANDFILL/SOLID WASTE DISPOSAL COSTS: Landfill Disposal Costs 2,339,205 2,279,205 2,113,862 165,343

Total Operations Within CAPS 46,807,963 46,807,963 45,157,421 1,650,542 Contingent 7,500 7,500 7,500

Total Operations Including Contulgent Within neAPS" 46,815,463 46,815,463 45,157,421 1,658,042 Detail: Salaries and Wages 24,252,528 24,706,328 24,437,226 269,102 Other Expenses 22,562,935 22,109,135 20,720,195 1,388,940

DEFERRED CHARGES & STATUTORY EXPENDITURES WITHIN CAPS: Statutory Expenditures: Contributions to Employees Retirement System 483,421 483,421 483,421

14 EXHIBIT A-3 (Page 5 of7) TOWNSHIP OF LAKEWOOD CURRENT FUND STATEMENT OF EXPENDITURES - REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31, 2010

APPROPRIATIONS EXPENDED UNEXPENDED BUDGET AFTER PAID OR BALANCE OPERATIONS WITHIN CAPS BUDGET MODIFICATION CHARGED RESERVED CANCELLED

Statutory Expenditures (continued): Social Security System (O.A.SJ.) 1,113,713 1,113,713 1,045,464 68,249 Consolidated Police & Firemen's Pension Fund 8,749 8,749 8,749 NJ Police & Fireman's Retirement System 1,385,050 1,385,050 1,385,050 Volunteer Firemen's Widow Pension R.S.43:I2-28.2 4,800 4,800 4,800

Defened Charges & Statutory Expenditures Within CAPS 2,995,733 2,995,733 2,927,484 68,249

Total Appropriations Within CAPS 49,811,196 49,811,196 48,084,905 1,726,291

OPERATIONS - EXCLUDED FROM CAPS Recycling Tax: Other Expenses 101,343 101,343 101,343 Contribu6ons to Police & Fireman's Retirement System of New Jersey 1,396,180 1,396,180 1,358,663 37,517 Contributions to Public Employees' Retirement System 490,752 490,752 484,682 6,070 SMFP Fire District Payments 47,327 47,327 47,327 Interlocal Services Agreement: Landfill Disposal Costs 102,795 102,795 102,795

Total Operations Excluded from "CAPS II 2,138,397 2,138,397 2,094,810 43,587

Public & Private Programs Offset by Revenues: Cleau Communities Program 97,095 97,095 97,095 Municipal Drug Alliance: State Share 48,000 48,000 48,000 Local Share 15,000 15,000 15,000 Safe & Secure Communities Program: State Share 60,000 60,000 60,000 Local Share 142,366 142,366 142,366 OSHP Cars Grant 69,960 69,960 Alcohol Education & Rehabilitation Fund 4,455 4,455 4,455 Edward Byrne Memorial Justice Grant Recycling Tonnage Grant 124,148 124,148 124,148 Community Development Block Grant Title I 850,299 850,299

15 EXHIBIT A-3 (Page 6 on) TOWNSHIP OF LAKEWOOD CURRENT FUND STATEMENT OF EXPENDITURES - REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31,2010

APPROPRlATIONS EXPENDED UNEXPENDED OPERATIONS EXCLUDED BUDGET AFTER PAID OR BALANCE FROM CAPS BUDGET MODIFICATION CHARGED RESERVED CANCELLED

Public & Private Programs Offset by Revenues (continued): Matching Funds for Grants 92,000 92,000 92,000 Urban Enterprise Zone: Administrative Grant 770,000 770,000 Municipal Services: State Share 690,575 690,575 690,575 Local Share 237,720 237,720 237,720 Co-op Advertising Program- Pilot Project 250,000 250,000 Small Business Development 155,000 155,000 Supplemental Parking 832,000 832,000 Financial Assistance Program 950,000 950,000 NJ Emergency Assistance Grant 5,000 5,000 5,000 Lakewood Stimulus Grant- Pilot Project 135,000 135,000 Business Attraction Initiative 62,000 62,000 Redevelopment Database- Pilot Project 20,000 20,000 FY II 966 Reimbursement Plan 1,449 1,449 Emergent Stadin11l Repair 1,275,000 1,275,000 FranJdin Street Redevelopment Area Acq. 981,000 981,000 Momnouth Avenue Revitalization 334,880 334,880 334,880 Administration Amendment 14,910 14,910 14,910 UEZ Administration Amendment 48,010 48,010 48,010 Environmental Assessment 66,000 66,000 66,000 Job Link Bus 105,000 105,000 105,000 Downtown Parking Phase II 249,337 249,337 249,337

Total Public & Private Programs Offset by Revenues 2,334,496 8,686,204 8,594,204 92,000

Capital Improvements - Excluded from "CAPS": Capital Improvement Fund 9,078 9,078 9,078 Energy Efficiency Grant 678,200 678,200 678,200 Byrne Justice Assistance Grant 124,014 124,014 124,014 Video Surveillance 133,424 133,424 133,424 Runaway End Identifier Lights - State 125,400 125,400 125,400 Runaway End Identifier Lights - Local 6,600 6,600 6,600 Helipad - State 52,250 52,250 52,250 Helipad - Local 2,750 2,750 2,750 Self Service Fnel Tank - State 47,500 47,500 47,500 Self Service Fuel Tank - Local 2,500 2,500 2,500 Seal Coating/Winsock - State 269,211 269,211 269,211 Seal Coating/Winsock - Local 14,169 14,169 14,169 Enviromnental Study Phase III - Federal 52,447 52,447 52,447 Enviromnental Study Phase III - Local 2,761 2,761 2,761 Fence Enviromnental- Federal 103,391 103,391 103,391 Fence Enviromnental - Local 5,442 5,442 5,442 Perimeter Fence Phase II - Federal 296,057 296,057 296,057 Perimeter Fence Phase II - State 7,807 7,807 7,807 Perimeter Fence Phase II - Local 7,807 7,807 7,807 Wetlands Mitigation - Federal 25,887 25,887 25,887

16 EXHIBIT A-3 (Page 7 of7) TOWNSHIP OF LAKEWOOD CURRENT FUND STATEMENT OF EXPENDITURES - REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31, 2010

APPROPRlATIONS EXPENDED UNEXPENDED OPERATIONS EXCLUDED BUDGET AFTER PAID OR BALANCE FROM CAPS BUDGET MODIFICATION CHARGED RESERVED CANCELLED

Capital Improvements (continued): Wetlands Mitigation - State 681 681 681 Wetlands Mitigation - Local 682 682 682 N.J. FOlTest Service 2009 BSP 7,000 7,000 Census Grant 50,000 50,000

Total Capital Improvements - Excluded from CAPS 1,968,058 2,025,058 2,025,058

Municipal Debt Service - Excluded from "CAPS": Payment of Bond Principal 3,620,000 3,620,000 3,620,000 Payment of Bond Anticipation Notes 250,000 250,000 249,700 300 Interest on Bonds 2,142,116 2,142,116 2,142,116 Interest on Notes 113,199 113,199 112,967 232 Green Trust Loan Program: Principal 37,500 37,500 37,500 Interest 2,250 2,250 2,250

Total Municipal Debt Service Excluded from CAPS 6,165,065 6,165,065 6,164,533 532

Deferred Charges - Excluded from "CAPS": Special Emergency Autborizations - 5 Years __....;1..:.4"'0,"'0"'00"- ___--'-==_ 140,000 140,000

Total DefelTed Charges - Municipal - Excluded from CAPS: 140,000 140,000 140,000

Total General Appropriations Excluded from CAPS 12,746,016 19,154,724 19,018,605 135,587 532

Subtotal General Appropriations 62,557,212 68,965,920 67,103,510 1,861,878 532 Reserve For Uncollected Taxes 6,575,493 6,575,493 6,575,493

Total General Appropriations $69,132,705 75,541,413 73,679,003 1,861,878 532

Budget $69,132,705 Added by N.lA. 40A:4-87 6,408,708

Total $75,541,413

Disbursements $55,692,064 Reserve for Encumbrances 661,262 Appropriated Reserves for Federal & State Grants 10,610,184 DefelTed Charges 140,000 Reserve for Uncollected Taxes 6,575,493

Total $73,679,003

The accompanying Notes to tbe Financial Statements are an integral part oftbis Statement.

17 EXHIBITB TOWNSHIP OF LAKEWOOD TRUST FUND COMPARATIVE STATEMENT OF ASSETS, LIABILITIES, RESERVES AND FUND BALANCE - REGULATORY BASIS DECEMBER 31,2010 AND 2009

ASSETS REFERENCE 2010 2009

Animal Control Trust Fund: Due from State of New Jersey B-5 $386 385 Interfund - Current FWld B-4 14,246 12,974

Total Animal Control Fund 14,632 13,359

Grant Trust Fund: Cash B-1 197,440 197,104

General Trust Fund: Cash & Cash Equivalents B-1 6,447,891 6,903,250 Investments B-2 1,544,465 1,540,186 Internmd - Cunent Fund B-7 1,525,255 2,029,026

Total General Trust Fund 9,517,611 10,472,462

Total Assets $9,729,683 10,682,925

LIABILITIES, RESERVES & FUND BALANCE

Animal Control Trust Fund: Reserve for Animal Control Expenditmes B-3 $14,632 13,359

Total Animal Control Fund 14,632 13,359

Grant Trust Fund: Reserve for Revolving Loan Grant B-6 197,440 197,104

General Trust Fund: Various Reserves B-8 9,517,611 10,472,462

Total General Trust Fund 9,517,611 10,472,462

Total Liabilities, Reserves & Fund Balance $9,729,683 10,682,925

The accompanying Notes to the Financial Statements are an integral part of this Statement.

18 EXHIBIT C TOWNSHIP OF LAKEWOOD GENERAL CAPITAL FUND COMPARATIVE STATEMENT OF ASSETS, LIABILITIES, RESERVES AND FUND BALANCE - REGULATORY BASIS DECEMBER 31, 2010 AND 2009

ASSETS REFERENCE 2010 2009

Cash & Cash Equivalents C-2 $1,345,043 2,111,567 Investments 4,742,475 Defened Charges to Futnre Taxation: Funded C-4 45,982,500 49,640,000 Unfunded C-5 19,355,826 16,905,526 Prospective Assessments Raised by Taxation C-6 3,600 3,600 Due from Americao Baseball Company, L.L.C. C-7 1,000,000 1,000,000

Total Assets $67,686,969 74,403,168

LIABILITIES, RESERVES & FUND BALANCE

Improvement Authorizations: Encumbered C-8 $460,625 428,934 Funded C-8 1,581,268 1,656,074 Unfuuded C-8 10,082,720 11,717,673 Serial Bonds C-9 45,870,000 49,490,000 Bond Anticipation Notes C-IO 9,368,000 5,235,700 Capital Improvement Fund C-11 35,997 26,919 N.J. Economic Development Authority Loan C-12 112,500 150,000 Reserve for Payment of Notes C-13 34,380 34,380 Reserve for Payment of Bonds C-14 17,944 717,944 Reserve for Improvements C-15 9,716 9,716 Reserve for Prospective Assessments Raised by Taxation 3,600 3,595 Reserve for Renewal & Replacement C-16 110,211 128,210 Reserve for Debt Service C-17 4,804,015 Fund Balaoce C-l 8 8

Total Liabilities, Reserves & Fund Balance $67,686,969 74,403,168

There were bonds aod notes authorized but not issued on December 31, 2009 of $9,987,826 and on December 31, 2009 was $11,669,826.

The accompaoying Notes to the Financial Statements are ao integral part of this Statement.

19 EXHlBITD TOWNSHIP OF LAKEWOOD PAYROLL FUND COMPARATIVE STATEMENT OF ASSETS, LIABILITIES, RESERVES AND FUND BALANCE - REGULATORY BASIS DECEMBER 31, 2010 AND 2009

ASSETS 2010 2009

Cash $359,013 339,086

Total Assets $359,013 339,086

LIABILITIES & RESERVES

Due to Various Agencies 359,013 339,086

Total Liabilities & Reserves $359,013 339,086

The accompanying Notes to Financial Statements are an integral part of this Statement.

20 EXHIBITE TOWNSHIP OF LAKEWOOD GENERAL FIXED ASSETS ACCOUNT GROUP COMPARATIVE STATEMENT OF FIXED ASSETS AND FUND BALANCE - REGULATORY BASIS DECEMBER 31, 2010 AND 2009

ASSETS 2010 2009

General Fixed Assets: Land $10,716,400 10,716,400 Buildings 26,933,005 26,933,005 Fumiture & Fixtures, Equipment & Vehicles 16,667,860 16,624,366

Total $54,317,265 54,273,771

FUND BALANCE

Total Investment in General Fixed Assets $54,317,265 54,273,771

The accompanying Notes to Financial Statements are an integral part of this Statement.

21 TOWNSIDP OF LAKEWOOD COUNTY OF OCEAN

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31,2010

******** TOWNSHIP OF LAKEWOOD

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010

Note L Summary of Significant Acconnting Policies

Description of Financial Reporting Entity - The Township of Lakewood is organized as a Committee Manager municipality under the provisions of N.J. S.40: 69A-82 et seq. The Township is governed by an elected Committee and by an appointed Municipal Manager and by such other officers and employees as may be duly appointed. The Committee shall consist of five members elected at large by voters of the Municipality and shall service for a ternl of three years beginning on the first day of January next following their election and that the Mayor shall be elected by the members of the Committee. Each member of the Committee carries a legislative vote.

This repOli includes the finaucial statements of the township of Lakewood (the "Township"), within the County of Ocean, in the State of New Jersey and reflects the activities of the Municipality which is under the control of the Mayor and Township Committee. The financial statements of the Board of Education and Fire District are reported sepamtely since their activities are administered by sepamte boards.

The Township's governing body is also responsible for appointing the members of the boards of other organizations, but the Township's accountability for these organizations do not extend beyond making the appointments. The governing body appoints the board members of the Lakewood Development Corporation, Lakewood Municipal Utilities Authority and the Lakewood Housing Authority.

Basis of Accounting, Measurement Focus and Basis of Presentation - The financial statements of the Township of Lakewood contain all funds and account groups in accordance with the "Reqnirements of Andit" as promulgated by the State of New Jersey, Department of Community Affairs, Division of Local Government Services. The principles and practices established by the Requirements of Audit aTe designed primarily for determining compliance with legal provisions and budgetary restrictions and as a means of reporting on the stewardship of public officials with respect to public funds. Generally, the financial statements are presented nsing the flow of current financial resources measurement focus and modified accrual basis of accounting with minor exceptions as mruldated by these "Requirements". In addition, the prescribed accounting principles previously referred to differ in celiain respects from accounting principles generally accepted in the United State of America applicable to local goverrnnent units. The more significant differences aTe explained in this Note.

In accordance with the "Requirements", the Township of Lakewood accounts for its financial trrulsactions through the use of sepru·ate funds aTe described as follows:

Current Fund - resources and expenditures for government operations of a general nature, including Federal and State Grant funds.

Trust Funds - receipt, custodianship and disbursement of funds in accordance with the purpose for which each reserve was created, including dog license revenue and expenditures and sundry deposits held for satisfactory completion of specific work.

22 TOWNSHIP OF LAKEWOOD

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31,2010

Note 1. Snmmary of Significant Accounting Policies (continued):

General Capital Fnnd - receipt and disbursement of funds for the acquisition of capital facilities, other than those acquired in the Current Fund.

Budgets and Budgetary Accountiug - The Township of Lakewood must adopt an annual budget for its current fund in accordance with NJ.S.A.40A:4 et seq. NJ.S.A.40A:4-5 requires the govel1ling body to introdnce and approve the annual municipal budget no later than February ]O'h of each year. At introduction, the govel1ling body shall fix the time and place for a public hearing on the budget and must advertise the time and place at least ten days prior to the hearing in a newspaper published and circulating in the municipality. The public heaTing must not be held less than twenty-eight days after the date the budget was introduced. After the hearing has been held, the govel1ling body may, by majority vote, adopt the budget or may amend the budget in accordance with NJ.S.A.40A:4-9. Amendments to adopted budgets, if any, are detailed in the statements of revenues and expenditures.

An extension of the statutory dates for introduction, approval and adoption of the municipal budget may be granted by the Director of the Division of Local Government Services, with the pennission of the Local Finance BOaTd.

Budgets aTe adopted on the same basis of accounting utilized for the preparation of the Township'S financial statements.

Cash, Cash Equivalents and Investments - Cash and Cash equivalents include petty cash, change funds and cash on deposit with public depositories. Investments are stated at cost. Consequently, unrealized gain or loss on investments has not been recorded in accordance with Governmental AccOlmting StandaTds Board Statement No. 31.

New Jersey municipal units are required by NJ.S.A.40A:5-14 to deposit public funds in a bank or trust company having it place of business in the State of New Jersey and organized under the laws of the United States or of the State of New Jersey or in the New Jersey Cash Management Fund. NJ.S.A.40A:5-15.1 provides a list of investments, which may be purchased by New Jersey municipal units. NJ.S.A.17:9-41 et seq. establishes the requirements for the security of deposits of governmental units. The statute requires that no governmental unit shall deposit public funds in a public depository unless such funds are secured in accordance with the Governmental Unit Deposit Protection Act, which was enacted in 1970 to protect govermnental units from a loss of funds on deposit with a failed banking institution in New Jersey. Public depositories include state or federally chartered banks, savings banks or associations located in the State of New Jersey or state or federally chaTtered banks, savings banks or associations located in another state with a branch office in the State of New Jersey, the deposits of which aTe federally insured. All public depositories must pledge collateral, having a maTket value at least equal to five percent of the average daily balance of collected public funds, to secure the deposits of Governmental Units. If a public depository fails, the collateral it has pledged, plus the collateral of all other public depositories, is available to pay the full amount of their deposits to the Governmental Units.

23 TOWNSHIP OF LAKEWOOD

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010

Note 1. Summary of Siguificant Accounting Policies (continned):

The Township of Lakewood deposit Funds in public depositories protected from loss under the provisions ofthe Act.

Interfunds - Interfnnd receivables and payables that rise from transactions between funds are recorded by all funds affected by such transactions in the period in which the transaction is executed. Interfund receivables in the Current Fund aTe recorded with offsetting reserves, which am created by charges to operations. Income is recognized in the yeaI' the receivables are liquidated. Interfund receivables in the other funds are not offset by reserves.

Inventories of Supplies - The costs of inventories of supplies for all funds are recorded as expenditures at the time individual items are purchased. The costs of inventories are not included on the v3l'ious balance sheets.

General Fixed Assets - Properly and equipment purchased by the Current and General Capital Funds are recorded as expenditures at the time of purchase and 3l'e not capitalized. All interest costs are recorded as expenditures when paid.

Accounting for Governmental Fixed Assets, as promulgated by Teclmical Accounting Directive No. 85-2 as issued by the Division of Local Government Services, differs in certain respects from generally accepted accounting principles. The following is brief description of the provisions of the Directive:

Fixed assets nsed in govemmental operations (general fixed assets) 3l'e accounted for in the General Fixed Assets Account Group. Public domain ("infrastructure") general fixed assets consisting of certain improvements other than buildings, such as roads, bridges, curhs and gutters, streets and sidewalks and drainage systems are not capitalized.

All fixed assets are valued at historical cost or estimated historical cost if actual historical cost is not available except for land, which is valued at estimated m3l'ket value. No depreciation on general fixed assets is recorded in the financial statements. Donated general fixed assets are valued at their estimated fair market value on the date received.

Expenditures for constmction in progress 3l'e recorded in the Capital Funds until such time as the construction is completed and put into operation. Fixed assets acquired through grants-in-aid or contributed capital has not been accounted for sep3l'ately. Balance Balance December 31, December 31, 2009 Additions Deletions 2010

Land & Land $10,716,400 $ $10,716,400 Buildings 26,933,005 26,933,005 Fumiture & Fixtures, Equipment & Vehicles 16,614,366 $43,494 16,667,860

Total $54,273,771 $43,494 $ $54317265

24 TOWNSHIP OF LAKEWOOD

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010

Note 1. Summary of Significant Accounting Policies (continned):

Foreclosed Property - Foreclosed property is recorded in the Current Fund at the assessed valuation when such property was acquired and is fully reserved. Ordinarily it is the intention of the municipality to resell foreclosed property in order to recover all or a p01iion of the delinquent taxes or assessments and to return the propeliy to a taxpaying basis. For this reason the value of foreclosed property has not been included in the General Fixed Assets Account Group. If such propeliy is converted to a municipal use, it will be recorded in the General Fixed Assets Account Group.

Deferred Charges - The recognition of certain expenditures is defcrred to future periods. These expenditures 01' deferred charges, are generally overexpenditures of legally adopted budget appropriations or emergency appropriations made in accordance with NJ.S.A.40A:4-46 et seq. Deferred charges are subsequently raised as items of appropriation in budgets of succeeding years.

Liens Sold for Other Governmental Units - Liens sold on behalf of other governmental units are not recorded on the records of the tax collector until such liens are collected. Upon their collection, such liens are recorded as a liability due to the governmental unit net of the costs of the initial sale. The related costs of sale are recognized as revenue when received.

Fund Balance - Fund balances included in the Current Fund and Utility Operating Funds represent amounts available for anticipation as revenue in future years budgets, with certain restrictions.

Revenues - Revenues are recorded when received in cash except for certain amounts, which are dne from other governmental units. Revenue from federal and state grants are realized when anticipated as such in the Township'S budget. Receivables for propeliy taxes are recorded with offsetting reserves on the balance sheet of the Township'S Current Fund; accordingly, such amounts are not recorded as revenue until collected. Other amounts that are due the Township which are susceptible to accrual are also recorded as receivables with offsetting reserves and recorded as revenue when received.

Property Tax Revennes - Property tax revenues are collected in quarterly installments due February I, May 1, August I and November 1. The amount of tax levied includes not only the amount required in supp01i of the Township'S amiual budget, but also the amounts required in support of the budgets of the County of Ocean and the Township of Lakewood Regional School District. Unpaid propeliy taxes are subject to tax sale in accordance with the statutes.

School Taxes - The municipality is responsible for levying, collecting and remitting school taxes for the Township of Lakewood School District. Operations is charged for the full amount required to be raised from taxation to operate the local school district for the period from January I to December 31.

Connty Taxes - The municipality is responsible for levying, collecting and remitting county taxes for the County of Ocean. Operations is charged for the amount due the County for the year, based upon the ratables required to be certified to the County Board of Taxation by January lOaf the current year. In addition, operations is charged for the County share of Added and Omitted Taxes certified to the County Board of Taxation by October lOaf the current year and due to be paid to the County by February 15 of the following year.

25 TOWNSHIP OF LAKEWOOD

NOTES TO FlNANClIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010

Note 1. Summary of Significant Acconnting Policies (continned):

Fire District Taxes - The municipality is responsible for levying, collecting and remitting taxes for the Township of Lakewood Fire District No.1 and Township of Lakewood Fire District 2.

Reserve for U ncollectcd Taxes - The inclusion of the "Reserve for Uncollected Taxes" appropriation in the township's annual budget projects the Township from taxes not paid currently. The reserve, the minimum amount of which is determined on the percentage of collections experienced in the immediate preceding year, with celiain exceptions, is required to provide assurance that cash collected in the current year will provide sufficient cash flow to meet expected obligations.

Expenditures - Expenditures are recorded on the "budgetary" basis of accounting. Generally, expenditnres are recorded when an amount is encumbered through the issuance of a numerically controlled purchase order or when a contract is executed as required by Technical Accounting Directive No. 85-1. When expenditure is paid, the amount encumhered is simultaneously liquidated in its original amount. Encumbrances are offset by an account entitled reserve for encumhrances. The reserve is .classified as a cash liability under New Jersey municipal accounting. At December 31, this reserve represents the portion of app~opriatiou reserves that has been encumbered and is subject to the same statutory provisions as appropriation reserves.

Appropriations for principal payments on outstanding general capital and utility bonds and notes are provided on the cash basis; interest on general capital indebtedness is on the cash basis; whereas interest on utility indebtedness is on the accrual basis.

Appropriation Reserves - Appropriation reserves covering unexpended appropriation balances are automatically created at year-end and recorded as liabilities, except for amounts, which may be canceled by the goveming body. Appropriation reserves are available, until lapsed at the close of the succeeding year, to meet specific claims, commitments 01' contracts incurred during the preceding fiscal year. Lapsed appropriation reserves ru'e recorded as income.

Long-Term Debt - Long-term debt, relative to the acquisition of capital assets, is recorded as a liability in the General Capital Fund. Where an improvement is a "local improvement", i.e. assessable upon completion, long-tenn debt associated with that portion of the cost of the improvement to be funded by assessments is trrulsfened to the Trust Fund upon the confinuation of the assessments 01' when the improvement is fully and permanently funded.

Compensated Absences and Post-Employment Benefits - Compensated absences for vacation, sick leave ruld other compensated absences are recorded and provided for in the ammal budget in the year in which they are paid, on a pay-as-you-go basis. Likewise, no accrual is made for post-employment benefits, if any, which ru'e also funded on the pay-as-you-go basis.

Comparative Data - Compru'ative total data for the prior year have been presented in the accompanying financial statements in order to provide 311 understrulding of chrulges in the Township's fmancial position and operations. However, comparative data have not been presented in each of the statements because their inclusion would malce the statements unduly complex and difficult to read.

26 TOWNSHIP OF LAKEWOOD

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010

Note 2. Cash and Cash Equivalents and Investments

The Township is governed by the deposit and investment limitations of New Jersey state law. The Deposits and investments held at December 31, 2010, and reported at fair value are as follows:

Carrying Type Value Deposits: Demand Deposits $25,711,069 New Jersey Cash Management Fund 2,116,731 Investments: US Treasury Notes 1,544,465

Total Deposits and hlVestments $29 372~

Reconciliation of Statement of Comparative Statement of Assets, Liabilities & Reserves: Cnrrent Fund $19,478,413 Other Trust Funds 8,189,796 General Capital Fund 1,345,043 Payroll Fund 359,013

Total Reconciliation $29372.265

Custodial Credit rusk - Deposits in financial institutions, reported as components of cash, cash equivalents and investments had a bank balance of $30,182,180 at December 31, 2010. Of the bank balance $1,090,533 was fully insnred by the FDIC (Federal Depository Insurance Corporation) and $29,091,647 was secured by a collateral pool held by the bank, but not in the Township's name, as required by New Jersey's Governmental Unit Deposit Protection Act (GUDPA). The Governmental Unit Deposit Protection Act is more fully described in Note 3 of these financial statements.

Investment Interest Rate Risk - The Township has no formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Maturities of investment held at December 31, 2010, are provided in the above schedule.

Investment Credit Risk - The Township has no investment policy that limits its investment choices other than the limitation of state law as follows:

• Bonds or other obligations of the United States of America or obligations guaranteed by the United States of America;

• Government money market mutual funds;

27 TOWNSHIP OF LAKEWOOD

NOTES TO FINANCllAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31,2010

Note 2. Cash and Cash Eqnivalents and Investments (continued):

• Any obligation that a federal agency or federal instrumentality has issued in accordance with an act of Congress, which security has a maturity date not greater than 397 days from the date of purchase, provided that such obligations bear a fixed rate of interest not dependent on any index or other external factor;

• Bonds or other obligations of the Township or bonds or other obligations of the local unit or units within which the Township is located;

• Bonds or other obligations, having a maturity date of not more than 397 days from the date of purchase, approved by the Division of Investment in the Department of Treasury for investment by the Township;

• Local Governments investment pools;

• Deposits with the State of New Jersey Cash Management Fund established pursuant to section I ofP.L. 1977, c.281; or

• Agreements for the repurchase of fully collateralized securities with celiainlimitations.

Concentration of Investment Credit Risk - The Township places no limit on the amount it may invest . . III anyone Issuer.

Note 3. Governmental Unit Deposit Protection Act (GUDPA)

The Township has deposited cash in 2010 with an approved public fund depository qualified under the provisions of the Government Unit Deposit Protection Act. In addition to savings and checking accounts the Township invests monies in celiificates of deposits.

The Governmental Unit Deposit Protection Act P.L. 1970, Chapter 236, was passed to afford protection against bankruptcy or defanlt by a depositOly. C.17:9-42 provides that no governmental unit shall deposit funds in a public depository unless such funds are secnred in accordance with this act. C.17:9-42 provides that evelY pnblic depository having public funds on deposit shall, as security for such deposits, maintain eligible collateral having a market value at least eqnal to either (I) 5% of the average daily balance of collected public funds on deposit during the 6 month period ending on the next preceding valuation date (June 30 or December 31) or (2) at the election of the depositOlY, at least equal to 5% of the average balance of collected public funds on deposit on the frrst, eighth, frfteenth, and twenty-second days of each month in the 6 month period ending on the next preceding valuation date (June 30 or December 31). No public depository shall be required to maintain any eligible collateral pursuant to this act as security for any deposit or deposits of any governmental unit to the extent such deposits are insured by F.D.I.C. or any other U.S. agency which insures public depository funds.

28 TOWNSHIP OF LAKEWOOD

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010

Note 3. Governmental Unit Deposit Protection Act (GUDlPA) (continued):

No public depository shall at any time receive and hold on deposit for any period in excess of 15 days public funds of a governmental unites) which, in the aggregate, exceed 75% of the capital funds of the depository, unless such depositOly shall, in addition to the security required to he maintained under the paragraph above, secure such excess by eligible collateral with a market value at least equal to 100% of such excess.

In the event of a default, the Commissioner of Banking within 20 days after the default occun-ence shall asceliain the amount of public funds on deposit in the defaulting depositmy and the amounts covered by federal deposit insurance and certify the amounts to each affected governmental unit. Within 10 days after receipt of this celiification, each unit shall furnish to the Commissioner verified statements of its public deposits. The Commissioner shall ascertain the amount derived or to be derived from the liquidation of the collateral maintained by the defaulting depository and shall distribute such proceeds pro rata among the governmental units to satisfy the net deposit liabilities to such units.

If the proceeds of the sale of the collateral are insufficient to pay in full the liability to all affected governmental units, the Commissioner shall assess the deficiency against all other public depositories having public funds on deposit determined by a fonnula detetmined by law. All sums collected by the Commissioner shall be paid to the governmental units having deposits in the defaulting depositolY in the proportion that the net deposit liability to each such governmental unit bears to the aggregate of the net deposit liabilities to all such governmental units.

All public depositories are required to furnish infmmation and repmis dealing with public funds on deposit every six months, June 30th and December 31st, with the Commissioner of Banking. Any public depository which refuses or neglects to give any infonnation so reqnested may be excluded by the

Commissioner from the right to receive public funds for deposit until such time as the Commissioner shall acknowledge that such depository has furnished the information requested.

Upon review and approval of the Certification Statement that the public depository complies with statutory requirements, the Commissioner issues fonns approving the bank as a municipal depository. The Municipality should request copies of these approval forms semi81IDually to assure that all depositories are complying with requirements.

Note 4. Interfund Receivables and Payables

The following interfund balances were recorded on the various balance sheets as of December 31, 20 I 0:

29 TOWNSHIP OF LAKEWOOD

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010

Note 4. Interfund Receivables & Payables (continued):

Interfunds Interfunds Fnnd Receivable Payable

Current Fund $ 310,517 $1,539,499 Federal & State Grant Fund 310,517 Other Trust Funds 1,525,253 Animal Control Fund 14,246

Total $1.850.016 $1 850016

The purpose of these interfunds are short-term borrowings.

Note 5. Long-Term Debt

The Local Bond Law govems the issuance of bonds and notes to finance general municipal capital expenditures. Bonds are retired in serial installments with the statutory period of usefulness. Bonds issued by the Township are general obligations bonds backed by the full faith and credit of the Township. Bond anticipation notes are issued to temporarily finance capital projects prior to the issuance of serial bonds. The terms of the notes cmmot exceed one year but the notes may be renewed from time to time for a period not exceeding one yem·. All such notes must be paid no later than the tenth amliversary of the date of the original note. The State of New Jersey also prescribes that on or before the third rumiversmy date of the original note a payment of at least equal to the first legally payable instalhnent of the bonds in anticipation of which such notes were issued be paid. A second legal installment must be paid if the notes m'e to be renewed beyond the fOUlth anniversary date of the original issuance and so on. Tax anticipation notes m'e issued if the cash on haud is not sufficient to cmTY on normal operations of the mUllicipality at any time during the yeru-. Such notes are authorized by a resolution adopted by the governing body.

As of December 31,2010, theTownship's Long-Ter1l1 Debt is as follows:

General Obligation Bonds:

$9,785,000 2002 Bonds due in rumual installments of $705,000 to $895,000 through October 2016 at an interest at 3.50%. 4,895,000

$2,800,0002003 Refunding Bonds due in annual installments of $260,000 to $280,000 through March 2013 at interests rates ranging from 2.875% t03.30%. 800,000

30 TOWNSHIP OF LAKEWOOD

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31,2010

Note 5. Long-Term Debt (continued):

General Obligation Bonds (continued):

$1,145,0002003 Pension Obligation Refunding Bonds due in annual installments of$35,000 to $165,000 through April 2021 at interests rates ranging from 4.70% to 5.90%. 1,040,000

$9,800,0002005 Bonds due in annual installments of $580,000 to $830,000 Through January 15,2020 at interest rates ranging from 3.625% to 4.00%. 7,050,000

$9,800,000 2007 Bonds due in annual installments of $300,000 to $500,000 Through November 1,2027 at interest rates ranging from 4.00% to 4.250%. 8,300,000

$21,800,0002008 Bonds due in annual installments of $960,000 to $970,000 Through November 1,2029 at interest rates ranging from 4.75% to 5.75%. Term Bonds due in 2031 in the ,amount of$I,940,000 at an interest rate of 5.75%. 20,340,000

2009 Refunding Bond Issue due in annual installments of $55,000 to $480,000 through Januruy 2017 at interest rates ranging from 2.0% to 5.0%. 3,445,000

Total $45870000

Schedule of Annual Debt Service for Principal and h,terest for the next five (5) years and five-year increments thereafter for Bonded Debt issued and outstanding:

Year Principal Interest Total

2011 $ 3,630,000 $ 2,169,504 $ 5,799,504 2012 3,660,000 2,035,079 5,695,079 2013 3,720,000 1,894,070 5,614,070 2014 3,525,000 1,744,580 5,269,580 2015 3,595,000 1,600,980 5,195,980 2016-2020 13,715,000 5,930,780 19,645,780 2021-2025 7,405,000 3,473,633 10,878,633 2026-2030 4,680,000 1,709,573 6,389,573 2031 1,940,000 111,550 2,051,550

Total $45870000 $20,669,749 $66539149

On JrulUary 26, 1994 the Township entered into a low interest rate loan funded by the New Jersey Economic Development Authority in the sum of $750,000. The interest rate is 1.50% and the loan matures on August 5, 2013. The proceeds have been used to help with the construction of the new Public Library.

31 TOWNSHIP OF LAKEWOOD

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010

Note 5. Long-Term Debt (continued):

Year Principal Interest Total

2011 $ 37,500.00 $1,687.50 $ 39,187.50 2012 37,500.00 1,125.00 38,625.00 2013 37,500.00 562.50 38,062.50

Total $112500.00 $3 375.00 $115,875.00

Note 6. Pension Plans

A, Plan Description

The Township of Lakewood contributes to a cost-sharing multiple-employer defined benefit pension plan, Public Employees' Retirement System (P.E.R.S.) and Police and Fireman's Retirement System (P.F.R.S.), administered by the State of New Jersey, Division of Pensions and Benefits. It provides retirement, disability, medical and death benefits to plan members and beneficiaries. The State of New Jersey P.E.R.S. and P.F.R.S. programs were established as of January 1, 1955 and July 1, 1944, respectively. The programs were established under the provisions of N.J.S.A.43:15A and N.JS.A.43:16A which assigns authority to establish and amend benefit provisions to the plan's board of trustees. P.E.R.S. and P.F.R.S. issue a publicly available financial report that includes financial statements and required supplementary information. That repOli may be obtained by writing to: State of New Jersey, Department of the Treasury, Division of Pensions and Benefits, P.O. Box 295, Trenton, NJ 08625, or calling (609) 984-1684.

B. Funding Policy

The System's designated purpose is to provide retirement, death, disability and medical benefits to certain qualified members. Membership in the System is mandatory for substantially all full-time employees of the State of New Jersey or any county, municipality, school district or public agency, provided the employee is not required to be a member of another state-administered retirement system or other state or local jurisdiction. The System's Board of Trustees is primarily responsible for the administration of the System.

According to the State of New Jersey administl'8tive code, all obligations of the System will be assumed by the State of New Jersey should the System terminate.

Plan members are required to contribute 5.5% of their annual covered salary for P.E.R.S, 8.5% of their mmual covered salmy for P.F.R.S. and the Township is required to contribute at an actuarially determined rate. The contribution requirements of plan members and the Township of Lakewood are

32 TOWNSHIP OF LAKEWOOD

NOTES TO FINANCIAL STATEMENTS . FOR THE YEAR ENDED DECEMBER 31, 2010

Note 6. Pension Plans (continued):

established and may be amended by the plan's board of trustees. The Township of Lakewood's contributions to P.E.R.S. for.the years ending December 31,2010,2009 and 2006 were $484,682, $462,110 and $584,981 respectively, equal to the required contributions for each year, and to P.F.R.S. for the years ending December 31, 2010, 2009 and 2008 were $1,358,663, $1,335,133 and $2,216,356 respectively, equal to the required contributions for each year.

Note 7. Compensated Absences

Full-time Township employees are entitled to fifteen paid sick leave days each year. Unused sick leave may be accumulated and carried forward from year to yem'; however, upon retirement no lump sum supplemental compensation payment shall exceed $15,000 unless the employee was hired before May of 1991. Any employee hired before May of 1991 shall be paid Yz the value of accumulated sick time. Unused vacation time may be accumulated and carried over to a succeeding year in an amount not exceeding one year's worth of vacation time. More time than that can be cmTied over with prior approval of the Municipal Manager throngh the Governing Body. Upon retirement, payment for vacation time cannot exceed more thml two yem's wOlth of accumnlated time. (If an employee earns 18 days of vacation time per year, the maximum payout npon retirement for vacation time is 36 days).

Pmt-time employees are entitled to no sick or vacation time.

The Township does not record accrued sick leave. However, at December 31,2010, it is estimated that accrued sick leave benefits payable in future years is valued at $7,020,078. In those years where the Township believes that retirement will occnr, bndgetary appropriations are made to fund estimated payments.

Note 8. New Jersey Unemployment Compensation Insurance

The Township has elected to fund its New Jersey unemployment Compensation Insurance under the "Benefit Reimbursement Method". Under this plan, the Township is required to reimburse the New Jersey Unemployment Trust Fund for benefits paid to its fOimer employees and charged to its account with the State. The Township is billed qnarterly for amounts due to the State. The following is a summary of Township contributions, reimbursements to the State for benefits paid mId the ending balance of the Township's Trust Fund for the current and previous two years:

Township Amount Ending Year Contributions Reimbursed Balance

2010 None $53,454 $314,939 2009 None 87,996 367,038 2008 None 44,962 452,010

33 TOWNSHIP OF LAKEWOOD

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010

Note 9. Risk Management

The Township of Lakewood is exposed to various risks of loss related to tOlis; theft of, damage to and destruction of assets; errors and omissions and natural disasters. The Township is a member of the Ocean Connty Municipal Joint Insurance Fund (JIF). This public entity risk pool is both an insured and self-administered group of 29 municipalities established for the purpose of insuring against property damage, general liability, motor vehicles and equipment liability and workmen's compensation. The JIF will be self-sustaining through member premiums. The JIF participates in the Municipal Excess Liability Insurance Program. There were no settlements in excess of insurance coverage in 2010,2009 and 2008.

Note 10. Deferred Compensatiou Salary Accouut

The Township offers it employees a Deferred Compensation Plan in accordance with Internal Revenue Code Section 457, which has been approved by the Director of Local Government Services. The Plan, available to all full time employees at their option, pennits employees to defer a portion of their salary to future years. The deferred compensation is not available to participants until tennination, retirement, death or unforeseeable emergency.

Amounts defened under Section 457 plans must be held in trust for the exclusive benefit ofpaliicipating employees and not be accessible by the Township or its creditors.

Note 11. Litigation

The Township is a defendant in several legal proceedings that are in varions stages of litigation. It is believed that the outcome, or exposure to the Township, from such litigation is either unknown or potential losses, if allY, would not be material to the financial statements.

Note 12. Deferred Charges to be Raised in Succeeding Budgets

Certain expenditures are required to be deferred to budgets of sncceeding years. At December 31, the following defened charges al'e shown on the balance sheets of the Current Fund and Trust Other Funds:

Balance to Succeeding Budgets Current Fund: Special Emergency Appropriation $560.000

34 TOWNSHIP OF LAKEWOOD

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010

Note 13. Post Employment Retirements Benefits

In addition to the pension benefits described in Note 6, the Township provides post employment benefits other than pension benefits to employees who retire from the Township and meet celtain eligibility criteria in accordance with contractnal agreements. These aTe lmown as post-employment benefits. Other post-employment benefits include post-employment health care benefits provided, regardless of the type of plan that provides them, and all post-employment benefits provided separately from a pension plan, excluding benefits defined as termination offers and benefits. Benefits are provided through the Central Jersey Health Insurance Fund, an agent mUltiple-employer health insurance fund.

The Township funds these benefits on a pay-as-you-go basis and therefore does not record accrued expenses related to these benefits. During the year 2010, there were 109 retired employees who received this benefit resulting in the payment of $1 ,576,963 in related health care premiums.

The Township's annual Other Post-Employment Benefit cost is calculated based on the Annual Required Contribution. The actuarial cost method used to determine the Plan's funding requirements is the "Unit Credit" method. Under this method, an actuarial accrued liability is determined as the present value of the earned benefits, which is allocated to service before the current plan year. The Plan is cUlTently unfunded. The unfunded actuarial liability is amOltized over thilty years. The following table shows the changes in the Township's annual Other Post-Employment Benefit cost for the yeru', the amount actually contributed to the Plan and chrulges iu their net Other Post-Employment Benefit obligation to the plan:

Annual Required Contribution $10,468,900 Interest on Net Other Post-Employment Benefit Adjustment to Annual Required Contribution

Subtotal 10,468,900

Ammal Other Post-Employment Benefit Contributions Made 1,576,963

Increase in Net OPEB Obligation 8,891,937 Net OPEB, Begilming of Year 17,985,433

Net OPEB, End ofYeru' $26877.llQ

The Township'S annual Other Post-Employment Benefit cost, the percentage of annual Other Post Employment Benefit cost contributed to the Plan, and the net Other Post Employment Benefit obligation (OPEB) for the year ending December 31, 2010 is as follows:

YEAR ANNUAL PERCENTAGE NETOPEB ENDED OPEBCOST CONTRIBUTED OBLIGATION

12/31110 $10,468,900 15.76 % $26,877,370

35 TOWNSHIP OF LAKEWOOD

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010

Note 13. Post Employment Retirements Benefits (continued):

Actuarial assumptions were used to value the post-retirement medical liabilities. Actuarial assumptions were based on the actual experience of the covered group, to the extent that creditable experience data was available, with an emphases on expected long-term future trends rather than giving undue weight to recent past experience. The reasonableness of each actuarial assnmption was considered independently based on its own merits, its consistency with each other assumption, and the combined impact of all assumptions.

Two economic assumptions used in the valuation are the discount rate and the health care cost trend rates. The economic assumptions are used to account for changes in the cost of benefits over time and to discount future benefit payments for the time value of money.

The Township's initial OPEB actuarial valuation as of January 1,2008 used the projected unit credit cost method. The actuarial assumptions included an annual medical cost trend rate of 10.5% initially, and decreases to a 5% long-term trend rate after thilieen years. The GASB statement requires that the discount rate used to determine the retiree health care liabilities should be the estimated long-term yield on the "investments that are expected to be used to finance the payments of benefits." Since the Township does not currently pre-fund the retiree health care liabilities, the discount rate should be based on the portfolio of the Township's "general assets" used to pay these benefits. The discount rate utilized as of January 1,2008 was 4%.

36 SUPPLEMENTAL EXHIBITS

CURRENT FUND EXHIBIT A-4 TOWNSHIP OF LAKEWOOD CURRENT FUND SCHEDULE OF CASH AND CASH EQUIVALENTS - TREASURER FOR THE YEAR ENDED DECEMBER 31, 2010

Balance December 31, 2009 $24,336,749

Increased by Receipts: Tax Collector $148,569,509 Nonbudget Revenue 3,385,356 State of New Jersey eCho 20, P.L. 1971) 801,921 Emergency Notes 560,000 Revenue Accounts Receivable 10,187,351 Interfunds 19,056,213 Various Reserves 26,932 Deposits on Sale of Property 21,500 Due to State of New Jersey 124,955 Demolition Charges Receivable 2,082 Section 8 Existing Housing 14,007,057 196,742,876

Subtotal 221,079,625

Decreased by Disbursements: 2010 Budget Appropriations 55,692,064 Interfunds 19,593,001 Repayment of Emergency Notes 3,580,872 2009 Appropriation Reserves 2,872,685 Accounts Payable 14,647 Reserve for Reassessment 467,900 Reserve for Tax Appeals 1,211,867 County Taxes Payable 26,129,026 Local School District Tax 73,190,928 Fire District Tax 3,575,321 Various Reserves 78,650 Due to State of New Jersey 116,681 Section & Existing Housing 15,077,570 201,601,212

Balance December 31, 2010 $19,478,413

37 EXHIBIT A-5 TOWNSHIP OF LAKEWOOD CURRENT FUND SCHEDULE OF CURRENT CASH - COLLECTOR FOR THE YEARS ENDED DECEMBER 31,2010

Balance December 31, 2009 $

Increased by Receipts: Taxes Receivable $142,877,823 Demolition Charges 2,082 Tax Title Liens 21,900 Revenue Accounts Receivable 1,246,717 Tax Overpayments 1,996,986 Prepaid Taxes 1,447,032 Interest & Costs on Taxes 976,969 148,569,509

Subtotal 148,569,509

Decreased by Disbursements: Turnover to Treasurer 148,569,509

Balance December 31, 2010 $

38 EXHIBIT A-6 TOWNSHIP OF LAKEWOOD CURRENT FUND SCHEDULE OF TAXES RECEIVABLE AND ANALYSIS OF PROPERTY TAX LEVY FOR THE YEAR ENDED DECEMBER 31, 2010 CHAPTER 20, P.L. 1971 BALANCE TRANSFERRED SENIOR CANCELLED, BALANCE DECEMBER31, COLLECTED TO TAX OVERPAYMENTS OVERPAYMENTS CITIZENS & REMITTED DECEMBER 31, YEAR 2009 2010 LEVY 2009 2010 TITLE LIENS APPLIED CREATED VETERANS OR ABATED 2010

2007 $10,762 757 10,005 2008 205,899 10,785 74,070 564,626 500 465,200 219,970 2009 4,933,091 4,364,626 23,491 89,165 1,388,534 (31,374) 1,333,551 542,166

Total 5,149,752 4,376,168 23,491 163,235 1,953,160 (30,874) 1,798,751 772,141 2010 148,469,166 2,181,025 138,501,655 183,197 _ ____ 845,404 1,455,429 5,302,456

W Balance $D49cI~_ 148.469,166 2,181.025 142,877,823 'D 206,688 163.235 1,953.160 814.530 3.254.180 6,074,597 ANALYSIS OF 2010 PROPERTY TAX LEVY

Tax Yield: General Pnrpose Tax $143,017,257 Fire District Tax 3,575,321 Added & Omitted Tax 1,876,588

Total $148.469.166

Tax Levy: Local District School Tax $73,546,157 Connty Taxes: Connty Taxes $21,506,861 Connty Library Tax 2,454,312 Connty Health Tax 973,952 Connty Open Space Tax 947,486 Due Connty for Added & Omitted Taxes 301,847 Total Connty Taxes 26,184,458 Fire District Taxes 3,575,321 Local Tax for Municipal Pnrposes 43,588,489 Add: Additional Tax Levied 1,574,741

Total $148469,166 EXHIBIT A-7 TOWNSHIP OF LAKEWOOD CURRENT FUND SCHEDULE OF TAX TITLE LIENS FOR THE YEARS ENDED DECEMBER 31,2010

Balance December 31,2009 $541,432

Increased by: Transfer from Taxes Receivable 206,688

Subtotal 748,120

Decreased by: Cash Collections 21,900

Balance December 31,2010 $726,220

EXHIBIT A-8 SCHEDULE OF CASH - CHANGE FUND

Balance December 31, 2010 & 2009 $950

40 EXHIBIT A-9 TOWNSHIP OF LAKEWOOD CURRENT FUND SCHEDULE OF PROPERTY ACQUIRED FOR TAXES (AT ASSESSED V ALUATION) FOR THE YEAR ENDED DECEMBER 31, 2010

Balance December 31, 2009 $5,959,192

Decreased by: Adjustment to Assessed Valuation 5,800

Balance December 31, 20 I 0 $5,953,392

EXHIBIT A-IO SCHEDULE OF DUE FROM STATE - P.L. 1971, C. 20 FOR THE YEAR ENDED DECEMBER 31, 2010

Balance December 31, 2009 $79,565

Increased by: Deductions per Tax Duplicate: Senior Citizens $203,000 Veterans 615,250 Deductions Allowed by Collector 27,154 845,404

Subtotal 924,969

Decreased by: Received from State of New Jersey 801,921 Deductions Disallowed - Prior Years 30,874 832,795

Balance December 31, 2010 $92,174

EXHIBIT A-ll SCHEDULE OF DEMOLITION CHARGES RECEIVABLE

Balance December 31, 2009 $28,306

Decreased by: Collections 2,082

Balance December 31, 20 I 0 $26,224

41 EXHIBIT A-12 TOWNSHIP OF LAKEWOOD CURRENT FUND SCHEDULE OF REVENUE ACCOUNTS RECEIVABLE FOR THE YEAR ENDED DECEMBER 31,2010

BALANCE BALANCE DECEMBER 31, ACCRUED COLLECTION DECEMBER 31, 2009 IN 2010 TREASURER COLLECTOR 2010 Clerk Alcoholic Beverages Licenses 80,100 80,100 Other Licenses $1,508 128,709 128,542 1,675 Other Fees & Pelmits 1,741 94,170 90,527 1,085 4,299 Division of Inspections: Construction Code Official 131,101 1,347,683 1,329,355 149,429 Other Fees & Permits 6,300 72,949 76,299 2,950 Department of Police: Police Identification Fees 46,390 46,390 Housing Fees 10,750 136,505 135,915 11,340 Planning Board Fees 5,420 82,631 88,051 Zoning Board Fees 5,060 52,995 53,200 4,855 Board of Health - Registrar Fees 21,885 21,885 Municipal Court: Fines & Costs 59,018 843,301 843,992 58,327 Recycling Revenue limn County 131,257 131,257 Emergency Medical Services 810,461 810,461 Police Off-Duty Employment Fmlds 101,941 101,941 Baseball Stadimn Rent 25,000 25,000 Shared Services Agreement - - Schools Trash/Recycling 88,083 88,083 Baseball Stadium - Debt Service on Notes 28,960 28,960 Cell Tower Lease 58,584 58,584 Tax Abatement Program Revenue 968,764 968,764 Tax Collector: Payment in Lieu of Taxes: Sons ofIsrael 179,872 179,872 Lalcewood Plaza II 96,996 96,996 State of New Jersey: Consolidated Municipal Property Tax Relief Aid 880,849 880,849 Energy Receipts Tax 4,274,267 4,274,267 Garden State Trust Fund 221 221 Reserve for Repayment of Debt Service 700,000 Cable TV Franchise Fees 141,912 Health Premimn Reinlbursement 51,560

Total $220,898 10,552,573 10,187,351 1,246,717 232,875

42 EXHIBIT A-13 TOWNSHIP OF LAKEWOOD CURRENT FUND SCHEDULE OF DEFERRED CHARGES N.J.S. 40A: 4-55 SPECIAL EMERGENCY FOR THE YEAR ENDED DECEMBER 31, 2010

""'"w liS OF FUNDED BY BALANCE DATE AMOUNT NET AMOUNT BUDGET CAPITAL DECEMBER 31, AUTHORIZED PURPOSE AUTHORIZED AUTHORIZED AUTHORIZED APPROPRIATION ORDINANACE 2010

6/18/09 Revaluation of Real Property $700,000 $140,000 $700,000 140,000 560,000

l1Il109 Reserve for Repayment of Tax Appeal' 2,880,872 576,174 2,880,872 2,880,872

Total $3,580,872 140,000 2,880,872 560,000 EXHIBIT A-14 (Page I of 4) TOWNSHIP OF LAKEWOOD CURRENT FUND SCHEDULE OF 2009 APPROPRIATION RESERVES FOR THE YEAR ENDED DECEMBER 31, 2010

BALANCE BALANCE DECEMBER 31,2009 AFTER PAID OR BALANCE RESERVED ENCUMBERED TRANSFERS CHARGES LAPSED

Administrative & Executive: Office of the Manager: Salaries and Wages $7,602 7,602 7,602 Other Expenses 11,208 6,993 18,201 11,335 6,866 Goveming Body: Other Expenses 19,485 47,721 67,206 53,203 14,003 Municipal Clerk: Salaries and Wages 1,054 1,054 1,054 Other Expenses 6,022 4,175 10,197 5,155 5,042 Purchasing Department: Salaries and Wages 3,674 3,674 3,674 Other Expenses 121 8,004 8,125 8,071 54 Financial Administration: Salaries and Wages 1,782 1,782 1,782 Other Expenses 8,028 8,028 7,770 258 Audit Services: Other Expenses 50,000 50,000 50,000 Computer Center: Salaries and Wages 212 212 212 Other Expenses 12,376 608 12,984 4,859 8,125 Collection of Taxes: Salaries and Wages 561 561 561 Other Expenses 3,510 3,510 3,510 Assessment of Taxes: Salaries and Wages 32,226 32,226 32,226 Other Expenses 289,969 25,300 272,569 77,953 194,616 Reassessment Other Expenses 180,000 180,000 180,000 Tax Appeals Other Expenses 130,527 130,527 130,337 19O Liquidation of Tax title Liens & Foreclosed Property: Other Expenses 18,458 18,458 18,458 Legal Services & Costs: Other Expenses 101,345 13,987 119,832 119,832 Engineering Services & Costs: Other Expenses 54,257 77,376 201,633 184,444 17,189 Civil Rights Commission: Other Expenses 1,250 1,250 1,250 Advisory Board on Disability: Other Expenses 2,000 2,000 2,000 Tourism Advisory Committee: Other Expenses 2,700 2,700 2,700 Veterans Advisory Committee: Other Expenses 4,332 4,332 4,332 Planning Board: Other Expenses 15,496 2,659 18,155 4,595 13,560 Zoning Board: Other Expenses 31,779 521 22,300 732 21,568 Police: Salaries and Wages 235,127 325,773 300,655 25,118 Other Expenses 13,837 73,358 87,195 85,622 1,573

44 EXHIBIT A-14 (Page 2 of4) TOWNSHIP OF LAKEWOOD CURRENT FUND SCHEDULE OF 2009 APPROPRIATION RESERVES FOR THE YEAR ENDED DECEMBER 31, 2010

BALANCE BALANCE DECEMBER 31,2005 AFTER PAID OR BALANCE RESERVED ENCUMBERED TRANSFERS CHARGES LAPSED

Emergency Management Services: Other Expenses 11,972 4,145 16,117 5,125 10,992 Emergency Medical Technicians: Salaries and Wages 29,781 29,781 29,781 Other Expenses 1,485 13,639 15,124 13,237 1,887 Municipal Prosecutor: Other Expenses 6,250 6,250 12,500 12,500 Road Repairs & Maintenance: Salaries and Wages 2,423 2,423 2,423 Other Expenses 116,050 28,909 144,959 127,706 17,253 Street Cleaning: Other Expenses 940 1,122 2,062 1,122 940 Department of Public Worles: Salaries and Wages 7,975 7,975 7,975 Other Expenses 28,653 4,434 33,087 11,824 21,263 Shade Tree Commission: Salaries and Wages 19,150 19,150 19,150 Other Expenses 15,016 435 15,451 435 15,016 Cross Street Landfill Maintenance: Other Expenses 1,875 1,875 1,875 Garbage & Trash Removal: Salaries and Wages 7,949 7,949 7,949 Other Expenses 25,060 15,320 40,380 14,855 25,525 Recycling: Other Expenses 35,110 10,378 45,488 7,117 38,371 Public Buildings & Grounds: Salaries and Wages 1,347 1,347 1,347 Other Expenses 22,011 24,851 46,862 26,563 20,299 Apartment Trash Reimbursements: Other Expenses 711 152,293 179,204 178,561 643 Automotive Mechanics: Salaries and Wages 20,423 20,423 20,423 Municipal Garage: Salaries and Wages 14,270 14,270 14,270 Other Expenses 13,255 15,600 28,855 16,561 12,294 Community Services Act: Other Expenses 102,010 306,575 408,585 406,477 2,108 Municipal Court: Salaries and Wages 16,151 16,151 16,151 Other Expenses 6,428 2,359 8,787 2,892 5,895 Public Defender: Other Expenses 1,100 1,100 1,100 Board of Health: Salaries and Wages 405 150 555 ISO 405 Other Expenses 873 555 1,428 580 848 Enviromnental Commission: Other Expenses 1,899 90 1,989 90 1,899

45 EXHIBIT A-14 (Page 3 of 4) TOWNSHIP OF LAKEWOOD CURRENT FUND SCHEDULE OF 2009 APPROPRIATION RESERVES FOR THE YEAR ENDED DECEMBER 31, 2010

BALANCE BALANCE DECEMBER 31,2009 AFTER PAID OR BALANCE RESERVED ENCUMBERED TRANSFERS CHARGES LAPSED

Animal Control: Salaries and Wages 147 147 147 Other Expenses 8,189 4,101 12,290 8,835 3,455 Relocation Assistance: Other Expenses 21,100 21,100 9,130 11,970 Senior & Social Services: Other Expenses 55,000 55,000 50,000 5,000 Catholic Charities 6,420 6,420 2,640 3,780 Kimball Medical Center 10,000 15,000 25,000 15,000 10,000 Lakewood Commmlity Services Corporation 30,000 30,000 30,000 Recreation: Salaries and Wages 387 387 387 Other Expenses 21,752 352 22,104 400 21,704 Community Center: Salaries and Wages 14,648 14,648 210 14,438 Other Expenses 9,851 3,155 13,006 3,245 9,761 Parks & Playgrounds: Salaries and Wages 3,182 3,182 3,182 Other Expenses 45,785 9,443 55,228 10,776 44,452 Salmy md Wage Adjusbnent 75,646 Celebration of Public Events: Other Expenses 17,500 17,500 17,500 Transfer to Lalcewood Airport 7,180 21,950 29,130 27,601 1,529 State Unifonn Construction Code Officials: Salaries and Wages 15,411 15,411 15,411 Other Expenses 62,444 19,012 68,456 19,012 49,444 Property Maintenmlce Code: Other Expenses 12,000 12,000 12,000 Insurance: Liability Insurance 678 4,077 4,755 3,160 1,595 Workers Compensation Insurance 6,028 6,028 6,028 Group Insurance P1m for Employees 338,859 323,859 323,859 Electricity 4,882 45,215 59,797 59,797 Street Lighting 17,610 84,541 158,651 158,651 Telephone 1,708 6,462 11,770 11,556 214 Water 11,206 1,423 12,629 3,215 9,414 Natural Gas 18,352 18,352 12,961 5,391 Gasoline 208,094 44,076 147,370 108,811 38,559 Stadimn Utilities 12,937 12,937 12,937 Lmdfill Disposal Costs 60,000 258,080 318,080 258,080 60,000 Recycling Tax 107,920 107,920 107,920 Contingent 25,000 25,000 25,000 Statutory Expenditures: Contributions to: Social Security System (O.A.S.I) 37,954 37,954 4,611 33,343 Consolidated Police & Firemen's Pension Fund 1 1

46 EXHIBIT A-14 (Page 4 of 4) TOWNSHIP OF LAKEWOOD CURRENT FUND SCHEDULE OF 2009 APPROPRIATION RESERVES FOR THE YEAR ENDED DECEMBER 31,2010

BALANCE BALANCE DECEMBER 3 1,2009 AFTER PAID OR BALANCE RESERVED ENCUMBERED TRANSFERS CHARGES LAPSED

Matching Funds for Grants 92,000 92,000 92,000 Contribution to: Police & Firemen's Retirement System of N.J. 16,636 16,636 16,636 Public Employees' Retirement System 4,963 4,963 4,963 Capital Improvements: Acquisition of Property 20,000 20,000 20,000

Total General Appropriations 2,732,321 1,783,353 4,515,674 2,925,969 1,589,705

Cash Disbursements $2,872,685 Accounts Payable 53,284

Total $2,925,969

47 EXHIBIT A-15 TOWNSHIP OF LAKEWOOD CURRENT FUND SCHEDULE OF ACCOUNTS PAYABLE FOR THE YEAR ENDED DECEMBER 31,2010

Balance December 31, 2009 $92,727

Increased by: Appropriation Reserves 53,284

Subtotal 146,011

Decreased by: Cash Disbursed 14,647

Balance December 31, 2010 $131,364

EXHIBIT A-16 SCHEDULE OF PREPAID TAXES FOR THE YEAR ENDED DECEMBER 31, 2010

Balance December 31, 2009 $2,181,025

Increased by: Collections, 2010 Taxes 1,447,032

Subtotal 3,628,057

Decreased by: 2,181,025 Applied to Taxes Receivable

Balance December 31,2010 $1,447,032

EXHIBIT A-17 SCHEDULE OF TAX OVERPAYMENTS FOR THE YEAR ENDED DECEMBER 31,2010

Balance December 31, 2009 $2,196,257

Increased by: Receipts - Collector 1,996,986

Subtotal 4,193,243

Decreased by: Applied 163,235

Balance December 31, 2010 $4,030,008

48 EXHIBIT A-18 TOWNSHIP OF LAKEWOOD CURRENT FUND SCHEDULE OF COUNTY TAXES PAYABLE FOR THE YEAR ENDED DECEMBER 31, 2010

Balance December 31, 2009 $246,415

Increased by: County Tax $21,506,861 County Library Tax 2,454,312 County Health Tax 973,952 County Open Space Preservation 947,486 Due County for Added & Omitted Taxes 301,847 26,184,458

Subtotal 26,430,873

Decreased by: Payments 26,129,026

Balance December 31, 2010 $301,847

EXHIBIT A-19 SCHEDULE OF LOCAL DISTRICT SCHOOL TAX PAYABLE FOR THE YEAR ENDED DECEMBER 31, 2010

Balance December 31, 2009 $597,113

Increased by: Levy - Calendar Year 2010 73,546,157

Subtotal 74,143,270

Decreased by: Payments 73,190,928

Balance December 31,2010 $952,342

EXHIBIT A-20 SCHEDULE OF FIRE DISTRICT TAXES PAYABLE FOR THE YEAR ENDED DECEMBER 31, 2010

Balance December 31, 2009 $

Increased by: Levy - Calendar Year 3,575,321

Decreased by: Payments 3,575,321

Balance December 31, 2010 $

49 EXHIBIT A-21 TOWNSHIP OF LAKEWOOD CURRENT FUND SCHEDULE OF VARIOUS RESERVES FOR THE YEAR ENDED DECEMBER 31, 2010

BALANCE BALANCE DECEMBER 3 I, CASH DECEMBER 31, 2009 RECEIPT DECREASED 2010 Reserve For: Industrial Commission $88,158 26,932 78,650 36,440 Garden State Trust Fund 221 221

Total $88,379 26,932 78,871 36,440

Detail: Anticipated as Revenue $221 Cash Disbursements 78,650

Total $78,871

EXHIBIT A-22 SCHEDULE OF DUE TO STATE OF NEW JERSEY FOR THE YEAR ENDED DECEMBER 31, 2010

MARRIAGE/ CONSTRUCTIOl\ DOMESTIC TRAINING PARTNERSHIP BURIAL TOTAL FEES FEES FEES

Balance December 31, 2009 $30,130 26,565 3,525 40

Increased by: Cash Receipts 124,955 110,435 14,450 70

Subtotal 155,085 137,000 17,975 110

Decreased by: Cash Disbursed 116,681 102,891 13,700 90

Balance December 31, 2010 $38,404 34,109 4,275 20

50 EXHIBIT A-23 TOWNSHIP OF LAKEWOOD CURRENT FUND SCHEDULE OF RESERVE FOR STATE BOARD OF TAXATION APPEALS FOR THE YEAR ENDED DECEMBER 31,2010

Balance December 31, 2009 $2,892,746

Decreased by : Refund of Tax Appeals 1,585,612

Balance December 31, 2010 $1,307,134

EXHIBIT A-24 SCHEDULE OF DEPOSITS ON SALE OF PROPERTY FOR THE YEAR ENDED DECEMBER 31, 2010

Balance, December 31, 2009 $92,852

Increased by: Cash Receipts 21,500

Subtotal 114,352

Decreased by: Applied to Sales of Property 25,100

Balance December 31, 2010 $89,252

EXHIBIT A-25 SCHEDULE OF DUE TO LAKEWOOD HOUSING FOR THE YEAR ENDED DECEMBER 31, 2010

Balance December 31, 2009 $1,160,984

Increased by: Cash Receipts 14,007,057

Subtotal 15,168,041

Decreased by: Cash Disbnrsed 15,077,570

Balance, December 31,2010 $90,471

51 EXHIBIT A-26 TOWNSHIP OF LAKEWOOD CURRENT FUND SCHEDULE OF INTERFUNDS - OTHER FUNDS FOR THE YEAR ENDED DECEMBER 31,2010

FEDERAL & ANIMAL STATE GRANT GENERAL CONTROL TOTAL FUND TRUST TRUST

Balance, December 31, 2009: Inter fund Receivable $276,228 276,228

(Interfund Payable) (2,042,000) (2,029,026) (12,974)

Increased by: Nonbudget Revenne Disbursements 19,593,001 14,866,743 4,712,968 13,290

Total Increased by 19,593,001 14,866,743 4,712,968 13,290

Subtotal 17,827,229 15,142,971 2,683,942 316

Decreased by: Collections - Treasmer: Settlements 14,562 14,562 Grants Receivable 14,698,769 14,698,769 Unappropriated Funds 133,685 133,685

Subtotal 14,847,016 14,832,454 14,562

Various Reserves 4,209,197 4,209,197

Total Decreased by 19,056,213 14,832,454 4,209,197 14,562

Balance, December 31, 2010: Interfund Receivable $310,517 310,517

(lnterfund Payable) ($1,539,501) (1,525,255) (14,246)

ANALYSIS OF NET CHARGE TO OPERATIONS

Interfund Receivable: Balance, December 31,2009 $276,228 Balance, December 31, 20 I 0 310,517

Net Credit to Operations ($34,289)

52 EXHIBIT A-27 TOWNSHIP OF LAKEWOOD CURRENT FUND SCHEDULE OF SPECIAL EMERGENCY NOTES FOR THE YEAR ENDED DECEMBER 31, 2010 v. w BALANCE BALANCE DATE OF DATE OF INTEREST DECEMBER 31, DECEMBER 31, ISSUE MATURITY RATE 2009 INCREASED DECREASED 2010

Reserve for Reassessment 9/25/09 9/24/10 1.790% $700,000 700,000 9/25/10 9/24111 1.330% 560,000 560,000

Reserve for Tax Appeals 12/30/09 4130110 .680 % 2,880,872 2,880,872

Total $3,580,872 560,000 3,580,872 560,000 EXHIBIT A-28 TOWNSHIP OF LAKEWOOD FEDERAL AND STATE GRANT FUND SCHEDULE OF DUE TO CURRENT FUND FOR THE YEAR ENDED DECEMBER 31, 2010

Balance December 31, 2009 $276,228

Increased by: Disbursed by CnlTent Fund: Appropriated Reserves $4,680,576 Cancellation of Appropriated Reserve 13,779 2010 Anticipated Revenue 10,172,388 14,866,743

Snbtotal 15,142,971

Decreased by: Deposited in Current Fund: Unappropriated Reserves 133,685 Grants Receivable 4,088,585 2010 Budget Appropriations 10,610,184 14,832,454

Balance December 31, 2010 $310,517

54 EXHIBIT A-29 (Page I of2) TOWNSHIP OF LAKEWOOD FEDERAL AND STATE GRANT FUND SCHEDULE OF GRANTS RECEIVABLE FOR THE YEAR ENDED DECEMBER 31,2010

UNAPPROPRIATED BALANCE 2010 RESERVES BALANCE DECEMBER 31, ANTICIPATED CASH REALIZED AS DECEMBER 31, GRANT 2009 REVENUE RECEIVED REVENUE CANCELLED 2010

Alcohol Education & Rehabilitation Fund 4,455 4,455 Bulletproof Vest Partnership Program $14,045 9,563 4,482 Clean Communities 97,095 80,402 16,693 Community Development Block Grant-2008 43,666 43,666 Community Development Block Grant-2009 785,048 513,133 271,915 Community Development Block Grant- Title I Assistance 179,214 173,833 5,381 Community Development Block Grant- 2010 850,299 850,299 Community Forestty Management Plan 2,000 2,000 State Homeland Security Program 264,430 259,850 4,580 Economic Development Initiative Funds 142,500 142,500 Edward Byrne Memorial Justice Assistance Grant 73,987 124,014 198,001 Energy Efficiency Grant 678,200 678,200 Helipad 52,250 52,250 Municipal Alliance On Alcoholism & Drug Abuse 15,893 48,000 42,396 21,497 New Jersey Department of Transportation: Cedarbridge Corporate Campus 849,796 849,796 Fomth Street 25,176 25,176 Kettle Creek & Vine Street Access Project 9,174 9,174 Kettle Creek & Vine Street Access Project - Phase II 150,204 150,204 Municipal Aid Program 2009 405,549 232,299 173,250 Raintree - Phase III 71,620 71,620 NJ Forest Service- 2009 Business Stimulus Fund 7,000 7,000 Ocean County Delinquency Awareness & Prevention Grant 10,000 10,000 Ocean County Census Grant 50,000 50,000 Ocean County Cultural Heritage Grant 3,250 3,250 Office of Justice - Justice Assistance Grant 34,400 34,400

Page Totals 3,079,952 1,911,313 1,449,792 21,148 3,520,325

55 EXHIBIT A-29 (page 2 of2) TOWNSHIP OF LAKEWOOD FEDERAL AND STATE GRANT FUND SCHEDULE OF GRANTS RECEIVABLE FOR THE YEAR ENDED DECEMBER 31,2010

UNAPPROPRlATED BALANCE 2010 RESERVES BALANCE DECEMBER 31 ,ANTICIPATED CASH REALIZED AS DECEMBER 31, GRANT 2009 REVENUE RECEIVED REVENUE CANCELLED 2010

Perimeter Fence Phase I1- State 7,807 7,807 Recycling Tonnage Grant 124,148 124,148 Runaway End Identifier Lights 125,400 125,400 Safe & Secure Communities Program 14,424 60,000 59,423 15,001 Self Coating/Winsock 269,211 269,211 Self Service Fuel Tank 47,500 47,500 State ofNJ - Smart Future Planning - Downtowr Parking & Traffic Circulation Plan 25,000 25,000 Urban Enterprise Zone: 242 Main Street Acquisition & Demolition 98,464 98,464 Acquisition of228 Main Street 390,700 390,700 Acquisition of EMS Ambulance 1,200 1,200 Administration Amendment 14,910 14,910 DEZ Administration Amendment 48,000 48,000 Administrative Budget - 2007/2008 100,856 100,856 Administrative Budget - 2008/2009 191,805 191,805 Administrative Budget - 2009/2010 927,363 891,042 36,321 Administration Grant 201012011 770,000 192,791 577,209 Baseball Stadium Year X 6,001 6,001 Blinds to Go Assistance - 2009 50,500 50,500 Block 93 Downtown Development 5,595 872 4,723 Bond Payment - Lakewood Baseball Stadium 5,999 3,651 2,348 Business Attraction Initiative 62,000 62,000 Co-op Advertising Program- Pilot Project 250,000 250,000 Downtown Parking Development Phase II Property Acquisition 1,066,418 126,752 939,666 Downtown Parking Phase II 249,337 249,337 Downtown Redevelopment Plan 26,000 26,000 Emergent Stadium Repair 1,275,000 1,275,000 Environmental Assessment 66,000 13,997 52,003 Financial Assistance Pro!!rmn 950,000 950,000 Financial Assistance II 76,243 9,325 66,918 Franklin Street Redevelopment Area Appraisals & Evaluations 95,158 12,279 82,879 Frm1klin Street Redevelopment Area Acquisition 981,000 981,000 FY 11 966 Reimbursement Plan 1,460 1,460 Job Linle Bus 105,000 65,492 39,508 Job Link Year 12 6,913 6,913 Job Link Year 13 119,024 61,066 57,958 Job Link Year 14 426,220 69,960 250,467 245,713 Lakewood Stimulus Grant- Pilot Project 135,000 135,000 Marketing & Public Relations 2007 8,206 8,206 Marketing & Public Relations - VI 490,366 148,494 341,872 Monmouth A venue Revitalization 334,880 334,880 Municipal Services - 2007 8,995 8,995 Municipal Services - 2009 132,498 97,005 35,493 Municipal Services- 2010 690,575 419,414 271,161 NJ Emergency Assistance Grant 5,000 5,000 Redevelopment Database- Pilot Prqject 20,000 20,000 Small Business Development 155,000 155,000 Strand Theater Year IV Capital Improvement 118,174 118,174 Strand Theater Capital Improvements & Renovations - Phase III 626,311 43,012 583,299 Supplemental Parking 832,000 832,000 Video Surveillance 133,424 133,424 Wetlands Mitigation- State 681 681 Federal Awards: Environmental Study Phase III 52,447 15,072 37,375 Fence Environmental 103,391 23,310 80,081 Perimeter Fence Phase II 296,057 296,057 Wetlands Mitigation 25,887 25,887

Grand Total All Pages $8,098,385 10,172,388 4,088,585 150,296 365,591 13,666,301

56 EXHIBIT A-30 (Page 1 of 4) TOWNSHIP OF LAKEWOOD FEDERAL AND STATE GRANT FUND SCHEDULE OF Al'PROPRIATED RESERVES FOR THE YEAR ENDED DECEMBER 31,2010

TRANFERS BALANCE FROM 2010 BALANCE DECEMBER 31, 2009 BUDGET DECEMBER 31, 2010 GRANT ENCUMBERED RESERVED APPROPRlATIONS EXPENDED CANCELLED ENCUMBERED RESERVED

Alcohol Education & Rehabilitation $926 2,660 4,455 926 7,115 Alcohol Education & Rehabilitation - 2000 1,000 1,000 Alcohol Education & Rehabilitation - 2009 2,784 2,784 Body Armor Replacement Grant 1,110 1,110 Body Armor Replacement Grant 10,408 10,408 Body Armor Replacement Grant - 2009 12,573 2,006 10,567 '-" ...., Bulletproof Vest Partnership Grant 15,939 15,939 Bulletproof Vest Partnership Grant - 2009 7,613 7,613 Calvary Lighthouse - Purchase of Police Equipment 500 500 Census Grant 50,000 50,000 Clean Communities Program 65,826 39,067 97,095 145,054 9,410 47,524 Community Development Block Grant - 2002/2003 34,279 13,001 34,279 13,001 Conununity Development Block Grant - 2004 17,300 334 17,300 334 Community Development Block Grant - 2005 24,015 13,009 24,015 13,009 Community Development Block Grant - 2006 85,754 11,113 94,179 760 1,928 Community Development Block Grant - 2007 13,284 13,284 Community Development Block Grant - 2008 14,854 48,227 23,147 39,934 Community Development Block Grant - 2009 224,550 427,560 502,792 19,625 129,693 Community Development Block Grant- 2010 850,299 94,771 4,968 750,560 COlmnunity Development Block Grant - Title I Assistance 210,840 170,329 7,372 33,139 COlmnunity Forestry Management Plan 2,000 2,000 COPS More Grant - 2000 8,894 8,894 COPS Problem Solving Grant 26,601 26,601 DEPE - Tree Planting Grant 5,190 5,190 Domestic Violence Training Grant 1,250 1,250 Driving While Intoxicated 45,164 45,164 Drunk Driving Enforcement Fund - 2008 30,418 5,629 509 24,280 Drunk Driving Enforcement Fund - 2009 21,486 3,407 18,079

Page Totals 469,614 969,915 1,001,849 1,051,722 171,274 _ 1,218,382 EXHffiIT A-3O (Page2of4) TOWNSHIP OF LAKEWOOD FEDERAL AND STATE GRANT FUND SCHEDULE OF APPROPRIATED RESERVES FOR THE YEAR ENDED DECEMBER 31,2010

TRANFERS BALANCE FROM 2010 BALANCE DECEMBER 31, 2009 BUDGET DECEMBER 31, 2010 GRANT ENCUMBERED RESERVED APPROPRlATIONS EXPENDED CANCELLED ENCUMBERED RESERVED

Economic Development Initiative Fund 142,500 142,500 Edward Byrne Memorial Justice Assistance Grant 1,253 73,987 124,014 62,252 22,011 114,991 Emergency Assistance Grant 5,000 5,000 524 6,232 3,244 Energy Efficiency Grant 678,200 48,654 34,500 595,046 Environmental Study Phase III- Federal 52,447 11,354 3,718 37,375 Environmental Study Phase III~ State 2,761 598 196 1,967 Fence Environmental- Federal 103,391 23,310 80,081 Fence Environmental- Local 5,443 1,226 4,217 Franklin Street Redevelopment .Area Acquisition 981,000 981,000 FY 11 966 Reimbursement Plan 1,449 1,449 Gypsy Moth Grant 22,786 22,786 V> 00 Helipad- State 52,250 52,250 Helipad- Local 2,750 2,750 Lakewood Stimulus Grant- Pilot Project 135,000 135,000 Local Law Enforcement Block Grant 5,481 5,481 Local Law Enforcement Block Grant - 2000 46,733 46,733 Local Law Enforcement Block Grant - 2001 954 1,626 954 1,626 Local Law Enforcement Block Grant - 2002 2,628 2,628 Local Law Enforcement Block Grant - 2003 2,762 2,762 Municipal Alliance on Alcoholism & Drug Abuse 2008 1,353 1,353 Municipal Alliance on Alcoholism & Drug Abuse 2009 5,395 7,914 10,528 2,781 Municipal Alliance on Alcoholism & Drug Abuse 2010- State 48,000 48,000 Municipal Alliance on Alcoholism & Drug Abuse 2010- Local 15,000 2,427 4,165 8,408 Municipal Stonnwater Regulation Program 14,016 14,016 N.!. Transportation Trust Fund - 2001 27,636 27,636 State of New Jersey Department of Transportation 40,041 40,041 New Jersey Department of Transportation: 2009 Road Program 790 790 2010 Road Program 173,249 173,249 Discretionary Aid - Raintree - Phase III 26,490 26,490 Fourth Street 12,453 12,453 Kettle Creek & Vine Street Access Project - Phase II 70,752 70,752 NJ Forest Services- 2009 Business Stimulus Fund (BSF) Grant 7,000 7,000 NJ State Police - Emergency Management Grant 5,000 5,000 New Jersey Transportation Trust Fund Authority Act - Cedarbridge Corporate Campus 72,438 738,356 34,439 40,850 735,505

Page Totals 192,088 1,309,505 2,213,705 245,551 235,884 3,233,863 EXHIBIT A-30 (Page 3 of 4) TOWNSHIP OF LAKEWOOD FEDERAL AND STATE GRANT FUND SCHEDULE OF APPROPRIATED RESERVES FOR THE YEAR ENDED DECEMBER 31,2010

TRANFERS BALANCE FROM 2010 BALANCE DECEMBER 31,2009 BUDGET DECEMBER 31, 2010 GRANT ENCUMBERED RESERVED APPROPRIATIONS EXPENDED CANCELLED ENCUMBERED RESERVED

Ocean County Cultural & Heritage Commission 13,000 13,000 Ocean County Delinquency Awareness & Prevention! 10,000 10,000 Ocean County Tourism Grant - 2008 1,600 1,600 Ocean County Tourism Grant - 2009 800 800 Perimeter Fence Phase II- Federal 296,057 296,057 Perimeter Fence Phase U- State 7,807 7,807 V> Perimeter Fence Phase II- Local 7,807 7,807 '0 Recycling Mini-Grant - Ocean County 4,000 132 4,000 132 Recycling Mini-Grant - Ocean County - 2007 645 645 Recycling Mini-Grant - Ocean County - 2009 249 249 Recycling Tonnage Grant 9,948 78,153 124,148 16,709 491 195,049 Runaway End Identifier Lights- State 125,400 125,400 Runaway End Identifier Lights- Local 6,600 6,600 Safe & Secure Communities Programs - 2008 18,002 18,002 Safe & Secure Communities Programs - 2009 7,473 7,473 Safe & Secure Communities Programs- 2010 State 60,000 60,000 Safe & Secure Communities Programs- 2010 Local 142,366 142,366 Self Service Fuel Tank- State 47,500 47,500 Self Service Fuel Tank- Local 2,500 2,500 Seal CoatinglWinsock- State 269,2[[ 269,2[[ Seal Coating/Winsock- Local 14,169 14,169 Small Business Development 155,000 155,000 State Homeland Security 130,877 30,984 160,659 1,202 State ofNJ - Smart Future Planning - Downtown Parking & Traffic Circulation Plan 25,451 25,451 Supplemental Parldng 832,000 3,000 829,000 Urban Enterprise Zone: 242 Main Street Acquisition & Demolition 98,309 98,309 Acquisition of228 Main Street 390,700 390,700 Administration Amendment 14,910 14,910 UEZ Administration Amendment 48,010 44,302 3,708

Page Totals 145,470 674,853 ~~~ 2,153,485 424,036 98,309 8,136 2,443,327 EXHIBIT A-30 (page 4 of 4) TOWNSHIP OF LAKEWOOD FEDERAL AND STATE GRANT FUND SCHEDULE OF APPROPRIATED RESERVES FOR THE YEAR ENDED DECEMBER 31, 2010

TRANFERS BALANCE FROM 2010 BALANCE DECEMBER 31,2009 BUDGET DECEMBER 31, 2010 GRANT ENCUMBERED RESERVED APPROPRlATIONS EXPENDED CANCELLED ENCUMBERED RESERVED

Administrative Budget 2007/2008 86,359 86,359 Administrative Budget 2008/2009 202,702 59,955 142,747 Administrative Budget 2009120 10 44,116 442,450 446,533 805 39,228 Administrative Budget 20 I 0120 II 710,000 412,369 8,367 349,264 Baseball Stadium- Year 10 6,001 6,001 Blinds to Go Assistance - 2009 50,375 50,375 Block 93 Downtown Development 7,125 7,125 Baseball Stadium - Year II 2,276 3,723 3,651 2,348 Business Attraction Initiative 62,000 55,112 6,888 Business Center Roadway Reconstruction Phase I 3,388 3,110 278 0\ 0 Co-ap Advertising Program- Pilot Project 250,000 250,000 Downtown Parking Development Phase II Property Acquisition 2,695 1,056,383 102,536 54,473 902,069 Downtown Parking Phase II 249,337 13,703 38,038 197,596 Downtown Redevelopment Plan 66,000 20,057 15,980 29,963 Emergent Stadium Repair 1,275,000 45,519 594,905 634,576 Financial Assistance Program 66,918 950,000 35,650 62,500 918,768 Franklin Street Redevelopment Area Appraisals & Evaluations 179 83,929 1,310 1,350 81,448 Job Link Bus 105,000 79,959 19,491 5,550 Job Link - Year 12 6,549 6,549 Job Link - Year 13 7,018 50,940 57,958 Job Link - Year 14 387,420 38,800 69,960 452,478 5,780 37,922 Marketing & Public Relations - 2007 26,178 26,178 Marketing & Public Relations - 2008 516,970 223,191 49,465 244,314 Monmouth Avenue Revitalization 334,880 11,150 43,831 279,899 Municipal Services - 2009 81,90 I 34,261 47,640 Municipal Services- 2010 State 690,575 570,034 120,541 Municipal Services- 2010 Local 237,720 167,629 70,091 Redevelopment Database- Pilot Project 20,000 2,649 14,905 2,446 Strand Theater - Capital Improvements (Year 3) 31,677 665,997 84,987 5,090 607,597 Strand Theater - Capital Improvements (Year 4) 37,093 210 37,093 210 Video Surveillance 133,424 133,424 Wetlands Mitigation- Federal 25,887 25,887 Wetlands Mitigation- State 681 681 Wetlands Mitigation- Local 681 681

Grand Total All Pages $1J19,646 635L171 10,610,184 4,680576 379369 1J67367 1 L853,689 EXHIBIT A-31 TOWNSHIP OF LAKEWOOD FEDERAL AND STATE GRANT FUND SCHEDULE OF UNAPPROPRIATED RESERVES FOR THE YEAR ENDED DECEMBER 31,2010

BALANCE TRANSFERRED BALANCE DECEMBER 31, FUNDING ro ANTICIPATED DECEMBER 31, GRANT 2009 RECEIVED REVNEUE CANCELLED 2010

Alcohol Education & Rehabilitation Grant $4,455 3,317 4,455 3,317 Body Annor Replacement Fund 14,267 14,267 Clean Communities 16,693 16,693 Drunk Driving Enforcement Fund 12,491 12,491 Emergency Assistant Grant 5,000 5,000 5,000 5,000 Gypsy Moth Program 1,043 1,043 Recycling Tonnage Grant 124,148 98,610 124,148 98,610

Total $151,339 133,685 150,296 134,728

61 SUPPLEMENTAL EXHIBITS

TRUST FUND EXHIBIT B-1 TOWNSHIP OF LAKEWOOD TRUST FUND SCHEDULE OF CASH AND CASH EQUlVALENTS FOR THE YEAR ENDED DECEMBER 31, 2010

GRANT TRUST FUND GENERAL TRUST FUND

Balance December 31,2009 $197,104 6,903,250

Increased by Receipts: Investment Eamings 336 Interfund - Current Fund 10,044 Various Reserves 1,989,250

Total Receipts 1,999,294

Subtotal 197,440 8,902,544

Decreased by Disbursements: Interfund - Current Fund 10,044 Various Reserves 2,444,609

Total Disbursements 2,454,653

Balance December 31,2010 $197,440 6,447,891

62 EXHillITB-2 TOWNSHIP OF LAKEWOOD GENERAL TRUST FUND SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED DECEMBER 31, 2010

Balance December 31, 2009 $1,540,188

Increased by: Net Interest Earnings 4,277

Balance December 31, 20 I 0 $1,544,465

EXHillITB-3 ANIMAL CONTROL TRUST FUND SCHEDULE OF RESERVE FOR ANIMAL CONTROL FUND EXPENDITURES FOR THE YEAR ENDED DECEMBER 31, 2010

Balance December 31, 2009 $13,359

Increased by: Dog License Fees Collected $12,196 Miscellaneous Fees Collected 660 12,856

Snbtotal 26,215

Decreased by: Expenditnres Under R.S. 4:19-15.11 11,583

Balance December 3 1, 2010 $14,632

LICENSE FEES COLLECTED

YEAR AMOUNT

2009 $8,240 2008 6,392

$14,632

63 EXHIBIT B-4 TOWNSHIP OF LAKEWOOD GENERAL TRUST FUND ANUWAL CONTROL TRUST FUND SCHEDULE OF INTERFUND - CURRENT FUND FOR THE YEAR ENDED DECEMBER 31,2010

Balance December 31,2009 $12,974

Increased by: Reserve for Animal Control Expenditures $12,856 Due to State of New Jersey 1,706 14,562

Subtotal 27,536

Decreased by: Reserve for Animal Control Expenditures II,583 Due to State of New Jersey 1,707 13,290

Balance December 31,2010 $14,246

EXHIBIT B-5 SCHEDULE OF DUE FROM STATE OF NEW JERSEY FOR THE YEAR ENDED DECEMBER 31, 2010

Balance December 31,2009 $385

Increased by: Remitted to State of New Jersey 1,707

Subtotal 2,092

Decreased by: State Fees 1,706

Balance December 31, 2010 $386

64 EXHIBIT B-6 TOWNSIllP OF LAKEWOOD GRANT TRUST FUND SCHEDULE OF RESERVE FOR REVOLVING LOAN GRANT FOR THE YEAR ENDED DECEMBER 31, 2010

Balance December 31, 2009 $197,104

Increased by: Interest Earned 336

Balance December 31, 2010 $197,440

EXHIBITB-7 GENERAL TRUST FUND SCHEDULE OF INTERFUND - CURRENT FUND FOR THE YEAR ENDED DECEMBER 31,2010

Balance December 31, 2009 $2,029,026

Increased by: Various Reserves 4,209,197

Subtotal 6,238,223

Decreased by: Various Reserves 4,712,968

Balance December 31, 2010 $1,525,255

65 EXHIBIT B-8 TOWNSHIP OF LAKEWOOD GENERAL TRUST FUND SCHEDULE OF VARIOUS RESERVES FOR THE YEAR ENDED DECEMBER 31, 2010

BALANCE BALANCE DECEMBER 31, DECEMBER 31, 2009 INCREASED DECREASED 2010

Unemployment Compensation Insurance $367,038 1,355 53,454 314,939 Escrow Perfonnallce 2,970,418 309,960 574,225 2,706,153 Sanitary Landfill Escrow 540,188 4,277 544,465 Outside Off-Duty Police Employment 418,449 630,976 697,807 351,618 Rcdemption of Tax Sale Certificates 850,593 3,497,917 3,832,395 516,115 Premium at Tax Sale 443,612 129,800 232,400 341,012 Law Enforcement 289,540 19,868 71,173 238,235 Law Enforcement Confiscation 39,170 4 39,174 Cogeneration Plant 2,000,000 2,000,000 Planning & Zoning Fees 812,155 602,748 628,992 785,911 Inspection Fees 829,760 249,298 283,196 795,862 Street Opening Permits 128,609 89,422 50,158 167,873 Parking Offenses Adjudication Act 2,626 626 3,252 Public Defender 31,398 33,498 23,442 41,454 Accumulated Absences 87,157 427,300 514,451 6 Snow Removal 68,491 35,000 68,460 35,031 Recreation 44,208 33,128 29,855 47,481 Pine Park Deposits 102,830 6,875 2,795 106,910 Garbage Pail Deposits 398,110 36,245 360 433,995 Toms River RCA Agreement 48,110 15 48,125

Total $10,472,462 6,108,312 7,063,163 9,517,611

Interfund - Current Fund $4,209,197 Cash Receipts 1,899,115

Total $6,108,312

Interfund - Cunent Fund $4,712,968 Cash Disbursed 2,350,195

Total $7,063,163

66 SUPPLEMENTAL EXHIBITS

GENERAL CAPITAL FUND EXHIBIT C-l TOWNSHIP OF LAKEWOOD GENERAL CAPITAL FUND SCHEDULE OF FUND BALANCE - REGULATORY BASIS FOR THE YEAR ENDED DECEMBER 31, 2010

Balance December 31, 2010 and 2009 $8

EXHIBIT C-2 SCHEDULE OF CASH, CASH EQUIVALENTS AND INVESTMENTS FOR THE YEAR ENDED DECEMBER 31,2010

Balance December 3 1,2009 $6,854,042

Increased by Receipts: Budget Appropriation: Capital Improvement Fund $9,078 Bonds Anticipation Notes 9,368,000 Reserve for Debt Service 93 9,377,171

Subtotal 16,231,213

Decreased by Disbursements: Improvement Authorizations 4,378,118 Reserve for De Utilized as Revenue 700,000 Remitted to UEZ 4,804,053 Bond Anticipation Notes 4,986,000 Reserve for Renewal & Replacement 17,999 14,886,170

Balance December 31, 2010 $1,345,043

67 EXHIBIT C-3 TOWNSHIP OF LAKEWOOD GENERAL CAPITAL FUND ANALYSIS OF GENERAL CAPITAL CASH, CASH EQUIVALENTS & INVESTMENTS FOR THE YEAR ENDED DECEMBER 31, 2010

Fund Balance $8 Capital Improvement Fund 35,997 Due from American Baseball Co, LLC (1,000,000) Reserve for Encumbrances 460,625 Reserve for Payment of Notes 34,380 Reserve for Payment of Bonds 17,944 Reserve for Capital Improvements 9,716 Reserve for Renewal & Replacements 11Q,211

Improvement Authorizations: Ordinance Number 07-11-91 Various Capital Improvements 35,062 06-25-92 Various Capital Improvements 750 05-14-92 Reappropriations for Various Purposes 17,661 93-23/97-42 Reappropriations for Various Improvements 19,981 94-36 Various Capital Improvements 4,106 94-68 Acquisition of Real Estate & Related Expenses 286 95-25 Various Capital Improvements 60,114 96-28/04-80 Various Capital Improvements (32,613) 97-29 Various Capital Improvements (15,213) 98-35 Various Capital Improvements 22 98-63 Acquisition of Land-Block 965 Lot 4 & Block 967 Lot 1 (464) 99-19/05-112 Acquisition of Various Parcels of Property 54,058 99-38/07-35 Various Capital Improvements (743) 99-64 Construction of a Baseball Facility (Including Parking) & Related Improvement 114,332 00-52/03-39 Various Capital Improvements (47,939) 00-54 Certain Cost of Construction Facility 1,139,689 01-33/05-103 Various Capital Improvements 197,902 01-39 Acquisition, Demolition & Development of Public Parking Lots (94) 02-31 Various Capital Improvements (5,307) 03-48 Various Capital Improvements 94,079 3-71 Construction of Kettle Creek Recreation Complex 34,497 04-56 Various Capital Improvements 49,882 5-32 Construction of New Public Works Facility 5,964 05-88 Various Capital Improvements 54,344 06-58/07-49 Various Capital Improvements (620,416) 07-39 Various Capital Improvements 547,045 08-42 Various Capital Improvements 164,449 09-25 Refunding Bond Ordinance 17,312 09-65 Various Capital Improvements (232,693) 10-16 Tax Appeal Refunding 15,803 10-67 Reappropriations ofBIO Mon. Avenue 121 & 2nd Street 4,306

Total $1,345,043

68 EXHIBIT C-4 TOWNSHIP OF LAKEWOOD GENERAL CAPITAL FUND SCHEDULE OF DEFERRED CHARGES TO FUTURE TAXATION - FUNDED FOR THE YEAR ENDED DECEMBER 31,2010

Balance December 31, 2009 $49,640,000

Decreased by: Budget Appropriation to Pay Loans $37,500 Budget Appropriation to Pay Bonds 3,620,000 3,657,500

Balance December 31, 2010 $45,982,500

69 EXHIBITC-5 (Page 1 of2) TOWNSHIP OF LAKEWOOD GENERAL CAPITAL FUND SCHEDULE OF DEFERRED CHARGES TO FUTURE TAXATION - UNFUNDED FOR THE YEAR ENDED DECEMBER3!, 2010

ANALYSIS OF BALANCE DECEMBER 31, 2010 FINANCED BY BALANCE BOND AUTHORIZATIONS SERIAL BALANCE BOND UNEXPENDED ORDINANCE IMPROVEMENT DECEMEER31, 2010 ANTICIPATION (CANCELLED)i BONDS DECEMBER 31, ANTICIPATION IMPROVEMENT NUMBER DESCRIPTION 2009 AUTHORlZATIONS NOTES PAID REAPPROPRIATED ISSUED 2010 NOTES EXPENDITURES AUTHORIZATIONS

09~13R90198-24 Various Capital Improvements $297,346 297,346 297,346 93-58/95-21 Various Capital Improvements 35,302 35,302 35,302 94-68 Acquisition of Certain Real Estate & Related Expenses 4,700 4,700 4,700 95-49 Acquisition of Certain Real -J Estate & Related Expenses 9,944 9,944 9,944 0 96-28/04-80 Various Capital Improvements 214,095 214,095 55,428 158,667 97-29 Various Capital Improvements 1,270,104 1,270,104 757,000 15,213 497,891 98-15 Acquisition of Real Property 13,178 13,178 13,178 98-35 Various Capital Improvements 117,000 117,000 117,001 98-63 Acquisition of Land-Block 965 Lot 4 & Block 967 Lot 1 464 464 464 99-19/05-112 Acquisition of Various Parcels of Real Property 361,613 32,000 329,613 61,200 322,471 99-38/07-35 Various Capital Improvements & Other Related Expenses 586,281 586,281 577,061 99-64 Construction of a Baseball Facility 384,795 384,795 384,795 00-52/03-39 Various Capital Improvements 809,501 50,000 759,501 536,000 50,725 172,776 00-54 Certain Costs of the Construction of a Baseball Facility 410,700 12,700 398,000 398,000 141,552 01-33/05-103 Various Capital Improvements & Other Related Expenses 191,180 191,180 191,180 01-39 Acquisition, Demolition, & Development of Public Parking Lots & Related Matters 222,000 222,000 94 221,906 02-31 Various Capital Improvements 469,625 55,000 414,625 16,524 398,101 EXHIBIT C-5 (Page 2 of2) TOWNSHIP OF LAKEWOOD GENERAL CAPITAL FUND SCHEDULE OF DEFERRED CHARGES TO FUTURE TAXATION - UNFUNDED FOR THE YEAR ENDED DECEMBER 31, 2010 ANALYSIS OF BALANCE DECEMBER 3 1,2010 FINANCED BY BALANCE BOND AUTIlORIZATIONS SERIAL BALANCE BOND UNEXPENDED ORDINANCE IMPROVEMENT DECEMBER31, 2010 ANTICIPATION (CANCELLED)! BONDS DECEMBER 31,ANTICIPATION IMPROVEMENT NUMBER DESCRlPTION 2009 AUTIlORIZATIONS NOTES PAID REAPPROPRlATED ISSUED 2010 NOTES EXPENDITURES AUTHORlZATIONS

03-48 Various Capital Improvements 859,669 859,669 161,500 792,248

03-71 Construction of Kettle Creek Recreational Complex 62,500 5,000 57,500 38,600 53,397

173,280 63,162 -.J 04-56 Various Capital Improvements 6,100 (80,000) 87,180 153,900 ~ 05-32 Construction of a New Public Works Facility & Related Expenses 70,000 63,000 7,000 7,000 5,964

05-88 Various Capital Improvements 1,372,278 22,100 1,350,178 527,900 862,873

06-58/07-49 08-40 Various Capital Improvements 3,443,486 3,800 3,439,686 1,850,900 20,416 1,568,370

07-39 Various Capital Improvements 1,474,126 1,474,126 756,000 69,153 648,973

08-42 Various Capital Improvements 2,362,031 2,362,031 625,000 1,885,851

09-65 Remounting of Ambulance Chassis 52,000 52,000 52,000 Replacement QfPublic Works Equipment 1,195,723 1,195,723 795,000 143,299 Upgrade of Police Equipment 442,605 442,605 442,605

10-67 Reappropriations of BfO MOD. Avenue & 121 & 2nd Street 80,000 80,000 4,304

10-16 Tax Appeal Refunding 2,700,000 2,700,000 2,700,000 15,803

Total $16,905,526 2,700,000 249,700 19,355,826 9,368,000 228,017 10,082,720 EXHIBITC-6 TOWNSHIP OF LAKEWOOD GENERAL CAPITAL FUND SCHEDULE OF PROSPECTIVE ASSESSMENTS RAISED BY TAXATION FOR THE YEAR ENDED DECEMBER 31, 2010

BALANCE ORDINANCE IMPROVEMENT TOTAL DOWN DECEMBER31, NUMBER DESCRIPTION DATE APPROPRIATION PAYMENT 2010 & 2009

93-43 Sidewalk & Curb Improvements 07-22-93 $75,000 $3,600 $3,600

EXHIBIT C-7 SCHEDULE OF DUE FROM AMERICAN BASEBALL COMPANY, LLC FOR THE YEAR ENDED DECEMBER 31, 2010

Balance December 31, 2010 & 2009 $1,000,000

72 EXHIB[TC-8 (page [ of 6) TOWNSHIP OF LAKEWOOD GENERAL CAPITAL FUND SCHEDULE OF IMPROVEMENT AUTHORIZATIONS FOR THE YEAR ENDED DECEMBER 31, 2010

20[ 0 AUTHORIZATIONS DEFERRED CHARGES TO CAPITAL FUTURE PAID AUTHORIZAT[ONS ORDINANCE IMPROVEMENT BALANCE DECEMBER 3 [,2009 IMPROVEMENT TAXAT[ON OR (CANCELLED)! BALANCEDECEMBER3[,20[0 NUMBER DESCRIPTION ENCUMBERED FUNDED UNFUNDED FUND UNFUNDED CHARGED REAPPROPRlATEDENCUMBERED Fl.jNDED UNFUNDED

09-13-90 Construction of New Emergency Management Building 3,056 3,056 Design & Construction of Oale Street & Spruce to Route 9 [90,253 [90,253 Design & Construction of Oak Street to Albert Avenue 78,002 78,002 Closure of Cross Street Landfill 26,035 26,035

07-11-9[ Acquisition ofVehic1es for Public Works $296 296 Renovations to the Heating & Air Conditioning in -J w Municipal Building 33,099 33,099 Acquisition of Land for Industrial Park Purposes [,667 [,667

06-25-92 Renovation to Ventilation System - Municipal Building 750 750

05-14-92 Renovate Municipal Jail [2,749 [2,749 Improvements to Township Amphitheater 4,9[2 4,9[2

93-23/03-57 AcquiSition afBlock 524 Lot 77 [9,680 19,680 Improvements to Brook Road Park 88 88 Acquisition of Certain Parcels of Property 213 2[3

93-58/95-21 Reconstruction & Overlay of Various Streets 2,200 2,200

95-2[ Sanitruy Landfill Phase IT Closure Design 627 627 Reconstruction of Various Curbs & Sidewalks in & Around Library 200 200 Reconstruction of Sidewalks Located at North & South Lake Drives & Hope-Chapel Road 32,[6[ 32,[6[ Removal & Remediation of Underground Storage Tanks 114 [[4

94-36 Final Closure of Landfill [70 [70 Improvements to Various Roads [82 [82 Improvements to Brook Road Park 3,754 3,754

94-68 Acquisition of Certain Real Estate & Related Expenses 286 4,700 286 4,700 EXHIBIT C-8 (page 2 of6) TOWNSHIP OF LAKEWOOD GENERAL CAPITAL FUND SCHEDULE OF IMPROVEMENT AUTHORIZATIONS FOR THE YEAR ENDED DECEMBER 31, 2010

2010 AUTHORlZATlONS DEFERRED CHARGES TO CAPITAL FUTURE PAID AUTHORlZATlONS ORDINANCE IMPROVEMENT BALANCE DECEMBER 31, 2009 IMPROVEMENT TAXATION OR (CANCELLED)! BALANCE DECEMBER 31,2010 NUMBER DESCRIPTION ENCUMBERED FUNDED UNFUNDED FUND UNFUNDED CHARGED REAPPROPRIATEC ENCUMBERED FUNDED UNFUNDED

95-25 Acquisition of Land in COlmection with Industrial Park 17,597 17,597 Acquisition of Computer Hardware & Software 28 28 Various hnprovements to Brook Road Park 1,137 1,137 Reconstruction & Overlay of Streets Within Industrial Parks 17,552 ]7,552 Pre Engineering DesignlL.P.D. Communication Room 23,800 23,800

95-49 Acquisition of Rea! Estate & Related Expenses 9,944 9,944

-16-28/04-80 Design, Construct & Provide Contract Administration .j::::.. of Sanitary Landfill Closure 125 3,667 125 3,667 Roadway Reconstruction & Removal & Replacement of Shade Trees in the Rights-of-Ways 4,616 155,000 4,616 155,000 Acquisition of Replacement of Centra! Processing Unit 6,556 6,556 Relocation & Replacement ofFolice Communication Center 10,225 10,225 Remove & Replace Playground Equipment, Park Furniture, Lighting, Storage Sheds & Other Buildings 482 482 Site Investigation Testing & Remedial Action in Conjunction with PubHc Works Garage & Pine Park 14,950 14,640 50 310 50 Reconstruction of Four Tennis Courts 28 28 Acquisition of Various Heavy Equipment 98 98 Acquisition of Computer Hardware & Software 73 73 Preliminary Engineering Services for Municipal Building Design 686 686 Acquire Miscellaneous Public Works Equipment 1

97-29 Construction of Oak Street Extension From Vine to Albert Avenues 25,882 623,166 256,008 106,416 286,624 Reconstruction of Various Streets 3,575 3,575 Reconstruction of Various Curbs, Streets & Sidewalks 114,483 114,483 Capital Impr'ovements to Police Department Facility 9 9 Purchase of Playground Equipment & Recreation Facility Rehabilitation 2,425 2,425 Various Improvements to Brook Road Park 16,126 16,126 Refurbishing the HV AC Systems & Roof Repairs 743 743 Handicap Accessibility & Related Improvements to The Carnegie Library 74,406 500 73,906 EXHIBIT C-8 (Page 3 of6) TOWNSHIP OF LAKEWOOD GENERAL CAPITAL FUND SCHEDULE OF IMPROVEMENT AUTHORIZATIONS FOR THE YEAR ENDED DECEMBER 31, 2010

2010 AUTHORIZATIONS DEFERRED CHARGES TO CAPITAL FUTURE PAID AUTHORIZATIONS ORDINANCE IMPROVEMENT BALANCE DECE!v1BER31, 2009 IMPROVE11ENT TAXATION OR (CAJlCELLED)1 BALANCE DECEMBER 31, 1010 NUMBER DESCRIPTION ENCUMBERED FUNDED UNFUNDED FUND UNFUNDED CHARGED REAPPROPRIATED ENCUMBERED FUNDED UNFUNDED'

98-15 Providing for the Acquisition of Real Property 13,178 13,178

98-35 Reconstruction of Industrial Park Roadways 8,314 8,314 Computer Hardware & Software 22 1,827 22 1,827 Refurbishment of Conference Room 1 1 Playground Equipment for Pine, 4th Street & North Lake Drive Parks 91,468 91,468 --J Replacement of Vehicles & Heavy Equipment Use by V> Public Works 2,902 2,902 hnprovements to Public Works Building 5,011 5,011 Curbing & Drainage Improvements Along South Lake Drive 7,478 7,478

99-19/05-112 Acquisition of Various Parcels of Property 322,471 322,471

99-38/07-35 Reconstruction of Various Streets 11,060 7,374 3,686 Repaving of Sidewalks Along West County Line Road 29,592 29,592 Culvert Improvements at Pine Street & Route 9 & Improvements in Cabinfield Area 8,477 326,989 8,477 316,989 Surveying, Geotechnical & Hydraulic Analysis & General Engineering Studies Along with Physical Improvements to the Forest Drive Dam 10,500 220,000 19,720 210,780 Acquisition of Equipment & Various Public Improvements 9,700 9,700

99~64 Construction of a Baseball Facility (Including Parking) & Related Improvements 114,331 384,795 114,332 384,795

00-52/03-39 Reconstruction of Various Streets 11,796 5,019 11,064 2,965 2,786 HV AC Renovations to Municipal Building 57,856 39,228 57,856 39,228 Police Department Equipment & Building Improvements 1,086 1,086 Public Works Equipment & Building Improvements 211,024 86,178 124,846 Recreational Complex Site Work & Improvements 7,616 7,616

OO~54 Certain Costs of the Construction of Baseball Facility 1,000,000 141,552 1,863 998,137 141,551 EXHIBIT C-8 (Page 4 of6) TOWNSHIP OF LAKEWOOD GENERAL CAPITAL FUND SCHEDULE OF IMPROVEMENT AUTHORIZATIONS FOR THE YEAR ENDED DECEMBER 31, 2010

2010 AUTHORIZATIONS DEFERRED CHARGES TO CAPITAL FUTURE PAID AUTHORIZATIONS ORDINANCE IMPROVEMENT BALANCE DECEMBER 31, 2009 IMPROVEMENT TAXATION OR (CANCELLED)! BALANCE DECEMBER 31, 2010 NUMBER DESCRIPTION ENCUMBERED FUNDED UNFUNDED FUND UNFUNDED CHARGED REAPPROPRIATED ENCUMBERED FUNDED UNFUNDED

01-33/05-103 Construction of Recreational Complex 167,187 167,187 Acquisition of Various Equipment & Building, Improvements for Police Department, Acquisition of Risk Management Computer Systems 4,420 4,420 Acquisition & Improvements for Department of Public Works 26,295 174,853 26,295 174,853 Office of Emergency Management (OEM) Building Repair & Maintenance & Purchase of Emergency -.J 0\ Transportation Vehicle 7,359 7,359 Acquisition of Oxygen Tank Safety Locking Devise for Oxygen Fill Station 749 749 Repair of Comrntmity Center Roof & Other Affected Components 8,219 8,219

01-39 Acquisition, Demolition & Development of Public Parking Lots 406 222,000 500 221,906

02-31 Overlay of Various Streets 1,622 1,622 Drainage Improvements in the Cabinfield Area 11,217 250,000 11,217 250,000 Community Center HV AC & Building Repairs 3,378 3,378 Acquisition & Improvements for Department of Public Works 141,124 141,124 Office Emergency Management Building Repairs & Improvements, Acquisition of Four Wheel Drive Vehicle & Trailer, & Construction of Light Tower 3,599 3,599

03-48 Acquisition of Exercise Equipment, Computer Upgrade & Acquisition of Furniture & Equipment 8,814 8,814 Acquisition of Light Tower for OEM 1,116 1,116 Replace Ambulance for Emergency Medical Technicians 7,472 7,472 Acquisition & Improvement for Department of Public Works 372 794,003 19,529 774,846

03-71 Construction of Kettle Creek Recreational Complex 53,397 53,397 EXHlBITC-8 (Page 5 of6) TOWNSHIP OF LAKEWOOD GENERAL CAPITAL FUND SCHEDULE OF IMPROVEMENT AUTHORIZATIONS FOR THE YEAR ENDED DECEMBER 31,2010

2010 AUTHORIZATIONS DEFERRED CHARGES TO CAPITAL FUTURE PAID AUTHORIZATIONS ORDINANCE IMPROVEMENT BALANCE DECEMBER 31,2009 IMPROVEMENT TAXATION OR (CANCELLED)/ BALANCE DECEMBER 31, 2010 NUMBER DESCRIPTION ENCUMBERED FUNDED UNFUNDED FUND UNFUNDED CHARGED REAPPROPRIATED ENCUMBERED FUNDED UNFUNDED

04-56 Various Road Improvements Including Paving & ConstructionIReconstruction of Sidewalks & Curbs 12,764 Acquisition of Equipment & Furniture for Municipal Offic 1,525 55,107 14,289 55,107 Acquisition of Upgraded Dictaphone Recording System for the Police Department 77 77 Acquisition & Improvements for Department of Public Works Including Replacement QfPlayground Equipment 87,978 (80,000) 7,978

05-32 Construction of New Public Works Facility 5,964 5,964 -.] -.] 05-88 Various Road Improvements 13,750 275,000 13,750 275,000 Acquisition of Equipment & Furniture for Municipal Offices 75,279 2,820 5,820 66,639 Replacement of First Responder Units & Installation of Vehicle Exhaust System in Bays for Emergency Medical Technicians 23,985 23,985 Acquisition & Improvements to Township Municipal Building & Office of Emergency Management 364,720 364,720 Acquisition of Various Equipment for Police Department 476 140,279 8,226 132,529

06-58/07-49 Various Road Improvements 1,139,739 42,521 1,097,218 Acquisition of Equipment & Furniture for Municipal Offices 66,744 8,520 58,224 Acquisition ofa Command Transport Vehicle & Vehicular Computerized Data SystemslPrinter for Emergency Medical Technicians & an Ambulance 64,880 64,880 Acquisitions of Equipment & Improvements to Municipal Building 1,043 161,277 4,557 157,763 Replacement of the Computerized Dispatch!Records Management System for Police Department 5,294 190,285 5,294 190,285 Storage Tanks

07~39 Various Road Improvements 13,750 275,000 13,750 275,000 Acquisition of Equipment for Emergency Medical Technicians 1,340 1,340 Acquisitions of Equipment for Office of Emergency Management 15,450 159,512 8,113 7,337 159,512 Acquisition of Equipment for Police Department 228,235 228,235 Replacement Equipment for Public Works Department 164,178 164,178 Acquisition of Computer Equipment 2,448 48,943 2,448 48,943 EXHIBIT C-8 (Page 6 of6) TOWNSHIP OF LAKEWOOD GENERAL CAPITAL FUND SCHEDULE OF IMPROVEMENT AUTHORIZATIONS FOR THE YEAR ENDED DECEMBER 31, 2010

2010 AUTHORIZATIONS DEFERRED CHARGES TO CAPITAL FUTURE PAID AUTHORIZATIONS ORDINANCE IMPROVEMENT BALANCEDECEMEER31,2009 IMPROVEMENT TAXATION OR (CANCELLED)! BALANCE DECEMBER 31,2010 NUMBER DESCRIPTION ENCUMBERED FUNDED UNFUNDED FUND UNFUNDED CHARGED REAPPROPRlATED ENCUMBERED FUNDED UNFUNDED -.J 00 08-42 Various Road Improvements 13,750 275,000 13,750 275,000 Replacement Equipment for Public Works Department & Fencing for Township Tennis Courts & Pine Park 32,2 II 1,573,275 32,2 II 1,573,275 Acquisition of Computer Hardware/Software Upgrades for the Township General Office 1,879 37,576 1,879 37,576

09-25 Refunding Bond Ordinance 7,598 18,054 8,340 17,312

09-65 Remounting of Ambulance Chassis 2,600 52,000 2,600 52,000 Replacement of Public Works Equipment 675 59,II2 1,195,723 886,226 225,985 143,299 Upgrade of Police Equipment 22,131 442,605 22,131 442,605

10-67 Reappropriations ofB/O Mon. Avenue 121 & 2nd Street 8,640 80,000 67,056 4,304

10-16 Tax Appeal Refunding 2,700,000 2,684,197 15,803

Total $428,934 1,656,074 II,717,673 2,700,000 4,378,II8 460,625 1,581,268 10,082,720 EXHIBIT C-9 (Page I of3) TOWNSHIP OF LAKEWOOD GENERAL CAPITAL FUND SCHEDULE OF GENERAL SERIAL BONDS FOR THE YEAR ENDED DECEMBER 31,2010

MATURITIES OF AMOUNT OF BONDS OUTSTANDING BALANCE PAID BY BALANCE DATE OF ORIGINAL DECEMBER31,2010 INTEREST DECEMBER 31, BUDGET DECEMBER 31, PURPOSE ISSUE ISSUE DATE AMOUNT RATE 2009 APPROPRIATION ISSUED 2010

2009 Refunding Bond Issue 1/15109 $3,500,000 01/15/10 $55,000 3.000% $3,500,000 55,000 3,445,000 01/15/11 515,000 2.000% 01/15/12 500,000 3.000% -.l 01/15113 495,000 4.000% 'D 01/15/14 490,000 4.000% 01/15/15 485,000 3.897% 01/15/16 480,000 5.000% 01/15117 480,000 5.000%

General Improvement Bonds 05/15199 9,089,000 01/15/10 $505,000 4.625% 505,000 505,000

Revenue Bonds, Series 2000 07/01/00 19,108,896 12/01/09 1,787,221 5.168%

General Improvements 10101/02 9,785,000 10101/10 705,000 3.50% 5,600,000 705,000 4,895,000 10101111 735,000 10101112 765,000 10101113 800,000 10101114 830,000 10101115 870,000 10101116 895,000

Refunding Bonds 05101103 2,800,000 03/15/10 280,000 2.875% 1,080,000 280,000 800,000 03/15/11 275,000 3.200% 03115/12 265,000 3.200% 03/15/13 260,000 3.300% EXHIBIT C-9 (Page 2 of3) TOWNSHIP OF LAKEWOOD GENERAL CAPITAL FUND SCHEDULE OF GENERAL SERIAL BONDS FOR THE YEAR ENDED DECEMBER 31, 2010

MATURITIES OF AMOUNT OF BONDS OUTSTANDING BALANCE PAID BY BALANCE DATE OF ORIGINAL DECEMBER 3 I, 2010 INTEREST DECEMBER 31, BUDGET DECEMBER 31, PURPOSE ISSUE ISSUE DATE AMOUNT RATE 2009 APPROPRIATION ISSUED 2010

Pension Obligation Refunding Bonds 09/01103 1,145,000 04/01/10 35,000 4.70% 1,075,000 35,000 1,040,000 04/01/11 45,000 5.00% 04/01112 55,000 5.20% 04/01113 65,000 5.40% 00 04/01114 75,000 5.50% 0 04/01/15 85,000 5.60% 04/01116 100,000 5.65% 04/01/17 115,000 5.75% 04/01118 130,000 5.85% 04/01/19 150,000 5.90% 04/01120 165,000 5.90% 04/01/21 55,000 5.90%

General Improvement 05101/05 9,800,000 01115110 580,000 3.625% 7,630,000 580,000 7,050,000 01/15/11 600,000 3.625% 01115/12 615,000 3.625% 01115113 640,000 3.750% 01115114 660,000 3.750% 01115115 685,000 3.750% 01115/16 710,000 3.750% 01115117 740,000 3.800% 01115118 770,000 4.000% 01/15119 800,000 4.000% 01115120 830,000 4.000% EXHIBITC-9 (Page 3 of3) TOWNSHIP OF LAKEWOOD GENERAL CAPITAL FUND SCHEDULE OF GENERAL SERIAL BONDS FOR THE YEAR ENDED DECEMBER 31,2010

MATURITIES OF AMOUNT OF BONDS OUTSTANDING BALANCE PAID BY BALANCE DATE OF ORIGINAL DECEMBER 31, 2010 INTEREST DECEMBER 31, BUDGET DECEMBER 31, PURPOSE ISSUE ISSUE DATE AMOUNT RATE 2009 APPROPRIATION ISSUED 2010

General Improvements 11/01/07 9,800,000 1I/0lfi0 500,000 4.000% 8,800,000 500,000 8,300,000 1I/0lfll 500,000 4.000% 1I/0lfl2 500,000 4.000% 11/0 lfl3 500,000 4.000% IlfOl/14 500,000 4.000% 1I/0lfl5 500,000 4.000% 11/0 III 6 500,000 4.000% 11/0 lfl7 500,000 4.100% 11/0 III 8 500,000 4.125% 1I/0lfl9 500,000 4.125% 1I/0lf20 500,000 4.125% 11/01121 500,000 4.125% 1I/0lf22 500,000 4.125% 00 11/01123 500,000 4.125% ~ 11/01/24 500,000 4.200% 11/01125 500,000 4.250% IlfOl/26 500,000 4.250% 1I/0lf27 300,000 4.250%

General Improvements 11/06/08 21,800,000 IlfOlflO 960,000 4.750% 21,300,000 960,000 20,340,000 11/0 III I 960,000 4.750% 11/01/12 960,000 4.750% 1I/0lfl3 960,000 4.750% 1I/0llI4 970,000 4.750% 1I/0lfl5 970,000 5.000% IlfOllI6 970,000 5.000% 11/0 lfl7 970,000 5.000% 11/01/18 970,000 5.000% 11/0 III 9 970,000 5.000% 11/01/20 970,000 5.000% 11/01121 970,000 5.000% 1I/0lf22 970,000 5.250% 1I/0lf23 970,000 5.375% 11/0 lf24 970,000 5.375% 11/01125 970,000 5.500% 11/0lf26 970,000 5.500% 11/01127 970,000 5.625% 11/01128 970,000 5.625% 11/0lf29 970,000 5.700%

11/01131 1,940,000 5.750%

21,300,000 Total $49.490.000 3.620.000 45.870.000 EXHIBIT C-I0 (Page 1 0[2) TOWNSHIP OF LAKEWOOD GENERAL CAPITAL FUND SCHEDULE OF BOND ANTICIPATION NOTES FOR THE YEAR ENDED DECEMBER 31, 2010

DATE OF ORDINANCE ISSUE OF AMOUNT OF BALANCE BALANCE NUMBER! ORIGINAL ORIGINAL DATE OF DATE OF INTEREST DECEMBER 31, DECEMBER 31, DATE IMPROVEMENT DESCRIPTION NOTE NOTE ISSUE MATURITY RATE 2009 INCREASED DECREASED 2010

97-29 Various Capital Improvements 07113107 $385,000 07/10109 07/09110 1.610% $385,000 385,000 07/11108 20,000 07/10109 07/09/10 1.610% 20,000 20,000 07/09110 07/08111 0.839% 757,000 757,000

99-19 Various Real Parcels of Land 07!ll/08 30,000 07/10/09 07/09110 1.610% 30,000 30,000 30,000 07/09110 07/08!ll 0.839% 61,200 61,200

00-52 Various Capital Improvements 07113107 120,000 07110/09 07/09110 1.610% 120,000 120,000 07113107 50,000 07110/09 07109/10 1.610% 50,000 50,000 07/09/10 07/08!ll 0.839% 536,000 536,000 00-54 Certain Costs of the Construction of Baseball Facility 03/29/01 1,000,000 03/20109 03/19110 179.000% 410,700 410,700 00 N 03/19/10 03/18111 1.520% 398,000 398,000

02-31 Various Capital Improvements 07113107 50,000 07/10/09 07/09110 1.610% 50,000 50,000 07/11108 5,000 07/10/09 07/09/10 1.610% 5,000 5,000

03-48 Various Capital Improvements 07/11108 130,000 07/10/09 07/09110 1.610% 130,000 130,000 07/09110 07/0811 I 0.839% 161,500 161,500

03-71 Construction of Kettle Creek 07113/07 30,000 07110109 07/09110 1.610% 30,000 30,000 Recreational Complex 07111/08 5,000 07110/09 07/09110 1.610% 5,000 5,000 07109110 07/08!ll 0.839% 38,600 38,600

04-56 Valious Capital Improvements 07113/07 100,000 07110109 07109110 1.610% 100,000 100,000 07111108 60,000 07110/09 07/09/10 1.610% 60,000 60,000 07/09110 07/08!ll 0.839% 153,900 153,900

05-32 Construction of New Public Works Facility 07/09110 61,900 07/09110 07/08111 0.839% 7,000 7,000

05-88 Various Capital Improvements 07/13/07 400,000 07/10/09 07/09110 1.610% 400,000 400,000 07111/08 150,000 07110109 07/09110 1.610% 150,000 150,000 07/09110 07/08!ll 0.839% 527,900 527,900

06-58/07-491 Various Capital Improvements 07113/07 650,000 0711 0109 07/09110 1.610% 650,000 650,000 08-40 07!ll/08 775,000 07110/09 07109110 1.610% 775,000 775,000 07/09110 07/08111 0.839% 1,850,900 1,850,900

06-58/07-49 Various Capital Improvements 07/11108 600,000 07110109 07/09110 1.610% 600,000 600,000

97-29 Various Capital Improvements 07110109 40,000 07/10/09 07/09110 1.610% 40,000 40,000 EXHIBIT C-1 0 (Page 2 of2) TOWNSHIP OF LAKEWOOD GENERAL CAPITAL FUND SCHEDULE OF BOND ANTICIPATION NOTES FOR THE YEAR ENDED DECEMBER 31, 2010

DATE OF ORDINANCE ISSUE OF AMOUNT OF BALANCE BALANCE NUMBER! ORIGINAL ORIGINAL DATE OF DATE OF INTEREST DECEMBER 31, DECEMBER 31, DATE IMPROVEMBNT DESCRIPTION NOTE NOTE ISSUE MATURITY RATE 2009 INCREASED DECREASED 2010

99-19 Various Real Parcels of Land 07/10109 32,000 07110/09 07/09/10 1.610% 32,000 32,000

00-52 Various Capital Improvements 07110/09 50,000 07110/09 07/09110 1.610% 50,000 50,000

00 03-71 Construction of Kettle Creek w Recreational Complex 07/10/09 5,000 07/10109 07/09/10 1.610% 5,000 5,000

05-32 Construction of New Public Works Facility 07/10109 63,000 07/10/09 07/09/10 1.610% 63,000 63,000

06-5S/07-49/0S-4C Various Capital Improvements 07/10109 350,000 07/10109 07/09110 1.610% 350,000 350,000

07-39 Various Capital Improvements 07110109 100,000 07/10/09 07/09110 1.610% 100,000 100,000 07110/09 100,000 07/09110 07/0S/11 0.839% 756,000 756,000

OS-42 Various Capital Improvements 07110109 625,000 07/10109 07/09110 1.610% 625,000 625,000 07/09/10 07/08/11 0.839% 625,000 625,000 09-65 VariOllS Capital Improvements 07/09/10 795,000 07/09/10 07/08/11 0.839% 795,000 795,000

10-16 Tax Appeal Refunding 04/29110 2,700,000 04/29/10 04/29/11 0.900% 2,700,000 2,700,000

Total $5.235,700 9,368,000 5.235,700 9.368,000

Paid From Budget Appropriations 249,700 New Issue $4,382,000 Reissued 4,986,000 4,986,000

Total $9,368,000 5,235,700 EXHIBIT C-Il TOWNSHIP OF LAKEWOOD GENERAL CAPITAL FUND SCHEDULE OF CAPITAL IMPROVEMENT FUND FOR THE YEAR ENDED DECEMBER 31, 2010

Balance December 31, 2009 $26,919

Increased by: Budget Appropriation 9,078

Balance December 31, 2010 $35,997

84 EXHIBIT C-12 TOWNSHlP OF LAKEWOOD GENERAL CAPITAL FUND SCHEDULE OF N.J. ECONOMIC DEVELOPMENT AUTHORITY LOAN FOR THE YEAR ENDED DECEMBER 31, 2010

BALANCE PAID BY BALANCE 00 V> DATE OF ORIGINAL INTEREST DECEMBER 31, BUDGET DECEMBER31, PURPOSE ISSUE ISSUE DATE AMOUNT RATE 2009 AUTHORIZATIONS 2010

Loan of 1/26/94 01/26/94 $750,000 2009 to 2013 $225,000 1.50% $150,000 37,500 112,500

Total $150,000 37,500 112,500

PAYMENT NUMBER DUE PRINCIPAL INTEREST

18 08-05-11 $37,500 1,688 19 08-05-12 37,500 1,125 20 08-05-13 37,500 563

Total $112,500 3,376 EXHIB IT C-13 TOWNSHIP OF LAKEWOOD GENERAL CAPITAL FUND SCHEDULE OF RESERVE FOR PAYMENT OF NOTES FOR THE YEAR ENDED DECEMBER 31, 2010

Balance December 31, 2010 & 2009 $34,380

EXHIBIT C-14 SCHEDULE OF RESERVE FOR PAYMENT OF BONDS FOR THE YEAR ENDED DECEMBER 31,2010

Balance December 31, 2010 $717,944

Decreased by: Anticipated in Current Fund Budget 700,000

Balance December 31, 2010 $17,944

EXHIBIT C-1S SCHEDULE OF RESERVE FOR IMPROVEMENTS FOR THE YEAR ENDED DECEMBER 31,2010

Balance December 31, 2010 & 2009 $9,716

86 EXHIBIT C-16 TOWNSHIP OF LAKEWOOD GENERAL CAPITAL FUND SCHEDULE OF RESERVE FOR RENEWAL AND REPLACEMENT FOR THE YEAR ENDED DECEMBER 31, 2010

Balance December 31, 2009 $128,210

Decreased by: Cash Disbursed 17,999

Balance December 31, 2010 $110,211

EXHIBIT C-17 SCHEDULE OF RESERVE FOR DEBT SERVICE FOR THE YEAR ENDED DECEMBER 31, 2010

Balance December 31, 2009 $4,804,015

Increased by: Interest Earnings 38

Subtotal 4,804,053

Decreased by: Cash Disbursed 4,804,053

Balance December 31, 2010

87 EXIDBIT C-18 TOWNSHIP OF LAKEWOOD GENERAL CAPITAL FUND SCHEDULE OF BONDS AND NOTES AUTHORIZED BUT NOT ISSUED FOR THE YEAR ENDED DECEMBER 31, 2010

BOND BALANCE PAID BY ANTICIPATION SERIAL BALANCE ORDINANCE DECEMBER 31, 2010 BUDGET NOTES CASH BONDS NOTES NOT DECEMBER 31, NUMBERIDATE IMPROVEMENT DESCRIPTION 2009 AUTHORIZATIONS APPROPRIATIONS ISSUED RECEIPTS ISSUED REISSUED 2010

9-13-90 Various Capital Improvements $297,346 297,346 93-58/95-21 Various Capital Improvements 35,302 35,302 94-68 Acquisition of Certain Real Estate 4,700 4,700 95-49 Acquisition of A Portion of Real Estate 9,944 9,944 96-28104-80 Various Capital Improvements 214,095 214,095 97-29 Various Capital Improvements 825,104 312,000 513,104 98-15 Acquisition of Real Property 13,178 13,178 00 00 98-35 Various Capital Improvements 117,000 117,000 98-63 Acquisition of Land 464 464 99-19 Various Real Parcels of Land 299,613 31,200 268,413 99-38/07-35 Various Capital Improvements 586,281 586,281 99-64 Construction of Baseball Facility 384,795 384,795 00-52 Various Capital Improvements 589,501 366,000 223,501 01-33 Various Capital Improvements & Other Related Expenses 191,179 191,179 01-39 Acquisition, Demolition, & Development of Public Parking Lots & Related Matters 222,000 222,000 02-31 Various Capital Improvements 414,625 414,625 03-48 Various Capital Improvements 729,669 31,500 698,169 03-71 Construction of Kettle Creek Recreational Complex 22,500 3,600 18,900 04-56 Various Capital Improvements 13,280 13,280 05-32 Construction of New Public Works Facility 7,000 7,000 05-88 Various Capital Improvements 822,279 822,279 06~58/07-49108-40 Various Capital Improvements 1,668,486 520,300 2,188,786 07-39 Various Capital Improvements 774,126 656,000 118,126 08-42 Various Capital Improvements 1,737,031 1,737,031 09-65 Various Capital Improvements 1,690,328 795,000 895,328 10-16 Tax Appeal Refunding 2,700,000 2,700,000

Total $11,669,826 2,700,000 4,902,300 520,300 9,987,826 , .

SUPPLEMENTAL EXHIBITS

GENERAL FIXED ASSETS EXHIBITE-I TOWNSHIP OF LAKEWOOD GENERAL FIXED ASSET ACCOUNT GROUP SCHEDULE OF INVESTMENTS IN GENERAL FIXED ASSETS DECEMBER 31, 2010 AND 2009

BALANCE BALANCE DECEMBER 31, DECEMBER 31, 2009 ADDITIONS DELETIONS 2010

General Fixed Assets: Land $10,716,400 10,716,400 Buildings 26,933,005 26,933,005 Furniture & Fixtures, Equipment & Vehicles 16,624,366 43,494 16,667,860

Total $54,273,771 43,494 54,317,265

89 SINGLE AUDIT SECTION .c. Certified Public Accountants & Consultants

REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 AND NEW JERSEY OMB CIRCULAR 04-04

Honorable Mayor and Members of Township Committee Townsbip of Lakewood County of Ocean Lakewood, New Jersey 08701

Compliance

We have audited the compliance of the Township of Lakewood, in the County of Ocean, State of New Jersey, with the types of compliance requirements described in the US. Office of Management and Budget (OME) Circular A-J33 Compliance Supplement and the New Jersey State Office of Management and Budget's (OME) State Grant Compliance Supplement that are applicable to each of its major federal and state programs for the fiscal year ended December 31, 2010. The Township's major federal and state programs are identified in the Summary of Auditor's Results section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal or state progranls is the responsibility of Township of Lakewood's management. Our responsibility is to express an opinion on Township of Lakewood's compliance based on our audit.

We condncted our audit of compliance in accordance with aUditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; OMB Circular A-I33 Audits of States, Local Governments and Non-Profit Organizations; and New Jersey OMB's Circular 04-04, Single Audit Policy for Recipients ofFederal Grants, State Grants and State Aid. Those standards, OMB Circular A-l33 and New Jersey OMB's Circular 04-04, require that we plan and perform the audit to obtain reasonable assurance abont whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal and state program occurred. An audit includes examining, on a test basis, evidence about the Township of Lakewood's compliance with those requirements and perfoTIning such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the Township of Lakewood's compliance with those requirements.

In our opinion, the Township of Lakewood, County of Ocean, State of New Jersey, complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal and state programs for the year ended December 31, 2010.

Internal Control Over Compliance

The management of the Township of Lakewood is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal and state programs. In planning and perfonning our audit, we considered the Township of MEDFORD OFFICt TOMS RIVER OFFICE 618 Stokes Road. Medford, NJ 08055 10 Allen St., Suite 28 • Toms River, NJ 08753 Tel: 609.953.0612 • Fax: 609.953.8443 Tel: 732.797.1333 • Fax: 732.797.1022 holmanfrenia.com 90 holmanfrenia.com Lakewood's internal control over compliance with requirements that could have a direct and material effect on a major federal and state program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and repOlt on the internal control over compliance in accordance with OMB Circular A-133 and OMB Circular 04-04.

A control deficiency in a Township's internal control over compliance exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect noncompliance with a type of compliance requirement of a federal or state program on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the Township's ability to administer a federal or state program such that there is more than a remote likelihood that a noncompliance with a type of compliance requirement of a federal or state program that is more than inconsequential will not be prevented or detected by the Township's internal control.

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material noncompliance with a type of compliance requirement of a major federal or state program will not be prevented or detected by the Township's internal control.

Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph of this section and wonld not necessarily identify all deficiencies in the internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above.

This report is intended solely for the information and use of the Township of Lalcewood's management and committee members, others within the organization, the Division of Local Government Services, state and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.

Respectfully submitted,

HOLMAN & FRENIA, P. C.

Kev n P. Frenia Certified Public Account Registered Municipal Accountant CR435

Medford, New Jersey June 17, 2011

91 SCHEDULE A TOWNSHIP OF LAKEWOOD SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED DECEMBER 31,2010

PASS-THROUGH FEDERAL GRANTOR'S #1 FEDERAL GRANTORIPASS-THROUGH CFDA FEDERAL GRANT CASH PROGRAM GRANTORIPROGRAM TITLE NUMBER GRANT # PERJOD RECEIVED EXPENDITURES

Department of Law & Public Safety: Edward Byme Memorial Justice Assistance Grant 16.751 15 -0404-0-1-7 54 Open 84,263

Total Department of Law & Public Safety 84,263

Department of Environmental Protection: Environmental Study Phase III N/A N/A Open $15,072 15,072 Fence Environmental N/A N/A Open 23,310 23,310

Total Department of Environmental Protection 38,382 38,382

Department of Housing & Urban Development Direct Programs; Community Development Block Grant 14.218 ·022-8020-078-02; Various $730,632 993,537 Energy Efficiency Grant N/A N/A Open 83,154 Residential Assistance Program 14.VNK NY-1l14 Open 14,007,057 15,077,570

Total Department of Housing & Urban Development 14,737,689 16,154,261

Total Federal Financial Assistance $14,776,071 16,276,906

92 SCHEDULEB TOWNSHIP OF LAKEWOOD SCHEDULE OF EXPENDITURES OF STATE FINANCIAL ASSISTANCE FOR THE YEAR ENDED DECEMBER 31, 2010

STATE ACCOUNT NUMBER OR GRANT CASH PROGRAM STATE PROGRAM GRANT NUMBER PERIOD RECEIVED EXPENDITURES

Department of Transportation: New Jersey Transportation Trust Fund Act: Road Program - 2009 480-078-6310-xxx-xxxxxx Open $232,299 790 Cedarbridge Corporate Campus 480-078-6310-xxx-xxxxxx Open 75,289

Total Deprutment of l'ran sport at ion 232,299 76,079

Department of Environmental Protection: Clean Communities Act 4900-765-178900-60 Various 80,402 154,464 Enviromuental Study Phase II! 2010 Various 794 Recycling Tonnage Grant 4900-752-178840-60 Various 17,200

Total Deprutment of Environmental Protection 80,402 172,458

Department of Law & Public Safety: Drunk Driving Enforcement Fund 6400-100-078-6400 Open 9,545 Alcohol Education & Rehabilitation 2009 Various 1,926 Body Armor Grant 1020-718-066-1020-001 Various 9,563 13,524 Local Law Enforcement Block Grant 2001 Various 954 Safe & Secure Communities 100-066-1020-107-09094001/01/09 to 12/31109 59,423 60,000

Total Deprutment of Law & Public Safety 68,986 85,949

Department of Homeland Security: Homeland Security Grant Program 2009 01101109 to 12/31109 259,850 160,659

Total Department of Homeland Security 259,850 160,659

Department of Community Affairs: Census Grant 100-022-8070-039-999000 Open 50,000 50,000

Total Department of Community Affairs 50,000 50,000

Department of Health: Pass-Through Programs from: Ocean County Board of Health: Municipal Drug Alliance 2010 01/01110 to 12/31110 26,503 48,000

Total Department of Health 26,503 48,000

Department of Commerce & Economic Development: Urban Enterprise Zone Assistance Fund: Various 763 -020-2830-034 Various 1,871,107 2,286,926 Municipal Services - 2010 763-020-2830-034 12/13110 to 12/31112 419,414 570,034 Emergent Stadium Repair 763-020-2830-034 12113/09 to 12/31111 640,424 Job Link - Year 14 763-020-2830-034 12/13/09 to 12/31111 250,467 458,258

Total Deprutment of Commerce & Economic Development 2,540,988 3,955,642

Total State Financial Assistance $3,259,028 4,548,787 93 TOWNSHIP OF LAKEWOOD

NOTES TO SCHEDULES OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE FOR THE YEAR ENDED DECEMBER 31, 2010

Note 1. General

The accompanying schedules of financial assistance present the activity of all state financial assistance programs of the Township of Lakewood. The Township is defined in Note I to the Township's general purpose financial statements. All federal awards and state financial assistance received directly fi-om state agencies, as well as state financial assistance passed through other government agencies is included on the schedule of federal awards and state financial assistance.

Note 2. Basis of Accounting

The accompanying schedules of financial assistance are presented using the modified accrual basis of accounting as promulgated by the State of New Jersey, Depmiment of Community Affairs, Division of Local Government Services, which is described in the Notes to the Financial Statements, Note 1.

Note 3. Relationship to Financial Statements - Statutory Basis

Amounts reported in the accompanying schedules agree with amounts repOlied in the Township's general-pnrpose financial statements. Expenditures from awards m'e reported in the Township's financial statements as follows: State Federal Total

State & Federal Grant Fund $4.548.787 $16,276906 $20825.693

Note 4. Relationship to Federal and State Financial Report

Amonnts reported in the accompanying schedules agree with the amounts reported in the related federal and state financial report.

Note 5. Major Programs

Major programs are identified in the Schedule of Findings mId Questioned Costs section.

94 TOWNSHIP OF LAKEWOOD SCHEDULE OF FINDINGS & QUESTIONED COSTS For the Fiscal Year Ended December 31, 2010

Section I - Snmmary of Auditor's Results

Fiuancial Statements

Type of auditor's report issued: Unqualified

Internal control over financial reporting:

1) Material weakness( es) identified? No

2) Where significant deficiencies identified that are not considered to be material weaknesses? Yes

Noncompliance material to basic financial Statements noted? No

Federal Awards

Internal Control over major programs:

1) Material weakness( es) identified? No

2) Significant deficiencies identified that are not considered to be material weaknesses? None RepOIted

Type of auditor's repOlt issued on compliance for major programs Unqualified

Auy audit findings disclosed that are required to be repOlted in accordance With 510(A) of Circular A-B3 No

Identification of major programs:

CFDA Number(s) Name of Federal Program or Cluster

14.UNK Residential Assistance Programs

Dollar threshold used to distinguish between type A and type B programs: $488,307

Auditee qualified as low-risk auditee? Yes

95 TOWNSHIP OF LAKEWOOD SCHEDULE OF FINJI)ThlCS & QUESTIONED COSTS For the Fiscal Year Ended December 31, 2010

Section I - Summary of Auditor's Results (coutinued):

State Awards

Dollar threshold used to distingnish between type A and type B programs: $300,000

Anditee qualified as low-risk anditee? No

Type of auditor's report issued on compliance for major programs Unqualified

Internal Control over major programs:

1) Material weakness(es) identified? No

2) Significant deficiencies identified that are not considered to be material weaknesses? No

Any audit findings disclosed that are required to be reported in accordance With NJ OMB Circular Letter 04-04 No

Identification of major programs:

GMIS Nnmber(s) Name of State Program

10-763-020-2830-034 Urban Enterprise Zone Assistance Fund

Section II - Financial Statement Findings

This section identifies the significant deficiencies, material wealmesses and instances of noncompliance related to the basic financial statements that are required to be repOlied in accordance with Chapter 5.18 of Government Auditing Standards.

Finding 2010-01:

Criteria or Specific Requirement:

The Tax Collector's monthly repOli should reconcile to cash on deposit on a monthly basis.

Condition:

Cash collections reflected on the monthly Collector's repOli do not agree to the monthly cash deposits in most instances.

96 TOWNSHIP OF LAKEWOOD SCHEDULE OF FINDINGS & QUESTIONED COSTS For the Fiscal Year Ended December 31, 2010

Section U - Financial Statement Findings (continned):

Finding 2010-01 (continned):

Context:

In order to maintain control over tax collections Treasurer's and Collector's cash receipts must agree.

Effect:

Internal controls over tax collections aTe not being complied with.

Canse:

Oversight by the Tax Collector.

Recommendation:

That the Tax Collector's reports be reconciled to cash deposits on a monthly basis.

Views of Responsible Officials and Planned Corrective Action:

The Township will correct in 2011.

Finding 2010-02:

Criteria or Specific Requirement:

N.J.A.C. 5:30-8.3 requires the Tax Collector to be bonded under an individual surety bond. The Collector is not separately bonded.

Condition:

The Tax Collector's surety bond must be a separate bond, rather than a blanket bond in order to meet the requirements promulgated by New Jersey Statute.

Context:

The Tax Collector was bonded as part of the blanket bond covering all Township employees.

Effect:

Bonding coverage was not in compliance with New Jersey Statute.

97 TOWNSIDP OF LAKEWOOD SCHEDULE OF FINDINGS & QUESTIONED COSTS For the Fiscal Year Ended December 31, 2010

Section IT - Financial Statement Findings (continned):

Finding 2010-02 (continned):

Canse:

The Township did not obtain individual bond coverage.

Recommendation:

That the Collector be separately bonded in order to comply with New Jersey Statute.

Views of Responsible Officials and Planned Corrective Action:

The Township will correct in 2011.

Finding 2010-03:

Criteria or Specific Reqnirement:

Proper detailed documentation should be maintained to account for tax overpayment balances in order to insure all accounts are properly credited and refunds are proper.

Condition:

The analysis of tax overpayment balances maintained by the Collector's Office does not sufficiently reflect all transactions.

Context:

The analysis of tax overpayment balances maintained by the Collector's Office does not sufficiently reflect all transactions.

Effect:

Accurate financial information was not available for tax overpayments during the year, nor at year-end, in order to facilitate the preparation of the annual financial statements.

Canse:

The Tax Collector failed to properly maintain an analysis of all overpayment transactions during the year.

98 TOWNSHIP OF LAKEWOOD SCHEDULE OF FINDINGS & QUESTIONED COSTS For the Fiscal Year Ended December 31, 2010

Section n - Financial Statement Findings (continned):

Finding 2010-03 (continned):

Recommendation:

That an analysis of all tax overpayment transactions be maintained and reconciled on a monthly basis.

Views of Responsible Officials and Planned Corrective Action:

The Township will correct in 2011.

Finding 2010-04:

Criteria or Specific Requirement:

Propeliies that are owned by the Township through foreclosure need to be accurately valued. These properties should reflect current assessment values that have been repOlied in the 2010 tax Duplicate.

Condition:

The listing of foreclosed properties held by the Township is recorded at old assessment values of the propeliies.

Context:

The Township listing of the foreclosed propeliies is being maintained at an old assessment value.

Effect:

The asset value recorded by the Township and subsequent reserve value are understated in the general ledger accounting system.

Cause:

The Township has not updated the values in several years.

Recommendation:

That the listing of foreclosed properties be updated to reflect assessed values from the 2010 tax duplicate.

Views of Responsible Officials and Planned Corrective Action:

The Township will correct in 2011.

99 TOWNSHIP OF LAKEWOOD SCHEDULE OF FINDINGS & QUESTIONED COSTS For the Fiscal Year Ended December 31, 2010

Section n - Financial Statement Findings (continued):

Finding 2010-05:

Criteria or Specific Requirement:

The Township should be maintaining an analysis of the third party liens it has collected in the trust other fund.

Condition:

No analysis of third party tax title liens has been maintained by the Township in the trust other fund.

Context:

The Township retains an updated detail of the third party liens that have been awarded at the tax sale.

Effect:

The Township has a cash balance in the trust other fund which cannot be allocated to specific liens.

Cause:

The tax collector has not maintained an accurate analysis of the tax title lien activity in the trust other fund.

Recommendation:

That an analysis of third party liens be maintained by the Township.

Views of Responsible Officials and Planned Corrective Action:

The Township will correct in 20ll.

Finding 2010-06:

Criteria or Specific Requirement:

All eligible properties that have a delinquent tax balance at 12/31/09 should be brought to tax sale in the subsequent year.

Condition:

Numerous prope11ies that had delinquent tax balances were not properly brought to tax sale in 2010. The 2010 tax sale was incomplete.

100 TOWNSHlIJP OF LAKEWOOD SCHEDULE OF FINDINGS & QUESTIONED COSTS For the Fiscal Year Ended December 31, 2010

Section II - Financial Statement Findings (continned):

Finding 2010-06 (continued):

Context:

The Township has identified numerous properties that should have been brought to tax sale in the 2010 year-and had not by 12/3111 O.

Effect:

The Township has numerous propeliies with delinquent tax balances that are greater than one year old and have not been brought to tax sale.

Cause:

The tax collector has held numerous propeliies out of the tax sale that have been identified as tax sale eligible properties.

Recommendation:

That the Township brings all delinquent tax balances to tax sale and hold a complete tax sale.

Views of Responsible Officials and Planned Corrective Action:

The delinquent properties will be brought to tax sale in the 2011 year if delinqnent balances have not been cleared.

Section III - Federal Awards & State Financial Assistance Finding & Questioned Costs

This section identifies audit findings required to be reported by section .SI0(a) of Circular A-l33 and New Jersey OMB's Circular Letter 04-04.

No Current Year Findings

101 TOWNSHIP OF LAKEWOOD SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS AND QUESTIONED COSTS AS PREPARED BY MANAGEMENT For the Fiscal Year Ended December 31, 2010

This section identifies the status of prior-year findings related to the basic financial statements and federal and state awards that are reqnired to be reported in accordance with Chapter 6.12 of Government Auditing Standards, U.S. OMB Circular A-133 (section .315 (a)(b)) and New Jersey OMB' s Circular 04- 04.

Finding 2010-01:

Condition:

The Tax Collector's surety bond mnst be a separate bond, rather than a blanket bond in order to meet the reqnirements promulgated by New Jersey Statute.

Current Status:

Not Corrected.

Finding 2010-02:

Condition:

The analysis of tax overpayment balances maintained by the Collector's Office does not sufficiently reflect all transactions.

Cnrrent Status:

Not Conecled.

102 SUPPLEMENTARY DATA Summary of Municipal Debt (Excluding Current Debt) 2010 2009 2008 Issued & Outstanding: General- Bonds & Notes $55,238,000 54,725,700 58,354,621 Loan Payable 112,500 150,000 187,500

Net Debt Issued 55,350,500 54,875,700 58,542,121

Authorized But Not Issued: General- Bonds & Notes 9,987,826 11,669,826 11,294,497

Total Issued & Authorized but Not Issued 65,338,326 66,545,526 69,836,618

Less: Reserve to Pay Debt Service 52,324 752,324 752,324 UEZ Baseball Facility,per Local Redevelopment Law (N.I.S.AAOA: 12A-37d) 782,794 795,494 2,595,415 Bonds per N.J.S.AAOA:2-52 1,040,000 1,075,000 1,105,000

Total 1,875,118 2,622,818 4,452,739

Net Bonds & Notes Issued & Authorized but Not Issued $63,463,208 63,922.708 65,383,879

Summary of Statutory Debt Condition - Annual Debt Statement

The summarized statement of debt condition which follows is prepared in accordance with the required method of setting up the Armual Debt Statement and indicates a statutory net debt of .78%.

GROSS DEBT DEDUCTIONS NET DEBT

Local School District Debt $2,347,000 2,347,000 General Debt 65,338,326 1,875,118 63,463,208

Total $67 ,685,326 4,222,118 63,463,208

Net debt, $63,463,208 divided by Equalized Valuation Basis Per N.I.S.AAOA:2-2 as amended, $8,123,817,269 equals .78 %.

Equalized Valuation Basis:

2010 $7,964,845,293 2009 8,173,034,637 2008 8,233,571,878

Average $8,123,817,269

Borrowing Power Under 40A:2-6

3.5% ofEqnalized Valuation Basis (Municipal) $284,333,604 Municipal Net Debt 63,463,208

Remaining Borrowing Power $220,870,396

**************

103 Comparative Statement of Operations and Change in Fund Balance - Current Fund

YEAR 2010 YEAR 2009 AMOUNT PERCENT AMOUNT PERCENT Revenue and Other Income Realized

Fund Balance Utilized $5,650,000 3.18% 5,500,000 3.15% Miscellaneous - From Other Than Local Property Tax Levies 27,936,989 15.72% 25,020,500 14.34% Collection of Delinquent Taxcs & Tax Title Liens 2,577,269 1.45% 4,252,885 2.44% Collection of Current Tax Levy 141,528,084 79.65% 139,700,461 80.07%

Total Income 177 ,692,342 100.00% 174,473,846 100.00%

Expenditures

Budget Expenditures - Municipal Purposes 68,965,388 39.96% 69,823,294 40.67% County Taxes 26,184,458 15.17% 25,377,249 14.78% Local! Regional School Taxes 73,546,157 42.62% 72,835,700 42.42% Special District Tax 3,575,321 2.07% 3,597,043 2.09% Refund of Prior Year Revenue 65,530 0.04% Interfunds Created/Other 296,739 0.17%

Total Expenditures 172,568,063 100.00% 171 ,698,816 100.00%

Excess in revenue 5,124,279 2,775,030

Expenditures Included Above which are by Statute Deferred Charges to Budgets of Succeeding Years 3,580,872

Statutory Excess to Fund Balance 5,124,279 6,355,902

Fund Balance January 1 7,560,991 6,705,089

Total 12,685,270 13,060,991

Less: Utilization as Anticipated Revenue 5,650,000 5,500,000

Fund Balance December 31 $7,035,270 7,560,991

104 Comparison of Tax Levies And Collection Currently

A study of this tabulation could indicate a possible trend in future tax levies. A decrease in the percentage of cunent collections could be an indication of a probable increase in future tax levies.

CURRENTLY PERCENTAGE CASH OF YEAR TAX LEVY COLLECTIONS COLLECTION

2010 $148,469,166 141,528,084 95.32% 2009 146,719,608 139,700,461 95.22% 2008 138,134,632 131,705,399 95.35%

Comparison of Tax Rate Information 2010 2009 2008

Total Tax Rate $2308 $1.844 $1.739

Apportionment of Tax Rate: Municipal 0.686 0.554 0.504 County 0.408 0.319 0.316 Local School District 1.157 0.925 0.871 Fire District 0.057 0.046 0.048

Net Valuation Taxable:

2010 $6,354,811,051 2009 $7,873,933,936 2008 $7,862,217,200

Delinquent Taxes and Tax Title Liens

This tabulation includes a comparison, expressed in percentage, of the total of delinquent taxes and tax title liens il relation to the tax levies of the last three years.

AMOUNT OF AMOUNT OF YEAR ENDED TAX TITLE DELINQUENT TOTAL PERCENTAGE DECEMBER 31 LIENS TAXES DELINQUENT OF TAX LEVY

2010 $726,220 6,074,597 6,800,817 4.64% 2009 541,432 5,149,752 4,996,999 3.62% 2008 315,836 4,681,163 4,996,999 3.62%

105 Property Acquired by Tax Title Lien Liquidation

The value of property acquired by liquidation of tax title liens on December 31, on the basis ofthe last assessed va1uation of such properties, was as follows:

YEAR AMOUNT

2010 $5,953,392 2009 5,959,192 2008 5,961,192 2007 3,317,692 2006 3,368,792

Comparative Schedule of Fund Balances

The following schedule details the amount of fund balances available at the end of the current year and four previous years and the amounts utilized in the subsequent year's budgets:

Current Fund Utilized in Percentage Balance Budget of of Fund Cun'ent Fund: December 31 Succeeding Year Balance Used

2010 $7,035,270 5,973,250 84.90% • 2009 7,560,991 5,650,000 74.73% 2008 6,705,087 5,500,000 82.03% 2007 10,299,838 7,570,000 73.50% 2006 9,710,128 7,570,000 77.96%

• As introduced

106 OFFICIALS IN OFFICE AND SURETY BONDS

Thl' following officials were in office at December 31, 20 I O.

AMOUNT OF NAME POSITION BOND

Steven Langert Mayor

Robert Singer Deputy Mayor

Raymond Coles Committeeman

Meir Lichtenstein Committeeman

Menashe Miller Committeeman

Michael Muscillo Township Administrator

William Rieker Treasurer, Chief Financial Officer $313,000

Mary Ann Del Mastro Township Clerk

C. Anne Doyle Tax Collector, Tax Search Officer

Scott J. Basen Judge $ 1,000

Carol Jenkins COUlt Director $ 65,000

Bathgate, Wegener & Wolf Township Attorney

Remington Vernick & Vena Township Engineer

All employees not covered by specific bonds listed above are covered by a public employee dishonesty bond in the amount of $50,000 by the Ocean County Municipal Joint Insnrance Fund.

There are blanket bonds for secondary coverage with the Municipal Excess Liability Joint Insurance Fund in the amount of $950,000 for Public Employees and $1,000,000 for Public Officials. Both of these bonds are subject to deductibles based upon other required coverages.

107 TOWNSHIP OF LAKEWOOD COUNTY OF OCEAN

PART II

COMMENTS AND RECOMMENDATIONS FOR THE YEAR ENDED DECEMBER 31, 2010

********* .c.

Certified Public Accountants & Consultants

The Honorable Mayor and Members of the Township Committee Township of Lakewood Lakewood, New Jersey 08701

We have audited the financial statements and transactions of the Township of Lakewood in the County of Ocean for the year endyd December 31, 2010. In accordance with requirements prescribed by the Division of Local Govemment Services, Department of Community Affairs, State of New Jersey, the following are the General Comments and Recommendations for the year then ended.

Scope of Audit

The audit covered the financial transactions of the Treasurer, Tax Collector, and the activities of the Mayor and Committee and the records of the various outside departments.

The audit did not and could not detelmine the character of services rendered for which payment had been made or for which reserves has been set up, nor could it determine the character, proper price or quantity of materials supplied for which claims had been passed. These details were necessarily covered by the intemal review and control before approval of such claims by the goveming body.

Cash on hand was counted and cash balances were reconciled with independent certifications obtained directly from the depositories.

The acclUed and realized revenues for the various Township Departments as shown on the Statements of Revenue and Revenue Accounts Receivable are presented as recorded in the Township records.

In accordance with requirements prescribed by the Division of Local Govemment Services, Department of Community Affairs, State of New Jersey, the following are the General Comments and Recommendations for the year then ended.

GENERAL COMMENTS

Contracts and Agreements Required to be advertised by (N.J.S.A.40A:11-4)

N.J.S.A.40A: 11-4 - Every contract or agreement, for the performance of any work or fumishing or hiring of any materials or supplies, the cost or the contract price whereof is to be paid with or out of public funds not included within the terms of Section 3 of this act, shall be made or awarded only by the goveming body of the contracting unit after public advertising for bids and bidding therefore, except as is provided otherwise in this act or specifically by any other Law. No work, materials or supplies shall be undertaken, acquired or furnished for a sum exceeding in the aggregate $26,000 except by contract or agreement.

It is pointed out that the goveming body of the municipality has the responsibility of detemlining whether the expenditures in any category will exceed the statutory minimum within the fiscal year. MEDFORD OFFICE TOMS RIVER OFFICE 618 Stokes Road· Medford, NJ 08055 10 Allen St., Suite 2B • Toms River, NJ 08753 Tel: 609.953.0612 • Fax: 609.953.8443 Tel: 732.797.1333. Fax: 732.797.1022 holmanfrenia.com 108 holmanfrenia.com Contracts and Agreements Required to be advertised by (N.J.S.A.40A:11-4) (continued):

Where question arises as to whether any contract or agreement might resnlt in violation of the statute, the solicitor's opinion should be sought before a commitment is made.

A test was conducted to determine that expenditures greater than $3,900 obtained solicitation of quotes. No exceptions were noted.

The minutes indicate that resolutions were adopted and advertised authorizing the awarding of contracts or agreements for "Professional Services," per N.J.S.A.40A:11-5.

Purchases were made through the State Divisiou of Purchases and Property and were approved by resolution of the Township Committee.

Inasmuch as the system of records did not provide for an accumulation of payments for categories for the performance of any work or the furnishing or hiring of any materials or supplies, the results of such an accumulation could not reasonably be ascertained. Disbursements were reviewed, however, to determine whether any clear-cut violations existed.

The compliance review of expenditmes did not reveal any individual payments or contracts in excess of the statutory limit "for the perfollnance of any work, or the furnishing of any materials, supplies or labor, or the hiring of teams or vehicles," other than those where bids had been previously sought by public advertisement or where a resolution had been previously adopted under the provisions of NJ.S.A.40A: 11- 6.

Contracts and Agreements Requiring Solicitation of Quotations

The examination of expenditures did not reveal any individual payments, contracts or agreements in excess of $3,900 thereafter "for the performance of any work or the furnishing or hiring of any materials or supplies", other than those where bids had been previously sought by public advertisement or where a resolution had been previously adopted under the provision of (NJ.S.A.40A:11-6.1).

Collection of Interest on Delinquent Taxes

NJ.S.54:4-67, as amended, provides the method for authorizing interest and the maximum rates to be charged for the nonpayment of taxes or assessments on or before the date when they would become delinquent.

The governing body on January I, 2010 adopted the following resolution authorizing interest to be charged on delinquent taxes:

"BE IT RESOLVED, by the Township of Lakewood, in the County of Ocean, State of New Jersey, that no interest be charged on any real property taxes if the current quarter is paid by the tenth of the middle month of the quarter in which it is due, and;

"BE IT FURTHER RESOLVED that the interest at the annual rate of eight (8%) percent per annum be added on the first $1.500.00 of the tax delinquency; that eighteen (18%) percent per annum on any amount in excess of One Thousand Five Hundred Dollars ($1,500.00) in accordance with the statute in such case made and provided; and that six percent (6%) be added on any amount in excess of $10,000 in interest and principal as of December 31, 2009 as an additional year-end charge.

109 Collection of Knterest on Delinquent Taxes (continned):

It appears from an examination of the Collector's record that interest was collected in accordance with the foregoing resolution.

Delinquent Taxes and Tax Title Liens

The delinquenttaxes at December 31,2010 include real estate taxes for 2010, 2009, 2008 and 2007.

The last tax sale was held on December 21, 20 I 0 but was not complete.

Inspection of 2010 tax sale certificates on file revealed that all tax sale certificates were available for audit.

The following comparison is made of the number of tax title liens receivable on December 31 of the last three years;

YEAR NUMBER OF LIENS

2010 111 2009 87 2008 74

It is essential to good management that all means provided by statute be utilized to liquidate tax title liens in order to get such propetiies back on a tax-payiug basis.

Examination of Bills

A test check of paid bills was made and each bill, upon proper approval, was considered as a separate and individual contract unless the records disclosed it to be a pati payment or estimate. No deficiencies were noted.

Payroll Fund

The exatnination of the payroll fund included testing the detail computation of earnings and various deductions or other credits from the payroll of the Township employees and was in satisfactory condition.

Municipal Court

A separate report for the Municipal Comi tratlsactions was filed in accordance with the requirements of the Local Finwce Board.

As pati of the test of the municipal court records, no attempt was made to differentiate between fines due the Township, COUllty, or State, or to pass upon the authenticity of the preparation and procedures for complaints issued.

110 Tax Collector's Annual Report

NJ.s'54:4-9J requires that on or before May 1" of each year, the Tax Collector shall file with the Treasurer and the governing body a statement of receipts during the preceding year as well as added assessments, taxes canceled and taxes unpaid as of December 31, all for the preceding tax year. This report was filed in 2010 with the governing body. The collection percentage was 95.22% and no deficiencies were noted.

Tax Collector

Finding 2010-01:

Cash collections reflected on the monthly Collector's repmi do not agree to the monthly cash deposits in most instances.

Recommendation:

That the Tax Collector's repmis be reconciled to cash deposits on a monthly basis.

*Finding 2010-02:

The Tax Collector's surety bond must be a separate bond, rather than a blanket bond in order to meet the requirements promulgated by New Jersey Statute.

Recommendation

That the Collector be separately bonded in order to comply with New Jersey Statute.

*Finding 2010-03:

The analysis of tax overpayment balances maintained by the Collector's Office does not sufficiently reflect all transactions.

Recommendation

That an analysis of all tax overpayment transactions be maintained and reconciled on a monthly basis.

Finding 2010-04:

The listing of foreclosed properties held by the Township is recorded at old assessment values of the propCliies.

Recommendation

That the listing of foreclosed propeliies be npdated to reflect assessed values from the 20 I 0 tax duplicate.

111 'fax Collector (continued):

Finding 2010-05:

No analysis of third paliy tax title liens has been maintained by the Township in the trust other fund.

Recommendation

That an analysis of third patty liens be maintained by tlle Township.

Findiug 2010-06:

Numerous properties that had delinquent tax balallces were not properly brought to tax sale in 20 I O. The 2010 tax sale was incomplete.

Recommeudation

That the Township brings all delinquent tax balallces to tax sale and hold a complete tax sale.

'Prior Yeal· Findings

Follow-up of Prior Year Findings

In accordance with Government Auditing Standards, our procedures included a review of all prior yeal· findings. Corrective action was taken on all prior year findings except for the ones mal·ked with an (*) asterisk above.

Aclmowiedgment

We express our appreciation for the assistance and comiesies extended to tlle members of the audit teall1. The problems and wealmesses noted in our review were not of such magnitude that they would affect our ability to express an opinion on the financial statements taken as a whole.

Should you have any questions concerning our comments or recommendations, or should you desire ally assistance in implementing our recommendations, please call me.

Respect lly submitted,

Registered Municipal Accountant No. CR435 Medford, New Jersey June 17,2011

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APPENDIX C

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FORM OF CONTINUING DISCLOSURE CERTIFICATE

This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by the Township of Lakewood, in the County of Ocean, New Jersey (the "Issuer") in connection with the issuance by the Issuer of $______principal amount of its General Improvement Refunding Bonds, Series 2012 (the "General Improvement Refunding Bonds") and $______principal amount of its Pension Refunding Bonds, Taxable Series 2012 (the "Pension Refunding Bonds" and together with the General Improvement Refunding Bonds, the "Bonds"). The Bonds are being issued pursuant to a Refunding Bond Ordinance (the "Ordinance") duly adopted by the Township Committee of the Issuer (the "Committee") on February 2, 2012 and a resolution duly adopted by the Committee on March 29, 2012 (the “Resolution”). The Bonds are dated their date of delivery. The General Improvement Refunding Bonds shall mature on January 15 in each of the years ____ to _____. The Pension Refunding Bonds shall mature on April 1 in each of the years ____ to _____. The Issuer covenants and agrees as follows:

Section 1. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the Bondholders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with the provisions of Rule 15c2-12(b)(5) promulgated by the Securities and Exchange Commission ("SEC") under the Securities Exchange Act of 1934, as the same may be amended from time to time ("Exchange Act").

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

"Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes.

"Continuing Disclosure Information" shall mean: (i) any notice required to be filed with the MSRB pursuant to Section 4 hereof; and (ii) any notice of an event required to be filed with the MSRB pursuant to Section 3(c) hereof.

"Dissemination Agent" shall mean the Issuer, or any successor Dissemination Agent designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation.

"EMMA" shall mean the Electronic Municipal Market Access System ("EMMA"), an internet based filing system created and maintained by the MSRB in accordance with the SEC Release, pursuant to which issuers of tax-exempt bonds, including the Bonds, and other filers on behalf of the such issuers shall upload Continuing Disclosure Information to assist underwriters in complying with the Rule and to provide the general public with access to such Continuing Disclosure Information.

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"Listed Events" shall mean any of the events listed in Section 3(a) of this Disclosure Certificate.

"MSRB" shall mean the Municipal Securities Rulemaking Board established pursuant to Section 15B(b)(1) of the Exchange Act.

"Bondholder" shall mean any person who is the registered owner of any Bond, including holders of beneficial interests in the Bonds.

"Participating Underwriter" shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds.

"Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Exchange Act.

"State" shall mean the State of New Jersey.

Section 3. Provision of Annual Reports .

(a) The Issuer shall, or shall cause the Dissemination Agent to, not later than nine (9) months after the end of the Issuer’s fiscal year, commencing with the Annual Report for the fiscal year ending December 31, 2012 provide to the MSRB an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. The Issuer shall also provide, or cause the Dissemination Agent to provide, to the MSRB the Issuer’s audited financial statements for the fiscal year ending December 31, 2011 within thirty (30) days after they become available. If the Issuer's fiscal year changes, it shall give notice of such change to MSRB. Any and all items that must be included in the Annual Report may be incorporated by reference from other information that is available to the public on the MSRB's Internet Web site, or that has been filed with the SEC. (b) Not later than fifteen (15) Business Days prior to the date specified in subsection (a) for making available or providing the Annual Report, the Issuer shall provide the Annual Report to the Dissemination Agent (if other than the Issuer). If the Issuer is unable to provide to the MSRB an Annual Report by the date required in subsection (a), the Issuer shall send a notice to the MSRB in substantially the form attached as Exhibit A .

(i) determine each year prior to the date for making available or providing the Annual Report the name and address of each repository, if any; and

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(ii) if applicable, if the Dissemination Agent is other than the Issuer, file a report with the Issuer certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, stating the date it was provided and listing all the Repositories to which it was provided.

Section 4. Content of Annual Reports . The Issuer’s Annual Report shall contain or include by reference the following:

1. The audited financial statements of the Issuer for the prior fiscal year, prepared in accordance with generally accepted accounting standards (GAAS) as from time to time in effect, and as prescribed by the Division of Local Government Services in the Department of Community Affairs of the State pursuant to Chapter 5 of Title 40A of the New Jersey Statutes. If the Issuer’s audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.

2. The financial information and operating data set forth in the Official Statement dated ______, 2012 prepared in connection with the sale of the Bonds, included in “APPENDIX A – GENERAL INFORMATION REGARDING THE TOWNSHIP”, under the headings “LARGEST TAXPAYERS”, “APPORTIONMENT OF TAX RATE”, “COMPARISON OF TAX LEVIES AND COLLECTIONS”, “TAX TITLE LIENS AND DELINQUENT TAXES”, “COMPARATIVE SCHEDULE OF FUND BALANCES”, “ASSESSED VALUATIONS OF PROPERTY BY CLASS”, PROPERTY VALUATIONS”, “STATUTORY DEBT”, “STATUTORY BORROWING POWER”, “UNDERLYING DEBT” and “GROSS DEBT COMPARED WITH TRUE VALUE”.

Section 5. Reporting of Significant Events .

(a) Pursuant to the provisions of this Section 5, the Issuer shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds:

1. principal and interest payment delinquencies;

2. non-payment related defaults, if material;

3. unscheduled draws on the debt service reserves reflecting financial difficulties;

4. unscheduled draws on the credit enhancements reflecting financial difficulties;

5. substitution of the credit or liquidity providers or their failure to perform;

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

7. modifications to rights of Bondholders, if material;

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

9. defeasances;

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

11. rating changes;

12. bankruptcy, insolvency, receivership or similar events of the Issuer, which shall be considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the Issuer in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Issuer, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Issuer;

13. 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

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

(b) Whenever the Issuer obtains knowledge of the occurrence of a Listed Event described in subsection (a) for which the disclosure obligation is dependent upon materiality, the Issuer shall as soon as possible determine if such event would be material under applicable federal securities laws.

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(c) If the Issuer determines that knowledge of the occurrence of a Listed Event would be material under applicable federal securities laws, the Issuer shall promptly file a notice of such occurrence with the MSRB. Notwithstanding the foregoing, notice of Listed Events described in subsections (a)(8) and (9) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to Bondholders of affected Bonds pursuant to the Resolution. Each notice required to be filed with the MSRB shall be in an electronic format as prescribed by the MSRB, and that all documents provided to the MSRB shall be accompanied by identifying information as prescribed by the MSRB.

Section 6. Termination of Reporting Obligation . The Issuer’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the Issuer shall give notice of such termination in the same manner as for a Listed Event under Section 5(c).

Section 7. Dissemination Agent . The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to this Disclosure Certificate. The initial Dissemination Agent shall be the Issuer.

Section 8. Amendment; Waiver . Notwithstanding any other provision of this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:

(a) If the amendment or waiver relates to the provisions of Section 3, it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted;

(b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and

(c) The amendment or waiver does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Bondholders or Beneficial Owners of the Bonds.

In the event of any amendment or waiver of a provision of this Disclosure Certificate, the Issuer shall describe such amendment in the same manner as for a Listed Event under Section 5(a), and shall include a narrative

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

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

Section 11. Duties, Immunities and Liabilities of Dissemination Agent . The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including reasonable attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s gross negligence or willful misconduct. The obligations of the Issuer under this Section 11 shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.

Section 12. Beneficiaries . This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriters and the Bondholders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity.

Dated: ______, 2012 TOWNSHIP OF LAKEWOOD, IN THE COUNTY OF OCEAN, NEW JERSEY

By: Chief Financial Officer

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EXHIBIT A

NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT

Name of Issuer: Township of Lakewood, in the County of Ocean, New Jersey

Name of Bond Issue: $______General Improvement Refunding Bonds, Series 2012 $______Pension Refunding Bonds, Series 2012

Date of Issuance: ______, 2012

NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect to the above-named Bonds as required by Section 3(a) of the Continuing Disclosure Certificate dated ______, 2012. The Issuer anticipates that the Annual Report will be filed by ______, 20__.

Dated: ______, 20__

TOWNSHIP OF LAKEWOOD, IN THE COUNTY OF OCEAN, NEW JERSEY

By: ______Name: Title:

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APPENDIX D

FORMS OF BOND COUNSEL'S OPINIONS

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An opinion in substantially the following form will be delivered at Closing, assuming no material changes in facts or law.

______, 2012

Township Committee of the Township of Lakewood, in the County of Ocean, New Jersey

Re: Township of Lakewood, in the County of Ocean, New Jersey $______General Improvement Refunding Bonds, Series 2012

Ladies and Gentlemen:

We have acted as Bond Counsel in connection with the issuance by the Township of Lakewood, in the County of Ocean, New Jersey (the "Township") of $_____ General Improvement Refunding Bonds, Series 2012 (the "Tax-Exempt Bonds"). The Tax-Exempt Bonds are general obligations of the Township and the full faith, credit and taxing power of the Township is available to pay the principal of and interest on the Tax-Exempt Bonds. The Tax- Exempt Bonds are dated their date of delivery, mature on January 15, in the amounts, in each of the years and bear interest at the rates, payable on January 15 and July 15 of each year, commencing January 15, 2013, as set forth in the table below:

Interest Year Amount Rate Price

The Tax-Exempt Bonds will be issued in book-entry form only in the form of one certificate for the principal amount of Tax-Exempt Bonds maturing in each year, registered in the name of and held by Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"), which will act as securities depository for the Tax-Exempt Bonds. DTC will be responsible for maintaining the book-entry system for recording the interests of its D-1 Township Committee of the Township of Lakewood, in the County of Ocean, New Jersey ______, 2012 participants or the transfers of such interests among such participants. Such participants shall be responsible for maintaining records regarding the beneficial ownership interests in the Tax- Exempt Bonds on behalf of individual purchasers. Individual purchases may be made in the principal amount of $5,000 or integral multiples thereof through book-entries on the books and records of DTC and its participants.

The Tax-Exempt Bonds are issued under the provisions of the Local Bond Law, Chapter 169 of the Laws of 1960 of the State of New Jersey, effective January 1, 1962 and the acts amendatory thereof and supplemental thereto (the "Act"), a resolution adopted by the Township Committee on March 29, 2012 (the "Resolution") and Refunding Bond Ordinance No. 2012-1 of the Township adopted by the Township Committee on February 2, 2012 (the "Refunding Bond Ordinance"). The Tax-Exempt Bonds are issued to (i) refund a portion of the Township's General Improvement Bonds, Series 2002, dated October 1, 2002, namely those bonds maturing on October 1 in the years 2013 through 2016 (the "2002 Refunded Bonds") and to call for redemption the 2002 Refunded Bonds maturing in the years 2013 through 2016 on October 1, 2012; (ii) refund a portion of the Township's General Improvement Bonds, Series 2005, dated May 1, 2005 namely those bonds maturing on January 15 in the years 2015 through 2020 (the "2005 Refunded Bonds", and together with the 2002 Refunded Bonds, the "Refunded Bonds"); and (iii) pay costs of issuance of the Tax-Exempt Bonds (the "Refunding Project"). The Refunding Project was authorized by the Ordinance.

The Tax-Exempt Bonds are not subject to redemption prior to their stated maturities.

In connection with the issuance of the Tax-Exempt Bonds, the Township has entered into an Escrow Deposit Agreement, dated ______, 2012 (the "Escrow Deposit Agreement") with ______, as escrow agent (the "Escrow Agent"), pursuant to which a portion of the proceeds of the Tax-Exempt Bonds and other available moneys of the Township will be deposited and held uninvested as cash or invested in direct and general obligations of, or obligations fully and unconditionally guaranteed by, the United States of America, the maturing principal of which and interest thereon shall be used to pay the interest on the Refunded Bonds until ______, 201_, and to pay the principal of and redemption premium thereon on said date. ______, has, based on certain information provided to it, verified (i) the mathematical computation of the adequacy of the maturing principal of and interest on the investments purchased with the proceeds of the Tax- Exempt Bonds (and other available funds) to make payment of the principal, redemption premium and interest on the Refunded Bonds on the payment dates, and (ii) the calculations of the yield on the Tax-Exempt Bonds and the yield on the investments held under the Escrow Deposit Agreement and purchased with proceeds of the Tax-Exempt Bonds. We have relied upon the verification of the sufficiency of the amounts to be held by the Escrow Agent and the yield calculations in concluding that the Tax-Exempt Bonds are not "arbitrage bonds" within the meaning of the Code. D-2 Township Committee of the Township of Lakewood, in the County of Ocean, New Jersey ______, 2012

In our capacity as Bond Counsel and as a basis for the opinions set forth below, we have examined the proceedings relating to the authorization and issuance of the Tax-Exempt Bonds, including (a) copies of the Resolution and the Refunding Bond Ordinance; (b) such matters of law, including, inter alia, the Act and the Internal Revenue Code of 1986, as amended (the "Code"), and (c) such other agreements, proceedings, certificates, records, approvals, resolutions and documents as to various matters with respect to the issuance of the Tax-Exempt Bonds as we have deemed necessary. We have further assumed and relied upon the genuineness, accuracy and completeness of all of the documents and other instruments which we have examined. As to questions of fact material to our opinion, we have relied upon the proceedings and other certifications of public officials executed and furnished to us without undertaking to verify the same by independent investigation.

Based upon the foregoing, we are of the opinion that:

1. The Tax-Exempt Bonds have been duly authorized, issued, executed and sold by the Township; the Resolution and the Refunding Bond Ordinance have been duly authorized and adopted by the Township; and the Tax-Exempt Bonds, the Resolution and the Refunding Bond Ordinance are legal, valid and binding obligations of the Township enforceable in accordance with their respective terms.

2. Assuming continuing compliance by the Issuer with the provisions of the Code applicable to the Tax-Exempt Bonds, and subject to certain provisions of the Code, under laws, regulations, rulings and judicial decisions existing on the date of original delivery of the Tax- Exempt Bonds, interest received by a holder of the Tax-Exempt Bonds will be excludable from gross income for federal income tax purposes and will not be treated as a tax preference item for purposes of the alternative minimum tax imposed on individuals or corporations. However, interest on the Tax-Exempt Bonds may become taxable retroactively if certain requirements under the Code are not complied with. Interest on the Tax-Exempt Bonds is included in the adjusted current earnings of certain corporations for purposes of computing the alternative minimum tax on such corporations.

3. Under the laws of the State of New Jersey as enacted and construed on the date of original issuance of the Tax-Exempt Bonds, interest on the Tax-Exempt Bonds and gain from the sale thereof are excludable from gross income under the New Jersey Gross Income Tax Act.

4. The power and obligation of the Township to pay the Tax-Exempt Bonds is unlimited, and the Township shall be required to levy ad valorem taxes upon all taxable real property within the Township for the payment of the principal of and interest on the Tax-Exempt Bonds without limitation as to rate or amount.

D-3 Township Committee of the Township of Lakewood, in the County of Ocean, New Jersey ______, 2012

For purposes of this opinion, the enforceability (but not the validity) of the documents mentioned herein may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws now or hereafter enacted by any state or by the federal government affecting the enforcement of creditors’ rights generally, and by equitable principles, and the phrase "enforceable in accordance with their respective terms" shall not mean that specific performance would necessarily be available as a remedy in every situation.

Other than as set forth in Paragraphs 2 and 3 hereof, we express no opinion regarding other federal and state tax consequences arising with respect to the Tax-Exempt Bonds.

We express no opinion herein as to the adequacy or accuracy of any official statement, private placement memorandum or other offering material pertaining to the offering of the Tax- Exempt Bonds.

GLUCKWALRATH LLP

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An opinion in substantially the following form will be delivered at Closing, assuming no material changes in facts or law.

______, 2012

Township Committee of the Township of Lakewood, in the County of Ocean, New Jersey

Re: Township of Lakewood, in the County of Ocean, New Jersey $______Pension Refunding Bonds, Taxable Series 2012

Ladies and Gentlemen:

We have acted as Bond Counsel in connection with the issuance by the Township of Lakewood, in the County of Ocean, New Jersey (the "Township") of $_____ Pension Refunding Bonds, Taxable Series 2012 (the "Taxable Bonds). The Taxable Bonds are general obligations of the Township and the full faith, credit and taxing power of the Township is available to pay the principal of and interest on the Taxable Bonds. The Taxable Bonds are dated their date of delivery, mature on April 1, in the amounts, in each of the years and bear interest at the rates payable on April 1 and October 1 of each year, commencing October 1, 2012, all as set forth in the table below:

Interest Year Amount* Rate Price

The Taxable Bonds will be issued in book-entry form only in the form of one certificate for the aggregate principal amount of Taxable Bonds of each series and maturity maturing in each year, registered in the name of and held by Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"), which will act as securities depository for the Taxable Bonds. DTC will be responsible for maintaining the book-entry system for recording the interests of its participants or the transfers of such interests among such participants. Such D-5 Township Committee of the Township of Lakewood, in the County of Ocean, New Jersey ______, 2012 participants shall be responsible for maintaining records regarding the beneficial ownership interests in the Bonds on behalf of individual purchasers. Individual purchases may be made in the principal amount of $5,000 or integral multiples thereof through book-entries on the books and records of DTC and its participants.

The Taxable Bonds are issued under the provisions of the Local Bond Law, Chapter 169 of the Laws of 1960 of the State of New Jersey, effective January 1, 1962 and the acts amendatory thereof and supplemental thereto (the "Act"), a resolution adopted by the Township Committee on March 29, 2012 (the "Resolution") and Refunding Bond Ordinance No. 2012-1 of the Township adopted by the Township Committee on February 2, 2012 (the "Refunding Bond Ordinance"). The Taxable Bonds are issued to (i) refund a portion of the Township's Pension Obligation Refunding Bonds, Series 2003 (Federally Taxable), dated April 1, 2003 namely those bonds maturing on April 1 in the years 2014 through 2021 (the "2003 Refunded Bonds"); (ii) pay costs of issuance of the Taxable Bonds (the "Refunding Project"). The Refunding Project was authorized by the Ordinance.

The Taxable Bonds are not subject to redemption prior to their stated maturities.

In connection with the issuance of the Taxable Bonds, the Authority has entered into an Escrow Deposit Agreement, dated ______, 2012 (the "Escrow Deposit Agreement") with ______, as escrow agent (the "Escrow Agent"), pursuant to which a portion of the proceeds of the Taxable Bonds and other available moneys of the Township will be deposited and held uninvested as cash or invested in direct and general obligations of, or obligations fully and unconditionally guaranteed by, the United States of America, the maturing principal of which and interest thereon shall be used to pay the interest on the 2003 Refunded Bonds until ______, 201_, and to pay the principal of and redemption premium thereon on said date. ______, has, based on certain information provided to it, verified the mathematical computation of the adequacy of the maturing principal of and interest on the investments purchased with the proceeds of the Taxable Bonds (and other available funds) to make payment of the principal, redemption premium and interest on the 2003 Refunded Bonds on the payment dates.

In our capacity as Bond Counsel and as a basis for the opinions set forth below, we have examined the proceedings relating to the authorization and issuance of the Taxable Bonds, including (a) copies of the Resolution and the Refunding Bond Ordinance; (b) such matters of law, including, inter alia, the Act, and (c) such other agreements, proceedings, certificates, records, approvals, resolutions and documents as to various matters with respect to the issuance of the Taxable Bonds as we have deemed necessary. We have further assumed and relied upon the genuineness, accuracy and completeness of all of the documents and other instruments which we have examined. As to questions of fact material to our opinion, we have relied upon the

D-6 Township Committee of the Township of Lakewood, in the County of Ocean, New Jersey ______, 2012 proceedings and other certifications of public officials executed and furnished to us without undertaking to verify the same by independent investigation.

Based upon the foregoing, we are of the opinion that:

1. The Taxable Bonds have been duly authorized, issued, executed and sold by the Township; the Resolution and the Refunding Bond Ordinance have been duly authorized and adopted by the Township; and the Taxable Bonds, the Resolution and the Refunding Bond Ordinance are legal, valid and binding obligations of the Township enforceable in accordance with their respective terms.

2. Under the laws of the State of New Jersey as enacted and construed on the date of original issuance of the Taxable Bonds, interest on the Taxable Bonds and gain from the sale thereof are excludable from gross income under the New Jersey Gross Income Tax Act.

3. The power and obligation of the Township to pay the Taxable Bonds is unlimited, and the Township shall be required to levy ad valorem taxes upon all taxable real property within the Township for the payment of the principal of and interest on the Taxable Bonds without limitation as to rate or amount.

Other than as set forth in Paragraph 2 hereof, we express no opinion regarding Federal and other state tax consequences arising with respect to the Taxable Bonds. No opinion is being rendered with respect to the treatment of interest on the Taxable Bonds for Federal income tax purposes.

D-7 Township Committee of the Township of Lakewood, in the County of Ocean, New Jersey ______, 2012

We express no opinion herein as to the adequacy or accuracy of any official statement, private placement memorandum or other offering material pertaining to the offering of the Bonds.

GLUCKWALRATH LLP

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